Aurora Cannabis (ACB.TO)

The whole medical/recreational marijuana industry is undergoing a lot of change. Most of that is legislative and we are seeing the development of a new industry that could be very large, but part of the challenge as an investor is trying to figure out what that means for these individual companies. Most of them don’t make much money or have a history of earnings. This is in the “too tough to figure out” category.

Any time there is a bought deal financing, typically the stock trades down to that level, or in some cases even below it. Also, this is going to bounce around with the overall sector. For the whole cannabis space, they are not trading at cheap valuations. This company has a fairly small facility, but has raised a ton of money in the last few months to fund out their new expansion. There are a lot of execution risks.

Canopy Growth (CGC-T) or Aurora Cannabis (ACB-X)? He does not want to recommend either, but would take the larger Canopy over Aurora. There is no rational way of evaluating these on any fundamental basis, so you are buying them on the anticipation that someone else is going to pay more. A very, very dangerous game.

His favourite in the space. They are being permitted to build the largest grow op in the world. You are going to see some significant growth. There are lots of catalysts in the space. These guys have the best growth potential. They purchased a clinic in Ontario and they intend to be vertically integrated. They are the first one to do that strategy.