Aurora Cannabis Takes Big Step to Becoming an EU Supplier, Graduates to TSX

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Pedanios, the wholly-owned German subsidiary of Aurora Cannabis, passed the first stage in becoming a licensed producer in Germany

SmallCapPower | July 14, 2017: Aurora Cannabis Inc. (TSXV: ACB) announced on July 12, 2017, that its wholly-owned German subsidiary Pedanios has been successful in passing the first stage of the tender application process to become a licensed producer of medical cannabis in Germany.

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Becoming a licensed medical producer in Germany would open new avenues for the cannabis conglomerate Aurora Cannabis for tapping the emerging cannabis markets of Germany and EU. Currently, Pedanios is importing medical marijuana into Germany and distributing to around 1000 German pharmacies. Going forward, if Pedanios gets the contract to produce cannabis in Germany it would lead to a lot of cost-saving, hence, we can see an increase in margins.

We are keeping our fingers crossed that Pedanios cracks the second and the final stage imposed by the German Federal Institute for Medicines and Medical Products. Given the technical expertise, resources and intellectual substance of Aurora Cannabis, this road seems opportunistic for the Pedanios.

With a population of more than 80 million, Germany is the first county in the world to cover the cost of medical cannabis, for any therapeutic application approved by a physician, through its national health insurance system.

Related: Aurora Cannabis Acquisition of German Marijuana Wholesaler Could Be a Game Changer

Pedanios, over the last 90 days leading up to the acquisition announcement by Aurora Cannabis, has achieved cash flow positive operations, with gross revenues of about C$1.15 million, and costs of approximately C$1 million. Revenues for May, up to and including May 26, 2017, were approximately C$0.5 million, reflecting a 410% increase in the daily sales pace as compared to average for the eight months prior to the introduction of the new law, and an increase over the April and March 2017 averages of 70% and 108%, respectively.

Aurora Cannabis currently trades at TTM Price to sales multiple of 61.93x.

In other news, Aurora Cannabis said recently that it has received conditional approval to graduate from the TSX Venture Exchange and list its common shares on the TSX. The stock symbol will remain the same.

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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