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We are now in earnings season for Canadian licensed marijuana producers and so far the numbers have been quite impressive.

This has been one of the hottest sectors to own over the last year and we remain bullish on account of due the improving fundamentals, emerging international market opportunities (Australia, Germany, Colombia, Denmark, etc.), the funded growth initiatives focused on increasing production capacity, and the long-term opportunity presented by this sector.

Over the last two weeks, three leading Canadian marijuana producer have released financial and operating results and we have highlighted below some of most important numbers below. We believe that these represent some of the best long-term opportunities and investors should be monitoring these companies.

MedReleaf: Quarterly Revenue Receives Boost from Cannabis Oil

Yesterday, MedReleaf Corp. (LEAF.TO) (MEDFF) traded higher after releasing financial and operating results for the third quarter which ended on December 31st. During the quarter, MedReleaf recorded a $5 million net loss on $11.4 million in revenue. When compared to the prior quarter, sales grew by 16% while the net loss increased due to the stock based compensation expense as well as greater operating and advertising expenses.

The marijuana producer benefited from a trend toward smokeless products and the higher revenue was primarily due to cannabis oil products. During the quarter, sales of dried cannabis were $8.6 million (a decrease of 13% from the prior year period) while extract sales were $2.3 million (an increase of $2.1 million from the prior year period)

Cannabis oil accounted for 21% of MedReleaf’s total revenue during the quarter and this number should increase with the launch of topical creams, softgel capsules, future product development initiatives, and growing industry demand.

MedReleaf has a strong balance sheet after completing two bought deals (December 4th and January 31st) for $192.5 million of gross proceeds which will be used to finance the acquisition and/or construction of additional cannabis production and manufacturing facilities and expand the marketing and sales initiatives.

We are bullish on these numbers and are favorable on MedReleaf’s long-term outlook due to the improving fundamentals, it’s expanding product line that is consistent with industry trends, and strong balance sheet which will be used to execute on previously announced growth initiatives.

Aurora Cannabis: Reports Strong Second Quarter Net Income  

Last week, Aurora Cannabis (ACB.TO) (ACBFF) released financial and operating results for the second quarter which ended on December 31st and the shares have traded mixed.

As of the date of the release, Aurora had over 23,000 active registered patients, up 5.9% from the same quarter last year. During the quarter, the medical marijuana producer recorded $10 in net income on  $11.7 million in revenue. Aurora generated approx. $2.5 million in revenue from its German operations and we are bullish on this aspect of the business.

Aurora continues to expand its domestic and international production footprint with an increasing number of high-technology, purpose-built, low production cost facilities. The company owns facilities that can produce more than 240,000 kilograms of high quality cannabis per year.

Over the last two years, Aurora Cannabis has been laser focused on execution and the marijuana producer is well positioned to capitalize on a global opportunity. Aurora has a war chest of cash and has made several strategic investments and acquisitions. We are bullish on the quarterly numbers and remain favorable on the long-term outlook.

Organigram: Positioned to Capitalize on Recreational Marijuana

In late January, Organigram Holdings (OGI.V) (OGRMF) released first quarter financial results for the period that ended on November 30th and we were favorable on these numbers. During the quarter, the marijuana producer recorded a $1.4 million net loss on $2.7 million in revenue.

When compared to the prior quarter, revenue increased by $600,000 and the net loss decreased by $600,000. The company saw significant growth in its sales of cannabis oil. During the quarter, cannabis oil sales were approx. 419,000 ml, compared to 178,000 ml in the fourth quarter. The growth in cannabis oil sales was fueled by Organigram’s Shubie Cannabis Oil 50ml bottle containing high CBD content.

When it comes to growth potential, we are favorable on Organigrams’ leverage to Canada’s recreational marijuana market. The marijuana producer previously announced the signing of a memorandum of understanding with the provincial authorities in both New Brunswick and Prince Edward Island for a minimum of five million grams and one million grams of cannabis per year, respectively, to serve the recreational market. Organigram believes it is well positioned to announce further similar transactions with other provincial authorities.

Organigram recently closed a $115 million bought deal financing and we are bullish on the company’s long-term outlook. The marijuana producer is well positioned to capitalize on the recreational marijuana market and we think this is a stock investors need to keep an eye on.