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How Recreational Cannabis Pricing in Canada Could Shape Up

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Part 4
How Recreational Cannabis Pricing in Canada Could Shape Up PART 4 OF 5

What Analysts Estimate for Cannabis Producers’ Sales in 2019

Cannabis sales expectations

The upcoming legalization of non-medical or recreational cannabis in Canada has led investors to pour money into cannabis producers such as Canopy Growth (WEED), Aphria (APHQF), Aurora Cannabis (ACBFF), and MedReleaf (MEDFF) among other players in the market (HMLSF). Investors hope that the untapped market for adult cannabis use in Canada will drive growth in earnings for these companies, which should translate into stock price appreciation.

What Analysts Estimate for Cannabis Producers&#8217; Sales in 2019

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Sales estimates

At this point, it would be helpful to see what seasoned analysts project for companies’ sales growth once recreational cannabis is legal. In the above chart, we’ve plotted Wall Street analyst sales growth estimates for seven cannabis producers in Canada.

Sales for each of the seven cannabis companies are estimated to jump in excess of 100% year-over-year in fiscal 2019, which will also be the first year with full-year sales from recreational cannabis.

Canopy Growth’s sales are estimated to grow by 258% to 306 million Canadian dollars in fiscal 2019 from the estimated 85 million Canadian dollars in fiscal 2018. Over the same period, Aurora Cannabis sales are estimated to grow by 290% to 275 million Canadian dollars. MedReleaf sales are estimated to grow by 224% to 150 million Canadian dollars, while Aphria sales are estimated to grow by 440% to 230 million Canadian dollars over the same period. We can see a similar trend for Cronos, CannTrust, and Supreme Cannabis as well.

In the concluding part of this series, we’ll discuss margins estimates for some of these companies.

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