Aurora Cannabis Inc (OTCMKTS:ACBFF) was picked out of a crowd by famed short-seller Andrew Left of Citron as a company lacking of a clear path to profitability or sufficient intellectual property, as well as a self-dealing company being hit under the surface by what he saw as a red flag of insider sales by executives. He also apparently made comparisons to Enron – the notorious catastrophic blow-up in the energy space 15 years ago – for a style of mark-to-market accounting on biological assets. One might suppose, given Citron’s track record for nailing companies to the wall on such explicit attacks, that Aurora would be taking heavy losses in share pricing as a result.
Instead we a see a stock holding up against the storm quite well. In fact, the company continues to push out strong catalysts, with its latest move being a strategic investment with strong implications. The target is The Green Organic Dutchman Holdings Ltd., a privately held cannabis producer with ACMPR licensed status and facilities in Ancaster, Ontario, with additional construction underway for “a high-technology, ALPS designed facility in Valleyfield, Quebec.”
Aurora Cannabis Inc (OTCMKTS:ACBFF) is a licensed producer of medical marijuana pursuant to the Marijuana for Medical Purposes Regulations and operates a 55,200 square foot expandable state-of-the-art production facility in Alberta, Canada.
ACBFF’s wholly-owned subsidiary, Australis Capital Inc., seeks to be an active participant in the U.S. Cannabis market. Aurora is trading on the Canadian Securities Exchange under the trading symbol “ACB”. The company is headquartered in Vancouver, Canada.
According to company’s materials, “Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island.
In addition, the Company holds approximately 9.6% of the issued shares (12.9% on a fully-diluted basis) in leading extraction technology company Radient Technologies Inc., based in Edmonton, and is in the process of completing an investment in Edmonton-based Hempco Food and Fiber for an ownership stake of up to 50.1%. Furthermore, Aurora is the cornerstone investor with a 19.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis. Aurora also owns Pedanios, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union (“EU”), based in Germany.”
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As noted above, ACBFF shareholders should be happy to see the stock holding up following an attack by a famed short-seller. They should also enjoy the company’s continued appetite for expansion, recently inking a strategic investment in The Green Organic Dutchman Holdings Ltd, a company pushing its own expansion with a second large production facility underway. According to the release, upon completion, its two facilities will measure a combined 970,000 square feet, with a total productive capacity of 116,000 kg per year. The Green Organic Dutchman Holdings Ltd has raised approximately $160,000,000, with over 4,000 shareholders, and is well positioned for the planned 2018 March IPO.
Apparently, the Dutchman’s initial public offering is planned to hit in two months. The presser goes on to note that it is “currently completing the expansion of its Ancaster, Ontario facility and, together with Aurora Larssen Projects Ltd. has commenced the project to construct an 820,000 square foot high technology hybrid greenhouse facility in Valleyfield, Quebec, with a projected production capacity in excess of 100,000 kg of organic cannabis per annum.”
Earning a current market cap value of $3686M, ACBFF has a significant war chest ($127.9M) of cash on the books, which compares with virtually no total current liabilities. ACBFF is pulling in trailing 12-month revenues of $23.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 168.6%. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $ACBFF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $ACBFF, either long or short, and we have not been compensated for this article.