Since investing in marijuana stocks became mainstream a few years ago, the biggest companies in the industry have received the majority of the attention. News outlets and investor resources have continued to cite the same companies as the basis for industry growth. Despite this, the potential for mid and small-cap pot stocks remains undeniably high. Although the list of the biggest marijuana stocks in the industry is relatively short, to keep the scope of this article limited, below we will discuss Canopy Growth and Aurora Cannabis. Recently these two pot stocks have had a tough few months. Although the last few months have not been kind to most pot stocks, Aurora and Canopy have been hit harder than most.
In regard to Canopy, the company hit a high of around $50 in late April of last year. Since that time, Canopy Growth has slid by more than 50% to its current $20-22 price level. In that same time, Aurora Cannabis has dropped in value by over 80%. This 80% drop is cause for concern as that will impact the value of the company in a major way. As bad as things may seem for these two, February is a new month. During the second week of February, Canopy Growth went up in value by almost 15%. This is in no way a sign that the company is out of the water, but it is positive news. The short answer to the overall question of whether or not big-name pot stocks are a buy or sell is difficult to tell right now. A lot is up in the air with the cannabis industry as a whole. For now, all we can do is continue to watch these big-name pot stocks to figure out whether or not they’re worth investing in.
Marijuana Stock To Watch: The Grim Case for Aurora Cannabis Inc.
Aurora Cannabis Inc. (ACB Stock Report) unfortunately does not have a lot of good news to report on but hopes remain high for future progress. If we go back and look at the second-quarter results, we see a 26% drop in its net sales. Investor’s expectations for the company were already quite low for the second quarter. But, the company reported almost $1 billion in net loss for that time period. That is a number worthy of worry. If we continue to look at the report, we see that most of the other figures were just as bad.
The only aspect of its financials that went up was its costs which is not a great sign either. There are a few factors that have led Aurora to this point but one, in particular, stands out. Recently, Aurora Cannabis had its German marijuana sales license suspended. This is due to poor growing practices and borderline dangerous cannabis for its consumers. For now, Aurora maybe a pot stock to think twice about but there’s always hope for the future as many investors still behind the company.
Is This Pot Stock on The way up?
On the flip side of the coin, Canopy Growth Inc. (CGC Stock Report) had a very solid third quarter compared to its previous reports. In its third quarter, the company saw its revenue shoot up by around 60% compared to the previous quarter. The company has seen some better times in the past but it’s clear that Canopy is pushing hard toward the future. Currently, Canopy Growth has a lot in the works.
One of the main projects that it has going is its partnership with Constellation Brands (NYSE:STZ). Constellation Brands famously invested a large sum of cash into Canopy Growth about a year ago. Since that time, the market has waited for the pair to begin producing cannabis-infused beverages which have taken more time than expected. Investors are still waiting on profitability from Canopy Growth but this is often outweighed by the promise of marijuana-infused beverages. So, is Canopy Growth a pot stock to watch or one to keep waiting on?
Right now, there is a lot going on in the cannabis industry that makes pot stocks exciting. In the case of big-name marijuana stocks, it truly comes down to the risk an investor is willing to take. With the right research in hand, the hopes are that this risk can be as minimized as much as possible.
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