Aurora Cannabis, amid loss, looks to international markets
The chief executive of Aurora Cannabis Inc. trumpeted international medical pot markets as his company’s key to future growth as it reported a $75.1-million loss in its most recent quarter.
The Edmonton-based pot company is already dabbling in Israel, Australia and Europe, but believes the U.S. and many other regions have revenue-generating potential, if the wave of pot legalization continues around the globe.
“We expect a domino-like effect as acceptance grows,” said Miguel Martin, on a Thursday call with analysts.
He has labelled the recreational sector as “irrational” and “unsustainable” because companies are speeding to slash prices and margins in the quest for market share during a period when they’re still contending with COVID-19-related pot-store closures in some regions.
Aurora has not been immune to the challenges. Its consumer cannabis net revenue fell 48 per cent to $14.8 million in its latest quarter from $28.5 million during the same time last year.
Martin attributed some of that hit to wholesale cannabis the company sold at a low price point rather than destroying it, and to price compression and other pressures in the recreational market.
“The largest manufacturers are having difficulty meeting Canadian recreational consumer needs either via an inability to grow the right product or a lack of understanding what the consumer wants,” Bill Kirk, of MKM Partners research firm, wrote in a note ahead of Martin’s call.
Aurora says its basic and diluted loss per share for the quarter amounted to 38 cents compared with $1.77 in the second quarter of last year. Net revenue for the quarter totalled $60.6 million, down 10 per cent from $67.6 million in the same period last year. —