Why Did Germany Halt Aurora Cannabis’s Sales?


Dec. 13 2019, Updated 1:48 p.m. ET

On November 29, Marijuana Business Daily reported that Germany had stopped the sale of Aurora Cannabis’s (ACB) medical marijuana products. The article stated that the German authorities were reviewing Aurora’s proprietary process, which enhances the shelf life of its products, citing the company’s spokesperson.

On December 11, Aurora’s chief corporate officer, Cam Battley, attended and presented at the Marijuana Business Daily‘s Investor Intelligence Conference. During his presentation, he was asked to explain more about the matter, according to Marijuana Business Daily.

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Battley stated that the company uses a process to protect its products from microbial contamination. However, he added that the process required an additional permit. As reported by the article, German law mandates that companies receive special permission to distribute medical products exposed to ionizing irradiation. However, Battley expects Aurora to receive the necessary permits within the next four weeks.

Aurora’s medical sales

Aurora Cannabis sells its products in 25 countries. In the last quarter, the company generated 30.5 million Canadian dollars’ worth of medical product sales, which formed 40.5% of its total sales. Its international medical sales contributed 6.6% of its total revenue. Germany is one of Aurora’s most important markets. The company owns one of the three cultivation licenses granted by the country.

Further, Battley expects Aurora to introduce more cannabis-derived products in Germany soon. In October, Germany provided an update on reimbursements related to medical cannabis. For more info, read Medical Marijuana: Germany Updates on Reimbursements.

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Analysts’ expectations for Aurora

For fiscal 2020, analysts expect Aurora Cannabis to report revenue of 404.2 million Canadian dollars, a YoY rise of 63% from 247.9 million Canadian dollars in fiscal 2019. Analysts continue to expect the company to report negative EBITDA this year. They expect its EBITDA to be -95.4 million Canadian dollars, an improvement from -156 million Canadian dollars in fiscal 2019. For more on Aurora’s profitability, read When Will Aurora Cannabis Become Profitable?

Stock performance

So far, this year, Aurora Cannabis has lost 49.3% of its stock value as of December 12. Weak sales in the fourth quarter of fiscal 2019 and the first quarter of fiscal 2020, management’s decision to scale down its expansion plans, and an early conversion of its convertible debentures caused the company’s stock to fall. Weakness in the cannabis sector has also contributed to the fall in the company’s stock price.

YTD, the ETFMG Alternative Harvest ETF (MJ) has fallen 30%. Meanwhile, Aurora has underperformed its peers Aphria (APHA), Canopy Growth (CGC), and Cronos Group (CRON). APHA, CGC, and CRON have fallen 11.6%, 23.9%, and 33%, respectively, YTD. For more cannabis-related news, check out 420 Investor Daily.


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