Aurora Cannabis vs. GW Pharmaceuticals: Which Cannabis Stock To Buy?
In this time and age when cannabis industry is simply blooming, it appears even an inexperienced rookie could try their hand at buying cannabis stocks and shares without the slightest fear of losing. Indeed, the global market is thought to be worth some astonishing $150 billion, with the prognosis of hitting $272 billion by 2028. You may have envisioned that world popular “shut up and take my money” meme already, but it’s not that simple (as usual). Stocks rise and fall, so it’s best to rely on the companies that have been around for a while and are doing a pretty good job, to say the least – Aurora Cannabis and GW Pharmaceuticals.
But which one is a tad better? Let’s make a brief comparison.
Aurora Cannabis is a Canadian cannabis producer which was founded in 2013. The company deals with the production and distribution of medical and recreational cannabis. Just saying their business is based in Canada speaks volumes. Ever since the country has legalized cannabis use in October last year, the sales have been rising, and it was excellent news for experienced players such as Aurora Cannabis.
They had a 20% market share in the last quarter of 2018. As one of the largest marijuana producers, and with expectations to produce astounding 500,000 kilograms in the near future, it appears they are a force to be reckoned with. Moreover, Aurora is Germany’s main cannabis supplier, and this European country is expected to follow Canada’s suit soon. In addition, it also exports products to 20 other countries in five continents. What is more, the announced shortage of cannabis supply is without a doubt an excellent opportunity for the company. Their latest market cap is $9.042B.
But, what about the drawbacks?
For one reason, their overall business in 2018 was not as stable as it may have seemed. Their general performance was quite disappointing, and they were listed as one of top five worst Canadian cannabis stocks. The last quarter turned out great due to the consequences of the messy legalization, which Aurora benefited from.
On the other hand, we have a British biopharmaceutical company and a true pioneer in the industry. They are globally well-known due to a product of theirs called Sativex, an oral spray that is extensively used in the treatment of multiple sclerosis. They reaped huge success with it, and it is sold as a prescription drug in the UK, EU, New Zealand, Israel and Canada. GW Pharmaceuticals was set up in 1998, and their vast research experience is bearing fruit once again with the latest breakthrough in medical cannabis industry in the form of Epidiolex. In its essence, this drug is a purified CBD, and one of the reasons why Epidiolex is a revolutionary prescription drug is the fact that it was recently approved by the U.S. Food and Drug Administration for patients suffering from different types of seizure. Bearing in mind its CBD content, this is definitely an unprecedented event. Obviously, the company has made a huge step into the US market and was recognized as trustworthy (even 2-year-olds are can be prescribed Epidiolex). Naturally, the sales are expected to skyrocket and reach $1 billion per year, or even $2 billion. By the way, GW Pharmaceuticals market cap is 5.131B.
So, everything seems to be going great, but… What the company did not prepare for, and it is a bit surprising bearing in mind their experience, is the huge demand for the new drug which has surpassed the expectations and caused the shares to drop by 3% (!). Which is worse, the doubt in their business management was triggered by a simple tweet of a dissatisfied father. It makes one wonder if GW Pharmaceuticals can rise to the challenge.
Taking everything into consideration, we believe that GW Pharmaceuticals’ future shines a bit more brightly than Aurora Cannabis’. The latter is definitely a huge producer and distributor, but GW Pharmaceuticals seem to be producing medical cannabis of such high quality that even the FDA had to approve of it. After all, the winners have always been those who were able to offer something unique, extraordinary and extremely high-quality, no matter the industry, and GW Pharmaceuticals appear to be one of them.