30 Minutes with Aurora Cannabis (TSE:ACB) (NYSE:ACB) CCO Cam Battley

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Aurora Cannabis Inc (TSE:ACB) (OTCMKTS:ACBFF) (FRA:21P) CCO Cam Battley joins Midas Letter for a long-form interview diving into the latest developments inside one of the world’s largest and leading cannabis companies. The CCO states Aurora has “achieved a level of scale and discipline that sets us apart” [from the competition] which should see the company separate from the concerns in the cannabis market as a whole. Based on Aurora’s guidance, the company is anticipating between 90 and 95 million in cannabis revenues, which would put Aurora at the top of the cannabis pile in respect to revenue. James quizzes Mr. Battley with some ‘tough question’ such as when the company will be profitable, competing with low-cost, outdoor cannabis and extracts on the global stage and when Aurora’s relationship with Nelson Pelz is going to result in value for shareholders. Recent press releases are also discussed such as Aurora’s credit facility upsizing to USD$280 Million and their partnership with UFC® for clinical research of hemp-derived CBD products for MMA athletes.

Transcript

James West: Hey, I’m joined by Cam Battley, now. He’s the Chief Corporate Officer of Aurora Cannabis – you all know where that trades. Cam, welcome back.

Cam Battley: Nice to see you again.

James West: Cam, it’s good to have you back. How’s your summer going? 

Cam Battley: Very good, other than the obvious, with respect to the markets being red in the sector.

James West: You know, to me it strikes me as a healthy evolution of the market that it goes down as well as going up.

Cam Battley: I’m glad you think it’s healthy, because our shareholders are not using that particular word.

James West: Hmm. I can just imagine. Frustrating as it may be for markets to aspirate, but being a living organism, as most markets are, they do have to breathe out as well as in.

Cam Battley: Look, you’re absolutely right. And I would say, first of all, a couple of things. One, Aurora has been distant from the drama and the convulsions and the difficulties that we have seen in this sector, and I find that sometimes a little frustrating that we keep quietly keeping our nose to the grindstone and executing consistently, continued growth across all of our distribution channels, and we’re doing what we promised to do, not just this year, but over several years.  And I would honestly like to see, over time, something that I’d like to achieve, is a bit of a decoupling of Aurora from the sector.

Bundling us in with every other company in the sector, I don’t think, is appropriate anymore. I think we’ve achieved a level of scale and discipline that sets us apart. But, let me add this: I know that there’s a lot of concern about the cannabis sector as a whole, and I think that there’s perhaps more concern than warranted. This sector is going to be okay, and sometimes, you know, in a market that is so heavily retail, as cannabis is right now, overwhelmingly so; we know that retail markets tend to trade on emotion and on news, and that’s why you see a lot of the, you know, the volatility that you don’t see in mature industries.

I think it’s probably worthwhile for investors in the sector to take a deep breath, take a look at what they liked about those companies in the first place, take a look at what they like about the opportunity of being early movers in a brand-new global industry, and reassess whether things are really so bad. I don’t think they are. I think the sector is going to be all right.

James West: Sure. Well, it should be easy enough to differentiate yourself with the rest of the industry, would be, just turning a profit.

Cam Battley: Yes.

James West: And your recent projections suggest that, the guidance suggests that, you are getting very close to that and some serious revenue.

Cam Battley: Well, so, yeah. We put out guidance, you know, a little over a week ago, and I think it was pretty important. We’ve seen some kind of weak earnings reports from some companies; we wanted it to be clear that we’re not experiencing some of the challenges that some of the others are, temporary or otherwise. And so based on our guidance, we’re anticipating in excess of 100 million in net revenues – over 90 million, between 90 and 95 million, in cannabis revenues, and that makes Aurora the global revenue leader in the cannabis sector, which is gratifying, because it’s something that we anticipated quite some time ago, and I think a lot of people found – I think they had a hard time believing that we’d be able to achieve it.

