The marijuana industry has been exploding over the past few years, and it’s no surprise that the legal market is taking off as well. In fact, the legal marijuana market is projected to reach upwards of US$22 billion by the end of 2021. With this in mind, it’s important to understand the current status of the industry and how it has grown.
Since we last updated the Marijuana Stocks blog, there have been significant developments in the marijuana industry. The U.S. House of Representatives just passed a bill, known as H.R. 5515, which would allow states to decide whether they want to legalize marijuana. This would essentially create a patchwork of pot laws that would rival the current patchwork of liquor laws in the U.S.
Marijuana businesses haven’t been doing too well lately. Even very strong, established companies have experienced difficult times due to the coronavirus pandemic. Aurora Cannabis found itself in a similar situation. Aurora Cannabis is a Canadian company that is a leader in the cannabis industry. However, it is making a loss and the situation of the shares is highly speculative. Let’s take a look at the latest statistics from Aurora Cannabis Inc. (TSE: ACB). The company’s 52-week range is $3.7100 to $47.0400 on average volume of 7,837,035. The company has a market capitalization of $491.152 million. The company’s position on the stock market has been in free fall for almost a year. While competitors are also in a similar situation, Canopy Growth has shown signs of recovery. Let’s also analyze the current situation of the shares of the main competing companies: 52-week period : $9.00 – 25.97 Average volume : 4,720,058 Market Capitalization : 6.981B 52-week period : $4.00 – 9.00 Average volume : 3,180,647 Market Capitalization : 1.858B 52-week period : $1.9500 – 6.4400 Average volume : 5,381,278 Market Capitalization : 1.302B 52-week period : $0.3460 – 2.7000 Average volume : 7,252,312 Market Capitalization : 292.505M 52-week period : $2.43 – 24.10 Average volume : 7,151,306 Market Capitalization : 760.766M Although Canopy Growth and Aphria shares have outperformed other companies, marijuana stocks are currently very mixed, and an investor should think carefully before investing. Compared to Aurora Cannabis’ status, there are better companies to invest in today. While the Company seeks and expects to achieve a positive adjusted EBDITA, i.e. earnings before interest, taxes, depreciation and amortization, there is no assurance that this will occur. Investors should therefore consider all aspects before investing their money. The company is doing its best to pay off the debt, but no one can say whether that will happen sooner or later. By settling the debts, the company must also increase its resources. Quarterly results and earnings have not been good, but the company is trying to reassure investors that things will improve soon. Aurora Cannabis is not a stock to buy at this time. It will take some time for the company to reach a level of profitability, and during that time it will have to focus on sales. The company needs to increase its sales, only then will it have a chance to survive in the future. The overall situation of the marijuana-cannabis industry is not good, so an investor should think carefully and analyze each stock fully before investing in it. Perhaps there will be better times in the future for these companies, but nothing can be said about that yet. The choice of these shares depends on the ability of the buyers to bear the risk.
Frequently Asked Questions
Will Aurora stock bounce back?
Aurora Cannabis (TSX:ACB) stock has been hit hard recently, falling by over 50% from its peak in early December. That’s a lot of money lost in a short period of time for most investors, so why has the stock been so volatile? Is it the end of the cannabis market? Will the company be able to recover? Aurora stock has had a rough couple of months, with investors expecting some big changes from the company. Some, including myself, expected the company to take an action later this year that would allow the company to launch a high-profile, cannabis-infused beverage in Canada. With the company reportedly working on getting the necessary approvals from Health Canada, it’s likely we’ll hear more about that in the coming weeks.
Why is Aurora stock down today?
The world of cannabis stocks is a volatile one. It’s always important to be informed, as a business in this industry is constantly changing. So, to make sure you’re in the know, we’ve put together a list of some of the most recent developments affecting the stocks you care about. Not many shares have been traded so far today. When stocks were first listed this morning, Aurora Cannabis (TSXV:ACB) was trading at $9.04. At the time of writing, it’s currently at $8.87, with a total market capitalization of $5.1 billion. This is a 2.30% drop. Aurora Cannabis hit a high of $9.11 on Friday, and a low of $8.77 on Thursday. The drop is also a 0.72% drop.
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