Here’s Why Cannabis Stocks Will Fall Even Further In 2020
Outside of a couple of good months to start the year, cannabis stocks have seen little bullishness since. Whether it's been scandals or disappointing results, there's been plenty of reasons for investors put the brakes on the once high-flying industry. And that's led to some big corrections.
Aurora Cannabis (NYSE: ACB), one of the top pot stocks in the industry, has fallen more than 30% since the beginning of the year, and those losses are nearly 60% when looking at the past six months. Other companies have incurred even bigger losses along the way. But as bad as things have been this year, 2020 could be a whole lot worse.
A lack of cash has been a big problem in the industry. Companies have been burning through lots of it in the name of growth as they build out their operations domestically and all over the world. Aurora has been no exception to that. In its most recent fiscal year, the company used up 192 million Canadian dollars in cash from its operations. That's up from CA$82 million the year before. And with cash flow and short term investments totaling just CA$316 million, it's easy to see how it could be a problem for Aurora if things don't improve.
Source Fool.com
