On February 11, Aurora Cannabis (ACB) reported its earnings. The company also held an earnings call. The Q&A session can provide more qualitative information about the company’s operations, future plans, and other useful details. We’ll discuss some of the key takeaways from the Q&A session.
Entering the US market
Aurora Cannabis’s management was asked about its plans to enter the US market following hemp legalization. The company’s management responded that there’s still confusion about the legalities of hemp-derived CBD products. The company cited New York, which recently cracked down on CBD products. Aurora Cannabis’s management stated that it remains on top of the market. The company will enter the US market when it’s legal to do so.
Aurora Cannabis’s management was asked about its plans on value-added product development for the recreational segment. While the company will enter each segment of the market, it views itself mainly as a medical company. As a result, the company doesn’t plan to direct all of its production from its Aurora Sky and Bradford facilities to the recreational market. However, the company will continue to focus on the medical segment.
Aurora Cannabis’s management was asked about its views on pricing pressures for cannabis dried flower in Canada. The company alleviated the concerns. Aurora Cannabis stated that the market is going too far with its assumption on pricing downsides. The company’s management added that the demand for legal cannabis remains higher than its supply. According to the company, it will be five years before there’s an oversupply situation.
Aurora Cannabis stated that it will focus on products that have a premium. The company might also increase the prices for products that are high-quality and have become customers’ favorites over dried flowers. Aurora Cannabis will likely focus on medical products that command a premium margin.