Aurora Cannabis Scores a Victory With Peltz

Aurora Cannabis (NYSE:ACB), Canada’s second biggest marijuana stock by sales and market share, has set its sights on partnerships that will allow it to expand into new markets as more countries pass pro-pot laws. The company’s management told investors today that it’s considering partnerships with companies to execute on its global strategy, and to that end, it’s hired billionaire investor Nelson Peltz as a strategic advisor. The decision to sign Peltz on to help it navigate new markets is savvy because it could accelerate the company’s transition into a consumer-goods powerhouse.

A big company that’s getting bigger

Arguably, no cannabis company has been as aggressively acquiring competitors as Aurora Cannabis. The company’s willingness to use its stock as currency so that it could acquire peers, including CannaMed and MedReleaf, has put it closely behind market-share leader Canopy Growth (NYSE:CGC) in terms of marijuana grow capacity, revenue, and market share.

In February, the company reported fourth-quarter figures, including the first six weeks of revenue from Canada’s fledgling recreational market, which opened in mid-October. The results showed that Aurora Cannabis’ penchant for M&A is paying off in the form of soaring production and revenue. Sales clocked in at $54 million Canadian, including CA$21.6 million in adult-use, recreational market sales. That means the company nabbed 17.5% of the CA$307 million spent on legal cannabis in Canada last quarter. For comparison, its revenue was only CA$11.7 million in the same quarter a year ago.

The company’s nowhere near done growing, either. Its marijuana production grew 57% quarter over quarter to 7,822 kilograms in the fourth quarter, and as of February, its annual marijuana production capacity was running at 120,000 kilos. The company expects to have 25,000 kilos available for sale exiting June, and management’s targeting reaching a 150,000-kilo production pace before the end of 2019. Delivering on those targets should help it increasingly win sales in Canada as CA$6 billion in annual marijuana sales shift to the regulated market from the black market…

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