Aurora Cannabis Set to Ramp Up Out West

Aurora Cannabis Inc. (TSX:ACB), one of the Canadian marijuana stocks, said it will expand its Aurora Sun facility by 33%

SmallCapPower | April 15, 2019: Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB), one of the Canadian cannabis stocks, Wednesday provided a construction update for its Aurora Sun facility in Medicine Hat, Alberta. The facility will be expanded to 1.62 million sq. ft., representing a 33% increase from its originally planned 1.2 million sq. ft. with 37 growing rooms, each at 32,500 sq. ft. Once fully operational, there will be more than 1,000,000 plants in various stages of growth in the facility at any given time. Aurora is projecting a production capacity at Aurora Sun in excess of 230,000 kg of high-quality cannabis per annum based on the success seen at the Aurora Sky facility.

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Its Aurora Sun facility will deploy advanced robotic shuttles to mobilize benches, increasing operational speed and facility efficiency, while allowing for multiple product streams simultaneously. The Company would use automation systems for cloning and production that will lower production costs. Further, the use of a low maintenance climate management system will result in superior plant health, yield and cannabinoid potency. The Company will set up thermal screens for additional energy efficiency/energy management and improve GMP/GACP segregation between grow, harvest, and post-production to facilitate faster and most efficient work flow. Deployment of higher throughput post-harvesting systems (such as drying systems) will reduce product time to market.

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Ground work for Aurora Sun is nearing completion, erection of the steel structure is advancing and installation of the glass at Sun is expected to be completed in May 2019. Like Aurora Sky, Health Canada licensing requests have determined that rooms will be available for planting before the entire facility is completed.

Aurora Cannabis CEO Terry Booth said, “Aurora Sun represents the next evolution in our Sky Class facility design, delivering massive scale, low cost production, and consistent, high-quality cannabis. Particularly in newly-opened markets, establishing first-mover position and embedding Aurora’s market share and brand requires a stable and reliable supply of high-quality cannabis for these markets. The increased scale of Aurora Sun reflects our expectations for the long-term growth in global demand, especially the higher margin international medical markets, which will be faced with significant supply shortages for the foreseeable future. Sun is also designed with flexibility in mind to enable us to quickly meet changing market demands, particularly as breeding and cultivation technologies evolve and as customer preferences and requirements change.”

The Company has indicated that Aurora Sun will outshine Aurora Sky in terms of technological advancements. Aurora Sun’s facility will include systems that will increase economic efficiencies and customer-driven flexibility to meet future evolutions in market requirements. While Aurora Sky integrates certain post-harvest processing systems, Aurora Sun will be focused solely on the mass scale, hyper-efficient production of high-quality cannabis. Most post-harvest processing will be handled at other facilities, such as Aurora Polaris.

Aurora Cannabis stock currently trades at a market capitalization of C$12 billion with a price-to-book multiple of 2.8x.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

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