An industry showdown is looking more likely for the two Canadian giants among marijuana growers, Aurora Cannabis (NASDAQOTH:ACBFF) and Canopy Growth Corp (NASDAQOTH:TWMJF). The question is, who will come up on top?
The competition between marijuana stocks from Aurora Cannabis and Canopy Growth Corp was fierce through 2017 with both companies reveling in tremendous gains.
Marijuana stocks Aurora saw a rise above 340% while marijuana stocks Canopy soared by nearly 250%. The start of this year has told a revised story of last year’s gains. Aurora stocks remain up by double-digit percentages, but, share prices for Canopy have fallen.
The tricky part for marijuana stocks investors is that past performance – and even present – do not necessarily predict the future.
What do investors need to know when making a case for the investment potentials of a company when seeking marijuana stocks to invest in?
All in all, the expectation is that marijuana stocks Aurora will be well positioned to claim a sizable share of Canada’s recreational cannabis market, which is predicted to exceed $5 billion each year.
The case for marijuana stocks Aurora investors requires vision for the long-term potential of Aurora Cannabis:
1. Marijuana stocks Aurora are currently the hottest ticket item on the cannabis stock market. The biggest explanation for this may be their successful, peaceful acquisition of CanniMed Therapeutics (NASDAQOTH:CMMDF) after months of initial hostility between the two companies. This acquisition is huge in its raising of Aurora’s immediate production capacity by 7,000 annual kilograms, as well as its annual funded capacity by 19,000 kilograms.
2. Marijuana stocks Aurora is a leader the industry when it comes to sales growth. In the company’s recent 2nd quarter report of fiscal 2018, a reported tripling of sales occurred year over year. Those sales were not limited to the Canadian cannabis market; they extended to the German market, with more than one-fifth of the company’s revenue coming from sales by its German subsidiary.
3. Aurora is racing to expand its capacity and its national and global footprint which contributes to its competitive edge when considering marijuana stocks to invest in. A lot of yet-unseen potential lies in Aurora’s sales on the German market as it remains in the early stages of market development. The company unquestionably has much to gain, pending Canada’s legalization of recreational weed. As the still-uncertain date of legalization nears, Aurora is making bold moves to ensure its expansion meets the incredible demand expected for recreational weed; hence, the acquisition of CanniMed and the expansion of its other production facilities.
4. Aurora is branching out with cross-industry partnerships to increase its retail presence beyond other marijuana stocks in Canada. The most recent example of this was the company’s investment in Liquor Stores N.A. Ltd (NASDAQOTH:LQSIF), which will allow for its cannabis products to be sold throughout Alberta in more than 200 retail liquor stores and new retail stores for cannabis only.
The case for marijuana stocks investors to consider the long-term potential of Canopy Growth Corp in spite of price slumps:
1. Canopy Growth’s marijuana stocks share prices may be down, but hands down, the company beats Aurora Cannabis in sales. The most recent announcement of Canopy’s quarterly revenue broke records for the Canadian cannabis industry’s highest revenue ever reported. True, Canopy’s year-over-year growth in sales lagged behind Aurora’s (123% compared to 201%); however, it nearly doubled the total revenue of its competitor.
2. Marijuana stocks company Canopy may be in the best position for international growth among cannabis growers. Canopy has a market presence not only in Germany, like its rival, but also in Denmark, Spain, Australia, Brazil, Chile, and Jamaica.
3. Of interest to those seeking marijuana stocks to invest in, Canopy claims some of the biggest stockpiles in the industry. Among cannabis growers in Canada, Canopy has the largest weed inventory. As it stockpiles inventory, Canopy gains an advantage in anticipation of the recreational weed demands once Canada proceeds with legalization. Along with its cannabis stockpile, Canopy claims the largest stockpile of cash among its peers, which could provide the necessary resources for continued expansion and acquisitions.
4. Canopy has secured more investments than any other company in the industry adding value for its marijuana stocks potential. For starters, Canopy has supply agreements with four Canadian provinces secured for multiple years – so far, the only cannabis grower to achieve this feat. It has also been the only grower in Canada able to secure a significant investment from a successful company – Constellation Brands (NYSE:STZ) – a major player in the alcoholic beverage industry.
(For more information, read The Future Looks Bright for Marijuana Stocks in Canada.)