ACB stock may be putting in a complex bottom after a House committee approved the MORE Act last week and the company announced the grand opening of its flagship retail store at 10:00 a.m. MT on November 27th in the West Edmonton Mall, North America’s largest mall. At approximately 11,000 square feet, Aurora has combined both a retail cannabis store and an immersive experiential space, encouraging visitors from around the world to explore unique products and participate in a rotating calendar of programming and events.
On November 14, 2019, Aurora Cannabis reported Q1 cannabis net revenue down 25% from Q4 at $70.8M. The company reported Q1 total net revenue down 24% from Q4 at $75.2M
“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. “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% to $0.85 per gram this quarter, as well as by our industry-leading gross margins and market share.”
Effective October 17, 2019, new regulations under the Cannabis Act came into effect which will allow for the sale of higher value, in-demand products such as vape pens, edibles, and other derivatives in the consumer market (“Cannabis 2.0”). The implementation of Cannabis 2.0 remains the most important market opportunity for the Company in Canada. Aurora is extremely well positioned and has prioritized its resources to prepare for a successful initial launch and supported an ongoing replenishment strategy to ensure consumers across Canada will have access to a diverse portfolio of high-quality derivative products they want to buy. Aurora expects to begin shipping these new product formats to provincial regulators starting late December 2019.
On November 15, 2019, Cantor Fitzgerald analyst Pablo Zuanic upgraded Aurora Cannabis to Overweight from Neutral with a price target of C$5.85, up from C$5.10. The analyst does not expect a worse quarter for the group than the September quarter. And even though little may change in the December quarter, positive catalysts align in 2020, Zuanic tells investors in a research note. Further, based on his read of the quarter for the group, he estimates Aurora is “overall in better shape than peers.” The analyst highlights the company’s “stable” pricing, “best-in-class” gross margins of 56%, which he notes are near three-times Tilray’s (TLRY), and no signs of provisions for rebates and returns.
On November 27, 2019, Aurora Cannabis announced the grand opening of its flagship retail store at 10:00 a.m. MT on November 27th in the West Edmonton Mall, North America’s largest mall. At approximately 11,000 square feet, Aurora has combined both a retail cannabis store and an immersive experiential space, encouraging visitors from around the world to explore unique products and participate in a rotating calendar of programming and events. Aurora’s flagship store offers visitors a safe, age-gated retail experience in full compliance with all relevant federal and provincial regulations.
“Aurora is proud to call Edmonton home. It’s here where we established our roots and built our business. There’s no better place for us to open the doors to our flagship store and to welcome consumers from all over the world to join us in celebrating how far the cannabis movement has come and how quickly it continues to grow,” said Terry Booth, CEO of Aurora. “This space is a reflection of Aurora’s core values, a celebration of our past, and cements our position as an innovative industry leader. We invite new and experienced consumers alike to come learn and explore.”
Following many firsts for the West Edmonton Mall, this partnership makes Aurora the first cannabis retailer to operate within a mall of this size, with Aurora serving as the Mall’s exclusive cannabis retailer. “West Edmonton Mall prides itself on delivering unique, one-of-a-kind experiences to its 30 million annual visitors. We are, in fact, the internationally recognized pioneers of merging retail with entertainment and maximizing the synergies between the two. We often accomplish our goal with world-class partners. What makes this collaboration particularly special is that our world-class and best-in-class partner, Aurora, is based right here in Edmonton. It is only through these unique circumstances that such an incredible project could come together,” said David Ghermezian, CEO of West Edmonton Mall.
To design an innovative retail experience, Aurora enlisted Bruce Mau Design in collaboration with GMC Architects, creating a place for consumers to gather. Inspired by technology, innovation and nature, the space explores the relationship between the natural elements that are core to the Aurora brand and the state-of-the-art production and commitment to industry advancement that drives Aurora’s continued growth. References to mountains, sky, water and sun permeate through material, lighting and digital experiences.
The flagship store will host world-class researchers, creators and culture makers to lead sessions with artists, chefs, local innovators and experts in the emerging world of cannabis to deliver next-level inspirational experiences. In the age-gated cannabis store, visitors will have access to over 42 different cannabis products from the Aurora family of brands.
ACB stock has lost more than 70% of its value over the last 6 months. I think the way to trade this stock is to have a few stocks like ACB on your watch list and the next big news to hit about legalizing pot at the Federal level, this is a stock you want to buy as quickly as possible, and then sell into the upward move.