Aurora Cannabis Inc. is one of Canada’s largest producers of recreational and medical marijuana. And, in October it began to trade publicly on the New York Stock Exchange. Surprisingly, Aurora Cannabis’ stock took an 8.5 percent dip on Nov. 14—but then, it bounced back the next day, effectively erasing their losses the previous day. Experts say that Aurora Cannabis is quickly outpacing its contemporary, Canopy Growth—the largest cannabis company in the world. True enough, there’s a lot on the horizon for the company but why is it off to a rocky start on the new stock exchange?
Aurora Cannabis Stock Performance
After listing on the NYSE, the Aurora Cannabis stock went down instead of up as many experts predicted. The short dip Aurora Cannabis stock experienced actually speaks more of the stock market’s volatility as there were no business prospect changes in November.
In fact, when the company reported its fiscal year 2018 first quarter results, it reported a 260 percent year-over-year increase in revenue and a 2,862 percent increase in earnings from investment gains. Previously in its financial report for the quarter ending on Sept. 30, 2018, it reported a $22.71 million revenue compared to the $6.58 million revenue in September 2017. The company also reported that it had about 30 percent of the overall market supplied in Ontario. Plus, some of the top best-selling strains in British Columbia were also Aurora Cannabis products.
However, the company’s operating expenses are increasing rapidly and are alarming. By the end of this recent quarter alone, it spent about $120 million. Thus, because of its high operating expenses, it might need to sell 90,000 kilograms just to break even—which may be an unrealistic goal within the Canadian context. Couple this with the fact that the company is not close to being profitable. That said it is positioning itself to be one of the top two Canadian cannabis companies and is real value is based on its global potential.
Aurora Cannabis Initiatives
Aurora Cannabis advocates for affordable, consistent and accessible marijuana for wellness. It has an award-winning support staff, cultivators and healthcare professionals working to eliminate the boundaries for easily-accessed effective medical marijuana. It has built its state-of-the-art facility in Cremona, Canada to grow its seeds and buds at optimal conditions.
The company is going through significant changes internally. It hired a new Chief Science Officer, Dr. Jonathan Page. His main responsibility is to initiate the research programs to develop new plant strains and discover new applications for cannabis—hence, strengthening the research and application of cannabis for Aurora and its customers.
According to the press release of the company: “Aurora has ingrained scientific methods throughout the Company, which it uses to drive efficiencies, medical and plant discovery and product innovation. That approach will only increase with Dr. Page’s appointment.”
Aurora Cannabis is also changing how it accounts for its investments. It owns Pedanios GmbH, a Berlin-based importer-exporter, and distributor of medical cannabis in the European Union. Aurora also hinges its growth on acquisitions rather than on organic growth. It took over CanniMed Therapeutics Inc. and MedReleaf Corp.—making this cannabis deal as one of the largest in history. By acquiring these two companies, Aurora can exponentially increase its cannabis production. The company is also concentrating on spending in preparation for the recreational marijuana demand after the October announcement.
The Present Fuels the Future
Aurora Cannabis has massively increased its production to bolster a sizeable future consumption. It is now able to grow 45,000 kilograms of different strains of cannabis per year. By 2019, Aurora expects to produce more than 500,000 kilograms per year. Its gross margin has also skyrocketed from 12 percent from the first quarter of 2018 to 70 percent of the first quarter of 2019. This growth has been driven by higher selling prices of dried cannabis and cannabis oil.
Aurora Cannabis is in good shape with distribution. It has supply agreements for recreational marijuana in nine Canadian provinces. As for medical marijuana, it already has a strong presence in Germany, which is the largest European market for marijuana. It has also established subsidiaries both in Italy and Denmark. Outside Europe, Aurora is penetrating medical cannabis markets in Australia, Colombia, Malta, and the Cayman Islands. The company could also supply to the United States—depending on the development of U.S. laws.
The Stakes for Aurora Cannabis and Canopy Growth
One thing that competitor Canopy Growth has over Aurora Cannabis is that it bolsters triple the current cannabis production. It is also in a partnership with a big company outside the cannabis industry. Constellation Brands, an alcoholic beverage company bought a 9.9 percent stake in Canopy and announced plans to develop marijuana-infused drinks. Constellation Brands also further invested in Canopy with $4 billion, totaling its stake to 38 percent.
On the other hand, Aurora Cannabis stock offers a lower valuation and higher current revenue. There were rumors of talks between Coca-Cola Co. and Aurora to develop cannabis-infused drinks. With the curative powers of marijuana, the idea of cannabis-infused drinks would help ease cramping and inflammation. However, further talks didn’t push through. Perhaps Aurora Cannabis can diversify its product offerings in the future and partner with other companies to aggressively broaden its reach within a growing market.
For many entrepreneurs, launching a single successful startup is enough. But for Jim McKelvey, his success involves six different startups that he still owns. Though best known as the Square founder, along with Jack Dorsey, Jim McKelvey has created an array of innovative businesses. In addition to founding Square, he is also involved in companies related to glass-blowing, venture capital, employee training, and digital publishing. Indeed, Jim McKelvey appears to have the Midas touch when it comes to entrepreneurship and Bold Leadership.
