Aurora Cannabis shares rallied as much as 14% and helped to pull the cannabis sector higher Tuesday, with the recovery in broader markets following a rout in global markets on Monday.

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Aurora’s stock ACB, -2.88% ACB, -1.88% rose after it issued guidance for its fiscal fourth quarter, even though the revenue forecast was “lighter than we/the Street modeled,” as Cowen analyst Vivien Azer described it.

Aurora said it expects to deliver revenue net of excise taxes for its fiscal fourth quarter of C$100 million ($75.8 million) to C$107 million, up from C$19.1 million in the year-earlier period. The current FactSet consensus is for revenue of C$112 million.

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The company had revenue of C$65.1 million for the previous quarter to end March. Net revenues are expected to range from C$90 million to C$95 million, with growth expected across all business segments, including medial cannabis, Canadian and international and consumer markets.

Aurora, which is the most widely held stock of the Canadian cannabis players, expects to report that production available for sale for Q4 2019 will be at the upper end of the range between 25,000 kg and 30,000 kg, ahead of previous guidance of 25,000 kgs,” it said in a statement. The company expects to post positive adjusted Ebitda — or earnings before interest, tax, depreciation and amortization — along with improvements in gross margins, kilograms of cannabis sold and cash costs per gram produced.

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Cowen said the numbers show strength in production and cultivation and said the revenue miss wasn’t surprising given the level of reported monthly retail sales from Statistics Canada. The start of legal adult-use cannabis in Canada hasn’t been as smooth as expected and numbers have lagged behind original expectations.

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“Given ACB’s strong production output, we would look for this to translate to strong revenue growth in FY20, particularly as new product form factors come online in late-2Q (December) as well as continued brick and mortar rollout,” said Azer, who rates Aurora as outperform and describes it as his top pick in cannabis. Aurora shares were last up 9%.

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The Dow Jones Industrial Average DJIA, +1.33% was last up 9 points, after losing 767 points Monday in the biggest one-day loss of 2019. The selloff came after China allowed its currency to rise above 7 yuan for the first time in a decade, after President Donald Trump announced tariffs on another $300 billion of Chinese imports. The U.S. responded by calling China a currency manipulator.

Meanwhile, Zenabis shares ZBISF, +10.88% ZENA, -8.33% rose before surrendering its gains to trade down 1.1%, after that company said it has received a license to add 9,900 kg of annual cultivation capacity at its Zenabis Langley facility. Vancouver-based Zenabis said the move increases its total licensed annual cultivation capacity to 42,800 kg of dried cannabis from 32,900 kg, an increase of more than 30%. The company has now received licenses for all four of its facilities with 438,200 square feet of licensed operational space.

GMP analyst Justin Keywood said the expanded capacity is “consistent with our timing expectations” and helps de-risk near-term forecasts. Zenabis is trading well below most of its peers at 6.5 times 2020 Ebitda, compared with average of 17 times. GMP rates the stock a buy and a C$3.25 price target that is more than twice its current price.

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On the regulatory front, advocacy site Marijuana Moment said the head of the federal agency that oversees financial services providers said credit unions will not be punished for working with cannabis companies in states that have legalized. In an interview with Credit Union Times, Rodney Hood, chairman of the National Credit Union Administration, also said Congress could resolve the banking issues plaguing the sector by lifting the federal ban.

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“It’s a business decision for the credit unions if they want to take the deposits,” Hood told Credit Union Times. They must adhere to existing federal guidance and ensure that the businesses work with are not violating anti-money-laundering laws or other rules. “We don’t get involved with micro-managing credit unions,” he said.

From news site Marijuana Business Daily comes the news that Missouri has started to accept applications for 348 medical cannabis licenses. The Missouri Department of Health said more than 600 applicants have already prefiled. The application process got under way on Saturday.

The state is planning to issue licenses for 60 grow facilities, 86 processors, 192 dispensaries and 10 testing labs.

Meanwhile, Iowa has added a new condition to its medical program; patients suffering from chronic pain will now be allowed to use medical cannabis. They will join people suffering from seizures, Crohn’s disease, AIDS, Lou Gehrig’s disease and Parkinson’s disease. But the Iowa Medical Cannabidiol Board rejected other indications, including anxiety disorder and opioid dependence and deferred a decision on post-traumatic stress disorder, according to Marijuana Business Daily.

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Elsewhere in the sector, market leader Canopy Growth CGC, -0.70% WEED, -0.36% was up 2.7%, Tilray TLRY, +0.84% was up 0.8%, and MedMen shares MMNFF, -0.27% were up 1.2%. OrganiGram Holdings’s stock OGI, -2.77% was up 2.2%. Aphria was up 0.4%, Cronos was up 1.2% and Green Growth Brands was down 1.8%. CannTrust was up 5.5% on hopes a buyer will emerge for the troubled company.

The ETFMG Alternative Harvest ETF MJ, +0.48% was up 2%, with 23 of its 38 component stocks higher. The Horizons Marijuana Life Sciences ETF HMMJ, +0.86% fell 1%, with 31 of its 54 constituent stocks trading higher.

The S&P 500 SPX, +1.59% was down 0.8%.

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