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American cannabis industry thrives despite Aurora Cannabis woes

While Canada-based Aurora Cannabis Inc (TSE: ACB) experienced a downtrend in shares price, US-based Veritas Farms Inc (OTC: VFRM) demonstrates the potential of the cannabis market through impressive growth

Aurora Cannabis stock still looking for firm ground

In the absence of any fundamental price catalysts, trading continues to be driven by the cannabis sector’s corrective tendencies.

Hopeful signs of bottoming out can already be observed for some players. These promising signals are not yet particularly pronounced for Aurora Cannabis, but they do exist. On the whole, the recent positive developments should still be taken with a good deal of restraint.

If you look at the chart showing Aurora’s recent stock evolution, you can see that the stock has not yet gained much. Like with other Canadian cannabis companies, the long-term downtrend continues to dominate trading. This negative course should continue for some time, as the gap between the current price level and the trend line is considerable.

The focus is on the short-term downward trend. The stock has left this trend via a lateral movement, which in turn could be a clue that the very large downward pressure may have eased. Currently, Aurora Cannabis stock has moved slightly, from a low of CA$ 4.6 ($3.49) and is heading back up towards CA$ 5.0 / 5.1 ($3.80)/($3.87).

A breakout move above this resistance level would be a first important step to initiate a relaxation. However, it likely won’t remain that way. We see further important milestones on the upper side in the range of CA$ 7.2 ($5.47) and, above all, CA$ 8.5 ($6.45). From our point of view, a breakout above CA$ 8.5 ($6.45) would be tantamount to a long-term reversal. But, as far as the resumption of the correction is concerned, Aurora’s shares are, of course, not out of the woods yet. Up to now, the advances on the upper side lacked dynamics. In this respect, the previous downward movement in the range of CA$ 4.6 ($3.49) must still be kept in mind. If the stock value goes below that, the situation must be re-evaluated.

US-based Veritas Farms appears to have found success in the cannabis sector

In contrast to Aurora Cannabis, some companies south of the border seem to have found the key to long-term growth in the cannabis industry.

One example is Veritas Farms Inc (OTC: VFRM), a fully integrated cannabis grower, that demonstrates the potential of the cannabis sector. In Q2 2019, Veritas generated more than $2.9 million in total revenue. That is a 500% increase since Q2 2018.

Moreover, the company’s gross profits reached $1,523,413 and thanks to great results, managed to reduce liabilities by over $1.3 million. This growth has been driven by an aggressive plan to rapidly expand the company’s distribution network, which now includes over 4,000 retailers and partners.

The company produces and distributes CBD products, such as gummies, tinctures, lotions and vape oils, with a focus on high-quality and transparency. In this regard, Veritas released a QR packaging code, that offers the customers the possibility to instantly check the quality of Veritas products. In addition, all product labs results are available online.

The key to success in the highly competitive cannabis sector is honesty and transparency, the two principles on which Veritas Farms Inc built its brand.