Aurora Cannabis Inc (OTCMKTS:ACBFF) got hit a bit to end last week but as held strong. ACBFF, along with everything else related to cannabis, took a hit when US Attorney General Jeff Sessions came forward with an announcement that he’s retracting the Cole Memo (and Obama-era dictate that made it easier and less risky for individual states to legalize cannabis without fear federal prosecutors will go after companies for trafficking). However, because this is ultimately a Canadian company with an increasingly strong level of EU exposure, shareholders may end up benefitting from the shift.
In addition, and strengthening that argument, the company just announced that it has signed a binding term sheet for the formation of a joint venture with Alfred Pedersen & Son, pursuant to which Aurora will ultimately own a 51% interest in Aurora Nordic Cannabis A/S, the joint venture company, which is based in Odense, Denmark. According to the release, Aurora and APS anticipate completing the final agreement shortly, governing the formation of the joint venture, subsequent to which Aurora Nordic will commence construction of an ALPS (Aurora Larssen Projects Ltd) designed, 1,000,000 square foot high-technology, fully automated cannabis production facility.
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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As noted above, we think the rescinding of the Cole Memo might ultimately help Aurora because the company has such an established portfolio of growth outside of the US, and cannabis growth will still end up being driven forward on some level. Hence, we may well see an even greater premium being pushed into plays positioned outside of the US market.
“This is a huge next step for Aurora, establishing us as the leading cannabis company in Europe, a market of well over 400 million people, dramatically accelerating our international expansion,” said Terry Booth, CEO. “We are already the leading exporter to and distributor of medical cannabis in Germany, and now have the largest funded capacity footprint in the rapidly-growing European market, in which only a handful of licensed cannabis companies are currently able to operate.”
Currently trading at a market capitalization of $3882.9M, ACBFF has a significant war chest ($127.9M) of cash on the books, which stands against 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.