Which company was the winner in Q1, 2019 – Aurora Cannabis, Canopy Growth, or Tilray?

Canadian marijuana stocks, in general, delivered sizzling performances in the first quarter of this year. Many stocks generated greater returns in the quarter than they did in all of 2018.

Among the biggest players in the cannabis industry, there was one clear winner. Aurora Cannabis (NYSE:ACB) handily outperformed both Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY). Why did Aurora’s gains beat its top rivals? There were three primary reasons…

1. Starting valuation

Probably the most important factor behind Aurora’s Q1 win over Canopy and Tilray was the respective starting valuations for each stock. Canopy Growth began 2019 with a market cap of nearly $10 billion. Tilray’s market cap was more than $6.5 billion. Meanwhile, Aurora Cannabis started out the year with a significantly lower market cap of $5.2 billion.

Despite its lower market cap, though, Aurora’s production capacity is much greater than Tilray’s. The company’s funded production capacity is even larger than Canopy Growth’s, ranking Aurora at the top of the industry. The bottom line is that, based on sheer bang for the buck, Aurora Cannabis was a relative bargain at the beginning of the first quarter compared to two of its key rivals.

2. Increased optimism about partnerships

Aurora Cannabis gained nearly 83% in the first quarter versus 61% for Canopy Growth and a 7% decline for Tilray. But for much of the quarter, Canopy Growth was ahead of Aurora. What happened for Aurora to take the lead? The company announced that it was bringing a billionaire on board.

In mid-March, Aurora revealed that Nelson Peltz was joining as a strategic advisor to help explore potential partnerships. Peltz, the founder and CEO of multibillion-dollar investment firm Trian Fund Management, claims extensive ties in the consumer goods industry.

Probably the biggest knock against Aurora is that it…

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