The Aurora Cannabis Craze

If you haven’t sold your Aurora Cannabis shares today at the $8 range then it means you are okay with the idea that they are worth more than Canopy Growth. You can make some rationalizations that is the case but as of now Aurora is behind Canopy Growth.

  • 55,000 sq ft facility compared to Canopy’s 600,000-something current capacity
  • $8 million recent quarterly revenue compared to Canopy’s $17 million
  • Aurora has not been in operation as long
  • If I could make a case for share dilution I would but I’m not smart enough

Yes, a stock price is supposed to reflect the future which Aurora will have if they can successfully build Aurora Sky and successfully grow the yields they promise to. There’s almost no room for error though.

I sold out of Aurora at $4 and $4.63 which will make some think that I’m being a sore loser. Well, yes I am, sort of. I could have bought a new car by now with my missed gains. In hindsight I may have sold out a little early but I would have sold out anyway in the mid $5 range.

Canopy Growth shot up because of the Constellation deal. What reason did Aurora have? I mean, what good reason? It’s just riding the Canopy coat tails with traders assuming the next big partnership will involve Aurora. My guess is that no reputable company will partner with Aurora until they get Aurora Sky running.

My speculation is that the Aurora wave has been sparked by traders missing out on the Canopy rise. If you can’t get #1 then you have to settle for the perceived #2. It’s rumoured that the continuous rise in the stock price is also due to a short squeeze that keeps happening because of the promotional news that traders are buying into. Also, people might be expecting the shares to rise some more if the Cannimed deal goes through.

The mentality that allows you to hold to $8 is the same one that prevents you from selling. It’s going to keep going up or it won’t go down. I’m obviously bad at predicting so who knows what’s going to happen. It just doesn’t make rational sense to me.

Canopy Growth & Constellation Brands Deal

The short story: big American alcohol distributor buys 9.9% of Canada’s largest marijuana producer. What might this mean? — people who sold their Canopy Growth shares might be crying tonight as tomorrow is the beginning of the trading week. Whether shares of WEED.T will spike is unknown but I think people are expecting it to. Cannabis stocks have risen over much less.

I can easily imagine cannabis infused drinks in mainstream culture. It may not replace alcohol but it will have its place. The fruits of this deal though will not come to light at least until edibles are legalized in July 2019. This deal is another green door that has opened for future major ventures, I believe.

During the humdrum periods of cannabis stocks we all get the itch to sell our shares. I never had the stones to sell them all because news like this just comes out of nowhere. CGC CGC CGC

Canopy Growth’s “Disappointing” Q4, Fiscal 2017 Earnings

Disappointment is often relative to what the expectations are and sometimes expectations are too optimistic for no great reason. Analysts were hoping for a few million dollars more in revenue and probably lower losses. Apparently a 191% increase in yearly revenue wasn’t impressive enough.

Canopy Growth is in extreme growth phase which means there’s going to be a lot of money spent. If you’re in the Canadian marijuana industry the time to make moves is now while everyone else is way behind you. While the medical marijuana industry is significant it’s all about the recreational side of the industry. Once it goes legal it’s going to be going from zero to sixty. Any earnings made now are not a great indication of success for the future.

Next quarter should be much more impressive given that they have their oil extraction machine in operation now, new line of gel capsules and the Mettrum facilities in order. This Bruce Linton guy appears to be the visionary of the industry. I like what he’s doing.