Why Aurora's Expansion is Significant to the Cannabis Industry

Cannabis Investing

Aurora Cannabis announced at the end of November it has initiated construction of an 800,000 square foot facility, which will produce 100,000 kilograms of cannabis per year.

If anything’s certain, the cannabis industry has soared to new highs in 2016, and it’s only going to grow from here on out. 
Take, for example, Aurora Cannabis (TSXV:ACB), who announced at the end of November that it had begun construction on an 800,000 square foot expansion, called “Aurora Sky.”  Construction of the the facility started in October of this year, and is targeted for completion by October of 2017.  Once completed, it is expected to be the largest cannabis production facility in the world.
Not only that, the press release notes it will be fully capable of producing at least 100,000 kilograms of high quality–and low cost–cannabis per year. With the number of medical marijuana patients growing, and legalization of cannabis forthcoming in 2017, Aurora’s new facility will no doubt make a huge impact on the industry.
Aurora’s president, Steve Dobler, said in the announcement its “objectives are very clear: to build the largest production capacity, with the highest production quality and the lowest production cost.” He continued, “We are confident that the Aurora Sky project will achieve all of our key objectives, and further establish Aurora as an innovator and world leader in the cannabis sector.”
To that end, the Investing News Network (INN) recently had the chance to speak with Aurora’s vice president, Cam Battley about how the facility will set Aurora apart from others, why they chose Dutch design for the expansion, and what legalization of marijuana means for the company moving forward.
Below is a transcript of our conversation. It has been edited for clarity and brevity. Read on to find out what Battley had to say.


INN: With the growing cannabis industry in Canada, how will this new facility set Aurora apart from others?
CB: To begin with, we set out to build the largest capacity cannabis production facility in the world, and beyond that we wanted to achieve two things: it’s not enough to just to produce a high volume of cannabis. We wanted to be able to produce it at the same level of quality that we’re producing at our indoor facility. We settled on the way to do that and that is the hybrid greenhouse of Dutch design, and this will allow us to to maintain our level of quality, which we will not compromise on. It will also allow us, through the heavy use of automation, to produce what we believe will be the lowest per gram cost of cannabis in Canada.
INN: Was there a specific reason for choosing the Dutch design for the expansion?
CB: There was. Very specifically, we were looking for options that would not simply give us scale, but quality. One thing we rejected almost immediately was a traditional greenhouse design, because we required really tight control of the environmental variables, including heat, humidity. What we settled on was this design, which has been used in things like orchids and vegetables, but it’s never been used before in cannabis.
It supplies us with a level of environmental variable control as well as the large scale. The Dutch produce the most high tech advanced and efficient greenhouses in the world, and it’s understandable if you think about as a lack of space in the Netherlands. It’s a very densely populated country, and land is at a premium. When they produce greenhouses, they must be efficient. That’s why we went this route.
INN: Do you think the legalization of recreational marijuana will impact the facility in any way?
CB: The reason we’re building this facility is to first of all satisfy the remarkably fast-growing medical cannabis market. There are now 125,000+ patients. That’s growing at a rate of 10 percent per month, so demand for medical cannabis alone is growing at  a remarkable rate.
In addition, we are looking forward to the near-term future when the federal government moves in spring to legalize consumer use of cannabis. I anticipate that this consumer legalization regime will be in place some time in 2018.
By that time, it will be necessary that licensed producers collectively have a lot more licensed capacity than we have today. And we are envisioning participating in the consumer market as well. With 100,000 kilograms of production capacity, once this facility reaches full production it will make up, as of now, the largest producer of cannabis.
INN: Thank you very much for your time today.
Don’t forget to follow us @INN_Resource for real-time news updates.
Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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