SEATTLE, WA / ACCESSWIRE / January 19, 2016 / CFN Media – The Canadian cannabis industry is poised for rapid growth over the coming years. After rolling out the Marihuana for Medical Purposes Regulations (MMPR), the country opened the door to the corporatization of the cannabis industry. Health Canada projected that more than 400,000 patients would enrol and generate approximately C$1.3 billion in revenue by 2020. With the election of Justin Trudeau, recreational legalization appears likely over the coming years, too.
Competition for a slice of the cannabis industry has been fierce. Under MMPR regulations, companies interested in growing and selling cannabis must apply to become licensed producers and undergo a rigorous approval process. The number of licensed producers stands at just 27 right now, despite thousands having already applied for the coveted license, only a small handful of them are publicly traded in Canada.
Aurora Cannabis Inc. (CNSX: ACB) (OTCQB: ACBFF) is the only licensed producer (LP) in Alberta, and has the second highest square footage approved for production amongst publicly traded LPs in the country. Since Alberta is one of the most business-friendly provinces in the country, the company benefits from a lower cost basis and ongoing operating costs. These attributes have made it among the lowest cost-per-gram licensed producers in the country with a state-of-the-art facility.
Nature Meets Technology
Aurora Cannabis has leveraged both nature and technology to its benefit by using the natural resources of Alberta while building a tailored facility from the ground up.
In rural Alberta, there is no cost for fresh mountain-fed water that is used throughout the facility as opposed to the municipal water used by other companies. The company also avoids the use of pesticides in its growing operations in order to uphold the highest quality, and is firmly opposed to irradiation since it destroys many of the desirable qualities of the cannabis plant. These attributes set it apart from many licensed producers across the country.
The company’s $11.5 million 55,200 square foot facility was built exclusively for the production of marijuana. By contrast, many licensed producers have repurposed facilities that were previously used to grow other types of plants. The facility has its own power generator and water plant with millions of dollars’ worth of instrumentation designed to tightly control everything from water temperature to nutrient levels.
Low Cost Advantage
Aurora Cannabis’ vertically integrated business model has several economic advantages over other licensed producers by being located in Alberta, as opposed to more populous regions.
Alberta has the lowest corporate tax rates and power costs in the country, while there is an abundance of farm credit programs and innovation grants available. The company’s strains are offered at $8 per gram with $5 per gram compassionate pricing and free shipping across the entire country. While Alberta may seem like a small market, the mail order nature of the MMPR means that the company can target consumers throughout the country.
By becoming a low-cost producer early on, the company could capture significant market share as the industry matures. The increased number of customers looking for bargains could also be upsold on ancillary products or services. For instance, the company entered into a preliminary agreement to secure the exclusive distribution rights to Mystabis in November – a revolutionary inhaler that provides pressurized metered doses of cannabis.
The Canadian cannabis industry is poised to rapidly grow over the coming years. While the MMPR program continues to grow, licensed producers are likely to be big beneficiaries from a move to legalize recreational marijuana. Mettrum Health Corp. (CVE: MT) (OTC: MQTRF), OrganiGram Holdings Inc. (CVE: OGI) (OTC: OGRMF), Canopy Growth Corp. and Aurora Cannabis are all major publicly traded players poised to capitalize on what promises to be an immensely lucrative multi-billion dollar marketplace that will surely eclipse the medical marijuana sector.
Thanks to its exceptionally low production costs and best-in-class commitment to standing out from its competitors, investors may want to take a closer look at Aurora — an emerging powerhouse in Canada’s burgeoning, government-endorsed marijuana industry.
For more information visit Aurora Cannabis’ website at http://auroramj.com/
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SOURCE: CFN Media Group
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