What Happens to Aurora Cannabis Inc (OTCMKTS:ACBFF) When the Herd is Thinned...

What Happens to Aurora Cannabis Inc (OTCMKTS:ACBFF) When the Herd is Thinned Out?


In the course of the cannabis boom in the North American equity markets over the past month, Aurora Cannabis Inc (OTCMKTS:ACBFF) has started to lag a little bit of late. The 200-day simple moving average has been a clear obstacle. And the stock has pulled back in recent days. But the market share story into the advent of the fully-legal adult-use market in Canada is still very much a live issue. In that vein, the company just announced that it has received a Health Canada production license for its Aurora Eau facility in Lachute, Quebec.

According to the release, “The Company now has seven facilities licensed for production, with a combined production capacity in excess of 160,000 kg per annum. Aurora has additional facilities under development, bringing the total funded capacity to more than 500,000 kg per annum. Additionally, Aurora, through its wholly-owned subsidiary MedReleaf Corp., has received its oils production license for its Bradford facility, which at full capacity is a 28,000 kg per annum cultivation facility. MedReleaf Bradford features a high-volume CO2 extraction facility, which will significantly increase oils production, and is in the process of stockpiling significant quantities of derivative products in anticipation of receipt of its sales license.”

Aurora Cannabis Inc (OTCMKTS:ACBFF) bills itself as 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 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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As noted above, shares of ACBFF have advanced sharply over the past month, but have peeled back off key resistance in recent days. However, the company continues to paint a very pretty picture of its chances of being one of the chosen few when this industry inevitably gets pared back down in a winner-take-all culling of the herd that is likely just around the corner.

“We are proud of the achievements at Aurora Eau, and with seven production licenses we are exceptionally well positioned to continue executing on our early mover advantage, in both the Canadian and the international markets,” said Terry Booth, CEO of Aurora. “With large-scale production scaling up at Aurora Sky, we have the ability to dedicate production from Aurora Eau to niche markets, thereby growing our brand recognition and enhancing our margin profile. Our new oils production license at Bradford further increases our capacity to produce higher margin oils, and drive growth.”

Currently trading at a market capitalization of $5.89B, ACBFF has a significant war chest ($231M) of cash on the books, which compares with about $56.1M in total current liabilities. 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 may be a very interesting story and we will look forward to updating it again soon. 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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