Better Buy: Aurora Cannabis Inc. vs. Canopy Growth Corporation


Canadian marijuana producers have entered a new era. After several years of supplying medical marijuana nationwide, they have begun moving into Canada’s recreational marijuana market, which opened on Oct. 17. Two of the biggest companies in both medical and recreational markets are Aurora Cannabis Inc. (NASDAQOTH:ACBFF) and Canopy Growth Corporation(NYSE:CGC).

So far in 2018, it hasn’t been much of a contest between Aurora and Canopy when it comes to stock performance. Canopy’s share price has soared three times higher than Aurora’s has. But which of these two Canadian marijuana stocks is the better buy for investors now?

The case for Aurora Cannabis

Perhaps the most important prerequisite for success in the cannabis industry is capacity. If a cannabis producer doesn’t have product to sell, it won’t make money. Aurora certainly has no problems in this area. In fact, the company is likely to claim the largest production capacity of all marijuana growers over the next couple of years.

Right now, Aurora is able to grow around 45,000 kilograms (92,208 pounds) per year. But that will jump to more than 150,000 kilograms per year by the end of 2018. By the middle of 2019, Aurora expects to have an annual production capacity totaling more than 500,000 kilograms.

While capacity is important, it’s also critical to have places to ship what is produced. Again, Aurora is in good shape. The company has supply agreements for the recreational marijuana market with nine provinces that combined represent 98% of Canada’s population.

Aurora Cannabis is also well-positioned in international medical marijuana markets. It has a significant presence in Germany, the largest European market. The company formed subsidiaries in Denmark and Italy. Aurora also is focusing on multiple other medical cannabis markets across the world, including Australia, the Cayman Islands, Colombia, and Malta.

The stock could get a boost soon from increased visibility to U.S. investors. Aurora’s shares will trade on the New York Stock Exchange effective Oct. 23, 2018. And there is a wild card that could serve as a major catalyst for the stock. Aurora has…

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