Aurora Cannabis (ACB) is a prominent player in the cannabis industry. So far, the company has struggled this year. Aurora Cannabis’s fourth-quarter results were disappointing. However, the company continues to focus on expansion plans to drive profitability and growth. On Tuesday, Aurora Cannabis and EnWave signed an exclusive and royalty-bearing commercial license agreement. Let’s see what the agreement is all about.
Aurora Cannabis and EnWave’s agreement
The agreement between Aurora Cannabis and EnWave gives the company sublicensing rights to use EnWave’s Radiant Energy Vacuum dehydration technology to dry cannabis in Australia. EnWave is an advanced technology company based in Vancouver.
Overall, the agreement will ensure that Aurora Cannabis holds an exclusive master license for using REV to dry cannabis in Australia. The company also gets an undisclosed share of royalties from any cannabis product dried with REV technology by sublicensees in Australia. However, certain minimum commercialization requirements have to be met.
Aurora Cannabis and EnWave also signed a royalty-bearing sublicense with Cann Group. The sublicense will give Cann Group the right to use EnWave’s REV technology to dry cannabis in Australia. Notably, Cann Group is the first company in Australia to receive a Cannabis Research Licence and Medicinal Cannabis Licence by the Australian government’s Office of Drug Control.
Drying cannabis is vital to get the best flavor out of the product. If cannabis isn’t dried correctly, it could ruin the quality of the final product. The THC (tetrahydrocannabinol) component isn’t active in recently harvested cannabis. As a result, cannabis has to be dried and cured correctly to activate the component. Also, curing helps get the best flavor out of the cannabis buds.
Why Aurora Cannabis chose EnWave’s REV technology
Aurora Cannabis chose EnWave due to its advanced and innovative product, the Radiant Energy Vacuum, for drying cannabis. Advanced technology will help achieve the desired flavor and quality of cannabis.
Also, the REV technology uniformly dries and decontaminates marijuana, which ultimately shortens the time from harvest to marketable cannabis products. EnWave developed methods that ensure uniform drying with flexible moisture content. Notably, uniform drying isn’t feasible with freeze-drying or air drying. However, these methods are awaiting patent approval.
REV technology ensures that the product’s color, flavor, and nutrients are intact during the drying process. Also, the technology uses a rapid and low-temperature drying method. Some of REV’s benefits are:
- high-speed processing
- continuous processing
- reduced energy usage
- new product opportunities
- flexible moisture content
Other growth strategies
Aurora Cannabis’s current growth strategy includes expanding into the edibles market. Recently, Canada legalized edibles. The company provided a preview of its plans for rolling out edibles, concentrates, and vapes in December. Aurora Cannabis is producing edible products, like gummies and chocolate, for consumers. The products will hit the market in December. Also, the Aurora Polaris facility will produce edibles like chocolates, hard-baked goods, mints, and infused beverages.
The company also plans to introduce vape products in December despite vape-related concerns. Aurora Cannabis signed a supply agreement with PAX Labs for its PAX Era device. The company will introduce a portfolio of vaping products.
Aurora Cannabis plans to grow high-quality cannabis outdoors at its new sites in Quebec and British Columbia. Notably, the company will use Aurora Valley and Aurora Eau to do cultivation research. Aurora Cannabis will generate the first harvest from its outdoor-grown cannabis in the second half of 2020 at the Quebec facility. To learn more, read Why Aurora Cannabis Wants to Grow Cannabis Outdoors.
Peers in the cannabis sector
Meanwhile, Canopy Growth (CGC) (WEED) is also expanding into the edibles market. The company plans to launch cannabis-infused beverages with Constellation Brands (STZ). Canopy Growth also plans to expand its CBD-market through its acquisition of BioSteel Sports Nutrition. The company will include edibles, beverages, and vapes in its product portfolio. Canopy Growth is also increasing its physical store count in Canada from 460 in September to 600 by March 2020. As a result, Jim Cramer thinks that the company needs a packaged goods CEO.
Hexo (HEXO) plans to expand through a partnership with Molson Coors. The company will launch CBD-infused beverages through a newly formed joint venture company called “Truss.” Hexo will report its fourth-quarter results on Thursday.
Aurora Cannabis will report its results for the first quarter of fiscal 2020 next month. To learn more, read Aurora Cannabis: What to Expect from Its Q1 Earnings.
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