Aurora Cannabis (ACB 2.23%) has perhaps been the most disappointing pot stock since Canada legalized adult recreational uses of marijuana back in 2018 -- and that's saying something. The company was initially seen as one of the frontrunners in the race to dominate this field, but things haven't turned out so well.

But could Aurora Cannabis be on the verge of making a comeback? The company recently announced some news that has the market buzzing, not to mention there are some interesting industrywide developments. With all that going on, let's find out whether investors should consider giving a second thought to the pot grower. 

Benefitting from multiple tailwinds

On Sept. 8, Aurora Cannabis announced a move to reduce its debt and interest expense. The company said it had repurchased $9 million worth of convertible debt between mid-August and early September. Aurora Cannabis raised the money to do so by issuing 20.1 million new shares. This is part of the company's goal to become free-cash-flow-positive next year -- something that would be an achievement considering how poorly it has performed in recent years, both financially and on the stock market.

That's not the only reason Aurora Cannabis has been on fire lately. The company is also benefiting from positive news on the regulatory front. The U.S. Department of Health and Human Services (HHS) recently recommended that marijuana be downgraded from a Schedule I controlled substance to Schedule III. If the agency in charge, the U.S. Drug Enforcement Administration (DEA), decides to follow this recommendation, things will get substantially easier for pot companies.

Schedule III substances are classified as less prone to dependence than those in the first or second category. For context, heroin is a Schedule I drug. Under the new HHS proposal, marijuana would also become recognized as having accepted medical use in the country -- a potential game changer for the pot industry. Yes, cannabis would remain illegal at the federal level, but things would get substantially less stringent for Aurora Cannabis and its peers.

Finally, there is a bill making its way through the U.S. Senate right now that could give pot companies easier access to various banking services, which they currently lack due to the legal landscape surrounding marijuana in the country. These are all positive developments for Aurora Cannabis and the rest of the industry, but is that enough to buy the stock? 

How long will this momentum last? 

Let's assume the DEA does reschedule cannabis as per the HHS's recommendation, and lawmakers pass this new bill seeking to grant cannabis companies easier access to traditional means of funding. Even under this scenario, it's not clear that Aurora Cannabis is a buy. Consider the company's financial results. In its latest period -- the first quarter of its fiscal year 2024, ended June 30 -- Aurora Cannabis reported revenue of 75.1 million Canadian dollars (about $55.7 million), up 50% year over year.

That sounds great, at least until one realizes that much of that growth wasn't organic and was instead due to an acquisition the company made in August 2022. This has been part of Aurora's strategy for years. The company has sought to dominate the market by making a series of acquisitions. There is nothing wrong with this strategy in principle, but Aurora Cannabis hardly had the financial means to splurge on takeovers, so it often had to issue new shares, diluting existing shareholders in the process.

Perhaps that would have been fine if these acquisitions had panned out and the company's financial results had increased substantially as a result, but that largely didn't happen. Aurora Cannabis' revenue growth has been unimpressive in the past five years after initially soaring once pot became legal in Canada. 

ACB Revenue (Quarterly) Chart

Data source: YCharts

In fairness, that's not entirely the company's fault. The Canadian market had been difficult, with intense competition (including from illicit markets), stiff regulations to obtain cannabis licenses, and other challenges. That's why there is no reason to think that Aurora Cannabis will suddenly turn things around even if the legal landscape substantially improves in the U.S. That will almost certainly attract plenty of new companies, and, based on the company's history, I wouldn't pick Aurora Cannabis to be one of the winners.

The company also remains unprofitable, although it has improved on this front in recent years and looks close to profitability. 

ACB Net Income (Quarterly) Chart

Data source: YCharts

Aurora Cannabis may or may not become free-cash-flow-positive next year. In my view, it doesn't matter. The company's track record is too poor for that to somehow tip the scales in its favor. It should take much more than that for most investors to consider initiating a position. For now, it's best to stay away and watch how things unfold from a safe distance.