William Sumner
Today, Aurora Cannabis Inc. (ACB) announced its financial results for the third fiscal quarter of 2018, ending on March 31, 2018.
The company completed the acquisition of CanniMed Therapeutics, one of the largest medical cannabis providers in Canada. Additionally, the company also completed strategic investments in Liquor Stores NA and The Green Organic Dutchman, in preparation for the launch of adult use cannabis sales in Canada later this summer.
“With production underway at Aurora Vie and Aurora Sky, yield enhancements being implemented at CanniMed, and significant new capacity coming online through 2018, we are targeting further, accelerated growth in subsequent quarters.,” commented Aurora CEO Terry Booth.
The company saw a large increase in the number of medical cannabis patients it served, surging 45,776 patients and representing a 249% increase. The sudden influx of medical cannabis patients was for the large part due to the company’s acquisition of CanniMed Therapeutics, which contributed 21, 327 patients.
The cost per gram to produce cannabis increased by 8.5%, from $1.41 to $1.53. Likewise, the cash cost of sales per gram also increased by 3.4%, from $1.74 to $1.80. Despite the increase in production and sales costs, the average selling price per gram declined by 4.4% to $7.99. Unsurprisingly, gross margins on cannabis produced by the company declined from 73.8% to 66%.
Revenue for the quarter was $16.1 million, representing a 37.6% increase compared to the previous quarter. Sales from cannabis rose by 11% to $10.8 million, with the majority of the coming from the Canadian market ($6.3 million). As of March 31, 2018, the company has approximately $338.5 million in working capital, compared to $170.1 million on June 30, 2017.
Despite the increase of revenue, losses for the company were quite high. The company reported a net loss of $20.8 million. The quarterly loss was largely attributed to share-based payments and the costs associated with acquiring CanniMed Therapeutics. Aurora ended up paying a premium for CanniMed as the hostile takeover caused the price of the acquisition to rise. With such high losses, Aurora has placed a pretty big bet on their acquisitions; leaving many to wonder when, or if, they will start to see returns.
