There’s no denying that marijuana represents a long-term growth opportunity for investors. There are tens of billions of dollars in cannabis sales being conducted in the black market annually all over the world. If additional countries legalize weed and shuffle these consumers into legal channels, the sky could be the limit for those marijuana companies that are able to really stand out.
Among investors, no pot stock is more popular than Aurora Cannabis (NYSE:ACB). In fact, according to online investing app Robinhood, which has 6 million members and is incredibly popular with millennials, Aurora was the most-held stock, period, earlier this year.
Here’s why Aurora Cannabis has been the most popular pot stock
Aurora’s popularity breaks down into three key areas.
First, there’s production. The company has 15 production facilities around the world that, if fully operational, could potentially yield close to 700,000 kilos of cannabis per year. With the exception of Canopy Growth and Flowr Corp., Aurora’s peak output more than doubles up its competitors. With such robust output, the expectation is that Aurora will have little trouble securing long-term supply contracts in — and outside of — Canada.
Secondly, there’s the company’s incredible international presence. Aurora Cannabis currently has a production, export, research, or partnership presence in 25 countries, including Canada. Only two other pot stocks have even reached the one-dozen country mark, including their home market of Canada. These external sales channels are expected to play a key role in the intermediate to long run, when dried flower becomes oversupplied and commoditized. Without these added sales channels, Aurora could succumb to domestic pricing pressures.
Thirdly, investors appreciate the forecasted efficiency that Aurora’s facilities bring to the table. The sheer size of Aurora’s campuses should allow economies of scale to yield some of the lowest per-gram production costs in the industry. Meanwhile, yield on a per-gram basis at its largest grow farms should be somewhere in the range of 120 grams per square foot to 140 grams per square foot. Comparatively, most of its peers are liable to produce anywhere from 75 grams per square foot to 125 grams per square foot, making Aurora well above-average in the efficiency department.
The craziest Aurora Cannabis statistic you’ll ever see
And yet, the most popular cannabis stock on the planet has been taken to the woodshed since hitting an all-time high eight