Aurora Cannabis U.S. Listing Could Be Fuel for Its Stock Price

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Announcement from Aurora Cannabis Inc. (TSX:ACB) comes after Canopy Growth (TSX:WEED) hinted at a NASDAQ listing

SmallCapPower | March 8, 2018: Aurora Cannabis Inc. (TSX:ACB), one of the leading cannabis companies in Canada, aims to get listed on an international exchange and is exploring options for the same. Among others, Aurora Cannabis is considering listing its shares on the Nasdaq, the New York Stock Exchange (NYSE) or the AIM, a division of the London Stock Exchange (LSE). Aurora’s move comes after Toronto-based Cronos Group Inc. (TSXV:CRON) became the first marijuana company to list on Nasdaq on February 27, 2018, under the trading ticker ‘CRON’.

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Aurora Cannabis is performing due diligence on the U.S. market before going ahead with a listing application because marijuana remains illegal in that country at the federal level. Aurora Cannabis is examining all listing options and will finalize the most beneficial one. Aurora Cannabis CEO Terry Booth said, “We’re all over it. We’ll look at all exchanges; we’ll look at New York Stock Exchange. Cronos broke that barrier, and good on ’em, it’s excellent for everybody.” Another marijuana company, Canopy Growth Corporation (TSX:WEED), having market cap of $6.23 billion, has hinted at listing on the NASDAQ.

Aurora Cannabis Inc.’s plan to get listed on a foreign exchange comes in the midst of a $852 million buyout of Saskatchewan-based CanniMed Therapeutics, which is believed to be the largest cannabis acquisition of all time. Although the initial talks between both the companies were hostile, CanniMed has agreed to Aurora’s offer of high premium over its mid-November trading price. Through this deal, 20,000 new medical patients will be added to the client list of Aurora Cannabis and its capacity will get enhanced by 19,000 kilograms per year.

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Overall, the listing on U.S. exchanges is a step further in legitimizing Canada’s flourishing marijuana industry and is positive news for all the companies in that space. In terms of valuation, Aurora Cannabis’ stock currently trades at market capitalization of $5.49 billion on TSX and price-to-book ratio of 9.59x. Aurora Cannabis reported strong revenue growth in its most-recent quarter and is expected to perform well in near future on the back of expansion in production capacity as well as strategic partnerships with others.

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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