Other than being marijuana stocks, Aphria (NYSE:APHA) and KushCo Holdings(NASDAQOTH:KSHB) might not appear to have much in common. The two companies focus on different segments of the cannabis industry supply chain. They focus on different geographical markets. One of these stocks — KushCo — has generated a nice gain so far in 2018. Aphria is down significantly year to date…
Both Aphria and KushCo Holdings offer the potential for solid returns over the long run. But which is the better buy right now?
The case for Aphria
Aphria has one major thing going for it that KushCo doesn’t: As of October, Aphria stock trades on the New York Stock Exchange (NYSE). This makes Aphria more accessible to a larger number of investors. It’s not surprising that Aphria’s trading volume is roughly four times greater than KushCo’s. But trading on the NYSE isn’t a reason to buy Aphria stock. There are several really good reasons to do so, though.
You can put Aphria’s opportunity in the Canadian recreational marijuana market near the top of the list. By 2022, Canadian recreational marijuana sales are projected to reach $5.5 billion, according to Arcview Market Research and BDS Analytics.
Aphria ranks as the third-largest marijuana producer in terms of production capacity. By early 2019, the company should be able to grow 255,000 kilograms of cannabis per year thanks to a major expansion at its Aphria One facility and the opening of its new Aphria Diamond facility.
Reaching Canadian recreational marijuana customers shouldn’t be a problem for Aphria. The company secured supply agreements with all of Canada’s provinces plus the Yukon territory. Aphria’s partnership with Southern Glazer’s, the largest wine and spirits distributor in North America, provides a retail presence across the country.
International markets present even larger opportunities for Aphria. The company’s recently announced acquisition of pharmaceutical distributor CC Pharma strengthens its position in Germany, which claims the biggest medical marijuana market outside of North America. Its acquisition of LATAM Holdings boosts Aphria’s operations in the fast-growing Latin American and Caribbean marijuana markets.
The case for KushCo
Picks and shovels were critical for gold rushes in the past. In the “green rush” of the cannabis industry today…
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