When it comes to capture the emerging market market share of Canada for the use of marijuana for adults, size is important. The company produces more cannabis x & # 39; probably runs the most market share, and this is true whether we are talking about dry flowers, cannabis oil, or (eventually) edibles and beverages. The battle for market share can & # 39; closed as well be determined by which company has a product on the shelves, and after reports & # 39; failure & # 39; widespread marijuana in the first few weeks after the opening of the recreational market in Canada last month, this is especially true.
While many can & # 39; & # 39 going in, this rapidly growing market, Aurora Cannabis (NYSE: ACB) has Tilray (NASDAQ: TLRY) beat when it comes to production, and it can & # 39; make the best stock to buy.
How can & # 39; be great this market?
There is a lot of excitement about the legalization of marijuana for good reason. In Canada, the recreational market can & # 39; excess of 4 billion Canadian dollars in 2019, and if so, is six times larger than the medical marijuana market Canada in its first year.
The opportunity in Canada, however, only scratch the surface of potential worldwide. Although the US market is fragmented because marijuana remains & # 39; controlled substance with & # 39; federal way, 33 states passed pro laws allowing medical use, and 10 states – including the largest of the nation state under population, California – passed recreational marijuana laws. As marijuana becomes increasingly integrated in the United States, a significant share of the 50 billion dollars spent on cannabis will move from the shadows to income statements of cannabis company.
The possibility to profit from marijuana is not limited to North America & # 39; America, either. The global market of marijuana worth $ 150 billion, according to the United Nations, and the winemaker and spirits is what Marks & # 39; constellation forecast sales & # 39; legal marijuana can & # 39; eclipse $ 200 billion in 15 years.
The production is crucial
The sales transition on the black market for highly regulated warehouse stores will require a lot of supply & # 39; marijuana, and how the experience of Canada on the use of adult already shows, markets newly laid out & # 39; likely to absorb any source they can get.
The reports & # 39; marijuana out of stock carried recreational Canadian market at the beginning, although preparations include investment & # 39; hundreds & # 39; dollars to build new greenhouses over the past year. The deficit has led to questions aimed at seeing how quickly the cannabis companies can increase production levels to match demand.
On the major manufacturers in Canada, Aurora Cannabis and Tilray are two companies that saw their production rise the most in the past year, and put each of them in & # 39; able to establish a lead over their peers. Recently, both companies have reported quarterly financial results offer insight into whether marijuana should be available to meet the demand for adult use.
Aurora Cannabis is the largest of these two companies greatly. He sold 2676 kg & # 39; cannabis the last quarter, and up 201% year on year, and its sales CA $ 35 million, including acquisitions. Tilray sold 1,613 kilograms & # 39; cannabis in the period, an increase of & # 39; 136% year over year, and its sales were only & # 39; US $ 10 million (US $ 13 million at current exchange rates).
The sales figures, however, are not nearly tell-up as the ramp at & # 39 kilograms harvested from these two companies when determining which company is positioned to make the most profit from the leisure of market Canada this year. Why? Because the company has more inventory and production will see its sales soar as the Canadian provinces seeking to catch up with consumer demand.
Based on the latest information, is Aurora Cannabis, not Tilray, which has the necessary supply. Harvesting & # 39; Aurora Cannabis increased 395% to 4996 kilograms in the last quarter, and as a result was at CA $ 80.8 in inventory. For comparison, inventory & # 39; Tilray was only & # 39; US $ 12.1 million, although its harvest increased by & # 39; 215% to 5032 kilograms in the quarter. Undoubtedly, Aurora Cannabis has much inventory can & # 39; lead to sales this quarter from Tilray.
S & # 39; next is
Aurora Cannabis has early lead in c & # 39; & # 39 terms, production, and if it & # 39; fulfill its target for production growth, then the his lead will increase. Currently, the capacity & # 39; annual output & # 39; Aurora is & # 39; about 70,000 kilograms, but expect the production capacity will reach an annual rate of & # 39; 150,000 kilograms in early 2019 and exceed 500,000 kilograms in 2020. Tilray is also increasing capacity, but its target & # 39; production & # 39; Next year is 90,000 kilograms compared.
Certainly, the production is not the only thing that involves relevance in & # 39; this emerging industry, but the potential to keep retail shelves suggests that, for now, the advantage of producing & # 39; Aurora put it in the most profitable leisure demand in the coming year.