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TORONTO – Aurora Cannabis has seen a "strong demand" for a recreational pot during the first weeks of legalization in Canada and expects consumer appetite to continue to outstrip supply during "some time".
The Edmonton-based pot producer was able to legalize Oct. 17 "almost all" its supply obligations before and after using jars for adults, but it will take time to increase its cannabis production in the coming quarters. said Cam Battley, CEO of Aurora.
"We have heard the discomfort of the provinces, which, in general, have not been able to provide sufficient supply," he said during a conference call with financial badysts to discuss the latest financial results of the company.
"We think we've done better than other companies, our peers, we're going to accelerate, we'll be able to catch up, but we can not do it right now."
The cannabis grower's comments were released as he reported his results for the quarter ended September 30th. During the first quarter of its 2019 fiscal year, it generated revenues of $ 29.7 million, more than triple the $ 8.2 million reported for the same period last year. The group also posted a profit of $ 104.2 million, up from almost $ 3.6 million a year ago, thanks to an unrealized cash gain on derivatives and securities. negotiable.
The average net selling price was $ 9.19 per gram in the quarter, up 12% from the previous year, thanks to an increase in cannabis extracts sold.
It is difficult to badyze the performance of marijuana-producing companies because of the accounting rules applied in the agricultural sector, which require companies to badign value to their potted plants before harvest and to the different approaches of producers to how to apply these guidelines.
With the legalization of cannabis for recreational purposes on Oct. 17 – making Canada the second-largest country in the world after Uruguay to do so – the pot market has opened.
There are many problems with the deployment of adult jar consumption in Canada, including product shortages in many markets as demand has outstripped supply. Some government entities involved in the sale and distribution of cannabis for recreational purposes in various provinces reported fewer products than expected and warned that shortages could last for months.
Aurora's results did not include recreational cannabis sales after legalization, but management provided some initial information on how the deployment unfolded.
Although not all provinces and territories have provided details on cannabis sales, Aurora said the adult society market has been "successful" so far, with its products ranking the top selling products and brands in many provinces. supply.
Aurora brands accounted for about 30% of the total market supply through the Ontario Cannabis Store, while it was also one of the top four dried flower products sold in British Columbia, the company said.
Martin Landry, an badyst at GMP Securities, said this market share was larger than expected for the company, particularly in Ontario.
"We were pleasantly surprised by the dynamism of their products in the retail market," he said.
Alcanna Inc., which operates five Nova Cannabis stores in Alberta and in which Aurora has a 25% stake, has achieved a $ 3.7 million turnover in the first 19 days, announced Monday. Battley.
Aurora said its last quarter's revenue included about $ 600,000 from the first shipments received by the provinces in the last days of September, before legalization.
The company added that during the three months ended September 30 and thereafter, it had made "significant progress in increasing its production capacity, including the receipt of various sales and production licenses".
For example, in September, he received his Health Canada production license for his Aurora Water facility in Lachute, Quebec, and opened on November 5th.
Aurora aims to increase production from an annualized production rate of 70,000 kilograms to 150,000 kilograms.
The cannabis producer could sell every gram it produces by June in the adult market, said general manager Terry Booth, citing the evaluation of the company's production team.
"We temper it, we respect our commitments, and when we have an additional supply, what we … we can sell it for the adult market, remember that the medical market and the European market can get us more far past, end point, "he told badysts.
The company is focusing its efforts on the international medical market, especially in the EU, Booth said.
"The future is promising for the medical cannabis system and we are a medical cannabis company in the world … This use by adults is only a small piece of a very big piece of pie. "
Companies in this article: (TSX: ACB)
Armina Ligaya, Canadian Press
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