Last year was a tough year for Aurora Cannabis Inc. (Nasdaq: ACB) (TSX: ACB) and we are closely following the company after the stock fell more than 80% in 2021.
Although the size of the decline is eyepopping, we continue to have a cautiously optimistic outlook with the Canadian Licensed Producer (LP). From focusing on strategic international cannabis markets to strengthening the balance sheet, the management team is executing on a strategy to become a profitable cannabis company.
Today, we want to highlight three significant developments that were recently reported by the Canadian cannabis company:
- Earlier this week, the Canadian LP sold its Polaris facility for approx. $15 million. The transaction is part of the company’s transformation strategy
- In early December, Aurora Cannabis repurchased approximately US$76.1 million of its convertible senior notes for US$73.8 million. Following the completion of the repurchase, Aurora Cannabis will have approximately US$110 million of notes outstanding.
- A few months earlier, the company repurchased approx. $23 million of convertible notes to further reduce debt and interest expenses
A key theme from Aurora Cannabis’ management team in 2022 was centered around achieving profitability. By repurchasing convertible notes, the company is executing on this strategy and we will monitor how the trend continues this year.
Over the last twelve months, Aurora Cannabis repurchased an aggregate of approximately US$235 million of its convertible senior notes and we are favorable on this. The transactions will allow the company to recognize approximately US$12.9 million in annual cash interest savings.
Going forward, we expect the most significant potential catalyst for Aurora Cannabis will be entering the United States (US) market. The company already owns assets in the US and is positioned to capitalize on the market once legislation allows it to do so. Until this aspect of the story advances, we expect Aurora Cannabis to be rangebound and we will monitor price movements from here.
At current levels, we remain cautiously optimistic with Aurora Cannabis and will continue to provide updates to our readers. To learn more about Aurora Cannabis, please send an email to firstname.lastname@example.org with the subject “Aurora Cannabis” to be added to our distribution list.
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This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws.