Aurora Cannabis Vs. MedReleaf: Which Stock Is A Better Bet?

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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As the recreational legalization of cannabis in Canada fast approaches, there is unprecedented investor interest in cannabis stocks. The initial interest and meaningful growth in the cannabis sector began in August 2016, when the Government of Canada introduced new regulations governing the use of cannabis for medical purposes. This article we will be comparing two Canadian marijuana producers, Aurora Cannabis Inc. (TSX:ACB; OTC:ACBFF) and MedReleaf Corp. (TSX:LEAF; OTC:MEDFF), which are financially sound and gearing up for the recreational legalization of the industry in Canada.

In an attempt to keep their promises from the October 2015 federal election, Canada’s Liberal Party announced in March 2017, that recreational cannabis will be legalized across Canada on, or shortly after, July 1, 2018. This proposed legalization has led to an unprecedented boom in cannabis stocks, as investors seek to pick a winner(s) from this change of legislation. Legalization could open up a large opportunity, with some research firms such as Deloitte forecasting an annual market of $22 billion. Marijuana Business Daily, on the other hand, projects a conservative $2.3 billion annual market in 2018/19, increasing to $4.5 billion by 2021  [Note: All figures are stated in Canadian dollars] . Once cannabis is fully legalized, it will allow institutional investors to take a bigger stake in the industry. For those who want to invest now, though, before recreational legalization this summer, it is important to stick to the most financially sound companies. If investors stick to companies with healthy balance sheets and fully-permitted licensing already in place, pump and dumps can be easily avoided...

Quarter-to-Quarter Revenue Growth:

For these companies, revenue growth is the most significant factor and it is quickly reflected in stock prices as quarterly reports roll out.

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Disclosure: Neither the author nor his/her family own shares in any of the companies mentioned above.

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Cannabis Stock Buyer 3 years ago Member's comment

Good info here. But why not hedge your bets and invest in both?