Aurora Cannabis (TSX:ACB) stock has been picking up traction in recent months thanks mainly to increased speculation over who the company’s first major dance partner is going to be. Background discussions between Aurora and Coca-Cola have been the hot topic of late, and it’s making many cannabis investors increasingly euphoric.
If ever Aurora ends up tangoing with Warren Buffett’s favourite beverage company to bring about a CBD-infused relaxation beverage, there’s no question that Aurora shares will take off like a bat out of heck. But such a development, I believe, won’t allow for Tilray (NASDAQ:TLRY) levels of explosive upside, whereby investors can get rich and ruined all in a single day’s trading.
Why has Tilray become “the” go-to trade for cannabis investors?
Tilray has been the talk of the town ever since shares of the Nanaimo-based cannabis company went live on the NASDAQ. The stock instantly became a trader’s paradise with off-the-charts trading volumes — not because Tilray is a “special” cannabis company. Rather, management was good at marketing itself to the world. The incredible hype drew from the IPO, the timely dissemination of positive material information, and the exclusive U.S. tradability of the stock made it easy for traders around the globe to own a piece of the security that had the potential to make investors rich quickly.
Had Tilray IPO’d on the TSX, we probably would have gotten a lesser degree of volatility, and the company wouldn’t be worth nearly as much as Canopy Growth stock. Having a stock traded on the NYSE or NASDAQ not only allows U.S. investors to participate in the trade, but investors from across the globe see the U.S. as the number one hot spot for foreign investment.
While foreign investors could find a way to access TSX-exclusive pot stocks as they swap their currencies for Canadian dollars, I’m sure you’d agree it’s a huge pain in the neck for them and a likely deal breaker for many when you consider the fact that there’s already a growing number of pot stocks now on the more liquid NYSE and NASDAQ exchanges.
Why Aurora could become the next Tilray
Although Aurora may be exhibiting extreme levels of volatility already, I think what investors have seen thus far is just an appetizer compared to what’s on the horizon.
As such, Aurora investors should prepare themselves for Tilray-level volumes and volatility as early as this month, since Aurora’s NYSE listing could be in the cards shortly after legalization day (October 17), a time when the world will be watching Canada and all cannabis companies very closely.
Once Aurora finally hit the NYSE, the floodgates for international investment will open. And one has to think that Aurora is prepared to schedule the public announcement of promising material events and appearances on hit shows like Mad Money as Tilray did.
Who knows? A Coca-Cola partnership could be made official after Aurora becomes a dual-listed stock, which would cause ACB shares to explode like a shaken-up can of classic Coke!
Aurora may be a household name for Canadians, but with no U.S. listing yet, Tilray, Canopy, and Cronos Group are the names under the U.S. (and international) spotlight. Watch for the spotlight to move in Aurora’s direction in the post-legalization era.
Tilray levels of volatility are coming soon to Aurora shares near you. Whether or not that’s a good thing depends on the strength of your stomach and what you intend to get out of pot stocks. Are you a gambler? Or are you in it for the long game?
In any case, I’d advise a majority of investors to watch the show from the sidelines. If you’re a gambler with disposable income, however, you may want to buy a ticket to see Aurora before they go on sale to the international public as early as late October. The Aurora late-October NYSE listing is currently waiting to be approved, but if I were to guess, it’ll just be a matter of time before the green light shines.
Stay hungry. Stay Foolish.
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Fool contributor Joey Frenette has no position in any of the stocks mentioned.