But we have, and you know, if you just take a look at the last 18 months, Aurora’s production has gone from about 5,000 kilograms per year to over 150,000 kilograms per year. So it’s a, you know, 30 times increase in a very short period of time. And beyond that, we’ve established what we believe is the global benchmark for cannabis production: no lost crops, very high quality, yields that I don’t think anybody’s ever seen at scale before. And we’ve found the markets, globally, to be able to distribute that. So we’re the leaders in medical cannabis in Canada. We’re the leaders in medical cannabis internationally. And we’re the leaders now, apparently, according to third party reports, in the Canadian adult consumer market, as well. 

So it’s continued growth. It’s a lack of drama, a lack of crisis, and that’s based on solid production techniques. It’s based on a very strong management team with a few people that I do want to make shout-outs to. And also, I think it’s a validation of our overall business model, and that’s a testament to Terry Booth, our CEO and co-founder.

James West: Okay. So you’re reporting your Q4 and year-end for fiscal 2018, correct? Now, how is your net number going to look relative to analysts’ consensus?

Cam Battley: We’re going to be pretty darn close. We, you know, obviously maintain close relationships with the analysts; we give them access to all the information that they need. So we’re going to be pretty close to where analysts have anticipated that we would be. It’s one of the reasons that we put out this guidance; we want there to be no surprises. We want to lead this sector in transparency as well as in other things, and we want to have clarity, and we want to let people know what to expect.

So that’s why we put out the guidance. We are continuing to track towards positive EBITDA, as indicated earlier in the year, and I’m very, very pleased with that. And I’ll tell you why: we, by putting a stake in the ground that we were taking profitability and that that path to profitability, seriously, it applied a whole new level of discipline to our operations. We’re not pushing out the promise of profitability, you know, year after year after year. And while we do believe that it’s critical to establish infrastructure globally while this window of opportunity exists, we don’t think that that conflicts with the opportunity to achieve profitability.

So, I’m very, very pleased with the way we’re doing. I’m very pleased with the way we’ve disciplined our operations, and managed our resources. But once again, you know, you’ve heard me say before, and I think I mentioned it on our last earnings call, that in my view, over the next couple of years, the critical success factor in this sector will be producing and selling via multiple distribution channels, a hell of a lot of cannabis. And we’re doing that like nobody else right now. So I wouldn’t want to be any other cannabis company other than Aurora today.

James West: Sure, of course. All right, let’s talk a bit about your upsizing of your traditional banking facility from 200 million to 360 million. Obviously, lots more firepower in the bank account to do the things that you guys are doing; what is the implications of that come August 2021? Under what circumstances would you not be in a position to pay that back according to the schedule required?

Cam Battley: Look, according to our projections, we’re not going to have any difficulty paying back debt. The most important things to take away from the upsizing of the credit facility is, I think, it’s about confidence. It’s about the consistency of our operations and our execution, and it’s about the credibility of the company. Our assets are valuable, and we validated those assets, such as our Aurora Sky facility at Edmonton International Airport – and by the way, we have additional Sky-class facilities under construction in Medicine Hat and, you know, Denmark – but it speaks to the credibility of the company.

This is the largest amount of traditional debt that any cannabis company has been able to access thus far, and you know, I’ve said this before: I think that this is, you know, very  important for Aurora in that it puts us apart from the rest, but, Aurora is at the leading edge of this industry. And so I think a broader takeaway would be that this is good for the industry at large. That Schedule One banks, and we’ve actually added additional Schedule One banks to the syndicate that is providing this credit facility – Schedule One banks are now leading in. They’re getting involved. They’re accepting and believing and banking on the fact that this is going to be a successful long-term industry, and it’s a good risk.

James West: So for shareholders, you’ve slowed down on the acquisition trail which – 

Cam Battley: You noticed. 

