The Aurora Sun cannabis growing facility is seen in the Box Springs Business Park on May 12. This week the company re-affirmed the construction and commissioning plan for the massive facility that will only partially open this summer.--NEWS PHOTO COLLIN GALLANT
cgallant@medicinehatnews.com@CollinGallant
Aurora Cannabis is carrying on with a previously announced plan to partially open its new “Sun” facility in Medicine Hat, the company announced as part of its quarterly financial update Thursday.
Another tidbit for Hatters came in an aftermarket conference call that the 260,000 square feet at Aurora Sun, which could be licensed in June, will produce “high-demand cultivars.”
The Edmonton-based cannabis firm sharply scaled back the initial operating size of the 1.6-million square-foot facility as part of a major corporate overhaul in February to adjust to slower than predicted cannabis demand.
This week, it reported higher revenue quarter to quarter, and said it was “on track” to meet a goal of net profitability later this year.
“It’s very encouraging,” CEO Micheal Singer said during an after-market conference call on Thursday with investors and media.
“We’ve made significant progress since February with more progress to come.”
Aurora reported a 39 per cent increase in sales volume during its third quarter (January to March) compared to winter 2019, and a quarter-to-quarter revenue jump of 34 per cent.
Ongoing expenses were lower by 45 per cent by the end of the quarter thanks to a “business transformation plan” of layoffs and other changes in February, and losses shrank by 37 per cent – C$50.8 million – compared to more than C$80 million in late 2019.
Those cuts also slashed capital plans in order to preserve cash the company needs to bolster its balance sheet after investors demanded changes to Aurora’s extremely aggressive plan to create a wide-ranging integrated company in the rapidly developing cannabis sector.
That included a pause before completion of the Aurora Sun Facility and a facility in Denmark, as well as cancelling several global sales expansion and marketing initiatives.
In Medicine Hat, six grow rooms would be used for “high-demand cultivars” and will continue or be completed in June, along with an edibles development facility in Edmonton.
The company is “fully operational” during the COVID-19 pandemic, but stated the effect on consumer markets and cannabis demand were still highly variable.
“We aren’t making a revenue prediction of the fourth quarter but we are committed to managing the business to positive EBITDA (unadjusted earnings) after the fourth quarter,” said financial officer Glenn Ibbot.
Aurora Sun was announced in March 2018 as a 1.2-million square-foot facility, worth about $130 million, but that was expanded in early 2019 to include an initial expansion and further space.
It was heralded as a hallmark economic development victory, and the City of Medicine Hat put $6 million in reserve funds toward covering development fees for the massive facility.
Initially, Aurora estimated that 400 full-time positions would be required to operate the facility and a power-supply contract that would earmark about 20 per cent of the city’s production capacity.
There is no updated estimate on jobs or power use.
