Why Canopy Is A Better Pick Than Aurora Now

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About: Aurora Cannabis Inc. (ACB), CGC, Includes: ACRGF, STZ, TLRY
by: Cornerstone Investments
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Cornerstone Investments
Long/Short Equity, long-term horizon, cannabis industry
Summary

Aurora and Canopy remain two of the largest cannabis companies in the world and valuation has converged between the two stocks.

Canopy benefits from its Constellation affiliation, $3.1 billion cash balance, and prestige from being the global cannabis pioneer.

Aurora grew through aggressive acquisitions which left it with a weaker financial profile than Canopy (massive share count, lower cash).

We think Canopy remains the better play due to its solid financial positions, Constellation support, and access to U.S. markets.

After the recent slump in the cannabis sector, the valuation gap between Aurora Cannabis (ACB) and Canopy Growth (CGC) has narrowed significantly. However, between these two of the largest cannabis companies