James West: Well, as a shareholder, who wouldn’t notice that? And that is comforting to shareholders, because every acquisition, while it does build the footprint of the company on the global stage, it makes one a little bit uncomfortable with the idea of earnings per share in the future. So –

Cam Battley: Well, this goes back to what I said about the guidance that we put out in January of this year. We signaled a shift in our strategy – an evolution, I guess, in our strategy. And what we said at the time is that we believe that we had substantially assembled the assets and capabilities in Canada that we needed to be a, or the, leader going forward, and that our future focus for M&A would be a on global scale, opening up new markets. And we’ve done that successfully, too; now, we’re operating in 25 global markets, 25 countries, and that’s by far the biggest global footprint in the industry.

But along with that, and along with the new discipline and that focus on that pathway to profitability, we also indicated we would be slowing down some of the M&A. It’s not that we regret anything we’ve done in the past, it’s just we felt we had reached a point where we had those assets and capabilities, and now we were able to shift gears. And it happened at a very good time, because what I’ve been hearing and what we’ve been hearing from the institutions is that they’re looking for a greater focus on that pathway to profitability, that we can’t keep operating, keep raising money, keep expanding, without caring about and putting a schedule on when we’re going to get to profitability.

So I’m pleased that I think we got the timing right with the major institutions, and I think that that will pay off for Aurora very well, because I think probably relative to most of our peers, we’re going to be ahead of them in terms of the timeline to profitability.

James West: That’s super intriguing. Now, the whole industry is suffering from a discounting process over the course of the summer, largely because investors sell in May and go away when they’ve made a lot of good money. But also, the earnings have been disappointing from the industry at large, primarily at the point of sale. And what is clearly emerging is that the influence of the black market on the ability of companies to generate significant revenue is not just present, but expanding, as evidenced by Colorado’s release recently of a chart showing that each year they seize more plants from illegal operations because these non-licensed entities are able to hide behind the licensed industry and do a better business.

To what extent is that going to impact Aurora’s ability to generate profit from significant sales in jurisdictions where a black market is still persistent?

Cam Battley: You know, there was something really interesting in the most recent StatsCanada report that showed that the attitudes of purchasers of cannabis, both legal and black market, the number one driver was safety and quality. 75 percent of people put that as the number one consideration.

This is where Aurora kills it, obviously. We don’t use pesticides at our Aurora facilities; we produce exceedingly high-quality cannabis that is done very, very well. We’ve got the leading brands in the industry, and I think, you know, as I say, third party reports are indicating that we’ve taken over the lead now in the Canadian adult consumer market.

So if you’ve got that on your side, and you also have the ability to, you know, to supply multiple jurisdictions across the country – and we’re in every jurisdiction across the country – and you have the ability to expand into markets that other companies simply don’t have the scale or the production to enter, it puts us in a very favourable position.

So, you know, where is the black market? You know, the indications that we’ve seen from what data exists – and let’s admit that it’s imperfect – is that the legal market is gradually but steadily replacing the illegal market. There will always be some people who will look for the lowest price; fair enough. But where we’re going is to a normalized market. You know, I often say, when was the last time you bought bathtub gin?

James West: [laughter] Bathtub gin? That’s a good one!

Cam Battley: Right? Well, so this was what was big during Prohibition – people literally making liquor in their bathtubs. And that doesn’t exist anymore. 

What we’re also seeing is a lot of talent who previously have come from the gray and black markets, moving into the legal and regulated market. That’s a normal course of affairs. And so, over the course of the next few years, I would anticipate in Canada, in the US consumer legal states, and in other future jurisdictions that do legalize cannabis for consumer use, you’ll see normalized markets develop, and the black market will get smaller and smaller and smaller. And we’re already seeing that phenomenon in the consumer legal states in the US, where the overwhelming majority of cannabis sold is via the legal market. So, we’ll get there.

James West: Fantastic. Okay, tough question number one: when is Aurora going to be profitable?

