Aurora Cannabis Inc (OTCMKTS:ACBFF) is Testing Critical Support Levels

Aurora Cannabis Inc (OTCMKTS:ACBFF) is Testing Critical Support Levels


Aurora Cannabis Inc (OTCMKTS:ACBFF) is attempting to carve out key pivot support this week as shares bounce higher following a test of the stocks February 5 lows around $5.75 per share. 2018 has thus far been tough sailing for shareholders of any of the major cannabis producers, particularly in Canada, with recent valuation fears fueling further heavy action. Nonetheless, the company continues to mobilize its resources and pick up market share.

To wit: Aurora just announced last week that CanniMed has entered into a Letter of Intent to become a preferred supplier of medical cannabis to Pharmasave. According to the release, “a member-governed cooperative of more than 650 independently owned community pharmacies across the country, Pharmasave is one of Canada’s leading independent community pharmacies.”

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. The Company operates a 55,200 square foot, state-of-the-art 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 a40,000 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, based in Germany.”

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As noted above, shares of the stock have been in distribution mode for most of the past three months. But the stock has seemingly found some support in recent trade after testing a key chart low. That action has been further fueled by signs that the company is beginning to benefit materially from its recent CanniMed acquisition.

“Canadians trust pharmacists to help guide them to the right information and products to treat their conditions,” said Terry Booth, Aurora CEO, “and now Pharmasave joins two other national pharmacy chains in showing their trust in us to provide them with medical cannabis products and education. These supply agreements allow us strong penetration into what is likely to be a sizable portion of the medical cannabis market, and they highlight the strength of our organizations, the scale of our operations and the world-class operational standards that both Aurora and CanniMed practice. We’re proud to partner with Pharmasave and expand our ability to help Canadians in need find the relief they are seeking.”

Now that the stock is found some semblance of support, given its status as a clear speculative favorite among traders, one can likely imagine the number of stop-loss orders now sitting beneath recent lows in the $5.50-5.75 area. If that level is breached on a further decline, one might get another opportunity at this stock at a test of its rising 200-day simple moving average, which is coming up under ACBFF shares right around the key $5 per share level.

At this time, carrying a capital value in the market of $2.23B, ACBFF has a significant war chest ($350.8M) of cash on the books, which is balanced by virtually no total current liabilities. ACBFF is pulling in trailing 12-month revenues of $31.1M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 201.2%. This is an exciting story, and we look forward to a follow-up chapter as events 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.

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