While most US cannabis investors are focused on home grown marijuana plays, up in The Great White North there’s a lot happening. By 2024, Health Canada projects that the medical cannabis market in Canada will reach $1.3 billion and have ~450,000 patients out of a population of 35 million.
Prime Minister Justin Trudeau was elected after including legalization of recreational marijuana. On April 20th, 2016, the Canadian Health Minister Jane Philpott announced that Canada would introduce legislation to decriminalize and regulate cannabis in spring of 2017. The recreational market in Canada is estimated to be worth $7 to $10 billion.
The company that aims to be on top of this market is Aurora Cannabis Inc, which trades on the TSX Venture Exchange under the symbol ACB, on the OTC Markets under ACBFF, and in Frankfurt under 21P. Since August, shares of ACBFF have risen over 400%. The company just recently moved from trading on the CSE to the TSX-V.
Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical marijuana pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR) and operates a 55,200 square foot, expandable, state-of-the-art production facility in Mountain View County, Alberta, Canada.
Last month, Aurora surpassed 7,700 active registered patients, just under eight months after the Company’s first sale of product. This is believed to be the fastest rate of patient registration after commencement of commercial operations achieved by any Licensed Producer. Strong sales growth continued, with total weight of dried cannabis sold reaching 147,000 grams in August, 2016, versus 124,000 grams sold the previous month. Gross revenue for the month of August, 2016 was $1.2 million, a 20% increase over July, 2016.
The Company’s production facility also just completed a substantial upgrade and expansion of its mother room, with the addition of full-spectrum LED + HID lighting and an automated irrigation system that can deliver cultivar-specific nutrient formulas. The improvements effectively double the room’s plant capacity and further strengthen Aurora’s commitment to full lifecycle plant health and quality.
Aurora, which was the first Licensed Producer to launch same-day delivery of medical cannabis, is now the first company to offer this service in two cities. As announced on May 24, 2016 , the Company began same-day product delivery in Calgary and surrounding communities.
Aurora is also well-funded. The company just announced new funding round being led by Canaccord Genuity Corp. CEO Terry Booth said:
“This Offering, following our financings in August and September, will place Aurora in an extremely powerful financial position, with a current cash balance in excess of $45 million available to pursue all our strategic initiatives. We are now one of the best capitalized companies, with one of the strongest balance sheets in the cannabis sector. We have a large number of initiatives underway that ensure the Aurora Standard will remain the industry benchmark in terms of product quality, production capacity, technological innovation, and overall customer experience. We will continue to execute with discipline on our business strategy, with the objective of building the most valuable cannabis company in Canada.”
Aurora has also been beefing up its board of directors with the additions of Joseph del Moral and Barry Fishman. Mr. del Moral is co-Founder and CEO of Canadian Cannabis Clinics (CCC). He is also a co-founder of CanvasRx Inc., Canada’s leading cannabis outreach and counselling service provider, where he served as CEO until its acquisition by Aurora.
It’s the appointment of Barry Fishman as Independent Director that really gets us excited. Mr. Fishman is the CEO of international specialty pharmaceutical company Merus Labs International Inc (NASDAQ:MSLI), where he has led the company to more than tripling sales and EBITDA over the last two fiscal years. Previously, he has served as CEO of both Teva Canada and Taro Canada, and is a past Chair of the Canadian Generic Manufacturers Association. He began his pharmaceutical career at Eli Lilly, where he advanced through several cross-functional leadership roles, including Vice President of Marketing. Mr. Fishman also has critical insights into the development of the cannabis sector, having previously served on the Board of Directors of Canopy Growth Corporation and Bedrocan Cannabis Corp. Fishman believes in Aurora. He’s staking his reputation and getting stock options to acquire 350,000 common shares in the capital of the Company, exercisable at $2.38 per share, expiring in five years. He said:
“I am delighted to join Aurora, and to become part of this dynamic team that will continue to provide leadership and drive innovation in the cannabis sector. This Company has been a standout in terms of its rapid growth, management and Board strength, disciplined execution of its strategic plan, and vision for the future of the industry. I look forward to playing a key role in Aurora’s governance and strategic decision-making.”
Aurora Cannabis looks to be one of the best plays in not only Canada, but also in the entire cannabis space. We believe investors should look towards Canada for not only its favorable regulatory environment, but also well-financed and well-run companies like Aurora. We will be updating our subscribers with the latest on Aurora and other cannabis names. For complete coverage, sign up below!
Disclosure: We have no position in Aurora Cannabis Inc and have not been compensated for this article.