Cam Battley: What we said in our most recent guidance is that we remain on-track towards EBITDA positive, and particularly EBITDA positive on cannabis operations. So I don’t want to be incarcerating for violating securities regulations, and I’ll wait until we report before September 15th, with our year-end. But if you’re asking me if I’m confident that we are on track, we’re still on track towards EBITDA positive and on that pathway to profitability, yes. And I think we are ahead of most of our peers, as well.

James West: Okay. Tough question number two: how is Aurora going to compete with low-cost, equatorial-grown, outdoor cannabis and their extracts, on the global stage, competing from a place where the cost of sales must be higher given the fact that these are ultra-high-tech, purpose built facilities of significant scale and with huge CapEx?

Cam Battley: This is one of your patented, really interesting, long, multi-level questions. [laughter]

James West: I should patent those, shouldn’t I?

Cam Battley: You really should. So, let’s break it down: first of all, we’re involved in outdoor grow, as well, in Latin America.

James West: The largest one in Canada, I understand.

Cam Battley: The largest one in Canada, in British Columbia, in Westwold in British Columbia, as well as another – 

James West: Did you say Westwold?

Cam Battley: Yes.

James West: Is that my wold?

Cam Battley: Not Westworld, Westwold. 

James West: Damn.

Cam Battley: And also, in Quebec. And what we’re doing right now, we’re essentially in the research phase with our outdoor grow. But you’ve heard me say before that we’ve got a lot of science talent in our company, including one of the cofounders of Anandia Labs, who is now our Chief Science Officer, and that’s Dr. Jonathan Page, who led the team that first sequenced the cannabis genome.

And through our plant science, separate from our human science, which is the clinical trials – through our plant science, and through a new breeding facility that we’re building in British Columbia, in Comox – we’re identifying strains that can be optimized for growth in any condition. Indoor, outdoor, greenhouse, northern latitudes, equatorial, and so on.

We do anticipate that outdoor grow will be a piece of the puzzle, and that’s why we’re investing in it. At the same time, we are thinking globally. We’re thinking like a global enterprise. And the challenge with outdoor grow is that there’s too much risk associated with it in order to build a global enterprise solely on that basis, because if you think about it, outdoor plants are, they’re vulnerable. This is why we started to, you know, use greenhouses and other facilities for, you know, growing plants of all kinds.

If there’s a big wind, you can lose a crop. If there’s a major rainstorm or hailstorm, it can wash the trichomes – the crystals of cannabinoids – right off the outside of the flower, because it wears its medicine on the outside, right? You have the risk of disease, you have the risk of pests, you have risk from pesticides from nearby agricultural facilities, because it’s all in the wind.

So, we believe in outdoor growing; we think it’s part of the puzzle. We are going to be engaging in it, and we think we’re going to do it better than others because we’re going to have the science backing the strains that are the hardiest, that are the most disease-resistant. We’re going to be selectively breeding for those characteristics. So, there’s that.

Now, the other thing to bear in mind is, think about any other industry. You will see in manufacturing, for example, that it’s coming to make a choice between producing in a developing country, for example, that has low labour costs, or producing in a developed country and using high technology. Does that sound familiar?

James West: Mm-hmm.

Cam Battley: So this is why we are hedging our bets. We are going to be producing low-cost cannabis, mostly for extraction, on an outdoor basis. But we’ve also, we have completely validated this concept of our Sky-class facilities, these mass-scale indoor facilities with a glass roof, with 100 percent control over the critical environmental variables. And I think we’ve seen by, you know, some of the performance of some of our peers that being able to produce without crop loss, being able to produce that really high quality product in a controlled indoor environment, being able to deliver extremely high yields and improving yields, and those high levels of cannabinoids or active pharmaceutical ingredients, that’s something that completely differentiates us from everybody else. There’s nobody in the industry who’s developed this kind of technology.

And one of the other characteristics of these high-tech, highly automated indoor grows using robotics is, it’s low-cost. And this is where we get our high gross margins. So we’re setting the pace for the entire industry in terms of margins, and that’s gratifying, but it’s based on a couple things. First of all, we think we will be able to command a very good price for our products, whether it be dried cannabis or derivatives. And we also know that we’re going to be able to produce for a lower cost than virtually anybody.

