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Stock Wars: Aurora Cannabis Vs. Tilray

November 11, 2020 9:10 am
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Stock Wars: Aurora Cannabis Vs. Tilray

Pot stocks have been trading higher on the heels of Joe Biden being announced as the 2020 presidential election winner. The five states that passed legalization for adult-use cannabis and medical cannabis also bolstered the market.

Today, we take a look at two of the hottest pot stocks on major exchanges in the United States.

About Aurora: Aurora Cannabis (NYSE:ACB) operates in medical cannabis, consumer cannabis and hemp-derived CBD. It has low cost cultivation and global reach.

Current production is 142,5000 kilograms a year.

About Tilray: Tilray Inc. (NASDAQ:TLRY) sells its cannabis products in 15 countries. The company also sells hemp and CBD products in more than 50 countries.

Tilray was the first company to export from North America to Africa, Australia, Europe and Latin America.

In 2018, Tilray became the first cannabis company to complete an IPO on a major stock exchange.

Tilray has partnerships with AB InBev (NYSE:BUD) and Novartis AG (NYSE:NVS) unit Sandoz.

Related Link: What A Biden Presidency Would Mean For Cannabis Stocks

U.S. Market: Aurora, which named Miguel Martin CEO in September, has called the U.S. market a large corporate objective. It acquired Reliva, one of the largest CBD brands in the U.S. with products available in over 20,000 stores.

Tilray boosted its presence in the U.S. by acquiring Manitoba Harvest in 2019. The company is the world’s largest hemp food company and also a growing CBD brand. 

Industry Size: Aurora listed an industry market size of $200 billion in an investor presentation.

Tilray sees a $150 billion market for the global cannabis market. Its CEO, Brendan Kennedy, believes “it's day one in the cannabis industry."

The company pointed out in a presentation that 41 of 196 countries have legalized medical marijuana. Only two of the 196 countries have legalized adult cannabis use on a federal level.

What’s Next: Aurora is calling its future Cannabis 2.0. The company launched 23 SKUs in December 2019.

New products from Aurora include vapes, gummies, chocolate, baked goods and mints.

Tilray sees growth coming from the European market, which has 14x the population of Canada. Tilray also sees multiple paths to revenue growth, counting adult use, medical and hemp/CBD all as growth areas.

The path to profitability is a huge focus for Tilray. The company believes it can increase its scale to lower costs and expand the Manitoba Harvest brand in the U.S.

Financials: Aurora reported revenue of $247.9 million for fiscal 2019. Revenue grew 349% year-over-year for the fiscal year. Kilograms produced and sold were up 920% and 629%, respectively, year-over-year. Aurora reported first-quarter cannabis revenue of $67.8 million. This was split between consumer cannabis revenue of $34.3 million and medical cannabis of $33.5 million.

Tilray reported third-quarter sales of $51.4 million, which was flat to the prior year. Excluding bulk sales, adjusted revenue was up 25% year-over-year. Cannabis revenue was $31.4 million in the third quarter and hemp revenue was 20.0 million for the company.

Stock Performance: Aurora shares are up over 100% in the last month thanks to the election of Biden and additional states legalizing marijuana.

Despite the recent increase in the price of Aurora, shares are down 50% in 2020. The company went public in 2018 and shares are trading below their IPO level after seeing huge spikes higher in 2018 and 2019.

Tilray shares are up 67% over the last month. Shares have fallen 41% year-to-date in 2020.

In 2018, Tilray was one of the hottest IPOs with shares going from $17 to $214. Shares now trade under $10.

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