Almost every major cannabis company is partnering up with firms in other industries to better position themselves for the future.
The most iconic of which has been Canopy Growth Corp , which announced last year a $4 billion investment from Constellation Brands to help develop CBD-beverages when Canadian legalization of CBD-edibles comes around in October.
While Wall Street analysts like Vivien Azer regard Aurora as the top pick in the industry, being able to secure a major partnership would be the icing on the cake for the cannabis giant. At the same time, however, this hasn’t dissuaded analysts like Azer from thinking highly of the company.
It turns out that the decision to remain entirely independent was a deliberate one and not due to a lack of interest from others. Instead, several sources have said that the absence of a major partnership was due to an experienced strategist advising the company against going that route.
In a recent interview with MarketWatch, Aurora’s chief corporate officer Cam Battley went on to say that hedge-fund manager and billionaire Nelson Peltz advised the company not to make a major partnership.
According to his perspective, selling out now would be selling the company’s shareholders short since Aurora’s value has been rising every quarter. Confident in the value the company can bring, Peltz argued that a fully independent Aurora that hasn’t sold its stake to another firm would do better in the long run.
“You can partner on a strategic level with multiple companies across multiple verticals and remain independent. The key to that is separating in your mind the concepts of strategic partnership and capital raise. There’s no need to assume that those two things go together…So that’s our strategy: It’s to do things a little bit differently. We do things differently across our business strategy,” said Battley in conclusion. “Cultivation is one where we’re the only one of our peers that’s producing at mass scale, that hasn’t simply rushed into retrofitted greenhouses and millions of square feet. And I think that decision has shown a great payoff thus far. We haven’t faced the kinds of issues that other companies have.”
Asides from Canopy, the much smaller rival HEXO Corp (TSE: HEXO)(NYSE: HEXO) signed a joint venture agreement with Molson Coors, while Cronos Group (NASDAQ: CRON) took a $1.8 billion investment from tobacco giant and Marlboro-maker Altria Group.
While Aurora seems to be the odd company out, that might just end up playing to their advantage.
Shares of Aurora ended the day on a slight dip, declining 2.5 percent in today’s trading session.
Aurora Cannabis Stock
Aurora Cannabis Inc is a Canada-based company engaged in the production and distribution of medical cannabis.
The Company is vertically integrated and horizontally diversified across every key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis, and hemp production, derivatives, home cultivation, wholesale and retail distribution.
The Company’s purpose-built facilities which integrate technologies across all processes are defined by automation and customization. The Company has a funded capacity of more than 500,000 kilograms per year as well as sales and operations in 24 countries worldwide. – Warrior Trading News