The unfinished Aurora Sun greenhouse and processing facility in northwest Medicine Hat could be operational by next fall, the company said this month as it eyes expanding its plant propagation subsidiary, Bevo.--News File Photo
cgallant@medicinehatnews.com@CollinGallant
Aurora Cannabis says it plans to have the Aurora Sun greenhouse repurposed and producing starter vegetables and flowers by this time next year.
The Edmonton-based cannabis producer recommitted to the timeline on Nov. 9 when it released its quarterly financial reports.
They state the company that launched a huge “business transformation program three years ago recorded its fourth consecutive quarter of positive unadjusted earnings, and will likely have positive cash flow in the next calendar year.”
Aurora’s CEO Miguel Martin said the company will deliver on that long-standing goal thanks to better medical division sales, cost containment and new income from traditional plant propagation at its Bevo division.
That is already operating at the Aurora Sky facility in Leduc, while Aurora Sun in the Hat will become a second facility for horticulture and supply contracts with greenhouse growers.
“It’s been an incredible three years and we’re nowhere near where we think we can get,” said a call with investment firms.
“Generate steady predictable revenue and earnings, albeit on a seasonal cadence,” according to Martin.
“By leveraging purpose-built but underutilized cannabis facilities, Bevo’s team of cultivation experts is undertaking a transformational product-line extension, moving into the profitable cultivated orchids market while continuing to grow the reach of their base business.
“By expanding our reach in the controlled-environment agricultural industry, Aurora’s shareholders can expect to benefit.”
Company presentations state through the move of B.C.-based Bevo into Leduc and Medicine Hat facilities, it hopes to expand sales supply into Alberta and American midwest greenhouse markets.
There is no immediate timeline or budget estimates for Aurora Sun refitting, completion or operations in documents that target the company’s first fiscal quarter of 2025, which begins next summer.
The huge, incomplete facility in Medicine Hat was mothballed three years ago as it pulled back capital construction spending and began closing existing facilities when the cannabis market failed to meet expectations after legalization.
This year it transferred ownership of Sun to a new subsidiary that was revamping the 800,000-square-foot Aurora Sky greenhouse in Leduc to grow wholesale vegetable seedlings for major greenhouse customers as well as ornamental flowers.
Supplying orchids, which are usually imported from south Asia, could provide high rate of return, said Martin.
“We definitely think that Bevo can expand on that,” he said. “It all gives us confidence, but I’d like a couple more months of early read of our products before we give more guidance (on earning expectations). We don’t want to get over our skis on this, but we’re bullish.”
Aurora’s second-quarter report states its revenue rose 30 per cent to $63 million, leading to a net income of about $300,000, compared to a $45-million loss in mid 2022.
Plant propagation brought in $7.1 million in the quarter and $27 million in the first six months, which is the seasonal busy period in the sector.
The company also said the firm has only $5 million in existing debt and $200 million in cash to fund potential expansion.
“It allows us to play offence from here on in,” said Martin.
