The expansion of its Aurora Sun facility is more proof that Aurora Cannabis (Aurora Cannabis Stock Quote, Chart TSX:ACB) is a global leader in the cannabis space, GMP Securities analyst Martin Landry says.
This morning, Aurora announced that it had expanded its Aurora Sun facility from $1.2-million square feet to $1.62-million square feet, a 33 per cent increase of the company’s original plans. The company says its Aurora Sky Class facilities are the most technologically advanced in the world.
“Aurora Sun represents the next evolution in our Sky Class facility design, delivering massive scale, low-cost production and consistent, high-quality cannabis,” CEO Terry Booth said. “Particularly in newly opened markets, establishing first-mover position and embedding Aurora’s market share and brand requires a stable and reliable supply of high-quality cannabis for these markets. The increased scale of Aurora Sun reflects our expectations for the long-term growth in global demand, especially the higher margin international medical markets which will be faced with significant supply shortages for the foreseeable future. Sun is also designed with flexibility in mind to enable us to quickly meet changing market demands, particularly as breeding and cultivation technologies evolve and as customer preferences and requirements change.”
Landry, in a “flash” update to clients today, notes that ACB’s next leg of Canadian production expansion is progressing. The analyst said moves made here will have positive ramifications around the globe for the company.
“Aurora Sun is being built to EU Good Manufacturing Practice (GMP) standards which could enable the facility’s production to be sold in European medical markets,” Landry notes. “This would further add to Aurora’s EU GMP certified footprint, allowing it to better serve international markets. At 230 tonnes, Aurora Sun could be one of the largest production facilities in Canada and potentially the world. Large scale facilities like Aurora Sun are a differentiation factor for ACB and could provide supply chain benefits. This progress bolsters Aurora’s position as a global leader in the cannabis space.”
Landry today reiterated his “Buy” rating and one-year price target of $15.00 on Aurora Cannabis, implying a return of 25.4 per cent at the time of publication.