CBD, the hemp-derived, non-psychoactive component of cannabis, seems to be everywhere nowadays. The fact is, however, that it’s a market in its infancy. Right now, savvy investors are placing their bets on Aurora Cannabis (NYSE:ACB) stock as a vote in favor of the emergent CBD revolution.
Granted, not everyone is leaning bullish on Aurora Cannabis stock, and I’ll address the critics’ arguments even if it marks me as a contrarian and a nonconformist but then, I’ve been known to go against the grain time and again, so why should today be any different?
Get Your Share of CBD Wealth with ACB Stock
If you’re not convinced of the CBD market’s explosive potential, I’ve got some numbers that ought to change your mind.
According to research firm BDS Analytics, the American market for cannabidiol (CBD) will balloon to $20 billion by the year 2024, signifying an astounding compounding annual growth rate of 49%. Meanwhile, a study conducted by Fior Markets projects that the global CBD industry will expand at a compound annual growth rate of 36.3% from 2019 through 2026.
Some people have reported that CBD is effective in alleviating pain, improving sleep disorders, and helping to reduce anxiety, among other benefits.
Have I made you a believer in CBD yet?
Whether you’re seeking solutions to common medical issues or if you just want to profit from this burgeoning cannabis subsector, CBD stocks are a great buy-and-hold in 2019 and ACB stock is a strong contender in this regard. The company proved its commitment to CBD in 2018 when Aurora acquired Agropro, the most prolific producer of hemp at that time in Europe. The company also bought Borela, the sister company of Agropro and a then-established producer and distributor of organic hemp-derived products.
Building a CBD Empire, One Acquisition at a Time
But that wasn’t all: also in 2018, Aurora Cannabis acquired the then-undisputed leader in South American hemp cultivation, ICC Labs. This acquisition gave Aurora control over 70% of Uruguay’s CBD market in one fell swoop, along with a massive extraction facility that’s able to process 150,000 kilograms’ worth of CBD product per year.
Thus, while other cannabis companies were still exploring their options in CBD, Aurora was proving itself as a dedicated and aggressive early mover in the space.
On top of all that, Aurora Cannabis just announced that it has completed its acquisition of hemp-based product provider Hempco Food and Fiber. Much like the ICC Labs takeover, the Hempco buyout will enhance Aurora’s ability to process huge quantities of raw hemp for CBD products efficiently and at a relatively low cost. Terry Booth, the CEO of Aurora, is eager to reap the rewards of the company’s latest acquisition:
Through the addition of Hempco, we have assembled a world-class portfolio of high-quality hemp assets that together form the basis of a strong new operating division that will develop CBD-from-hemp around the world.
Here Come the Critics
Of course, there will always be haters and doubters whenever a cannabis company like Aurora makes a big, bold move; what I see as progress, they view as taking on risk. Perhaps that would account for Cliff Asness’ AQR Capital Management unloading 7,102,892 shares of ACB, valued in excess of $64 million, a vote of “no confidence” if I ever saw one.
Or maybe Asness has been listening to Michael Avery, an analyst at Piper Jaffray, who has complained that Aurora Cannabis can’t sell CBD products in Europe “until it receives EU-GMP certification, which could take time.”
I hate to call Avery “Captain Obvious,” but that’s a known factor and Aurora is a highly profitable company that evidently doesn’t mind waiting for regulatory hurdles to be cleared; if time is the only obstacle to massive profits in Europe, then Aurora will wait patiently and so will I.
The Takeaway on Aurora Cannabis Stock
How much longer will it be before the CBD market really takes off and pushes the ACB stock price to new highs? No one can pinpoint an exact date, but I’m fine with buying and holding Aurora Cannabis stock shares in anticipation of CBD riches and hemp-powered prosperity in the near future.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
