GMP Securities: Aurora continues to advance as world cannabis leader

The company expands its Aurora Sun facility to the delight of investors

Aurora Cannabis (TSE: ACB) has expanded its Aurora Sun facility by 33%. It previously measured 1.2 million square feet and is now at 1.62 million square feet, and the company asserts that the installation’s Sky Class facilities are the “most technologically advanced” in the world. This is good news for investors and the company, and GMP Securities analyst Martin Landry points out that it’s just another example of Aurora’s growing dominance in the cannabis market.

According to Landry, “Aurora Sun is being built to EU Good Manufacturing Practice (GMP) standards which could enable the facility’s production to be sold in European medical markets. This would further add to Aurora’s EU GMP certified footprint, allowing it to better serve international markets. At 230 [tons], Aurora Sun could be one of the largest production facilities in Canada and potentially the world. Large-scale facilities like Aurora Sun are a differentiation factor for ACB and could provide supply chain benefits. This progress bolsters Aurora’s position as a global leader in the cannabis space.”

Aurora CEO Terry Booth has said about the facility, “Aurora Sun represents the next evolution in our Sky Class facility design, delivering massive scale, low-cost production and consistent, high-quality cannabis. Particularly in newly opened markets, establishing first-mover position and embedding Aurora’s market share and brand requires a stable and reliable supply of high-quality cannabis for these markets. The increased scale of Aurora Sun reflects our expectations for the long-term growth in global demand, especially the higher margin international medical markets which will be faced with significant supply shortages for the foreseeable future. Sun is also designed with flexibility in mind to enable us to quickly meet changing market demands, particularly as breeding and cultivation technologies evolve and as customer preferences and requirements change.”

Because of this, Landry restated his “buy” rating of Aurora and confirmed a one-year price target of about $11.12. This would provide a return of about 25.4%.