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Aurora Cannabis Inc (NYSE:ACB) Sets Out for Global Domination with ICC Move

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Aurora Cannabis Inc (NYSE:ACB) continues to pull back, dropping about 50% off its highs. However, the stock is still up over 250% in the past year. Like Canopy, this is a long game in play for Aurora. Think of the old board game “Risk”. The world is a big map of the territory to be won or lost if you believe, like the management teams at these two companies believe, that we are on a path to see most of the world gradually start to increasingly legalize cannabis.

The science is increasingly supportive of this move, and the world has gotten smaller and smaller in terms of cultural differentiation with the advent of a global fiber optic IT infrastructure in the late 1990’s. The result is increasing homogenization of views on many things, with cannabis being part of that equation. So, given this outlook on the world, what is the goal of the strategic vision of one of the best and biggest, and most well-capitalized, cannabis players?

Aurora Cannabis Inc (NYSE:ACB) is one of the most widely diversified players in the cannabis space due to its powerful strategic investments.

And that status has just been further augmented with the company’s recent announcement that Aurora has received consent and approval from its consortium of lenders led by Bank of Montreal to move forward with the acquisition of all of the issued and outstanding common shares of ICC Labs Inc. (ICC), a fully licensed producer and distributor of medicinal cannabinoid extracts, recreational cannabis, and industrial hemp products in Uruguay as well as a fully licensed producer of medicinal cannabis in Colombia.

In other words, Aurora is setting up camp in a big way in the South American market.

Think of that risk board again. This is a territorial race between several of the biggest players, including Aurora and Canopy as probably the frontrunners, then perhaps, Aphria and several others. We would see Tilray as somewhere just outside of the top ten on this list (despite the company’s somewhat baseless attempts to hype itself as some sort of leading player in the space).

Aurora Cannabis Inc (NYSE:ACB) managed to rope in revenues totaling $19.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 222.6%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($149.4M against $75.2M).

As noted in the release detailing the strategic rationale behind the acquisition, Aurora states that this deal “will create a strong foundation for expansion, and will leverage ICC’s first-mover advantage in South America, bringing significant low-cost production capacity, a well-diversified product portfolio, and extensive distribution channels throughout South America and internationally. Led by CEO Alejandro Antalich, a widely-recognized leader in the South American cannabis market with over 25 years of experience in the pharmaceutical sector, the acquisition of ICC will establish Aurora as the industry leader in South America, a continent with over 420 million people.  ICC is based in Uruguay, the first country in the world to legalize cannabis for adult consumer use. In addition, ICC holds licenses in Colombia for the production of medical cannabis.”

 

Knowledge is Power

Aurora Cannabis Inc (NYSE:ACB) has demonstrated rapid organic growth and strong execution on strategic M&A, which to date includes 15 companies – MedReleaf, CanvasRX, Peloton Pharmaceutical,  Aurora Deutschland (formerly Pedanios), H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, Anandia Labs, HotHouse Consulting, Agropro, Borela, and the pending acquisition of ICC Labs.

We would also note that the company has invested in and established strategic partnerships with a range of leading innovators, including: The Green Organic Dutchman Holdings Ltd. (TSX: TGOD), Radient Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), Namaste Technologies Inc. (TSXV: N), Evio Beauty Group (private), Wagner Dimas (private), CTT Pharmaceuticals (OTCC: CTTH), and Alcanna Inc. (TSX: CLIQ).

However, just drilling down into its core cannabis production operations, Aurora Cannabis Enterprises Inc, trumpets itself as “one of the world’s largest and leading cannabis companies” and a licensed producer of medical cannabis pursuant to ACMPR.

We would expect expansion on the way given the inflow of investment capital. But, at present, the Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, known as Aurora Mountain, 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.

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Canopy Rivers Inc. (OTCMKTS:CNPOF) Portfolio Company TerrAscend Corp (OTCMKTS:TRSSF) To Acquire State Flower Brand

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Canopy Rivers Inc. (OTCMKTS: CNPOF) has announced that portfolio company TerrAscend Corp (OTCMKTS: TRSSF) has entered a definitive agreement to buy ABI SF, LLC a cannabis cultivation facility operators that own the State Flower brand.

Acquisition of State Flower

According to the terms of the agreement, initially, TerrAscend will acquire 49.9% of State Flower equity for around $2.85 million from the conversion of a previously issued convertible debenture. The company has also extended a $3.75 million line of credit to State Flower for enhancing improvements in the facility aimed at boosting its capacity. TerrAscend will acquire the rest of the 50.1% within a predetermined 12-month period based on future revenue.

