Will Aurora’s Expansion in Germany Lead to Profitability?
The TDR Three Key Takeaways on Aurora’s Expanded Cannabis Operations in Germany:
- Aurora Cannabis Inc. has secured enhanced licenses for cultivation and research under Germany’s new Medical Cannabis Act.
- The new licenses allow Aurora to cultivate additional products and trial up to seven novel cultivars, aiming to meet the growing demand of the German patient base.
- Based on Wall Street estimates, it seems that profitability will be in the year 2026 or later.
Aurora Cannabis Inc. (TSX: ACB, NASDAQ: ACB), a Canadian-based global medical cannabis company, has received expanded licenses from the Federal Institute for Drugs and Medical Devices (BfArM) under Germany’s new Medical Cannabis Act. These licenses continue Aurora’s domestic cultivation efforts and allow for the addition of an approved product and the trial of up to seven new cultivars at their EU GMP facility in Leuna, Germany.
Aurora has been cultivating approximately 1,000 kg of medical cannabis flower annually at their Leuna facility since 2021. The company’s enhanced licenses will enable it to expand its product offerings and invest in domestic research, leveraging its global cultivation expertise to benefit the local market.
Michael Simon, President Aurora Europe, publicly shared: “We thank the German government for its continued investment in the growth of medical cannabis, made possible by decriminalization, which will improve access to medical cannabis for patients all across Germany. We now have the framework to extend our portfolio, invest in domestic research and leverage Aurora’s global cultivation expertise locally.”
Miguel Martin, Aurora’s CEO, highlighted last month after the company released its FY 2024 earnings that international expansion was key to Aurora’s future growth. In addition to Canada and Germany, Aurora is also focused on Australia, Poland, and the UK. The international expansion does hold strong promise but will take some time to develop.
Is Fiscal Year 2025 the year Aurora can turn the page and achieve positive cash flow and earnings? In FY 2024, the company still produced a negative Levered Free Cash flow of $63M. Wall Street analysts predict revenue of $219M in FY 2025, higher than the $199.5M achieved for FY 2024. However, without a significant cost reduction, analysts predict an earnings per share loss of $0.34 a share. Based on Wall Street estimates, it seems that profitability will be in the year 2026 or later.
We will closely watch Aurora’s progress internationally and in Canada and update our readers as more information becomes available.
