In addition to technology, 2020 has been a difficult year for many sectors. The search for positive news in the cannabis sector has been particularly difficult. That doesn't mean there haven't been a few positive signs that could indicate more prosperous times to come.
Aurora Cannabis (NYSE :), (TSX 🙂 is one company with good reason to be optimistic. The Canadian cannabis grower saw its stock price rise sharply in November, followed by a reversal – but profits are increasing.
In November, the pot stock increased by 188%, returning the pre-pandemic level. This upward move reflects solid developments, including one that happened in the past week.
Last Wednesday, Aurora announced it had struck a deal to enter the Israeli market.
Under the terms of the two-year agreement, Aurora will supply 4,000 kilograms of dried flowers annually to Cantek Holdings, a medical cannabis operator. The product will be processed and co-branded by the two companies.
The deal is a major coup for Aurora as it expands its international presence.
"We are excited about our strategic relationship with Cantek, a leader in the Israeli market," said Miguel Martin, Aurora CEO.
"This agreement represents a great opportunity for Aurora to expand our medical cannabis brand and leading science in one of our key international markets."
The deal also strategically positions Aurora in a second of the two largest medical cannabis markets outside of Canada – Germany and Israel, one of the largest importers of medical-grade marijuana.
As an RBC Capital Markets analyst put it, the supply agreement could effectively triple Aurora's international production of medical cannabis to approximately $ 43 million by 2022.
Shares of the Edmonton-based cannabis grower added just over 11.5% Monday to close at $ 11.68 in New York. But despite the rebound in November, the stock has lost more than half of its value since early 2020.
Village Farms: One To Watch
Another Pot Stock Investor You might want to keep an eye on Village Farms International (NASDAQ :), (TSX :). This Canada-based vertically integrated greenhouse builder is one of the largest vegetable growers in North America and the only publicly traded greenhouse horticulturist in Canada – trades both in Toronto and on the – and operates Pure Sunfarms, its cannabis subsidiary.
The stock is up nearly 120% in November. In the past year, it is up just over 71%.
Weekly chart of Village Farms
The company has signed a deal with Shoppers Drug Mart, launched CBD-infused gummies in Hong Kong and, according to an analyst report last week, is trading among its competitors based on a "business value to EBITDA ratio."
Village Farms is also well positioned to benefit from the legalization of cannabis in the US as it operates several growing sites in the US
