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Aurora Cannabis Inc Consolidating Before Heading Higher

Aurora Cannabis Inc Consolidating Before Heading Higher
Written by
Alex Carlson
Published on
December 19, 2016
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Aurora Cannabis Inc has backed off its November highs and is consolidating before we making another run again. This comes as we've seen across the board profit taking in the entire cannabis space. We at Insider Financial believe that Aurora Cannabis at current levels represents a discount entry opportunity for investors that have not yet gotten on board the Canadian cannabis train.Canada is the hottest country right now for cannabis investors as it has the most favorable regulatory environment for cannabis in the world. With the election in the US of President-elect Donald Trump and his appointment of marijuana opponent Senator Jeff Sessions as Attorney General, investors are looking towards the Great White North for a more certain future.By 2024, Health Canada projects that the medical cannabis market in Canada will have ~450,000 patients out of a population of 35 million. Prime Minister Justin Trudeau was elected after including legalization of recreational marijuana. On April 20th, 2016, the Canadian Health Minister Jane Philpott announced that Canada would introduce legislation to decriminalize and regulate cannabis in spring of 2017. The recreational market in Canada is estimated to be worth as much as C$7 to C$10 billion.Last week, we saw the Canadian Federal Task Force issues its recommendations on how to legalize recreational marijuana use. The proposals include a minimum purchase age of 18, federal oversight on production, provincial governments charged with retail distribution and maintaining criminal offenses for illicit production and trafficking. The Task Force was lead by Canada’s former attorney general and offered more than 80 recommendations on how Canada could become the largest developed-world country to legalize marijuana.The Canadian government’s goal is to root out the criminal elements that have trafficked in marijuana and made a fortune doing so. Getting marijuana out from the black market and into a regulated environment would make Canada the first developed country to do so and provide a model for other governments worldwide. The Task Force’s report estimates the Canadian black market for marijuana to be worth C$7 billion annually. This potential is what makes Canadian cannabis players like Aurora Cannabis Inc so exciting for investors.Last week, Aurora provided some news regarding the location of its 800,000 square foot Aurora Sky cannabis production facility currently under construction at the Edmonton International Airport. Aurora said that the location of Aurora Sky provides a number of major competitive advantages, including access to abundant and reliable low-cost power, as well as unparalleled proximity to infrastructure and essential services, such as gas, water, sewage, public transportation, courier services, and international customs for clearing supplies and equipment. Furthermore, the location facilitates capitalizing on opportunities for future export of product and genetics around the world.Aurora also signed an MOU last week with Radient Technologies Inc (TSX VENTURE:RTI). The deal calls for Aurora to invest up to $2 million into Radient by means of a convertible debenture. Radient currently operates from a 20,000 square foot, GMP compliant, Natural Health Products Directorate licensed facility in Edmonton extracting natural ingredients for a range of industries including food and beverage, nutrition, supplements, pharmaceuticals, and cosmetics.Radient operates under strict quality controls and owns patented extraction technologies, originally developed by scientists at Environment Canada. These proprietary technologies have proven capable of producing high-quality standardized extracts with faster through puts, improved yields, higher purities, and lower costs when compared to conventional extraction methods. Aurora and Radiant are going to use Radiant's technology for the joint development and commercialization of superior and standardized cannabinoid extracts. Aurora CEO Terry Booth said:

"Radient's technology promises a significant advance in both quality and efficiency of cannabis extract production. This is especially important considering global market dynamics, which point to strong demand for cannabis derivative products. Importantly, Radient's extraction technology has also been proven to deliver superior preservation of aromatic compounds known as terpenes, which are key to the cannabis consumer experience and the Aurora Standard."

Currently trading with a market cap of C$639 million, Aurora Cannabis Inc remains one of the must-own stocks for cannabis investors. The new 800,000 square foot Aurora Sky facility will have Aurora Cannabis on track to producing 100,000 kilograms of dried product annually. With the facilities of the Edmonton International Airport at its disposal, Aurora Cannabis is poised to be an international cannabis player. With the recent task force recommendations making recreational marijuana legalization likely within the next several months, we could see Aurora Cannabis crack the C$1 billion market cap much sooner rather than later. We will be updating our subscribers as soon as we know more. For the latest updates on Aurora Cannabis Inc, sign up below!Disclosure: We have no position in Aurora Cannabis Inc and have not been compensated for this article.

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