Aurora is a company that until recently was focused primarily on the medical and then later consumer cannabis markets. The Canadian company has expanded its greenhouse produciton faclities, and grew almost 60,000 kg of cannabis in its fiscal 2019
In its recent year ending earnings statement, Aurora, which manufactures medical marijuana and vape prodicts, announed a 349% rise in sales. The company is positioning itself for wider legalization of edible products, specifically those focused on CBD.
To that end, Aurora announced in July a partnership with UFC, a combat sports league that promotes mixed martial arts events. The aim of the research partnership is to investigate the effects of CBD on pain and recovery for high stress athletes
“This groundbreaking research will generate the data required to establish CBD as an accepted therapeutic ingredient,” said Aurora chief corporate officer Cam Battley.
“The intellectual property from this research will lead to the creation of science backed, hemp derived CBD products that will combat the rapidly growing market of untested CBD treatments. We're excited about the opportunities ahead for us in the U.S. market and we'll continue to take a measured, but strategic approach to how we enter this space,” he added. Battley made his comments as part of an earnings call with analysts that was posted in transcript form on the site seekingalpha.com.
“We are laser focused on CBD derived from hemp and the various opportunities that exist in that. When USA passed the Farm Act they leapfrogged across the rest of the world or over the rest of the world in CBD derived from hemp,” added Aurora CEO Terry Booth.
Acquisitions to speed market entry
Booth said Aurora will be investigating further acquisitions in the US market to speed its market entry. But decided where to place its focus will be tricky while the regulatory situation remains unclear. The US Food and Drug Adminstration is in the process of wading through more than 4,000 comments that it received in the wake of the May 31 meeting it convened in Washington DC on CBD. The agency has said it intends to make a statement on CBD regulation sometime in the fall. At teh moment the agency’s postion is that CBD is not a legal dietary ingredient and should not be used in dietary supplements or foods. That determination is ranked against the stark reality of a huge market that has grown up in recent years that has paid little to no heed to FDA’s stated position.
“We are anticipating that to be isolate will be the first step from the FDA as an ingestible mainly because there are 112 or 113 cannabinoids in cannabis and they have not been tested by the World Health Organization. The WHO has come out and said that CBD is safe as an ingestible, but they've put brackets around that sentence. This is only for pure CBD,” Booth said.
“And I think the phrase is commonly misused, ‘a broad spectrum CBD.’ There is no such thing. It’s broad spectrum cannabinoids minus the THC derived from hemp and/or cannabis. So we are hoping the broad spectrum is something that is approved for ingestibles as we feel it's more effective, but the first step in those ingestibles may indeed be an isolate. So we're making sure both of those bases are covered in our review of companies that participate in that industry in the United States,” he said.
Aurora announced sales of $249 million CAD ($188 million USD) in its fiscal 2019. Despite the rapid rise in sales, the company has continued to lose money, reporting losing more than $11 million CAD in the fourth quarter, which was a significant improvement over the third quarter, which the company reported a loss of $36.6 million CAD.