And I think ultimately you’re going to see the cost of our highly automated facilities’ production and the cost of outdoor grow – the real cost, including QA costs and including, you know, being able to access markets – I think you’re going to find those costs converging.

James West: Okay. Let’s take some of the questions that our audience has so thoughtfully come up with. Simon Cherette (phon) says, please ask Cam about possible new markets in Thailand, Mexico, and how much market share Aurora has taken from Canopy/competitors over the last quarter.

Cam Battley: So, let’s start with the last first: I’m not really 100 percent confident in the sketchy data that we’re able to get thus far in terms of the consumer market, but there are third party reports that indicate that Aurora has moved into first place in the Canadian adult consumer market, which is gratifying. We know that we’re putting out great products; we know that our brands are in demand, and we know that we’ve got the production to meet the demand and, you know, recently, we’ve seen, you know, one of the companies in this space get hit by Health Canada.

James West: Oh, right, okay.

Cam Battley: And what that means is, there’s a very large amount of product that won’t be there. So, you know, we’ve heard predictions as to when there’s going to be oversupply in the Canadian market and it keeps getting pushed back, and this has just simply done that again.

So we’re, you know, we’re more than prepared with the production, I think more production than anybody else, to fill that gap, as well as on the medical side. So that’s the first part.

The other part is with respect to new markets, and we’re seeing enormous interest. I actually just had a delegation from Thailand into Aurora Sky in Edmonton this week, led by the Thai ambassador to Canada and involving a number of Thai government officials and researchers from different universities. There is enormous interest, and I love this – there’s enormous interest in learning from Canada’s experience.

The same goes for a number of countries on different continents around the world, that they want to learn from what Canada has done with respect to establishing our medical cannabis system, and replicate those successes.

I would gently suggest that there are some things that Canada could have done better, and perhaps I’m a broken record, but it won’t surprise you to say that I don’t think that it’s right to tax medical cannabis. In Canada, that’s the only prescription product for which any tax applies, and we have both excise tax and GST/HST on medical cannabis in Canada, and if you think this is a preview of something that I’d like to talk about ahead of the Federal election, you would be right.

James West: [laughter] Okay.

Cam Battley: But, you know, let’s give Canada a lot of credit, and particularly the public servants at Health Canada. They put together a medical cannabis system in a hurry, under orders by the Supreme Court of Canada, and they did it exceedingly well, and they did it to the point where other countries are coming to visit us to learn how it’s done. We’re the leaders. That pleases me. Makes me patriotically proud.

James West: Sure. I’m with you, there. Okay, John Doe says, what is your plan – 

Cam Battley: John Doe?

James West: John Doe.

Cam Battley: I don’t think that’s a real person.

James West: Oh, it could be John Doo. Well, that’s just their screen name. But his question is, What is your plan for the US hemp market.

Cam Battley: To enter it.

James West: [laughter] I like that. Short, and to the point. Matt Barone (phon) says, James, please ask Cam some tough questions: whether or not they will be EBITDA positive – we just covered that. Latin America and their plan to enter the US market – we kind of just covered that.

Cam Battley: I’ll go into a bit more detail about that. So Latin America, you know, we’ve established very strong infrastructure there. It is performing well. It’s taking a long. We do have to wait for the markets to actually launch in some countries. Brazil is a good example. You know, there’s limited opportunities right now, but there are going to be very major opportunities, and that’s a very large population. In fact, the key reason for our investments in ICC Labs and elsewhere in Latin America is because we know there’s going to be a strong market there, and we want to get in first. We want to get in early, establish the relationships, build that infrastructure, so that we’re ready as the markets switch on. Initially medical, and we anticipate in certain countries, ultimately consumer. There have been some noises about consumer legalization in a number of countries in Latin America.

