Last Monday, Aurora Cannabis bought Canadian cannabis producer MedReleaf for a value of $2.5 billion US dollars, making it the largest cannabis company to date. Projected to be able to produce 570,000 kilograms of cannabis a year, with a number of facilities in Canada and Denmark. It will be a primary supplier for the medical cannabis needed in Europe and at this time has distribution agreements with over 11 countries extending as far as Australia and South America.
Aurora cannabis has been expanding their reach and production caps via purchasing and partnering with companies since 2017. Beginning with its construction of Aurora Sky (an 800,000 sq ft production facility) in late 2017 and then its completion of it’s Nordic facility the following January. The mega-company continued to acquire CanniMed Therapeutics, and proceeded to release plans to build another facility known as Aurora Sun in Alberta. Last monday’s acquisition of MedReleaf marks the most recent expansion of the company’s holdings and officially brings it to the top of the list of largest scaled cannabis companies in the world.
To some analysts, the “biggest issue I’ve had with Aurora Cannabis — is its ongoing destruction of shareholder value via dilution”
While others believe, that within a few years, “the market will reward cannabis companies based upon revenue”, similarly to how Amazon’s rise to success began with focusing on “rapidly winning market share than… boosting margins and earnings”.
For now, its all up in the air.