Better Buy: Cronos vs. Tilray
A new year is around the corner for the cannabis industry, and that can mean a new start for two troubled stocks: Tilray (NASDAQ: TLRY) and Cronos Group (NASDAQ: CRON). Like much of the industry, both have struggled this past year and both are now at lower valuations. And with the launch of the "Cannabis 2.0" market in Canada sure to give both companies a boost in 2020, it's a good time for investors to take a close look at these two stocks to see which is the better buy going forward.
Having tobacco giant Altria (NYSE: MO) in Cronos' back pocket ensures that running short on cash and resources shouldn't be an issue for the pot stock. Altria made a large $1.8 billion investment into Cronos a year ago, which gives it lots of incentive to ensure things go well for the cannabis producer. Rising net losses and a lack of cash flow have been problems in the cannabis industry this year, and that's why the partnership with Altria gives the company an immediate advantage.
With 1.5 billion Canadian dollars in cash on its books as of September 30, Cronos isn't in any imminent danger of that being a problem just yet. Cronos' cash burn over the past nine months has totaled CA$102 million, but it's been the company's investing activities of more than CA$906 million that have been draining the well. Having access to cash can allow Cronos to take advantage of acquisitions or growth opportunities as they come up.
Source Fool.com
