Both Aurora Cannabis and Sundial Growers are Canadian cannabis companies with high-potential. They have the potential to grow into billion dollar brands, but only one can prevail in this market. It’s not just about how much money these two organizations will earn; it is also a question of consumer satisfaction for both companies – who ultimately has better products?
Aurora Cannabis is the Canadian cannabis company that has grown rapidly over the last few years, resulting in a $13 billion valuation. The company now faces opposition from one of their biggest rivals, Sundial Growers. Aurora claims it’s an attempt to create “false market competition.” But will this be enough for consumers?In a battle over cannabis-growing rights, Aurora Cannabis is suing Sundial Growers for allegedly infringing on its patents. This case could have wide-reaching consequences in the insurmountable race to capitalize on the legalization of weed.
The “sundial growers stock forecast 2021” is a stock that was created by Aurora Cannabis. The company has had some recent successes, but the company still has a long way to go.
Sundial Growers (NASDAQ:SNDL) and Aurora Cannabis (NYSE:ACB) are two companies that investors should definitely avoid purchasing (NASDAQ:ACB). Neither of the Canadian marijuana firms is profitable, and their most recent financial reports both showed a drop in quarterly sales.
However, this does not imply that the two stocks are equal, and I believe that one of them will emerge as the obvious victor of the contest. One of them may even turn out to be a good investment if a few critical factors improve. Let’s look into it.
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Aurora must adapt quickly in order to live.
The first thing investors should know about these two firms is that they are both struggling to make enough money to cover their costs alone by selling cannabis.
Aurora’s financial situation is particularly precarious. It has roughly $400 million in debt ($323.3 million) and approximately $425 million in cash and equivalents. It experienced a cash outflow of CA$263.66 million in the previous 12 months, which was largely due to the repayment of $122.92 million in long-term debt.
The company’s reserves will be depleted if it decides to make a comparable significant debt payment next year, given its trailing operating expenditures of CA$225 million. And, unless its fortunes change substantially in the next 24 months, it will be in risk of running out of cash to fund its continued activities.
Aurora has also been battling for years to become profitable, and its condition hasn’t changed. While management claims that cutting down operations as part of its transformation strategy would save up to CA$80 million per year in costs, that may not be enough if it comes at the price of income left on the table. Similarly, although the company’s leadership has said that additional shops are opening and that demand for adult recreational items is expected to increase, it’s difficult to see how adding more sites can address the issue of continuous unprofitability.
Something has to give, whether it’s dwindling income, rising expenses, or a liquidity crunch. To put it another way, shareholders should be wary of having their equity eroded by a fresh stock issue, since it may be the only route out of the present impasse.
The preferable method is to use a sundial.
Sundial Growers, unlike Aurora Cannabis, has a healthy financial situation. It has unrestricted cash of CA$743 million, a meager CA$48.8 million in trailing operational expenditures, and no debt, despite a loss of CA$140.29 million in the previous year.
Sundial is a corporation that is building up new business units and making transformational acquisitions to penetrate new markets, in addition to having a much longer runway. Since its reorganization in 2020, Sundial’s new SunStream Bancorp section has been looking for profitable cannabis businesses to purchase or invest in, and investment income made up a greater share of Sundial’s overall revenue in the first half of 2021 than cannabis sales.
It may also be broadening its company by entering the Canadian liquor sector. Sundial will receive a majority position in Nova Cannabis as part of its planned purchase of Alcanna, Canada’s biggest private booze retailer, for CA$346 million in stock. In principle, that share means it will hold more retail sites in Canada than any other cannabis company. Aurora Cannabis, on the other hand, has no such plans in the pipeline.
Despite the fact that Sundial is the superior marijuana stock, investors should exercise caution. Although the company’s investments have given it fresh life, it has yet to demonstrate that it can financially sell any one product for an extended period of time. Even while it has lots of cash on hand, merely surviving isn’t enough to get consumers to purchase the stock on a regular basis. It will have to increase its top line in order to do so, not to mention its chances of growing outside of Canada.
The “sundial growers news 2021” is a company that has been sued by Aurora Cannabis. The lawsuit alleges that the sundial growers are violating their patent rights.
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