HIGHLIGHTS
- Aurora prioritizes medical pot sales versus recreational
- Average Aurora medical selling price at $7.73/gram versus $5.48 for retail
- Absorbing tax on medical cannabis cost Aurora roughly $3-million in Q3 2019
Despite strong sales for recreational cannabis among licensed producers, Aurora Cannabis Inc. said its priority is to sell medical marijuana to its growing number of patients in Canada, with the European market its second regional focus in the same segment, while adult-use offerings here ranked third.
Medical cannabis is sold via a more streamlined supply chain than the recreational market, which goes through wholesalers, and even with most licensed producers absorbing the prescription tax, price points are higher in this segment.
“It’s Canadian medical patients first, European patients second, and recreation market third,” said Terry Booth, Aurora’s chief executive, on a call with analysts on Wednesday.
In Aurora’s third-quarter 2019, a three-month period ending March 31, the average net selling price of medical cannabis was $7.73 per gram, down from $8.14 in the second quarter, according to its Management’s Discussion and Analysis report. The average net selling price of “consumer” cannabis, however, was $5.48 in the third quarter versus $5.67 in the second quarter.
The company, along with other LPs, is lobbying the federal government to remove the excise from medical marijuana. In its third quarter, absorbing this tax cost Aurora around $3-million, the company said.
The Edmonton-based LP is not alone in charging more for its medical pot. LP CannTrust reported revenue from dried medical cannabis at $7.33 per gram in its first-quarter 2019 versus $4.54 wholesale, with medical sales accounting for 67 per cent of its revenue.
Aurora had 77,136 active medical patients in Canada in its third quarter 2019, up sharply from 43,308 in the fourth quarter of 2018 despite the growing and nascent recreational market, and said it expected growth in Europe over the next quarters and years.
While Aurora’s medical sales are expected to keep rising in Canada, Chief Corporate Officer Cam Battley said on the call, adding: “We love Europe. Europe is a market where there’s very little competition … and very limited supply. We are really ramping up now to supply that market.”