The pot producer is the first to report earnings since Canada legalized marijuana last month
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by Kristine Owram
Aurora Cannabis Inc., the first pot producer to report earnings since Canada legalized marijuana last month, gained as much as 5 percent in pre-market trading after profit and sales surged.
Aurora posted C$29.7 million ($22 million) in revenue for the fiscal first quarter ended Sept. 30, up from C$8.2 million a year earlier. Although the quarter ended before Canada legalized recreational marijuana on Oct. 17, the revenue figure included C$600,000 in sales to the provinces. The remainder was from medical sales.
Aurora’s products and brands ranked among the top-sellers in many of the provinces it supplied in the first two weeks of legalization, the company said in a statement Monday. In Ontario, Canada’s most populous province, Aurora brands accounted for approximately 30 percent of the total market supplied through the government-run Ontario Cannabis Store, while in British Columbia, Aurora had the top four best-selling dried flower products. Shortages have persisted across the country since the early days of legalization.
“The commencement of adult consumer use sales in Canada has been very successful for Aurora, with strong performance across all product categories and brands,” Chief Executive Officer Terry Booth said in the statement. “Given the strong unmet consumer demand evident across Canada, we are confident that our rapidly increasing production capacity will result in continued acceleration of revenue growth.”
Aurora is currently producing at an annualized run rate of 70,000 kilograms and expects that to ramp up to 150,000 kilograms by early 2019.
Net income was C$104.2 million, up from C$3.6 million in the same quarter last year. The gain was primarily attributable to an unrealized non-cash gain on securities. Aurora reported a gross margin on cannabis sales of 70 percent, up from 58 percent a year earlier but down slightly from 74 percent in the previous quarter. The cash cost to produce a gram of dried cannabis fell to C$1.45 from C$1.87 a year earlier. The average sale price was C$8.39 a gram, up from C$8.02 the previous quarter.
Aurora, based in Edmonton, Alberta, rose to $7.48 in pre-market trading in New York.
Copyright Bloomberg News
