Company Overview: Aurora Cannabis

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For our third volume of Company Overview, we focus on Aurora Cannabis. Licensed in February of 2015, Aurora was created to serve the medical cannabis community and prides itself on competitive pricing and exceptional patient service. These guys consistently have a nice selection of dried cannabis and cannabis oils and have recently started expanding its production capacity.

Aurora Cannabis – Volume 003

Aurora Overview

Aurora Cannabis (Aurora) is a Canadian producer of medical cannabis and cannabis oils. Licensed in early 2015 and based out of Mountain View County in Alberta, the company is publicly traded on the Toronto Stock Exchange since July 2017.

Quick facts:
  • 20,000 patients (registered and pending combined)
  • Sold over 300,000 grams of marijuana last year
  • Controls nearly 15% of the entire Canadian medical marijuana market
  • Owns a 19.99% stake in Cann Group (Australia’s first LP)
  • Owns Pedanios GmbH (major German wholesale distributor of medical cannabis in the European Union)

Aurora Location & Facilities

  • Cremona, AB: 55,200 sq ft.
  • Aurora Sky, Edmonton, AB: 800,000 sq ft. (under construction)
  • Peloton, Pointe-Claire, QC: 40,000 sq ft. (under construction)

Aurora is located in Mountain View County, Alberta where it operates a state-of-the-art production facility covering 55, 200 square feet. Aurora is currently constructing its 2nd facility, labeled as the Aurora Sky. The cultivation facility will span 800,000 square feet at the Edmonton International Airport. Further, the company purchased a nearly completed 40,000 square foot production facility in Pointe-Claire, Quebec.

Aurora Sky will be a hybrid greenhouse and the most technologically advanced of its kind. The facility is expected to boost the company’s production capacity by over 100,000 kilograms annually and help them become one of the lowest cost producers in the world.

Aurora Sky Project Status:

  • Completed construction of over 290,000 square feet of the structure
  • 80% of the specialty glass roofing installed
  • Planting of cannabis to start by end of 2017
  • Subsequent harvesting and at the beginning of 2018
  • Full completion is expected by mid-2018

Aurora Medical Marijuana Licenses

Aurora was initially licensed in February of 2015 and again in October 2017 un the Health Canada’s ACMPR program.

The company holds the following medical marijuana licenses:

  • Dried cannabis cultivation
  • Dried cannabis sale
  • Cannabis oil production
  • Cannabis oil sale

Aurora Products, sales, & Patients

As per the results of the fourth quarter ended June 30, 2017, Aurora:

  • Registered an additional 3,500 patients
  • Overall number of its registered and pending users to surpass 20,000

The month of August 2017 was a record high in terms of sales and revenue:

  • More than 328,322 grams of medical cannabis sold
  • Revenues of $3.1 million

Revenues for the fourth quarter were $5.9 million as compared to $1.2 million the previous year. The increase in revenue was mostly attributed to an increase in the number of patients in addition to the increase in the average selling price of a gram of medical cannabis.

Sales of dried medical cannabis leaves and oils amounted to $5.6 million. 5.2 million (92.9%) of this was generated in Canada while the rest came from Germany. Patient outreach and counseling services also contributed 0.3 million in the last quarter of 2017. The total products sold in the last financial year amounted to 755,059 grams of dried cannabis leaves and cannabis oils at an average price of $7.45 per gram. This is an improvement compared to the same period in the previous year which saw a total products sale of 200,310 grams at $6.09 per gram.

The company recorded a net loss of $4.8 million, attributed to acquisition and project evaluation costs, unrealized non-cash loss on debentures, increase in finance costs due to debentures and the continued execution of the company’s growth strategy.

Partners and subsidiaries

On Oct 2, 2017, Aurora announced that it had acquired 100% of both Urban Cultivator Inc. and BC Northern Lights Enterprises Ltd. The two are leading companies in the sale and production of proprietary systems used for the efficient, safe and high-yield of indoor cannabis cultivation. The companies also offer state-of-the-art indoor gardening appliances for the cultivation of herbs, vegetables, microgreens, etc. in home kitchens. The pair had a combined revenue of more than $5 million in the current fiscal year ending October 31, 2017. The acquisitions are set to boost Aurora’s strategic objectives of serving the home gardening market in Canada even better.

Aurora announced the acquisition of Pedanios GmbH, a leading distributor, importer, and exporter of medical cannabis in the EU. Pedanios owns all the necessary permits and has been in operation since December 2015 in the EU. Its sales doubled in March 2017 after the German parliament passed a new medical cannabis law. Currently, the company wholesales medical cannabis to over 750 pharmacies with the widest range of products in Germany compared to other producers.

On September 18, 2017, Aurora announced that it has closed a strategic investment in Hempco Food and Fiber Inc. allowing it to acquire up to approximately 25% of the company initially. In addition, Aurora will be given an option to acquire an additional 25% Hemco, which if exercised, would bring Aurora’s total stake ownership at Hemco to 50.1%. The deal is subject to shareholder and regulatory approval at the time of this writing.

In September 2017, Aurora and Namaste Technologies entered into an exclusive hardware supply agreement for the Canadian market. Aurora will be the sole distributor Namaste products through its online store.

Aurora also signed a Memorandum of Understanding with Radient Technologies Inc. to commercialize and develop superior and standardized cannabinoid extracts in high quantities as a joint venture. The Company invested by way of convertible debt.

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