The marijuana industry may be relatively new, but some companies have already firmly established themselves at the top of the pile, and Aurora Cannabis (TSX:ACB) (NYSE:ACB) is certainly one of them. However, Aurora stock is trading almost at its lowest point of 2019 currently.
At this point in time, many companies are just coming out of a tough few months for the marijuana industry, and for investors, it is tough to figure out the best stocks to invest in. That being said, Aurora is an industry leader, and it is only natural that in an uncertain market, many investors will probably think of buying Aurora stock. Hence, it is important to figure out the prospects of the stock.
Key Analysis
One thing that needs to be kept in mind is that for a vertically integrated cannabis company, production capacity is one of the most important factors, and in that regard, Aurora Cannabis is right up there among the biggest producers.
Aurora has grown its capacity significantly and hopes to produce 625,000 kilos yearly for the next two years. Moreover, the company is also building two Sky-model facilities that will further boost production massively. The two facilities combined could add as much as 270,000 kilos of cannabis a year.
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Aurora stock is up 1% at $5.63 on the NYSE.
The company has also signed important deals that could see it becoming even stronger in the long run. It managed to win a tender that will see it supplying medical cannabis to Italy. The contract stipulated that Aurora is going to supply 400 kilos a year, giving the company an opening into the lucrative European market.
Additionally, the Bank of Montreal provided Aurora Cannabis with a credit line of $360 million CAd, up from the previous $200 million CAD. That will also be a major boost for the company as it tries to continually invest more in its business.
Analysts believe that Aurora is a company that can scale up quickly and has clearly emerged as a leader in the industry. Hence, Aurora stock could prove to be an excellent long-term play.
What do you think?
Featured image: Canva
