No, Aurora is not throwing away all of its cannabis…
A recent article from Forbes about Aurora Cannabis Inc. (NYSE: ACB) has been getting a lot of attention.
At first, I thought this article was so poorly-written and researched that nothing need be said about it.
But it “went viral,” as they say, and now it seems like just about everyone has heard about it, even if they haven’t personally read it. Not only is the article itself not right, some of the stories about the article itself make claims that the article writer didn’t even make!
People have been painting a picture of Aurora Cannabis “dumping” cannabis in the sense of sending it to a landfill or something.
And of course, the thought is that if Aurora is doing this, its competitors will have to do the same thing at some point.
But that is just not happening, and the article’s author did not claim that that is what is happening.
What Aurora did and what the author wrote about are completely different than what’s being talked about.
What Really Happened with Aurora Cannabis
Instead of putting one of Aurora’s brands on a product and shipping it to provincial distributors for eventual sale in cannabis stores, Aurora shipped bulk cannabis to other producers for them to put their brand on a product and ship it to provincial distributors for eventual sale in cannabis stores.
That sounds a whole lot less sinister than Aurora “dumping” cannabis, doesn’t it?
In fact, this story actually is better than most people realize.
These wholesale sales might be the best thing to happen to the Canadian cannabis industry in the year that recreational cannabis has been legal.
That’s because at least some of those wholesale deliveries are to extractors, to be turned into cannabis oils and distillates.
Cannabis companies are preparing for “Cannabis 2.0” in Canada, when vaping products and edibles become legal in the country. And some of the country’s extractors are buying up cannabis so that they have sufficient oil for when the products start to ship.
In fact, we have two of the premier cannabis extractors in our Cannabis Investor’s Report model portfolio.
And with the cannabis extract market projected to be worth $23.7 billion by 2025, this could be one of the fastest growing markets in the cannabis sector.
The Advantage of Extraction
Cannabis oil has a key advantage over flower cannabis for producers.
It doesn’t go bad nearly as quickly.
The big cannabis companies are getting complaints that they are shipping older cannabis, which dries out, loses flavorful terpenes, and it otherwise is an inferior product to the great craft brands being shipped by companies like 48North Cannabis Corp. (OTC: NCNNF) and The Supreme Cannabis Co. (OTC: SPRWF).
Well, now a lot of that older cannabis, which didn’t sell because there just weren’t enough stores to sell through, can go to an extractor.
The extractor can pull out the THC, CBD, and whatever else it wants and put it on a shelf for two or more years.
That adds life to that old cannabis.
Eventually, Aurora (and other producers) will purchase the cannabis oil back from the extractors and put it in gummies, chocolates, beverages, and vape pens.
This man’s three principles for cannabis investing led him to a multi-million-dollar fortune. And he wants to share them with you.
To be clear, it is possible that there are problems at Aurora; I can’t see inside the company. In the short term, some of the larger producers may experience issues with their low-end business. Canadians increasingly insist on high-quality cannabis (fortunately, most of the big producers also have high-end products to sell).
But overall, the Canadian industry is finally enjoying the kind of growth that investors have been looking for.
Monthly sales at cannabis stores, which spent the first few months of adult-use legalization flat, are increasing and are now more than double the level we saw at the beginning of legal adult use in October of last year.
That growth will continue as Alberta, British Columbia, and even Quebec add legal dispensaries.
Things will go through the roof if Ontario ever gets its act together and allows the number of stores that population can support.
Executive Director, National Institute for Cannabis Investors
PS: The demand for extracted cannabis molecules is only increasing. And there’s one particular molecule that’s could see market growth over 3,000%. CBD is currently flying off shelves around the country – at stores like Walmart, CVS, and even Ulta Beauty. The “Year of CBD” is in full swing and we’re only expecting it to continue growing as extractors receive more cannabis. This is great news for anyone looking to get off the sidelines and start investing in cannabis. In fact, we can show you a CBD company that’s selling for under $3 a share – with the potential to triple or quadruple in just a matter of weeks. You can learn more about it right here.
16 responses to “Don’t Panic Because of Aurora”
October 28 2019