The cannabis industry is expanding at a torrid clip. Investment bank Cowen expects global cannabis sales to grow to $75 billion by 2030, while Bank of America analysts believe the marijuana market could one day generate $166 billion in annual sales.
One marijuana company, Aurora Cannabis (NYSE: ACB), is particularly well positioned to capture a substantial portion of the industry's profits in the coming decade. Read on to learn more about it.
Aurora Cannabis' peak production capacity is unmatched. Aurora is on track to produce more than 625,000 kilograms of cannabis annually by 2020. Among rival producers, only Canopy Growth (NYSE: CGC) appears to be on track to produce at least 500,000 kilograms during this time.
Aurora's superior production capacity should provide it with powerful scale advantages over its smaller competitors. By spreading its costs over a larger sales base, Aurora should be able to produce industry-leading profit margins over time.
Moreover, being a low-cost producer should help Aurora weather any near-term oversupply issues should its home market of Canada become saturated. If an industry shakeout occurs, Aurora is likely to be one of the last cannabis producers standing.