What happened
Shares of Aurora Cannabis (ACB -2.79%) sank more than 12% on Tuesday, following a worrisome earnings release from a rival marijuana producer.
So what
Pot company Tilray (TLRY) reported first-quarter losses that were far larger than Wall Street's forecasts. Revenue climbed 126% year over year to $52.1 million, driven by a 165% rise in adult-use cannabis sales and a 221% surge in medical cannabis sales in international markets. But its net loss ballooned to $184.1 million, or $1.73 per share, versus a loss of $29.4 million, or $0.31 per share, in the year-ago period. Analysts had expected a net loss of only $0.44 per share.
Shares of Aurora Cannabis fell sharply on Tuesday. Image source: Getty Images.
Now what
Analysts are concerned that cannabis companies could see tepid sales in the coming weeks, after consumers stocked up on marijuana during the early days of the pandemic. That could weigh on Aurora's and Tilray's results in the coming quarters.
Pot sales could also be stifled by the increased safety measures health officials are requiring from dispensaries during the COVID-19 crisis. Many cannabis stores are reducing their hours of operation, cutting staff, and offering only pickup and delivery, all of which could dent revenue and profits.
In turn, investors appear to be growing increasingly concerned about Aurora's upcoming earnings release, due out on Thursday.