Canopy Rivers, CEO, and President, Narbe Alexandrian stated that the acquisition demonstrates how TerrAscend is delivering its expansion plans. This offers more exposure in the US for Canopy Rivers and TerrAscend shareholders. The CEO added that the acquisition of State Flower would enable TerrAscend to seize a significant foothold in the US as a result of its solid consumer-facing brand. Alexandrian further said that with the retail foothold in the US already secured vial Apothecarium, the acquisition of State Flower would be a natural strategic fit for the company.

State Flower produces Ultra-premium cannabis

State Flower is popular for its high-quality cannabis flower currently sold through dispensaries in Nevada and California including Apothecarium. It operates a licensed facility in San Francisco California. It has emphasized a craft approach in its cultivation through the best-in-class genetics at the Envirocann certified facility. Evirocann certification confirms that bets management practices are in place in growing and processing of cannabis. It also ensures environmental stewardship as well as compliance with state and local regulations.

State Flower President, Daniel Wacks stated that through their work with TerrAscend and Apothecarium they have established a great cultural and strategic fit. He added that the company was proud of its achievements and were glad to have found a partner who believes in their team. Wacks said that they are looking forward to the partnership to create the best-in-class growing capabilities in all locations where TerrAscend operates.

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Auxly Cannabis Group Inc. (OTCMKTS:CBWTF) Subsidiary KGK Science Receives Cannabis Research Licence

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Auxly Cannabis Group Inc. (OTCMKTS:CBWTF) has announced that its wholly-owned subsidiary KGK Science Inc. has received a Cannabis Research Licence from Health Canada. Under the cannabis regulations, this will allow the subsidiary to possess and manage cannabis for clinical trials.

KGK to conduct the first clinical trial

This is the first license of its kind in Canada to a contract research organization. KGK will be conducting its first cannabis-based clinical trial to test pharmacokinetics of CBD and THC in healthy adults. The trial will start on October based on a procedure developed by KGK researchers at the company’s in-house clinic in Ontario. A third party who sponsored KGK to carry the trial on their behalf will receive the results.

KGK has several cannabis trials in its pipeline, and it is on its way to show its leadership in research and regulatory services in supporting cannabis and cannabis derivatives. CEO and President of KGK, Najla Guthrie stated that the trial is a significant step for the company’s business, clients, and the cannabis industry at large. He added that support from regulatory bodies and government was essential for manufacturers to take science-driven approaches in substantiating the safety of products through clinical trials.

Auxly establishing presence in Atlantic Canada

Recently Auxly and its strategic partner Atlantic Cultivation announced the signing of a comprehensive supply, retail and development agreement with the province of Newfoundland and Labrador. This is a significant milestone for Auxly as it looks to establish its presence in Atlantic Canada.

According to the agreement, Atlantic qualifies to apply for the running of five new retail outlets in the province. Currently, site scouting is underway, and Atlantic expects to open its first retail store in the first quarter of 2020. On its end, Auxly will supply up to 50 kg of dried cannabis flower this year to the province of Newfoundland and Labrador. This will increase to 1,000 kg next year with the option of additional 1,000 kg in 2021.

Auxly CEO, Hugo Alves said that they were delighted to build the company’s partnership with Atlantic as they seek to reinforce their position in Atlantic Canada.

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SinglePoint Inc. (OTCMKTS:SING) Subsidiary To Offer Energy Solutions To The First Ever Hemp Distribution Centre

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SinglePoint Inc. (OTCMKTS:SING) has announced that its subsidiary Direct Solar of America and GSX international Group along with other corporations, are planning a first of its kind Hemp Distribution center.

Direct Solar to offer energy solutions to distribution and production centers

Direct Solar of America will supply all then required energy solutions to the distribution and production centers. This is along with energy solutions to autonomous farmers within the coop. Equally, the SinglePoint subsidiary will also facilitate the assigning or selling of ITCs between centers and farmers as well as with third parties.

This opportunity to enter the hemp market represents a massive chance to enter the burgeoning market expected to be a multi-billion dollar industry in the next few years. An organization able to effectively pool the resources of small hemp farmers and form consolidated distribution and production centers could have a competitive edge in the hemp processing market in the future. In addition to the current tax incentives provided through ITCs as well as Opportunity Zones, any group that can access both will be in a better position to reap high returns.

Direct solar services to offer exceptional value add

The company’s services will provide a unique value addition not easily replicated. This will lead to the creation of a natural barrier that will limit the entry of competitors in future that offering a long-term competitive edge. Equally, the solution will offer immediate stability to the hemp market at the same time, generate considerable profits.

Generally, the profit potential is massive owing to the current solar tax incentives and the opportunity zone exemptions. It is estimated that the project will be fully profitable in 3 to 4 growing cycles. Southern farmers will enjoy the benefit of multiple seasons per year while northern farmers will only have one growing season per year.

To reap the maximum benefit of the structure is to take advantage of the currently available tax exemptions for opportunity zone development. The financial incentive will ensure the project is profitable in the next 24 to 36 months.

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