Aurora Cannabis (TSX:ACB)(NYSE:ACB) shares are currently trading at a rather lofty 500 times price-to-earnings multiple.

But are fears that Canada’s second-largest publicly traded cannabis stock is overvalued overblown?

Let’s take a closer look at why ACB’s current price-to-earnings multiple might not have  much to do with the company’s potential as an attractive long-term growth prospect.

Aurora’s market capitalization right now sits at about $10 billion, which means that at a forward price-to-earnings ratio of 500 times the market is currently expecting the company to earn somewhere in the neighbourhood of $200 million next year ($10 billion divided by 500).

It's probably not much of an exaggeration to state that most investors' eyes are "on the green." Marijuana is arguably the hottest investment idea of this generation, with global legal sales potentially growing to between $50 billion and $75 billion by 2029/2030, up from around $12 billion in 2018. Given that most cannabis sales are still tied up in the black market, there's ample opportunity for legalizations in the U.S. and around the world to push a steady stream of these illicit transactions into legal channels.

But within the cannabis industry lies perhaps the most exciting trend of all: the rise of cannabidiol (CBD).

Saskatchewan may be seeing more hemp crops in the future.

Andrea Eriksson, business development officer at Norquest College in Edmonton, spoke at the Farm Progress Show in Regina this past week to educate farmers about hemp crops and the recent growth of the industry.

Saskatchewan is second in the country in the crop’s production, behind only Alberta.

Eriksson said the industry has “untapped potential” but added there is a lot of confusion as to what exactly hemp is. Although it is considered a cannabis plant, it is not marijuana.

Cannabis stocks have come off the boil since the start of 2019 and there appears to be little life left in the sector as fears of a trade war and a weaker global economy weigh on the outlook for consumer products. This is being exacerbated by growing fears that marijuana stocks are in a bubble and many are heavily overvalued.

Right now, few industries offer greater long-term growth potential than the legal marijuana industry. On Wall Street, peak sales projections for the cannabis industry have come in as high as $166 billion. The analyst behind this lofty forecast, Bank of America's Christopher Carey, also suggests that marijuana could disrupt industries that today combine for $2.6 trillion in annual sales.

Aurora Cannabis' (NYSE:ACB) sizzle seems to have fizzled. The Canadian marijuana stock more than doubled by the middle of March. Since then, though, Aurora has given up roughly half of its big gain.

But don't think for a second that Aurora can't turn up the heat yet again. The company continues to pick up momentum in the Canadian adult-use recreational pot market and in international medical cannabis markets.

It's also possible that Aurora could surpass its peak share price from a few months ago if the right scenarios unfold. Here are three potential catalysts that could cause Aurora Cannabis stock to skyrocket.

What are the most popular marijuana stocks on the market right now? It depends on how you measure popularity.

Probably the best way to evaluate the popularity of a stock is to look at its average daily trading volume. This number provides a great barometer of investor interest in a given stock. You might argue that some very unpopular stocks could have high average trading volumes as investors sell off the stock. While that might be true, remember that there's a buyer on the other end of every one of those transactions.

Canadian pot producer Canopy Growth (CGC), the most valuable weed company in the world, reports fiscal fourth-quarter earnings after the close today. Canopy Growth stock rose Thursday, as did most other marijuana stocks.

Canopy Growth Earnings

Estimates: Wall Street expects Canopy Growth to stay in the red, with a per-share loss of 17 cents, or 22 cents Canadian. Sales are expected to jump 294% from a year ago to $71 million, or 93.67 million Canadian dollars. Canopy Growth holds its conference call to discuss the results on Friday morning.

Results: Due after the close.

Cannabis stocks continued to make steady gains Thursday, after a rough few weeks.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, was up 1% to 243.5 points on Thursday. The Horizons Marijuana Life Sciences Index ETF was up 1% to C$19.02. The OTCQX Cannabis Index was up 3.5% at 757.6 points.

Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB) is one of the Canadian cannabis stocks and is the second-largest Canadian cultivator by market cap. ACB is vertically integrated and horizontally diversified across various segments of the cannabis value chain. In an article published on May 24, 2019, we discussed how Aurora Cannabis has a medical cannabis market edge.