Alberta-based Aurora Cannabis sold off its stake in Australian medical marijuana company Cann Group, but the Canadian producer says it still sees promise in the Australian market.
“We continue to see growth potential in this important market and will maintain active relationships with key distribution partners to enhance availability of Aurora’s portfolio of leading, high quality medical cannabis,” Aurora spokeswoman Michelle Lefler wrote in an email to Marijuana Business Daily.
She said Aurora remains focused on its “core markets” of:
- Canadian medical and recreational.
- CBD in the United States.
- Developed international medical markets.
“Our capital investment mirrors this focus and is reflected in our decision to redeploy our capital and simplify our position in the expanding Australian market,” Lefler said.
Aurora listed Australia as one of its “primary market opportunities” as recently as February 2020.
However, the designation was not given to Australia in its September disclosure.
Aurora’s stake sale comes about three weeks after it booked an impairment loss worth some 37.2 million Canadian dollars ($28.2 million) on its Cann Group position for the fiscal year ended June 30, 2020. That is in addition to an impairment charge of CA$18.2 million for the previous year.
“We disposed of our entire position in Cann Group Ltd. effective October 9, 2020,” Aurora’s chief legal officer, Jillian Swainson, wrote in an Australian regulatory filing.
Cann Group was advised that Aurora exited its ownership position, it said in a press release.
“Aurora sold its 11.84% shareholding in Cann Group via off-market trades to a small number of undisclosed buyers after the market closed on Friday, 9 October 2020,” the company stated.
Aurora’s nearly 32 million shares in Cann Group represented a 22.4% ownership interest in the Australian company as of June 30, 2020, Aurora said in a regulatory filing with the U.S. Securities and Exchange Commission in September.
Accounting for the difference between Cann’s statement (11.84%) and Aurora disclosure (22.4%), Aurora said its “holdings were diluted” since June 30.
Aurora first acquired 19.9% of Cann Group’s ordinary shares at a cost of about CA$6.5 million in 2017.
Later that year, Aurora acquired additional shares at a cost of CA$17.6 million, increasing its ownership to 22%.
Then on Jan. 4, 2018, Aurora increased its position again at a cost of CA$8 million.
Australia’s regulated market for medical cannabis has seen strong growth of late, but it remains small by North American standards.
Aurora reported a net loss of CA$3.3 billion for its latest fiscal year.
Cann Group’s shares trade on Australian Securities Exchange as CAN.