Aurora Cannabis, Canada’s second-largest cannabis producer, is optimizing its production and distribution capabilities to deliver more recreational marijuana to market, company officials said during its latest earnings release on Monday.
The Alberta-based company recorded C$54.2 million of revenue in its second fiscal quarter of 2019, an 83 percent increase from the previous quarter - and 387 percent year over year. But it reported a C$237.75 million loss largely from its investments in other cannabis firms and “temporary inefficiencies.”
The earnings marked the first full quarter since the legalization of recreational marijuana in the country. The bulk of the revenue came from the 15,430 pounds of cannabis it sold, compared to 17,465 pounds it produced.
“This is only the beginning,” said Cam Battley, Chief Corporate Officer, speaking to the company’s said during a conference call with analysts.
Battley said the company will be able to produce up to 330,000 pounds of cannabis per year by the end of March, up from 275,000 currently, largely from increases at its Aurora Sky facility in Edmonton. He also expects an increase in retail availability as well.
“We are ramping up production rapidly,” he said.
The company received C$21.5 million in revenue from recreational cannabis compared to C$26 million from its pre-existing medical cannabis business.
The earnings cover what continues to a rocky rollout of legal marijuana. Shortages are common across the country, and some experts suggest they will continue for years.
Battley acknowledged the challenges in meeting demand for recreational cannabis but said the company is adjusting.
“We were very pleased with out logistics and operations out of the gate… but It’s going to take some time to iron out all the bugs,” Battley said. “We're going to have to see better retail infrastructure in provinces across the country in order to see, the kind, the level of sales that I think everybody is anticipating.”
For example, Ontario’s government-run cannabis retailer still hasn’t opened any physical stores.
Aurora operates 11 facilities across Canada and produces cannabis for the recreation and medical markets. Prior to announcing earnings, Aurora announced it had completed the first commercial export of cannabis oil to the United Kingdom, adding to the international reach of its medical cannabis products.
Canada’s leading producer, Canopy Growth, reports its quarterly results on Thursday.