So that’s a population of 600 million people, and you want to be early. You want to have those relationships; you want to have the infrastructure prepared, and you want to be able to take advantage as those markets start to grow. So we’re very, very pleased with that. What was the other part of the question? Oh, entering the US.

So as I’ve said before, our US strategy is multiple points of entry, and we’ve been in the US now for some time, since, oh, I guess about a year ago, with Australis Capital, which is assembling this lovely suite of assets and capabilities in the US, and for which we have a back-in right, and that was our first step into the US market.

We’ve also entered the US market through our partnership with UFC. Are you a fan of mixed martial arts?

James West: I am a mixed martial arts fighter.

Cam Battley: Holy cow. We’re going to have to get a beer.

James West: [laughter] I’m just kidding. I am not a mixed martial arts fighter in the UFC sense, but I have fought with every aspect of my body over time in various situations, so…

Cam Battley: You must need some CBD.

James West: I definitely need to be a CBD consumer.

Cam Battley: Because so do the fighters. And so we have a research partnership with the UFC, a multi-year partnership.

James West: We had a UFC fighter on as a guest recently.

Cam Battley: Really?

James West: I can’t remember his name; he’s a Canadian contender, I’m going to say championship, but we’ll – I’ll show you that segment in an email, but – 

Cam Battley: Lovely.

James West: Now that I know that Aurora is actually UFC connected, I’m going to reach out to more of those guys.

Cam Battley: So, we are, and in fact, a couple months ago, I was with our team, our extended team, in Las Vegas and I got to see my first live UFC fight, which was astonishing. It’s really intense, and these athletes, they really are incredible, because they train year-round, right? So they don’t have an off-season. They train and fight year-round, and the performance institute established by the UFC to help these athletes be in absolutely optimal shape, is incredibly impressive. In fact, the entire UFC operation is massively impressive, and we’re delighted to be partners with them.

But what we’re going to be doing is researching together the therapeutic utility of CBD for things such as injury recovery, exercise recovery, and even injury prevention. This is a very significant entry and a long term partnership, so a very significant entry into the US market.

And then of course, you know, people are wondering when are we going to make a move with respect to hemp-derived CBD. When are we going to make additional moves into the US? And obviously, I can’t reveal that right now; once again, we have to be worried about selective disclosure every time we talk about it. But we do anticipate moving into the US via different points of entry, and I’ve said it before, and I’ll say it again: if you want to be a global leader, you have to be a leader in the United States, and we will be.

James West: Okay. Everybody – there’s actually several instances of people wanting to know, and I’m just going to qualify their questions into a more linear sort of topic: When is the relationship with Nelson Pelz going to result in some value for shareholders of Aurora?

Cam Battley: You know what? I would actually say that the relationship with Nelson Pelz is already paying off. You haven’t seen us announce yet partnerships with companies in mature industries, but you’ve heard what our strategy is, and that is to optimally enter multiple verticals. And also, not give away control.

So we’ve seen the experience of a couple of companies in our sector who’ve given up control. They’ve given up control of their Boards and significant equity to a single company in a single vertical, and that’s not the way we want to go. We think that we know best how to open up cannabis markets, both medical and consumer, on a global basis, and it’s not being arrogant. It’s simply that in a sector that is brand-new, for which there’s no blueprint, and there’s no map forward, we think that we’ve made more right moves than anybody else, and we don’t think that another company in some other mature industry can easily come in and tell us how to grow the global cannabis business better than we can.

So, maintaining our independence is key. Partnering with multiple companies in different verticals is our objective. Nelson is the most, not just connected, but wise advisor we could possibly have. And so that is moving forward. I know that people would like us to have announced, you know, some partnerships by yesterday, but the reality is, it takes time. The negotiation happens on both sides, and we want to get it right. You know, you’ve heard me say, let’s measure twice and cut once. Because once you establish these long-term, significant, multi-year partnerships, it’s very hard to modify them. So you really want to get it right the first time.

