As we have said a number of times, Aurora Cannabis Inc (OTCMKTS:ACBFF) is the most aggressive deployer of cash from operations for proactive growth in the cannabis patch. The company is extremely expansive in its portfolio of strategic relationships and investments, consistently diversifying its revenue streams over time, which should – in theory – provide a major buffer against volatility during future soft patches in the cannabis story without really detracting from growth potential during the good times. It’s one of the reasons we have been such fans of the story since early last year.
As yet another example, the company just announced that, “pursuant to an Amended and Restated Private Placement Subscription Agreement dated September 15, 2017, with Hempco Food and Fiber Inc. (TSX-V:HEMP), Aurora Cannabis Inc. subscribed for 10,558,676 units in the share capital of the Reporting Issuer, each Unit consisted of one common share at a purchase price of $0.3075 per common share and one share purchase warrant at an exercise price of $0.41 per warrant share, exercisable up to and including November 14, 2019. The Units were purchased for gross proceeds of $3,246,797.87.”
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 a 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, based in Germany.”
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The chart shows 25% piled on for shareholders of the stock during the trailing month. Furthermore, the name has benefitted from a jump in recent trading volume to the tune of 21% above its longer-run average levels.
According to the release, “Concurrent with the acquisition under the Offering, the Acquiror also entered into a Call Option Agreement with Charles Holmes and Angela Holmes (the “Founders”), that allows the Acquiror to purchase up to 10,754,942 Shares in the share capital of the Reporting Issuer (50% from Charles Holmes and 50% from Angela Holmes) (the “Additional Shares”) from the Founders in equal amounts. Prior to the Transaction, the Acquiror held Nil common shares in the share capital of the Reporting Issuer.”
Earning a current market cap value of $3.76B, ACBFF has a significant war chest ($231M) of cash on the books, which compares with about $2.6M in total current liabilities. One should also note that debt has been growing over recent quarters, but so has cash, and at a much faster rate, which is now fueling these types of investments.
ACBFF is pulling in trailing 12-month revenues of $42M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 211.1%. 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.