To say that Aurora Cannabis Inc (OTCMKTS:ACBFF) is one of the leaders in the cannabis space is a bit of an understatement. As we have widely documented, we would put it as perhaps THE leader in the space – the spiritual mascot and lead warrior. And it has earned that place with execution and a lot of very smart strategic investments. However, as shareholders found out on Tuesday, it may not be the best time to the leader over coming days.
Why? Because we have finally arrived at the great “sell the news” moment on Canadian full legalization of the adult-use market. The speculative money has poured in to capitalize on the news. And the only way to do that is to monetize the investment, which, necessarily, involves converting paper gains into real gains via a process known as “selling”. And selling is just what you got in the cannabis space on Tuesday.
Aurora Cannabis Inc (OTCMKTS:ACBFF) is one of the most widely diversified players in the cannabis space due to its powerful strategic investments. That suggests it will have an easier time recovering from some profit-taking.
Another factor that should help matters is the company’s announcement on Tuesday that it has received the necessary compliance verification from Health Canada to release for sale its innovative, high-potency, vape-ready CBD oil product line. According to the release, “Launched today under the brand Aurora Cloud, the first products released contain over 550mg of CBD and less than 30mg of THC, making them the only vape-ready CBD products legally available in Canada. This is the first of a broader line of full-spectrum cannabinoid-based, vape ready cartridge products the Company intends to launch in the future.”
“Being the first LP to launch a vape-ready CBD-rich product for the rapidly growing medical and wellness markets reflects our continued leadership in developing and rapidly commercializing product innovations, providing us with an important competitive advantage,” said Terry Booth, CEO. “We identified a significant unmet market need, and our technical and regulatory teams rapidly executed on this opportunity. We are very proud of this accomplishment by our teams, and will continue to leverage our leadership in executing on our strategy to develop a robust portfolio of high value-add, higher-margin products for all markets and jurisdictions that we participate in.”
Diversified, Balanced, and Forward Looking: All Good Reasons to Hope for the Pullback
In addition to the Company’s 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 – Aurora is distinguished by its reputation as a partner of choice and employer of choice in the global cannabis sector.
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.
Aurora Cannabis Inc (OTCMKTS:ACBFF) 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). File this last point with the strategic diversification.
The best bets into a “sell the news” pullback will be diversified core players with strong balance sheets. Especially those with coming catalysts – and the company’s recent announcement of a move to file for listing on the NYSE certainly qualifies there.