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I was about to write .. “interesting development” but actually it isn’t as Rob Mcpherson an industry commentator highlights below and as Evan Mills an expert on cannabis grows and energy use patiently explained to me very recently on the Karma Koala podcast the cost of retrofitting cannabis grow facilities to other crops is prohibitively expense and nigh on a pointless exercise
Calgary City News
An Alberta-based cannabis company is diversifying its business operations by growing and selling orchids, as Canadian pot producers wrestle a volatile market, Aurora Cannabis was keen to try something new.
“One of the areas that we got very excited about was propagation and environmentally controlled agriculture, which we knew a bit about because of some of the folks who worked with us on cannabis,” explained Aurora Cannabis CEO Miguel Martin.
In August of 2022, Aurora acquired a 50.1 per cent stake in Bevo Farms; one of the largest suppliers of propagated produce in all of North America.
But, the company was looking to expand.
“One of the great benefits to that was they could use these world class glass greenhouses that we have,” said Martin. “Particularly the one in Edmonton.”
In May 2022, Aurora announced the closure of it Sky Greenhouse in Edmonton as part of a cost savings initative.
With cannabis operations ceased, the empty temperature-controlled facility opened the window for a Bevo move-in.
“Edmonton as everyone probably knows is an absolute perfect place to service both Canada and the U.S. and orchids at the time were primarily being serviced by growers in southeast Asia,” Martin said.
A Bevo begins its orchid expansion, Aurora optimism is high.
Still, Martin insists the company is committed to cannabis.
“We are still predominantly a medical cannabis company,” he said. “The vast majority of our sales and profitability come from cannabis.”
Industry commentator Rob McPherson writes
““We are still predominantly a medical cannabis company,” he said. “The vast majority of our sales and profitability come from cannabis.””
“predominantly” should be “exclusively”, because “vast majority” really means “all of it”.
Aurora Cannabis went into produce and flowers, I believe, just to avoid the negative publicity of having to close or sell at a loss, yet another mega-facility. Plus the fact, at the time, investors were gullible enough to think it made sense.
Add to this the fact that Aurora is terrible at recreational cannabis.
Village Farms has finally got the memo and read it – you can’t be in cannabis and produce/flowers because, there are no leverageable synergies between cannabis and produce/flowers. That is why they are splitting off their produce business.
Aurora needs to do the same – soon – today – now. Single-mindedly focus and reset the fixed asset footprint to match it.
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