Canopy Growth (NYSE: CGC) If you ask me which stock of marijuana is a better choice among NYSE: CGC the eye blinks before answering. In my opinion, the clear winner is Canopy Growth.
But what if the choice was instead of Aurora and Canopy Growth's spinoff, Canopy Rivers (NASDAQOTH: CNPOF) ? This is an intriguing match, especially considering Canopy Rivers is the hottest stock of marijuana on the market in January, and despite the retreat, it's still a great year to date.
Which of these two stocks is a better choice now? Here's how Aurora Cannabis and Canopy Rivers accumulate
The case with Aurora Cannabis
Perhaps the best argument in favor of buying Aurora Cannabis is its huge production capacity. After Aurora reported on her fiscal results from the second quarter last week, I noticed that "capacity is king – and Aurora bears a crown." And that's true.
If you think the world market for marijuana will be much bigger than now (and why would not you?), It's just the reason that the most successful players on this market will do that. to be able to deliver a product to meet rising demand. Aurora already claims an annual production capacity of 120,000 kilograms and is about to increase its capacity to about 700,000 kilograms per year.
Of course, production capacity is not everything. A company must also have a global distributor to succeed. But Aurora also repels this box. The company is the leader of the important German marijuana market. Recently she sent a medical cannabis to Britain. Aurora is active in Latin America and Australia. If there is a significant marijuana market, Aurora is there or on the road
I think it is important to note that Aurora Cannabis has captured 20% of the market in the early days of the marijuana market in Canada. This is enough to rank the company at least second in market share. I suppose Aurora will be able to reproduce this position on the world market for marijuana. Let's turn to a big negative for Aurora in the past. The company has opened its stock as crazy. This dilution has affected by reducing the value of existing shares. Aurora's stake was that dilution is worth increasing capacity and expanding globally as quickly as possible. I suspect this bet will be paid in the long run. However, further dilution may reduce the call to invest in the stock.
There's a knock on Aurora, which can actually work for him on the road. Unlike some of its major competitors, the company has not made a partnership and significant investment from a major player outside the cannabis industry. The bad news is that this means that Aurora does not have that much money to finance its expansion, such as Canopy Growth. However, the good news is that Aurora is available as a leading potential candidate for other large companies that would like to enter the cannabis market.
The Canopy Rivers Case
Canopy Growst launches Canopy Rivers as an investment platform to follow the capabilities of the global cannabis market. The diversification of Canopy Rivers as a result of investing in a number of companies is probably the best reason to appeal to the stock.
So far, Canopy Rivers has invested 14 marijuana businesses. It is particularly remarkable that these businesses operate in several different parts of the supply chain of cannabis.
For example, CanapaR is based in Canada, but has a subsidiary that cultivates hemp in Italy. The Greenhouse Juice Company launches herbal foods and beverages with plans to launch cannabidiol-infused products (CBD). The headphones provide real-time business intelligence and real-time analysis services for the cannabis industry. Solo Growth is a leading retailer of cannabis.
Canopy Rivers uses several types of investment structures. The company has often created copyright transfer transactions when the companies they invest in agree to pay royalties on the revenue generated. It also invests in convertible bonds issued by its investment partners. In some cases, Canopy Rivers purchased shares in the cannabis business.
The good thing about Canopy Rivers is that if one of the companies it invests in does not succeed, Canopy Rivers will not suffer a big blow. This is the beauty of diversification.
It certainly does not hurt that Canopy Rivers is still in close contact with Canopy Growth, which owns about 27% of the company. Canopy Growth allows businesses in which Canopy Rivers invests to access their distribution network, genetics and strategic support. This is a great plus for Canopy Rivers in attracting the best portfolio partners.
Better Stock of Marijuana
From a purely financial point of view, Canopy Rivers seems to be a better stock. The company reported a good profit in its second quarter, supported by a large profit from the fair value of its Canadian cannabis TerrAscend investment. Aurora Cannabis scored a big loss in the last quarter.
Both companies must have strong growth prospects. However, Canopy Rivers' investments in the cannabis supply chain may give it an advantage over Aurora.
Overall, I think Canopy Rivers is probably the better stock of marijuana for Aurora Cannabis, at least for now. However, the company is still only at an early stage. I'd rather wait and see how I'm going for some time before calling Canopy Rivers as a purchase for most investors. js # xfbml = 1 & version = v2.3 & # 39 ;, true);
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