Aurora Cannabis eyes future of international medical pot markets as revenues fall by 10 per cent

A worker looks at cannabis seedlings at an Aurora Cannabis facility. The Edmonton-based company is eyeing international medical pot markets as a key to future growth. Ryan Remiorz/Canadian Press file photo

The chief executive of Aurora Cannabis Inc. trumpeted international medical pot markets as his company’s key to future growth as it reported a $75.1-million loss in its most recent quarter.

The Edmonton-based pot company is already dabbling in Israel, Australia and Europe, but believes the U.S. and many other regions have revenue-generating potential, if the wave of pot legalization continues around the globe.

“We expect a domino-like effect as acceptance grows,” said Miguel Martin, on a Thursday call with analysts.

“Where there is money to be made in a federally regulated structure, Aurora will be there and we will win.”

Martin has spent recent quarters shaking his head at several trends that have emerged in the recreational cannabis industry.

He has labelled the recreational sector as “irrational” and “unsustainable” because companies are speeding to slash prices and margins in the quest for market share during a period when they’re still contending with COVID-19 pot store closures in some regions.

“You’re seeing core SKUs that are selling at a significantly negative gross margin. You’re seeing an exceptional amount of over inventory,” he said Thursday.

“And you’re seeing a situation like with Quebec right now, with the vaccine mandates, where you’re seeing a 16 to 20 per cent drop in sales, so it’s a weird market.”

Aurora has not been immune to the challenges. Its consumer cannabis net revenue fell 48 per cent to $14.8 million in its latest quarter from $28.5 million during the same time last year.

Martin attributed some of that hit to wholesale cannabis the company sold at a low price point rather than destroying and to price compression and other pressures in the recreational market.

“The largest Canadian licensed producers are still finding it difficult to maintain market share, particularly in the recreational market,” Bill Kirk, executive director of MKM Partners research firm, wrote in a note ahead of Martin’s call.

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