Aurora Cannabis And Canopy Growth Corp. Are Racing To Build Competing Canadian Cannabis Retail Footprints

Although the Canadian cannabis retail sector has not lived up to the expectations that were associated with the 2.0 market, the industry has recorded major advancements so far this year. From the number of open retail outlets to the types of products that are being offered to consumers, the landscape of the Canadian cannabis retail market has been slowly changing for the better.

When it comes to the Canadian medical and recreational cannabis market, there are a few companies that are leading the charge. The companies that we are most interested in are the ones that are also producing the cannabis and want to highlight two opportunities that our readers should be aware of.

The companies that we are focused on are Canopy Growth Corporation (WEED.TO) (CGC) and Aurora Cannabis Inc. (ACB.TO) (ACB). Although many analysts like to compare and find similarities between the businesses, we believe that Canopy Growth is light-years ahead of Aurora Cannabis and do not expect to see Aurora Cannabis close the gap in the foreseeable future.

Through a series of acquisitions and investments, both companies have become highly levered to the Canadian cannabis retail market. Although Aurora Cannabis has announced more transaction than Canopy Growth on this side of the business, Canopy Growth has done a better job when it comes to executing and opening new retail outlets.

One of the main reasons we are more confident in Canopy Growth is related to the strength of the balance sheet. With almost $2 billion of cash on the balance sheet, Canopy Growth is well positioned to execute on previously announced initiatives, and we expect this aspect of the story to play an important role in the long-term success of the business.

Aurora Cannabis was a clear beneficiary of the legal cannabis movement in Canada and it raised more than $500 million of equity and debt capital. In the early years of the movement, Aurora Cannabis was able to raise equity capital like it was growing on trees. A lot has changed in the last year and the company has been primarily raising debt capital to support the business. Aurora Cannabis has also sold off several of its previous investments and did not profit nearly as much as expected on these investments.

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Disclosure: This report was authored by and is property of Technical420. All information and data relied upon in drafting this report is publicly available. The author believes and considers its ...

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