Aurora boss Cam Battley says it will be around for the next 50 years as the therapeutic benefits of cannabis change the way drugs are prescribed in Canada we and across the globe. The Chief Corporate Officer of the Edmonton-based business was speaking to CBD Testers at the Canadian Cannabis Capital Markets Conference in London earlier.
He said: “It is happening very fast, cannabis – starting with medical cannabis – is what I would call a global mega-trend; a rapid change in law, society and business, that is sweeping the world. For that reason there are now more than 40 countries that have medical cannabis or are in the process of implementing it. It’s happening very fast and it’s happening for a good reason – its therapeutic utility is becoming clear to physicians and to patients.”
Canada was one of the first countries to introduce a medical cannabis program in 2001 and last year became the second country, after Uruguay, to make recreational cannabis legal.
Estimates of the size of the global industry vary widely. The ‘2019 Update to the State of Legal Marijuana Markets’, from Arcview Market Research and BDS Analytics says global sales are expected to grow 38% in 2019 to $16.9 billion, and hit $31.3 billion by 2022.
While experts at Grand View Research, Inc. says the global legal cannabis market is expected to reach U.S $146.4 billion by end of 2025. With a 15-year head-start on most competitors this first-mover advantage is helping Canadian business dominate the rapidly-growing, global market.
Mr Battley continued: “Canadian companies will continue to be the world leaders for a particular reason; they have a remarkably enviably global footprint. Our clinical program which includes more than 40 clinical trials either completed or underway is far ahead of any other competitors, in any other place in the world.
“U.S. companies that might have been competitors can’t operate or ship their products overseas because cannabis remains federally illegal and that means that when we move into country after country we are not bumping into any U.S. competitors.
“This is very unusual and very favorable to our shareholders. So we can gain years of experience, of investment, of establishing our operations around the world, of clinical programs, the expertise we have gained is very significant, so I suspect Aurora and a couple others will remain world leaders on a sustained basis. I know we will be around in 10, 20 and 50 years.”
Canadian cannabis stocks peaked shortly after the recreational legalization last autumn, but many are now down by as much as a quarter and some market bears question whether the sector is overvalued.
Mr Battley was having none of it, he continued: “If you look at the equity analysts they are not saying all cannabis stocks in Canada are overvalued. Some may be, but not ourselves, Canopy, and couple of others.
“In fact we are not considered over-valued, but perhaps a little future-valued, based on the analysts estimates on a multiple of future earnings. If you take a look at the buy recommendations and the price targets that would indicate they are not overvalued.
“Now, when people say overvalued, they are ignoring the state of the industry, the phase that it is at, they are saying that compared to traditional, mature pharma, or any mature industry – and you cannot measure a brand new industry – even one that is growing as quickly as cannabis, based on traditional metrics.
“Every industry is based on the fundamentals, its earnings, its revenues and this industry will soon be to, and for some, that will be sooner than others. Aurora can be differentiated from its peers, as we are on the transition to profitability. We put a stake in the ground in January and we will be EBITDA positive (making a profit) in this quarter (ending this June) and this is 18 months ahead of most of our peers. And this is simply because our revenues are rising much faster than our costs.”
In the last quarter Aurora doubled production to 16,000 kilograms and production continues on a ‘steep, hockey stick-like increase’ he says. Mr Battley joined the business three years ago after a career in big pharma with the likes of Bayer and GSK.
In that time Aurora has increased its global headcount from 35 employees to 2,750 now and has a presence in 24 countries. He says Aurora has adopted a different approach, shunning the trend to retro-fit tomato or cumber greenhouses for new $100m, hi-tech facilities.
He added: “It is paying off in spades. We are killing it. We don’t lose crops, our model is replicable and scaleable.”
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Nov. 8, Missouri residents will have the opportunity to vote on legalization of adult-use cannabis. Missouri passed a constitutional amendment for medical cannabis in 2018 and advocates are looking to build on the momentum in the state. Amendment 3, the Marijuana Legalization Initiative, is on the ballot in Missouri as an initiated constitutional amendment. If […]
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They’re not there yet, and they might not get there, but this coming November, at least three states, (and possibly six), are putting it up to voters in yet more cannabis ballot measures for recreational legalizations. Will we get up to 25 legal states by the end of elections? 2022 elections are going to be […]
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