Legal medical marijuana is a multi-billion-dollar global market and this nascent industry will be one of the greatest investment opportunities in our lifetimes.
While a lot of investors are focused on investment opportunities in the United States, the Trump administration has scared away many investors and a significant amount of capital.
Aurora: Capitalizing on a Global Cannabis Market
Canada has been capitalizing on the United States’ absence and the country has been leading the global cannabis movement.
Aurora Cannabis (ACB.TO) (ACBFF) is one of 58 Canadian licensed medical marijuana producers and has been capitalizing on this emerging opportunity.
Last week, Aurora issued an operational update and provided insight into some of the upcoming potential catalysts. We are favorable on this update and continue to view Aurora as a long-term opportunity.
Continues to Record Strong Growth
Aurora started selling medical marijuana in January 2016. As of August 28th, the company had more than 19,000 active and pending registered patients and continues to see strong growth (added 3,000 new patients in July and August).
This licensed medical marijuana producer has benefited from two major trends. The first is its leverage to international medical marijuana markets, especially Germany. The second is its focus on the cannabis oil market through partnerships and investments.
Aurora expects gross revenues for cannabis sales in Canada and Germany to exceed $3 million for August, a new company record. Cannabis oil products now represent approximately 26% of gross revenues.
Decision for German Based Pedanios Expected by Year-End
In May, Aurora acquired Pedanios GmbH which has been importing, exporting, and distributing medical cannabis into and within the EU since December 2015. Pedanios is Germany’s largest importer, exporter, and distributor of medical cannabis and has shipped to more than 1,000 German pharmacies.
Pedanios continues to grow revenues and has built a record order backlog, leveraging its access to supply from its existing partners in Canada and the Netherlands. In September, Pedanios expects to introduce Aurora-grown product to the German market, which will allow it to satisfy the higher than expected demand. Pedanios is also actively pursuing discussions regarding entry into other European jurisdictions.
In July, Pedanios passed the first stage of the tender application process to become a licensed medical cannabis producer in Germany. The company expects to receive final approval (or rejection) regarding the domestic cultivation license before the end of the year.
Australia-Based Cann Group Completes First Harvest
In June, Cann Group became the first Australian company to be licensed by the Office of Drug Control for commercial medical cannabis cultivation and production.
Last week, Aurora reported that Cann Group successfully completed the harvest of its first cultivation cycle of medical cannabis at its facility in Victoria. The Australian licensed medical marijuana producer is cultivating cannabis to manufacture into a final product that can be accessed by patients.
Focused on Increasing Capacity for the Canadian Market
The Canadian medical marijuana market has seen incredible growth and there has not been enough supply to meet the demand. This has resulted in licensed producers purchasing wholesale medical marijuana from other licensed growers in the country.
To help satisfy the high demand and support its rapidly growing registered patient base, Aurora entered into an agreement to purchase a significant amount of wholesale product from a licensed producer of high quality cannabis. The additional supply will be tested and cleared by Anandia Labs; further details regarding this agreement will be disclosed in the coming weeks.
Aurora has been working on building a massive brand new state-of-the-art marijuana cultivation facility called Aurora Sky. The company said that construction is progressing well and management reiterated its expectation of having plants growing before the end of 2017 (construction expected to be completed in the first half of 2018).
The company also said that construction upgrades at its Québec facility are nearly complete. Internal design and construction have been conducted specifically to ensure the facility meets Good Manufacturing Practices (GMP) standards. Aurora expects that production at the facility will commence before the end of 2017.
credit:420intel.com
