AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF) Is A Discount Entry Opportunity

The cannabis legalization trend is no longer exclusive to North America. Australia, and most recently, Germany have taken steps to legalize cannabis. Consequently, many U.S. and Canadian companies are moving to capitalize on the new International cannabis markets. AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF) has taken the first step to capitalize on the European cannabis markets.Before we delve into the details, a little background for our readers taking their first look at the Company. Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”).The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, and is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of, a third 40,000 square foot production facility in Pointe Claire, Quebec, near Montreal. In addition, the company is the cornerstone investor with a 19.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis.Since our last review of the Company, Aurora Cannabis Inc took a major leap forward on May 26, 2017 when it announced its acquisition of Pedanios GmbH ("Pedanios"), a leading wholesale medical cannabis company in the European Union ("EU"). Since December of 2015, Pedanios has been a successful importer, exporter, and distributor of cannabis for medical purposes into and within the EU. As a federally licensed medical and narcotic wholesale and GMP inspected narcotic import company, it holds all relevant licenses and permits.Pedanios' monthly sales immediately doubled and growth continues to accelerate as Germany's 80 million citizens begin to benefit from the improvements to patient access guaranteed by the new law. Perhaps the most notable news regarding the transaction is the fact that Pedanios is currently operating cash-flow positive, which translates to an immediate positive on Aurora Cannabis’ balance sheet. Neil Belot, Aurora's Chief Global Business Development Officer commented:

"This is a transformational acquisition for Aurora, and a key step in our aggressive international expansion strategy. The transaction will ensure ongoing and increasing high quality product is available to fuel Pedanios' rapid growth, while positioning Aurora and Pedanios to seize upon opportunities together in Germany and the EU's emerging cannabis industry."

Under the terms of the purchase agreement, dated May 18, 2017, Aurora will pay a consideration to holders of Class B securities of Pedanios approximately 3,421,756 common shares of Aurora, priced at $2.14 per share. In addition, a total consideration of approximately $13,565,000 in cash and common shares is payable to the holders of Class A common shares of Pedanios.Pedanios, over the last 90 days, has achieved cash flow positive operations, with gross revenues of approximately CAD$1.15 million, and costs of approximately CA$1.00 million. Revenues for May, up to and including May 26, 2017, were approximately CAD$0.5 million, reflecting a 410% increase in the daily sales pace as compared to average for the 8 months prior to the introduction of the new law, and an increase over the April and March 2017 averages of 70% and 108%, respectively.In a second acquisition since our last review, Aurora Cannabis Inc has made a strategic investment in Hempco (TSX-V: HEMP), one of the world's largest industrial producers of hemp and hemp products.The Company announced that it made a strategic investment for an ownership stake in Hempco of up to 19.9% on a fully diluted basis. Additionally, subject to customary conditions, Aurora will obtain an option to acquire shares from the majority owners of Hempco that, upon exercise of the option, will bring Aurora's total ownership interest in Hempco to 50.1% on a fully diluted basis. The market for CBDs in the form of capsules, oils, and topicals is expected to show significant growth, and Aurora considers the proposed transaction with Hempco to be a strategic initiative to enable market share dominance in this attractive segment.In other important recent news, Aurora Cannabis Inc announced on May 31, 2017, the appointment of Allan Cleiren as Chief Operational Officer (COO) of the Company. With nearly three decades of leadership experience in finance and operations management with both privately and publicly held companies in the life sciences, insurance, rail, construction, oil and gas service, and other sectors, Mr. Cleiren will be tasked with the synergistic integration of both domestic and international acquisitions, assessing future opportunities for further expansion.

ACBFF stock continues to pull back from the high of US$2.65 that it reached on its last upswing. The stock is currently trading at US$1.61. Current market capitalization stands at US$527.40 million, on 393.17 million shares outstanding as of June 15, 2017.AURORA CANNABIS IN COM NPV has steady revenues, a strong balance sheet, and two recent acquisitions that will have an immediate positive impact. We’re finding it difficult to make an argument not to buy this stock, especially when the stock price action is exhibiting a dip. Be sure to also check out our full coverage on ACBFF. We will be updating our subscribers as soon as we know more. For the latest updates on ACBFF, sign up below!Image courtesy of Daniel X. O'Neill via FlickrDisclosure: We have no position in ACBFF and have not been compensated for this article.