Two cannabis stocks might not be the best performers right now, but holding them could prove equitable
Even though publicly-traded cannabis companies, due to the impact of the coronavirus pandemic, have lost some of the previous attention they were getting, they are still hot in the market. Everyone is clear that the cannabis industry will be one of the top growers in the consumer space in the next few years; added to that, there is an opportunity to make a worthy investment during July in some of the cannabis ventures that are picking up benefits already. This makes them worth an investment, and analysts point to two large companies that are particularly heavy in the market: Canopy Growth and Aurora Cannabis.
Canopy Growth is one of the most popular companies with operations in both the US and Canadian markets. Perhaps the latest financial figures didn’t seem promising for the company – it reported an adjusted EBITDA loss of $102 million – but there are other aspects of the company worth paying attention to. The company has been making important changes in terms of reaching profitability, and the following statement was issued, “Canopy Growth expects Fiscal 2021 to be a transition year as the Company resets its strategic focus, rolls out a new organizational design, and implements a comprehensive operational and supply chain productivity program.” This has to do with the core changes the company has gone through since the arrival of the David Klein as CEO coming from its big shareholder, Constellation Brands, which has invested a great deal in the company.
On the other hand, Aurora is going through a similar process. It was once one of the largest and most solid cannabis companies out there and, within a year, it was struggling to survive. However, thanks to deep structural changes similar to those of Canopy Growth, the company is transforming its business. It has been focusing on cost-cutting, strategic realignment, and production consolidation. “Both the Canadian facility rationalization and inventory revaluation are expected to improve gross margins and accelerate our ability to generate positive cash flow,” Interim CEO Michael Singer said in a statement.