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Aurora Cannabis Inc. is a major pot producer, but if its bets on other cannabis companies continue to bear fruit, it may be able to stop growing the herb itself.
Dawn
ACBFF, -7.45%
CBA -7.23%
recently stated that its investments amounted to more than C $ 700 million ($ 540 million) as of September 21, fueled in part by the demand for marijuana stocks before the full legalization of marijuana in Canada on Wednesday. Aurora's portfolio benefited the entire industry, bringing the company's earnings in the fourth quarter to $ 79.9 million, following a loss of $ 20.8 million the previous year.
Read first: A guide to jar stocks: What you need to know to invest in cannabis companies
One of the largest and most profitable bets of the company is a stake in Green Organic Dutchman Holdings Ltd.
TGODF, -3.19%
tgod, -3.17%
an investment of C $ 55 million in the company at $ 1.65 per share in January, or $ 5.53 per share as of Tuesday. That would be worth about $ 184 million Canadian, which is about 13% of the company. There is an option to increase this participation to more than 50%.
Aurora has also announced investments in Hempco Food and Fiber Inc.
HEMP, -4.85%
CTT Pharmaceuticals Inc.
CTTH, -3.23%
Holdings Choom Inc.
CHOOF, -0.53%
and a 20% interest in Capcium Inc., a private company that provides Aurora with equipment for the manufacture of marijuana pills for medicinal purposes.
Other marijuana stocks to watch for: Tilray has global ambitions
The company created Australis Capital Inc. in September as an investment company focused on the US cannabis market.
How is Aurora: recreational or medical?
Aurora is active in the marijuana markets for medical and recreational purposes. In Canada, Aurora operates a medical cannabis business, but also increases its recreational capacity before legalization. Like all Canadian producers, its international activities focus on the medical pot.
Intellectual property
Aurora does not disclose the number of patents it has obtained or the number of patents pending. The company claims to be interested in four major areas of research and development: the analytical science related to profiling of cannabinoids and terpenes, plant science, clinical studies, including cannabinoid applications, and clinical science.
More marijuana stocks to watch for: Canopy Growth is the $ 4 billion gorilla of the cannabis industry.
Supply contracts
The company says it has signed supply agreements with every province and territory in Canada, representing 98% of the population. It has no agreements with New Brunswick or the territory of Nunavut.
Alberta's retail plans are one of the company's key initiatives in adult recreation. Through its investment in Alcanna Inc., the largest privately owned liquor retailer in the country, the company plans to sell marijuana in the 37 stores that Alcan plans to open in Alberta – the maximum amount allowed by law. province – and continue its retail sales in Ontario. Ontario has stated that federally registered producers are allowed to open a single retail outlet in the province, under the regulations unveiled in September.
More marijuana stocks to watch for: GW Pharma is a drug manufacturer that cultivates its own cannabis plants
Aurora is currently present in several European countries, including Germany and Italy, as well as medical marijuana operations in Colombia, through the acquisition of MedeReleaf. She also exported medical products to Australia and invested in Cann Group, a local medical products producer.
How many weeds grow and at what price?
As of September, Aurora said it could generate an annualized growth rate of 45,000 kilograms of pot per year. The company sold a total of 5,022 kg in fiscal 2018, up 2,382 kg in 2017; Aurora produced 5,632 kilograms during the year, up from 3,037 kilograms in 2017.
For the fourth quarter, the net selling price of dried cannabis equivalent per gram of Aurora was CDN $ 8.02 compared to $ 7.30 in the same quarter of the previous year. She sold pot oil for 13.52 Canadian dollars per gram, up 12.83 Canadian dollars the year before.
More marijuana stocks to watch: Aphria is positioning itself as a producer of low cost jars
Aurora's cash costs for dried cannabis amounted to CAD 1.87 per gram in the fourth quarter, compared to CAD 1.80 per gram in the same period last year. Oil costs CA $ 1.70 instead of CA $ 1.53.
How many pots can he grow?
According to its latest quarterly report, the company expects to be able to produce 100,000 kilograms of pot a year by the end of 2018, and targets an execution rate of 150,000 kilograms. In the future, the company hopes to produce more than 500,000 kilograms a year.
Aurora's US-listed shares gained 50.4% in 2018, while S & P 500 shares
SPX, + 2.15%
earned 3% and the Dow Jones Industrial Average
DJIA, + 2.17%
added 2.4%.
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