Cannabis stocks, including Aurora Cannabis (TSX:ACB), exploded higher on Friday as reports surfaced that President Donald Trump plans to reclassify marijuana from Schedule I to Schedule III. This reclassification could potentially reshape an industry long constrained by federal prohibition in the U.S.
Aurora Cannabis surged 21% alongside sector peers as investors anticipated the regulatory shift that would align cannabis with common prescription medications rather than with heroin and LSD (lysergic acid diethylamide).
The Washington Post cited six sources to “confirm” Trump’s intention to issue an executive order directing the Justice Department to implement rescheduling.
The potential reclassification would primarily improve operating conditions for cannabis companies in the United States. For instance, marijuana producers will now have access to traditional banking relationships and standard business tax deductions under Section 280E. Moreover, it will open doors for pharmaceutical companies to develop approved cannabis products dispensed like conventional prescriptions.
Aurora Cannabis CEO Miguel Martin and other industry leaders expressed unprecedented optimism about the regulatory breakthrough. However, investors must temper enthusiasm with Aurora’s fundamental reality. Despite the recent uptick, ACB stock is still down 99% from all-time highs.
Aurora Cannabis, with a market cap of $400 million, remains unprofitable. Between fiscal 2020 and fiscal 2025 (ended in March), the Canada-based marijuana producer has reported a cumulative free cash outflow of $1.3 billion.
So, let’s see if ACB stock can stage a recovery in 2026 and beyond.
Is Aurora Cannabis stock a good buy right now?
In the fiscal second quarter (Q2) of 2026, Aurora Cannabis reported net sales of $90 million, an increase of 11% year over year. While medical cannabis sales rose 15%, international sales rose 22% year over year, indicating a focus on high-margin segments. In fact, gross margins in these verticals stood at 69%, above the initial target of 60%.
Aurora Cannabis management emphasized that its competitive moat stems from vertical integration across multiple E.U. GMP-certified (European Union Good Manufacturing Practice) facilities, which now account for 90% of annual manufacturing capacity.
This regulatory advantage was evident over the past year as competitors struggled with Portuguese supply chain disruptions and quality failures. Management also announced plans to double production capacity at the Leuna facility in Germany, as it invests in advanced lighting and irrigation systems.
Aurora holds leadership positions across the four largest national legal medical cannabis markets outside Canada, including Germany, Australia, Poland, and the United Kingdom.
The Polish market has more than doubled from two tons annually in 2023 to approximately five tons in 2025. Notably, Aurora has launched the highest potency medical cannabis products available in the country.
German imports have exploded from eight metric tons in 2018 to 72 metric tons in 2024, and the market is on track to more than double in 2025, providing substantial runway for continued expansion.
What is the ACB stock price target in December 2025?
Aurora Cannabis ended the recent quarter with $142 million in cash. Its adjusted earnings before interest, tax, depreciation, and amortization in fiscal Q2 rose 52% to $15.4 million, exceeding top-line growth by a factor of five.
Analysts tracking ACB stock forecast revenue to increase from $343 million in fiscal 2025 to $500 million in 2030. The marijuana producer is forecast to report a free cash flow of $103 million in 2030, compared to an outflow of $2.85 million in fiscal 2025.
If ACB stock is priced at 10 times free cash flow, which is not too expensive, it could gain close to 160% within the next four years.
