Aurora downsize continues with closure of greenhouse in Leduc

By MEDICINE HAT NEWS on May 13, 2022.

https://www.medicinehatnews.com@MedicineHatNews

Aurora Cannabis is closing more facilities, including its largest remaining “sky-class” greenhouse, in favour of relying on a recently acquired growing company and to continue to cut production and expenses.

The Aurora Sky greenhouse in Leduc was the Edmonton-based firm’s showcase facility when Cannabis became legal in 2018 and was the model for the Aurora Sun facility in Medicine Hat as it sought to build a high-quality brand at massive scale to lower the cost of production.

In tandem with financial results posted Thursday the company said it would close later this year, and expects interest to potentially sell the site to be high, according to officials.

CEO Miguel Martin said during a call with investors that Sky’s location near the Edmonton International Airport would certainly a garner interest, but didn’t address other shuttered facilities.

The company marketed the partially completed Aurora Sun facility in Medicine Hat in the spring of 2021 through global real estate firm Colliers, with a proposed schedule to contemplate offers by last fall.

The company has been working to turnaround losses since initial predictions about the size of the legal cannabis market failed to materialize.

Construction halted on the Hat facility – planned to produce 260,000 kilograms – annually in late 2020, and production at Leduc was reduced to 25 per cent in 2021.

Aurora is on track to sell about 55,000 grams this fiscal year.

The company recently acquired Thrive Cannabis and use of its production lines along with long-running smaller facilities, known as River and Ridge, to produce “premium brand” recreational cannabis and high-quality medicinal products.

It reported impairment charges led to a net loss of more than $1 billion in its most recent quarter while pricing pressures ate into its revenues.

The third-quarter loss was up from a more than $160 million loss it reported in the same quarter last year and was coupled with $741.7 million in goodwill impairment charges and $176.1 million in impairment related to property, plants and equipment.

“In the meantime, our focus remains on maximizing profitability by leveraging low cost production and further rationalizing facilities that no longer make sense, and we have entered higher margin categories,” said Martin.

Closing Sky will save the company $7 million per quarter.

— with files from The Canadian Press

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