According to Health Canada, licensed businesses sold 7,115 kilograms of dried flower in January. That was 3.7% less than in December, which hardly looks like a Canadian sales explosion that will help Aurora Cannabis (NYSE: ACB) or Cronos Group (NASDAQ: CRON) make ends meet before they need to ask investors for more money.
There are more than a few reasons for the slowdown, some of which many investors have been trying their hardest to ignore. Here’s what you need to know.
1. Oil sales are up
Cowen Group’s (NASDAQ: COWN) top pot stock analyst, Vivien Azer, ignored the disappointing numbers from Health Canada and reiterated an “outperform” rating for Aurora Cannabis and a $14 price target that was 55% higher than Aurora’s closing price ahead of the news.
Analysts who acknowledged the slowdown were quick to point out cannabis oil sales, which rose 4.3% to 7,856 liters. Right now, the Ontario Cannabis Store is selling 15 capsules of Canopy Growth’s (NYSE: CGC) Highlands Softgels that contain 2.5 mg of THC for CA$20.90. One gram of dry cannabis flower can still produce enough THC to fill four bottles. Un-encapsulated Cannabis oil runs CA$49 for a tiny bottle that …