Aurora Cannabis: A Low-Cost, Fast-Emerging Industry Powerhouse
January 19th, 2016
News, Top Story
The Canadian cannabis industry is poised for rapid growth over the coming years. After rolling out the Marihuana for Medical Purposes Regulations (MMPR), the country opened the door to the corporatization of the cannabis industry. Health Canada projected that more than 400,000 patients would enrol and generate approximately C$1.3 billion in revenue by 2020. With the election of Justin Trudeau, recreational legalization appears likely over the coming years, too.
Competition for a slice of the cannabis industry has been fierce. Under MMPR regulations, companies interested in growing and selling cannabis must apply to become licensed producers and undergo a rigorous approval process. The number of licensed producers stands at just 27 right now, despite thousands having already applied for the coveted license, only a small handful of them are publicly traded in Canada.
Aurora Cannabis Inc. (CNSX: ACB) (OTCQB: ACBFF) is the only licensed producer (LP) in Alberta, and has the second highest square footage approved for production amongst publicly traded LPs in the country. Since Alberta is one of the most business-friendly provinces in the country, the company benefits from a lower cost basis and ongoing operating costs. These attributes have made it among the lowest cost-per-gram licensed producers in the country with a state-of-the-art facility.
Nature Meets Technology
Aurora Cannabis has leveraged both nature and technology to its benefit by using the natural resources of Alberta while building a tailored facility from the ground up.
In rural Alberta, there is no cost for fresh mountain-fed water that is used throughout the facility as opposed to the municipal water used by other companies. The company also avoids the use of pesticides in its growing operations in order to uphold the highest quality, and is firmly opposed to irradiation since it destroys many of the desirable qualities of the cannabis plant. These attributes set it apart from many licensed producers across the country.
The company’s $11.5 million 55,200 square foot facility was built exclusively for the production of marijuana. By contrast, many licensed producers have repurposed facilities that were previously used to grow other types of plants. The facility has its own power generator and water plant with millions of dollars’ worth of instrumentation designed to tightly control everything from water temperature to nutrient levels.
Low Cost Advantage
Aurora Cannabis’ vertically integrated business model has several economic advantages over other licensed producers by being located in Alberta, as opposed to more populous regions.
Alberta has the lowest corporate tax rates and power costs in the country, while there is an abundance of farm credit programs and innovation grants available. The company’s strains are offered at $8 per gram with $5 per gram compassionate pricing and free shipping across the entire country. While Alberta may seem like a small market, the mail order nature of the MMPR means that the company can target consumers throughout the country.
By becoming a low-cost producer early on, the company could capture significant market share as the industry matures. The increased number of customers looking for bargains could also be upsold on ancillary products or services. For instance, the company entered into a preliminary agreement to secure the exclusive distribution rights to Mystabis in November – a revolutionary inhaler that provides pressurized metered doses of cannabis.
The Canadian cannabis industry is poised to rapidly grow over the coming years. While the MMPR program continues to grow, licensed producers are likely to be big beneficiaries from a move to legalize recreational marijuana. Mettrum Health Corp. (CVE: MT) (OTC: MQTRF), OrganiGram Holdings Inc. (CVE: OGI) (OTC: OGRMF), Canopy Growth Corp. and Aurora Cannabis are all major publicly traded players poised to capitalize on what promises to be an immensely lucrative multi-billion dollar marketplace that will surely eclipse the medical marijuana sector.
Thanks to its exceptionally low production costs and best-in-class commitment to standing out from its competitors, investors may want to take a closer look at Aurora — an emerging powerhouse in Canada’s burgeoning, government-endorsed marijuana industry.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website 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. CFN Media Group, 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. CFN Media Group, 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. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, 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: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. 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. CFN Media Group, 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. CFN Media Group, 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. CFN Media Group, 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: https://www.cannabisfn.com/legal-disclaimer/.