The European Union Is Quickly Becoming A Major Growth Engine For Global Cannabis Companies
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During the last year, we have highlighted the cannabis opportunity in the European Union (EU) and have stressed the importance of being levered to this market for companies, especially Canadian Licensed Producers (LPs). 

One of the most significant developments of the year was the closing of the merger of Aphria and Tilray, Inc. (Nasdaq: TLRY) (TSX: TLRY). We believe the EU cannabis market played a key role in the decision to merge and will monitor how this aspect of the story advances from here. We are of the opinion that the combined company is well positioned to benefit from having an early mover advantage in several strategic markets in the EU. 

A few years ago, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) was considered to be a leading cannabis operator in the EU. After reporting low revenues from the EU market for several consecutive quarters, the market seemed to have lost interest in this aspect of the story and we believe this impacted investor sentiment. 

Although we have not been impressed with Aurora’s ability to execute on the cannabis opportunity in the EU, we believe the business owns strategic assets that will support the growth of this aspect of the story. 

Extends Relationship With a Leading Operator in the UK

Earlier this week, the Canadian LP’s subsidiary, Aurora Germany GmbH, reported to have extended the term of its market access services agreement with Grow Group PLC by two years. Grow Group is a biopharmaceutical company that is focused on improving access to cannabis-based medicines in the UK and we are favorable to the relationship that Aurora has with it.  

In August 2019, Aurora entered into a strategic relationship with Grow and was one of the first operators to partner with the biotech firm. Since then, both companies have enhanced its leverage to the UK cannabis market and this is a market that we are excited about as a long-term opportunity. 

For Aurora, renewing the agreement will help broaden access for patients by leveraging Grow’s network for creating awareness of medical cannabis options. The company operates a EU good manufacturing practices (EU GMP) facility which is committed to providing access to premium pharmaceutical-grade medical cannabis and we are favorable on the amount of revenue that can be generated by it. 

Aurora Cannabis has a proven track record in the UK and its success can be attributed to the relationship with Grow and its joint venture partner, IPS. Going forward, Grow will benefit from Aurora’s product portfolio as it will allow it to offer premium cannabis flower and extracts to doctors and the patients who will benefit from them.

Read entire article at Technical 420

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Source: 420 Intel – Europe

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