With more than C$160 million in the bank, Aurora Cannabis Inc. (CVE:ACB) has set itself up nicely to challenge both Canopy Growth Corporation (TSE:WEED) and Aphria Inc. (TSE:APH)
SmallCapPower | May 2, 2017: Is Aurora Cannabis Inc. (TSXV: ACB) positioning itself to become #1 in Canadian marijuana space? The Company announced today that it has closed its previously-announced bought deal private placement of 7.0% unsecured convertible debentures for gross proceeds of C$75 million. Aurora Cannabis now boasts a cash position of more than C$160 million, which it plans to use to expand both in Canada and abroad.
“The acquisition of Peloton in Quebec and our investment in Cann Group in Australia are the first steps in growing our footprint, and we will continue to pursue aggressively other opportunities we have identified to transform Aurora from one of the largest Canadian cannabis companies into a global leader,” says Aurora Cannabis CEO Terry Booth.
To say that Aurora Cannabis is expanding aggressively could be an understatement, as it already operates a 55,200 square foot, production facility in Mountain View County, Alberta, and is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky,” at the Edmonton International Airport, which is expected to produce 100,000 kilograms worth of dried marijuana annually.
It has also acquired, and is undertaking completion of, a third 40,000 square foot production facility in Pointe Claire, Quebec, near Montreal. As well, the Company has also begun to branch out internationally, with a nearly 20% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis.
Aurora Cannabis’ new Aurora Sky facility prototype would result in a slightly smaller facility, boasting production efficiencies of nearly double those of Aphria or Canopy, due to its greenhouse technology that includes automated climate control, which should result in significant cost reductions, potentially making Aurora the most profitable player in the Canadian space. Aurora Cannabis is seen by many as having the best-quality product on the market.
Another likely catalyst for the Company’s stock price can be seen its April 20, 2017, announcement that it has begun selling a new product line of ingestible cannabis oils called Aurora Drops, which will sell for $115 per bottle, or $80 per bottle for clients approved for Aurora’s compassionate pricing program. Cannabis oils are considered a high-margin product that could boost Aurora Cannabis’ top and bottom lines.
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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