James West: You bet. Okay, Lost in Boston wants to know: I wish I could get some Aurora swag to wear in spirit of the call. Can we order – 

Cam Battley: Is that lost in Boston, or lost in Bolton?

James West: Bolton! Sorry, Lost in Bolton.

Cam Battley: Who’s a Twitter follower.

James West: Right!

Cam Battley: Shout out to Lost in Bolton.

James West: Okay, so says, I wish I could get some Aurora swag to wear in spirit of the call. Can we order swag in the US yet?

Cam Battley: You know what? I actually checked up on that when I saw that Tweet, I think it was in an airport, and according to our current regulatory guidelines, we are not able to sell in the US. But, it’s under review, and I do hope that through our Aurora gift shop, we will be able to sell, obviously non-product swag.

James West: Right.

Cam Battley: And we’ve got enormous demand for it. People love the T-shirts and the hats and the hoodies and all the other swag that we’ve got. 

James West: Okay, and that leads me to Tough Question Number Four, we’ll call it. To what extent does the Canadian rules governing the advertising and promotion of cannabis products handcuff companies like Aurora from generating a robust profit?

Cam Battley: Okay. There’s two questions there: Does it constrain us from generating a robust profit? No. No. And the evidence of that is our leadership in, you know, all of the different segments: Canadian medical, global medical, and Canadian consumer, and the attractiveness of our brands. Even in a marketing-constrained situation, our marketing department has done a very, very good job, and we are differentiated.

And a big part of that, I’ll add, is based on quality. Quality is king, you know? And if you don’t produce quality products that people actually want to consume, you’re not going to be there.

So, does it constrain us from generating profit? No. Does it constrain us in another way? Yes. And this is a conversation that I do want to have with the Federal parties. They need to understand that the current regulations that govern packaging, branding and marketing on cannabis are both scientifically not valid in that there’s ample evidence to show that cannabis is a more benign substance than alcohol on both an individual health impact basis and on a societal impact basis. I feel very strongly about this. And you know, we’ve constrained the packaging, branding and marketing of cannabis, I would say, excessively. 

And it should be, and I’ve said this before the law was even passed: it should be harmonized with beer, wine and liquor. If you can advertise in appropriate ways to appropriate audiences on an age-gated basis, beer, wine, and liquor, well, by God, you should be able to do the same thing with cannabis products, which scientifically are more benign.

Now, why does this matter? Because on a longer term basis, we have got to let these leading Canadian companies establish brand equity. We’ve got to be able to build brands. Right now, you know, I’ve been very clear: I think that the number one critical success factor in this sector globally over the next couple of years is being able to produce and sell a lot of cannabis, and being able to open up new markets and do that as much on a global basis as you possibly can. And we’re killing it that way.

But I want the opportunity for Aurora and other leading Canadian companies to be able to establish long-term global leadership by letting us build brands. Every company, in every industry, needs to be able to build brands to differentiate from everybody else and to compete with global companies, right? And so this is something that needs to be revisited. It’s understandable that we had to start with tight regulation with the advent of this market, but now, let’s have that conversation again. Let’s focus on a shared objective, which is continued Canadian leadership in this new global industry.

Wouldn’t it be a damn shame if Canada was the leader in establishing a national medical cannabis system, in establishing consumer legalization and a properly regulated system at that, that’s going to work very well – wouldn’t it be a shame if we set that leadership up, and then let it drift away because we wouldn’t let these companies be grown-up companies?

So I think it’s a great question from your listener, and it’s something I’m going to be talking about, and I think the industry is going to be talking about, a lot more in the lead-up to the election and for some time after that. We’ve got to be real. We’ve got to understand that establishing global leadership means a certain amount of give and take with government. 

James West: You bet. Cam, that is a plethora of input, and thank you very much. As usual, you have been an educational source for so long; thanks for joining me again today.

Cam Battley: Always nice to see you.

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