Aurora Cannabis
Canadian cannabis giant Aurora Cannabis has seen its stock jump nearly 50% this week after publishing a record-breaking financial performance in its third quarter.
Notably, its stellar performance was largely due to the growth of medical cannabis markets across Europe, where Aurora continues to hold a prominent position.
In the three months to December 31, 2024, Aurora reported total net revenue of C$88.2 million, a 37% increase year-over-year.
It also reported a record net income of C$31.2 million, marking a 282% increase from the prior year, and achieved a record adjusted EBITDA of C$23.1 million, up 316% year-over-year.
This growth was primarily driven by a 51% surge in global medical cannabis revenue, which reached C$68.1 million and accounted for 77% of the company’s consolidated net revenue.
The increase of C$23.1m was attributed to higher sales in Australia, Germany, Poland, and the UK, as well as increased revenue in Canada from insurance-covered and self-paying patients.
International net revenue grew by 112%, now representing 60% of Aurora’s global medical cannabis net revenue.
The company’s plant propagation segment also experienced a 22% increase, driven by organic expansion and an enhanced product portfolio.
Conversely, adult-use cannabis net revenue in Canada declined by 15% to C$9.9 million, as Aurora prioritised supplying its GMP-manufactured products to higher-margin global medical markets.
Business of Cannabis will be delving into Aurora’s performance and its implications for the European market in more detail in the coming days, including an interview with its CEO Miguel Martin.
Little Green Pharma
The Australian Stock Exchange (ASX)-listed medical cannabis operator this week announced the acquisition of its long-term distribution partner, Health House.
Little Green Pharma’s (LGP) choice to bide its time to make a bid for the company, which has been up for sale since September 2024, appears to have paid off, seeing the company finalise the acquisition yesterday (February 05) for just A$375,000.
According to LPG, Health House has an annual turnover of around A$7.5m and maintains a ‘cashflow breakeven’ position.
Melodiol Global Health, the former parent company of Health House, put the company up for sale for A$10.9 million in September, before falling into liquidation in December.
After failing to find a buyer, this price was dropped significantly in November to just A$3.3m, Cannabiz.au reported, before LPG signed a letter of intention to buy the company for A$1.25m in December, following Medodiol’s collapse into liquidation.
Now LPG will acquire Health House’s property, plant, equipment (PPE), inventory, and intellectual property, with LGP assuming a A$350,000 net liability position (excluding existing payables due to LGP).
The overall A$375,000, which includes a previously paid $75,000 deposit, will consist of an immediate payment of A$171,000 upon completion, and a final payment of A$129,000 due in 40 days.
It came just days after the company reported runaway growth in the final quarter of 2024, driven largely by its growing European operations.
In Q4, LGP saw revenue jump 75% year-on-year to A$9.5m, including cash receipts of A$10m a 90% increase compared to the same period a year earlier.
LGP’s European sales grew 20% in the quarter, buoyed by rising demand for both flower and oil products. Germany, in particular, saw strong momentum, with A$1 million in flower sales recorded in December and A$6 million in binding purchase orders secured across the German and UK markets for the next two quarters.
Despite strong overall growth, flower sales dipped 5%, largely due to supply constraints for its popular CherryCo Smalls product and temporary regulatory delays affecting Australian flower shipments into Germany. However, other flower categories saw a 30% increase, offsetting the impact.
LGP ended the quarter with A$3.7 million in cash and minimal long-term debt of A$3.2 million. The company’s year-to-date revenue of A$27 million has already surpassed the entire previous financial year’s revenue of A$25.6 million, reflecting strong sales momentum.
CEO Paul Long emphasised the company’s focus on expansion and operational efficiency, stating, “We are committed to positioning LGP as a leading supplier in Europe’s rapidly expanding medicinal cannabis market. Our continued revenue growth, strategic acquisitions, and product innovation put us in a strong position heading into 2025.”
Argent Biopharma
Its ASX-listed stablemate, Argent Biopharma, which recently de-listed from the London Stock Exchange, has announced the resignation of director Layton Mills.
Mr Mills, who joined the company (then called MGC Pharmaceuticals) in June 2023, as a non-executive director, has ‘tendered his resignation,’ but the company gave no reason behind the abrupt departure.
This will be effective ‘upon the appointment of a suitable Australian replacement,’ and the company is reportedly already in advanced discussions with ‘several highly qualified candidates.’
Like LGP, the news came just days after the publication of its latest financial figures; however, unlike its Australian rival, these painted a much bleaker picture of its financial health.
For the quarter, Argent reported revenues of just A$2,000, while operating outflows for the quarter alone totalled A$1.2m, including A$461k allocated to staff costs, A$615k spent on corporate and administration costs, and A$200k in marketing and advertising investments to support product awareness and brand positioning.
As part of an ongoing cost reduction strategy, the company also announced the closure of two manufacturing facilities, looking instead to outsource certain areas of production, shifting its focus to be solely on research and development.
Argent secured A$200,000 in a private placement during the quarter, issuing 666,667 new ordinary shares at A$0.30 per share. Funds from this raise are earmarked for ongoing drug development efforts in the US and EU markets.
Post-quarter, the company successfully raised an additional US$4.5 million (~A$6.9 million) through a subscription-based placement.
As such, as of the end of December, Argent reported A$718k in cash on hand, compared to A$311k in the prior quarter, reflecting a net positive cash position due to financing activities.
