The increasing legalization of cannabis in the United States and the rising popularity of cannabis products for therapeutic and recreational uses have propelled the cannabis market’s growth. However, our view is that Aurora Cannabis (NASDAQ:ACB) doesn’t look fundamentally fit enough to capitalize on the industry’s trend. So, instead, we think it could be worth betting on fundamentally sound pot companies Curaleaf (CURLF), Tilray (NASDAQ:TLRY), and HEXO (NASDAQ:HEXO). We think they could potentially deliver promising returns in the coming months. Let’s discuss.The growing requirement of cannabidiol oil for therapeutic needs from an aging population, and a growing consumer preference for innovative recreational cannabis products, have been driving the cannabis industry’s growth. The global spending on legal cannabis is expected to reach $43 billion by 2024. Last week, the U.S. Department of Agriculture (USDA) announced steps to improve insurance policies for hemp businesses to make them more flexible. Also, the record high support from U.S. adults and GOP lawmakers has generated positive sentiment concerning the cannabis market.
However, medicinal cannabis company Aurora Cannabis Inc.’s (ACB), which is based in Calgary, Canada, has not benefited from the favorable industry trends. In its last reported quarter, the company’s total net revenue decreased 11.1% year-over-year to CAD60.11 million ($47.54 million). The stock has declined 34.6% in price over the past six months and 38% over the past year. Furthermore, the stock’s average price target of $6.31 represents a potential 4% decline from its $6.57 last closing price. Therefore, we think ACB may not be the right choice to cash in on the industry tailwinds.
Instead, pot stocks Curaleaf Holdings, Inc. (OTC:CURLF), Tilray, Inc. (TLRY), and HEXO Corp. (HEXO), which possess strong fundamentals, could be ideal bets to capitalize on industry trends. Wall Street analysts expect these stocks to deliver solid returns in the coming months.