Shares of Aurora Cannabis Inc (OTCMKTS:ACBFF) continue to defy gravity after a period of thick strategic activity. We often see some corrective action in a stock at such times during this type of stretch. And it may be a kind of bullish indication that we are still seeing shares of the stock hold their ground and broadly advance over the past three months despite the level of capital commitment on the table over that period.
Speaking directly to that matter, the company just announce that Institutional Shareholder Services Inc. and Glass Lewis and Co., LLC, two leading advisory firms, have recommended that shareholders of Aurora vote for the Share Issuance Resolution with respect to the plan of arrangement to acquire all of the shares issued and outstanding of MedReleaf Corp. According to the release, “Additionally, both firms recommend shareholders vote for the Reduction of Capital Resolution in regard to the proposed spin-out of Aurora’s U.S. assets by way of a distribution of capital to Aurora Shareholders of the common shares of Australis Capital Inc.”
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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ACBFF shares have moved above their longer-term major moving averages in recent action, suggesting that the stock remains in a primary degree bull market trend from a standard and traditional technical perspective. The stock has also been clearly picking up interest in terms of overall average trading activity, with recent average daily volume printing about 28% above its historical average.
“We are bringing together two leading cannabis companies with very complementary assets, teams, brands, cultures and philosophies, in order to further capitalize on unique and immediate opportunities in the global cannabis sector, and to accelerate growth,” said Terry Booth, CEO. “The two leading independent shareholder advisory firms have now validated this proposal and recommend shareholders vote in favor of the combination due to its strategic synergies. The Board and management of Aurora recommend shareholders vote their proxies in favor of both resolutions as soon as possible, including the capital reduction related to the proposed spin-out of Australis.”
Currently trading at a market capitalization of $3.93B, ACBFF has a significant war chest ($231M) of cash on the books, which is balanced by about $2.6M in total current liabilities. One should also note that debt has been growing over recent quarters. 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%. As more color becomes clear on the name, we will review the situation and update our take. 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.