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Aurora Cannabis Inc Keeps Climbing

Aurora Cannabis Inc Keeps Climbing
Written by
Alex Carlson
Published on
November 16, 2016
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Aurora Cannabis Inc keeps climbing after posting strong earnings and its latest operations update. Investor enthusiasm for the leading Canadian cannabis players like Aurora, Canopy Growth Corp, and Aphria Inc continues. Aphria just boosted its war chest and Canopy became Canada's first billion dollar plus cannabis unicorn after its tremendous bull run. With a current market cap of C$669 million, is Aurora Cannabis next to have a billion dollar market cap?First up, a little background on the company. Aurora Cannabis Inc trades on the TSX Venture Exchange under the symbol ACB, on the OTC Markets under ACBFF, and in Frankfurt under 21P. Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical marijuana pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR) and operates a 55,200 square foot, expandable, state-of-the-art production facility in Mountain View County, Alberta, Canada. The license was granted November 2015 and product sales started on January 5, 2016.The latest operational update showed that Aurora's wholly owned subsidiary, CanvasRx, Canada's largest network of cannabis patient counseling centers, continues to expand its leadership in patient outreach and registration. CanvasRx has now helped over 13,000 patients register with Licensed Producers, including more than 2,500 patients registered with Aurora. This represents growth in patient registration in excess of 30% since being acquired by Aurora in August 2016. CanvasRx now has 20 locations across Canada, including Edmonton and Calgary. Five more locations are planned to be opened before the end of 2016.As of October 27, Aurora had 9,000 active registered patients, reflecting what management believes is the fastest patient registration rate in the industry after commencement of commercial operations. This is up from 7,700 active patients reported by the company in September.Furthermore, Aurora's gross revenues have exceeded $1 million for each of the months of July, August, September and October 2016. In addition, on November 2, Aurora processed 1,096 orders and sold 19,745 grams of cannabis, the Company's single highest volume day of sales since beginning commercial operations. The period from October 28 to November 3 represented Aurora's largest seven-day sales performance ever, with a total of more than 50 kilograms sold.After closing its $25 million convertible debenture, Aurora has significantly increased its current cash position. Aurora now has one of the strongest cash positions in the cannabis sector, with approximately $48 million in unrestricted cash available to execute on all the Company's business strategies. These include funding the Company's consolidated operations through to profitability and positive earnings per share, and the significant expansion of Aurora's production capacity. CEO Terry Booth said:

"We continue to fire on all cylinders, reaching more patients, continuing to integrate industry-leading technology, and further building our operational capabilities from a position of unprecedented financial strength. The strength of our balance sheet provides an exceptional opportunity to continue expanding our leadership position in this rapidly growing medical cannabis market. Furthermore, it provides us with the necessary financial resources, without the need to return to the capital markets, to begin preparing and positioning ourselves for the pending legalization of recreational use in Canada, a market estimated at up to $10 billion per year once mature. These preparations include the expansion of our production capacity through the construction of an additional, very large scale, best-in-class production facility."

By 2024, Health Canada projects that the medical cannabis market in Canada will reach $1.3 billion and 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 $7 to $10 billion.Aurora Cannabis looks set to continue its epic run. With recreational marijuana legalization about to happen in Canada within the next several months, Aurora is going to be a prime beneficiary. This will keep the momentum going for Aurora shares as we head into 2017. After rising 22% yesterday and now sporting a market cap of C$669 million, all Aurora needs is another push and we'll see a C$1 billion market cap. It would not surprise us to see this happen sooner rather than later.We will be updating our subscribers with the latest on Aurora and other cannabis names. For complete coverage, sign up below!Disclosure: We have no position in Aurora Cannabis Inc and have not been compensated for this article.

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