Aurora Cannabis Inc. (TSX:ACB) announced a partnership with a Danish tomato and pepper producer to grow and sell cannabis in Europe
SmallCapPower | January 5, 2018: Aurora Cannabis Inc. (TSX:ACB), a Canadian marijuana producer, Thursday announced a partnership with Danish tomato and pepper producer Alfred Pedersen & Son to produce and sell cannabis in Europe. As per the partnership, the companies will form a joint venture, Aurora Nordic Cannabis, which will be based out of Odense, Denmark. Alfred Pedersen & Son received its license to cultivate cannabis from Denmark’s Medicines Agency on January 1, 2018. This gives Aurora Nordic a major advantage as one of just a few companies with a license to cultivate in Europe. Aurora Cannabis will own a 51% stake in the joint venture.
After the completion of the final agreement, Aurora Nordic will commence construction of a 1,000,000 square foot high-technology, fully-automated cannabis production facility. This production facility will be capable of producing up to 120,000 kg of cannabis per year. Construction will be phased, with cultivation commencing upon completion of the first 200,000 square feet, which is anticipated in the third quarter of calendar 2018.
Aurora Cannabis CEO Terry Booth said, “This is a huge next step for Aurora, establishing us as the leading cannabis company in Europe, a market of well over 400 million people, dramatically accelerating our international expansion. We are already the leading exporter to and distributors of medical cannabis in Germany, and now have the largest funded capacity footprint in the rapidly-growing European market, in which only a handful of licensed cannabis companies are currently able to operate.”
The new facility, upon completion, would establish Aurora Nordic as the continent’s largest producer of cannabis. Furthermore, through Aurora’s wholly-owned subsidiary, Pedanios, Aurora Nordic will have access to Europe’s largest distributor of cannabis, providing direct access to a large and rapidly-growing customer base. The joint venture will focus on selling cannabis in Denmark, Sweden, Norway, Finland and Iceland, through Pedanios.
The announcement was released on the same day U.S. Attorney General Jeff Sessions rescinded memos from the Obama administration that had adopted a policy of non-interference with marijuana-friendly state laws, which caused most Canadian marijuana stocks to drop on Thursday.
Aurora Cannabis shares have surged more than 300% during the past three months given the increased investor activity in marijuana space. Aurora Cannabis currently trades at an astronomically high Price to Sales ratio of 256.73x.
Disclosure: Neither the author nor his/her family own shares in the company mentioned above.
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