Alberta-based Aurora Cannabis Inc., one of Canada’s largest licensed medical marijuana producers, said Tuesday that November 2017 had been a “record” month for sales at home and in Germany, where medical cannabis is also legal.
Aurora said it sold 354,000 grams or gram equivalents in November, and reported net cannabis revenues of $3.1 million. That’s up significantly from the same period in 2016, when the company’s sales topped 200,000 grams for what was then a record.
Aurora also said that its liquid assets, its cash and marketable securities as of the end of 2017, exceeded $500 million.
“Aurora begins 2018 with unparalleled financial strength to accelerate its aggressive domestic and international expansion strategy,” the company said in a press release.
THE MAIL-ORDER MARKET
Aurora’s big month highlights the importance of Canada’s mail-order medical marijuana regime to producers, as the system is one of the few legitimate avenues for revenue ahead of the Canadian government’s planned legalization of recreational pot this July.
Health Canada’s most recent market data showed that sales of dried medical marijuana by licensed producers rose from 4,037 kilograms for the quarter spanning April 2016 to June 2016 to 5,836 kilograms for January 2017 to March 2017, a 44.6-per-cent increase. Sales of cannabis oil exploded from 1,500 kilograms to 5,673 kilograms over the same period, a 278.2-per-cent jump.
Medical sales may be worth more to companies as well. Health Canada released its first “snapshot” of cannabis use in December, reporting that medical users usually spent around $121 per month on the drug. This was 61.3 per cent more than recreational users, who reported spending close to $75 a month on non-medical cannabis products.
“That supports the view held by a number of companies that the medical buyer is potentially worth more, from a revenue perspective, than a recreational buyer,” said Russell Stanley, analyst at Echelon Wealth Partners.
But the federal government’s plan to legalize recreational cannabis this year may also give a boost to the legitimacy of the medical market.
“One can argue that upon legalization, doctors may be more inclined to prescribe marijuana as some physicians are currently hesitant to prescribe medical marijuana,” said Martin Landry, analyst at GMP Securities, in a Dec. 22 note.
The number of authorized licensed producers of medical marijuana continues to grow as well, with the total number of cultivation and sales licenses issued standing at 84, up 133 per cent from the 36 licenses at the beginning of 2017, Echelon noted.
The drumbeat of announcements regarding new products and expanded operations continues too.
British Columbia-based True Leaf Medicine International Ltd. said Tuesday it had exercised an option to buy 40 acres of land to build a 25,000 square-foot “hydroponic medicinal cannabis production facility.”
Also Tuesday, Napanee, Ont.-based ABcann Global Corp. said it had received a license from Health Canada to produce medical cannabis oils, with approval of sales expected in the first quarter of 2018.
And Saskatoon-based CanniMed Therapeutics Inc. — the target of a hostile takeover bid launched by Aurora last month — announced Tuesday that it had entered into a medical marijuana supply agreement with licensed producer Up Cannabis Inc., a wholly-owned subsidiary of Newstrike Resources Ltd.
According to a press release, the terms of the 15-month agreement will see Up Cannabis supply CanniMed with up to 1,500 kilograms of marijuana, once Up Cannabis receives approval from Health Canada to sell its pot.
The supply deal deepens CanniMed’s ties to Newstrike, which it is attempting to acquire as it fends off Aurora’s unsolicited bid.
Ivan Ross Vrána, a medical cannabis expert and vice-president of public affairs at Hill+Knowlton Strategies, said that the research and development investments being made by companies will ensure that the medical side of the marijuana business will remain crucial “in the long run.”
“I don’t think by any means it’s going to disappear,” he said.