Aurora Cannabis: Justified

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Aurora Cannabis (ACB) is the second most valuable cannabis company in the world and has retaken second position in Canadian recreational cannabis market share after a strong March quarter. Operationally, Aurora is growing in both Canada and internationally, including producing nearly twice as much cannabis this quarter as last (15,590 kg; up 99% QoQ) and being one of only three companies to win a tender to cultivate medical cannabis in Germany.

Aurora earned $65.1 million in the March quarter, up 20% QoQ although slightly below analyst estimates of $67.5 million. Gross margins ticked upward to 56%, far ahead of larger peer Canopy Growth’s (NYSE:CGC) 22% gross margins last quarter. Aurora lost $76 million in EBITDA (ex-FV) this quarter and had a free cash flow deficit of $151 million, with about two thirds of that deficit due to capital expenditures. Perhaps owing to this deficit, Aurora has

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