Today I’ll analyze two cannabis companies, Sundial Growers (NASDAQ:SNDL) and 22nd Century Group (NASDAQ:XXII), to see which is currently a better buy.Cannabis stocks remain a popular choice among retail investors due to their potential to generate market-beating gains in the upcoming decade. There is a good chance for the U.S. government to legalize marijuana at the federal level in the not too distant future which would push demand significantly higher and make it easier for cannabis companies to access traditional forms of capital to fuel their expansion plans.
However, like in all emerging markets, in the cannabis industry there are several companies that are reporting massive losses and trading at steep valuations. There is a good chance for many of the companies in the cannabis space to go bust, given their high cash burn rate and shareholder dilution. But this high-growth industry will also have a few stocks that will generate exponential gains on the back of inorganic growth, an expanding addressable market and the benefits derived from economies of scale.
Keeping these factors in mind, let’s see which cannabis stock, Sundial (SNDL) or 22nd Century Group (XXII), should be on your radar right now.