MEDICINE HAT, ALTA. — Canadian cannabis producer Aurora Cannabis is suspending construction on its Alberta and Denmark facilities in order to “strengthen its balance sheet” after poor financial performance.
“Over the past several years, Aurora has earned its place as a global leader in the cannabis industry. Despite short term distribution and regulatory headwinds in Canada that have temporarily impacted the industry, the long-term opportunity for Aurora in the global cannabis and cannabinoids market is immense,” said Terry Booth, CEO, Aurora Cannabis, in a press release. “Aurora has, and will continue, to focus on everything in our control. Our success in doing this was demonstrated again this quarter by continued strong improvement in our core KPIs. We delivered solid operating results this quarter, exemplified by our industry-leading cash cost to produce which declined another 25 per cent to $0.85 per gram this quarter, as well as by our industry-leading gross margins and market share.”
The company reported net cannabis revenue of $70.8 million in Q1 2020 compared to $94.6 million in Q4 2019.
The company stated it would immediately cease construction activity at its Aurora Nordic 2 facility in Denmark to save an estimated $80 million over the next 12 months. Aurora Nordic 1, a 100,000 square foot facility located in Odense, Denmark, is fully completed, has received a production license, and the Company expects to receive a license to sell shortly.
Aurora has also decided to defer most of the final construction and commissioning activities at its Aurora Sun facility in Medicine Hat, Alta. for the foreseeable future. Company officials anticipate this will save $110 million of cash. Construction crews at Aurora Nordic 2 and Aurora Sun facilities have both projects fully enclosed.
Aurora expects to have at least six flower rooms completed and in operation at Aurora Sun in 2020, for a total of 238,000 square feet. As global demand develops, or as Aurora’s market share in the global cannabis market increases, we will reactivate these projects.