Weed stocks have been trading higher in the last couple of days with AdvisorShares Pure Cannabis ETF (YOLO) is up 11.94%, AdvisorShares Trust AdvisorShares Pure US Cannabis ETF (MSOS) jumping 11.99%, and ETFMG U.S. Alternative Harvest ETF (MJUS) also gaining…
9.63%.
Why have cannabis stocks been trading higher for the past five days?
The increase could have been sparked by the news that GOP lawmakers introduced their own cannabis legalization bill, which has led many to think that this could a step closer to federal reform. Or maybe they are up because earnings report season is underway with financial reports from various marijuana giants.
In any case, we decided to take a look at two favorite weed stocks on the major exchanges in the United States.
About Aurora:
Aurora Cannabis (NASDAQ: ACB) operates medical cannabis, consumer cannabis and hemp-derived CBD sectors. Being one of the largest cannabis companies in the world, it has a global footprint spanning 25 countries across five continents. Its market cap is at $1.32 billion.
The current production capacity is around 150,000 kilograms of marijuana biomass annually.
In the recent period, the company has been focusing on the medical cannabis market in Europe.
About Tilray:
Tilray (NASDAQ: TLRY) was the first pure-play marijuana company to list on NASDAQ back in 2018, reaching an eightfold within just two months of going public. It was founded in 2013, and some three years later it became the first medical cannabis producer in the U.S. to obtain a good manufacturing practices certification.
In May of this year, Tilray acquired another large cannabis operator – Aphria, giving it a market cap of $5.73 billion. At the time of the merger, the combined company was projected to generate roughly $81 million in annual pre-tax cost synergies within the following eighteen months.
Tilray has operations in Canada, the U.S., Europe, Australia and Latin America; its 20 brands are available across 20 countries including cannabis lines, hemp-based foods, and alcoholic beverages. The company is collaborating with Anheuser-Busch InBev (ABI.BR), the world’s largest brewer.
U.S. Market:
In 2020, Aurora bought Reliva, LLC, one of the biggest producers of hemp-derived CBD products in the U.S. for around $50 million in stock, favorably positioning itself in the U.S. for possible federal legalization.
When Tilray merged with Aphria it obtained its cannabis lifestyle branded craft brewer SweetWater, in addition to already acquiring a producer of hemp-based foods, Manitoba Harvest, in 2019. Then, in August 2021, the company acquired the majority of the Los Angeles-based cannabis retailer MedMen’s (OTCQX: MMNFF) outstanding senior secured convertible notes. Under the deal, Tilray would take a 21% ownership interest in case of federal marijuana legalization.
Industry Size:
In its 2020 Investor Presentation, Aurora cannabis highlighted how it is earning its leadership position in a $200 billion industry, while in its newest presentation from October 2021, the company does not share industry size projections on a global level. Nevertheless, it discusses several markets separately, estimating its global biosynthesis market size would reach $10 billion by 2025 and its European market size hit CA$5 billion by 2025.
Tilray’s chairman and CEO Irwin D. Simon recently stated that the company aims to “realize the promise and potential of Tilray by capitalizing on the nearly $200 billion global cannabis market opportunity.”
What’s Next:
Aurora announced a business transformation plan in Sep. 2020, when it appointed Miguel Martin as new CEO. Under the new plan…
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