Canopy Growth (CGC) and Aurora Cannabis (ACB) are renowned names in the cannabis industry. Canopy Growth has always been ahead of its competitor from the previous times but the latest results of the quarter are better for Aurora Cannabis this time. There was exceptional response seen in the turnaround for the Match quarter and consequently, the stocks have grown up to a higher percentage than CGC in May. The position of ACB is improving and hence, the positioning on the stock market is also going upwards.
CGC has come out as a failure for March quarter results due to the market shifting towards the other esteemed brands. In the early phases of Q1, ACB made the move for shifting the production towards the value brand. The recreational cannabis sales grew in the Covid19 crisis from C $8M to C $42M. However, Canopy Growth had an increase of business to 2.5 times the original value (C $49M). CGC focused on their scuffle for the beverage company startup and didn’t turn up quite well for recreational cannabis growth. Moreover, CGC has been changing the leadership and executive roles.
Short-term or Long-term goals?
The biggest issue about the Canadian cannabis sector is to fetch about their massive supply approaches. The companies were going towards spreading their wings in the US, Europe, Australia, African regions, and Latin America. The building of new markets for increasing the share in recreational cannabis in Canada and the US was complicated.
Aurora Cannabis made a wise decision in February 2020 in the reduction of their operating costs by half of the on-going value which came out to be about C$45 million/quarter. Canopy Growth, on the other hand, invested in the money-losing business by looking at the long-term prospects. Aurora Cannabis attained growth with its reduction in costing approach and Canopy Growth faced EBITDA losses after the end of Q1.
Think about buying CGC or ACB?
The debate goes on between the investors to choose ACB or CGC for their cannabis-related investment. The rank of CGC has been one and ACB is on two. However, analysts see things differently. ACB is coming up with the best turnaround plans with the lowest dilution risk and higher credibility among the investors. On the other hand, CGC has straight policies and with the change in the leadership board, things are still unclear. Hence, lower chances of going up within less time. The opportunities for ACB are no less than CGC but being the high-value business company, CGC can even do wonders in the coming time. Buying ACB could be a great deal at the moment, as per most of the preeminent investors.
Aurora Cannabis valuation equation is more persuasive at the moment and the stocks are probably going to get higher in the coming phases. So, it is marked as a better option from the opinion of investors. The recent times have shown that ACB can be thought over CGC at the moment in terms of stocks.