Legal recreational marijuana sales in Canada haven’t had the effect on stock prices that investors had been hoping for. Shares of CannTrust Holdings (NASDAQOTH:CNTTF) and Aurora Cannabis (NYSE:ACB) have tumbled 37% and 44%, respectively since the rollout began, and careful shoppers are wondering which is a better deal at recent prices.
Although the path to cannabis riches is going to be a lot more complicated than many investors expected, these two players could have what it takes. Here’s a closer look at both to find out which is the better stock now.
The case for CannTrust Holdings
Dozens of producers are scaling up, but CannTrust is one of precious few that aren’t bleeding money. At the end of September, the company estimated that plants growing were capable of yielding 6,700 kg, from just 1,900 kg at the end of 2017. Despite rapidly ramping up production, operations eked out a profit of 1.0 million Canadian dollars during the third quarter and CA$15.2 million during the first nine months of 2018.
By producing cannabis at a relatively low cost and selling it to 50,000 active medical patients throughout Canada, CannTrust is able to produce cash flow statements that won’t turn your hair white. The company sold around 1,400 kg of dried cannabis and cannabis equivalents at an impressive average price of CA$8.37 per gram during the three months ended this September.
CannTrust will also supply a significant amount of the recreational cannabis consumed in Canada through supply agreements in place with nine provinces. The company thinks the agreements will exceed 30,000 kg in annual sales and meeting this expectation would probably send the stock climbing again.
At recent prices, CannTrust Holdings sports an…
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