Aurora Cannabis Inc (OTCMKTS:ACBFF) has been a master of diversifying its revenue streams through synergistic investments. The company has been dealing with the best kind of problem: too much cash from operations. And given that pot production is likely to be a cyclical crop industry, it’s essential that a company in its position develop ways to invest that cash along lines that can also reduce costs or otherwise augment operations. The company’s latest move is a textbook example of how to navigate such a business problem.
Specifically, the company just announced a non-binding term sheet with Micron Waste Technologies Inc. (OTC: MICWF), a developer of proprietary digester solutions for the treatment of organic waste, for a strategic investment by Aurora in Micron, and for both companies to collaborate on the optimization of Micron’s technology for the treatment of organic waste generated in the cultivation and production of cannabis products.
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 (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production 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 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 (“EU”), based in Germany.”
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According to the company’s most recent release, Micron has developed a new technology, based on aerobic digestion and subsequent treatment, that converts organic waste into clean water that meets municipal effluent discharge standards.
“The investment in and collaboration with Micron reflect our commitment to innovation in the cannabis sector, aimed in this case at achieving improved operational economics, as well as a superior, ‘greener’ approach to organic waste management,” said Terry Booth, CEO of Aurora. “The treatment and disposal of organic waste in the cannabis industry is a time consuming and costly exercise that is subject to strict regulation by Health Canada. Micron’s solution promises to be a very elegant, highly efficient and low-cost alternative that will also have a positive impact on the environment. In making this investment, we anticipate benefiting not only from the positive impact on our operations, but also by being exposed to the upside potential of Micron’s commercial development. We look forward to collaborating with Micron in furthering the market reach of this very promising technology.”
Currently trading at a market capitalization of $2106.8M, ACBFF has a significant war chest ($127.9M) of cash on the books, which must be weighed relative to virtually no total current liabilities. ACBFF is pulling in trailing 12-month revenues of $23.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 168.6%. 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.