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Aurora: A Compelling Way to Profit from Canadian Cannabis


Canada has long been a pioneer of medical cannabis since the introduction of its MMAR and MMPR programs. With the election of Justin Trudeau as Prime Minister, the country could take an even bigger step to become the first G7 nation to legalize recreational cannabis. According to Alan Brochstein of 420Investor, the legal recreational market alone could conservatively be worth $2 billion to $4 billion.

There is no shortage of companies looking to capitalize on this opportunity, including aspiring producers like Organigram Holdings Inc. (CSE: OGI) (OTC: OGRMF) and Aphria Inc. (CSE: APH) (OTC: APHQF). But, the 27 existing licensed producers under the MMPR program are likely the best positioned. Since the government has already vetted them, they could be first-to-market in enrolling clients and building their brands.

Aurora’s Advantage

Aurora Cannabis Inc. (CSE: ACB) (OTC: ACBFF) was founded on the premise that legal cannabis shouldn’t be costly, unreliable, or confusing to access. Located in the shadow of the Rockies, the company’s $11.5 million 55,200 square foot facility combines natural elements like fresh mountain water with state-of-the-art technology to provide the cleanest, safest products on the market that avoid techniques like irradiation that destroys desirable qualities in plants.

In addition to producing high quality cannabis, the company’s vertically integrated business model and use of natural resources have made it a low-cost producer. Alberta also has the lowest tax rates in the country and an abundance of farm credit programs and grants available to innovative companies in the space. By leveraging these advantages, all of the company’s strains are being offered at just $8 per gram with $5 per gram compassionate pricing.

The company is also building out a complementary portfolio of technologies that it can cross-market to its enrolled patients to drive additional revenue. For instance, it entered into a preliminary agreement to secure the exclusive distribution rights to Mystabis last November, which is a revolutionary inhaler that provides pressurized, metered doses of cannabis without the use of heat or combustion. Tools like these could eventually target both the medical and recreational sides of the market.

Turning Point

Aurora Cannabis has already registered hundreds of medical cannabis clients and experienced better-than-expected crop yields. In a recent press release, issued in early February, the company indicated that crops yielded 1.36 grams per watt, or 1.4 kilograms per light. The 55,200 square foot facility could therefore produce about 7,000 kilograms of dried cannabis each year after it becomes fully operational by spring of this year.

The company also recently launched its redesigned website at www.auroramj.com with a streamlined registration process and user-friendly patient and physician portals. In conjunction with its launch on January 4th, the Founding 420 program was implemented to bestow a number of benefits to its first four hundred and twenty clients in exchange for detailed feedback on its product, service, delivery, brand, and other key performance indicators.

Later this month, the company intends to begin selling its flagship CBD cannabis strain that has tested at over 25% CBD and 1% THC by an independent, third-party laboratory. These attributes make its strain the highest percentage CBD flower in Canada by a wide margin, which should help accelerate sales in the medical market. With an application submitted for a Section 56 exemption, the company could also soon begin to market CBD oil products once approved by Health Canada.

Looking Ahead

Aurora Cannabis represents a unique play in Canada’s emerging cannabis market, which could reach $2 billion to $4 billion in size if recreational legalization passes under the leadership of Justin Trudeau. With both a low-cost and high-quality advantage over other producers, the company could capture significant market share in the market’s early stage, which could pay off over the long-run as household brands are established and the market expands dramatically.

In addition to investors in Canada’s MMPR space, those involved with U.S. companies like Mcig Inc. (OTC: MGIC) or international firms like GW Pharmaceuticals plc (NASDAQ: GWPH) may want to take a closer look at the stock as an opportunity to diversify into Canada’s promising market.

For more information, visit the company’s website at www.auroramj.com.

Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist.

Disclaimer: Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: http://www.cannabisfn.com/legal-disclaimer/.

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