Aurora stock has dropped 27% approximately since April and currently sells for $7.34 USD on the NYSE. In fact, Aurora Cannabis (TSX:ACB) (NYSE:ACB) shares have struggled to gain any meaningful traction since the end of 2017, only hitting $10.52 at their highest in mid-2018.
By now, many investors are disgruntled as the company has diluted stock to fund acquisitions and has yet to make money. However, Aurora is Canada’s biggest cannabis grower and has put the pieces in place to be one of the world’s biggest by this time next year.
The key to this could be its investment into CBD.
Aurora Stock Affected By Acquisitions
Acquisitions are at the heart of this company. Yes, it’s frustrating for investors to watch the company increase its share count to over 1 billion in order to fund them. But by acquiring so many companies, Aurora Cannabis is poised to be a CBD king.
The US CBD market is estimated to reach $22 billion by 2022. That’s a sizeable market. And Europe isn’t too far behind; estimations say that the European CBD market will be worth $1.7 billion by 2023.
For this reason, those looking for a long-term investment might consider Aurora stock.
Hemp at Home
In 2017, Aurora Cannabis invested in Vancouver’s Hempco—a maker of hemp-derived food, hemp fiber, and hemp nutraceuticals. Then, three months ago, Aurora turned that investment into an acquisition.
Hempco is expanding capacity so it can produce 2.9 million kilograms of cannabis annually. As such, the deal gives Aurora a solid launching pad for the North American hemp CBD and industrial hemp markets.
Hemp in Europe
Away from home, Aurora Cannabis has spread its footprint into Europe in a big way. In 2018, Aurora acquired Agropro and its sister company Borela. Agropro is Europe’s largest producer, processor, and supplier of certified organic hemp and hemp products. Borela processes and distributes organic hulled hemp seeds, hemp seed protein, hemp flour, and hemp seed oil.
Hemp in South America
In what seemed like more good news for Aurora stock, the company then entered Uruguay by acquiring ICC Labs that same year. In a deal that compliments the aforementioned ones, ICC has a 70% market share in Uruguay’s legal cannabis market. Akin to that, ICC is a major player in the South American hemp CBD market. The company owns an extraction facility with the capability of processing 150,000 kg of hemp biomass into CBD oil annually.
Is the US Next?
What’s left on the map is the US. Aurora has spent big to build up its CBD presence in Canada, Europe, and South America, but all-the-while it has ignored the US.
There is, according to management, a vague “strategy” but that’s all they are giving away.
Such massive figures suggest that Aurora Cannabis will reap the benefits of the European market anyway, and because of its clout, it may transition easily into the US when it deems the time is right.
Aurora stock, as such, seems more like a long-time play. But if you want a quick buck, stay away!
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