Tremendous success does not come without a great deal of hard work and powerful leadership. Though Bold Leader Jim McKelvey admittedly appreciates the importance of luck, he thought it unlikely that Lady Luck would shower him with favor so many times. Instead, Jim McKelvey applies his unique and bold style of leadership in an array of different areas. By taking an in-depth look inside the Square founder’s leadership philosophy, entrepreneurs and leaders everywhere can benefit.
Jim McKelvey’s Bold Leadership Foundation—Perseverance and Diligence
In each of Jim McKelvey’s businesses, he identifies a specific problem that needs a solution. As the Square founder, his inability to sell his own glass-blown art pinpointed a need for an accessible payment platform for small business owners. Another of his businesses, LaunchCode, fills the lack of technologically skilled workers through employee training and apprenticeships. And, Invisibly is now striving to fix the broken digital ad ecosystem that plagues the digital publishing world—thus, allowing content creators to sustainably monetize their content. In each instance, Jim McKelvey succeeded, because he started with the problem.
While recognizing a need is great, creating a solution is not easy. As Jim McKelvey describes, great leaders need to expect failure and rejection. Perseverance is an important secret to leadership success and often is the difference between bold leadership and startup failure.
Mentor, Educator, and a True Believer in the Team
Bold leadership has been defined in part as fostering success in others while having the ability to delegate effectively. These characteristics certainly apply to Jim McKelvey. The Square founder recognized talent in Jack Dorsey during his previous interactions with him. This insight along with his keen problem-solving skillset and bold leadership allowed Square, a $30 billion-plus market cap public company, to become a reality. In nearly all of Jim McKelvey’s pursuits, he has collaborated with others to co-create a vision. His capacity to encourage others to utilize their talents and work together are among his boldest leadership traits.
A key part of fostering talent also involves serving as a mentor and educator to others. Jim McKelvey is a published author of three internationally recognized textbooks that seek to enhance others’ understanding. His first book, a computer science textbook—which he wrote when he was in college—was written in an effort to improve upon the professor’s inadequate course book. He also wrote the primary resource today for beginner glass-blowers. Similarly, at LaunchCode, he is developing programmers through training and education to enhance the local talent market. These leadership pursuits exemplify Jim McKelvey’s belief in people.
A Bold Leader who Strives to Make a Difference in the World
As the Square founder, Jim McKelvey provides a solution to help artists and small businesses excel. At LaunchCode, he aims to reduce poverty and unemployment by developing technology skills in the community. And at Invisibly, Jim McKelvey wants to enhance the published content society enjoys by ensuring content creators are appropriately rewarded. Underlying each of Jim McKelvey’s pursuits is a social agenda.
The drive to make the world a better place has always been a core piece of Jim McKelvey’s leadership. His father, a chemical engineering pioneer, and professor instilled these motivations within Jim McKelvey. His friends at Washington University in St. Louis also helped him appreciate humility, integrity and a down-to-earth perspective. This combination of influences is what molded Jim McKelvey’s passion for helping others. And it remains a key part of his bold leadership today.
Advice for Bold Leaders and Entrepreneurs of Tomorrow
McKelvey is a great example of a modern-day bold leader who serves as a role model for countless others. With this in mind, the Square founder encourages others to be real and authentic and to follow their passions. In addition, he emphasizes that cultivating relationships and investing in self-education is critical. But above all else, he heartens people to lead with integrity and to expect failure before certain success. As I wrote in a recent article featured in ProjectBoldLife, the path to success is rarely linear and requires course correction along the way. McKelvey is a master at understanding this is and persevering against the odds.
“Failure with a startup is really a question of the entrepreneur giving up. Now you can say. ‘Well if we don’t have funding, we have to let everybody go.’ But many times, I’ve had my company reduced to me. It doesn’t die until you quit, and I just never quit,” Jim McKelvey Founder of Invisibly, LaunchCode and Square.
Being bold requires courage, and bold leadership demands this and much more. But as Jim McKelvey demonstrates, this combination of pursuits can drive tremendous success and cultivate strong leadership potential along the way.
To learn more about Jim McKelvey’s newest venture, visit our exclusive story, video, and infographic on Invisibly.
Positive Industry Perspective
Aurora Cannabis is doing very well in recreational cannabis, but its medical cannabis is not performing as well as expected—given its acquisition of MedReleaf. Nonetheless, Aurora Cannabis is still a growing company and still has not fully realized its potential. With all its ongoing and future initiatives, it is poised to be the leader in researching, developing, and selling cannabis all over the globe.
One thing it must watch out for is its ballooning operating expenses. If it keeps going at this rate, it will eat at its revenue—and the company won’t be a profitable one any longer. Nevertheless, Aurora Cannabis Founder and CEO Terry Booth maintains that company is healthy and strategically sound.
“We continue to successfully execute our differentiated and diversified strategy committed towards domestic and international expansion in the medical cannabis market, adult consumer use sales, production scale-up, innovation, plant, and medical research, and product development,” Booth plainly affirms. “Given the strong unmet consumer demand evident across Canada, we are confident that our rapidly increasing production capacity will result in the continued acceleration of revenue growth.”
Following the legalization of marijuana in Canada on Oct. 17, 2018, the cannabis industry has been undoubtedly experiencing a major boost in the economy through investments, production, and public consumption. With Aurora Cannabis stock making an impact in today’s world, only time will tell of the results of the company’s bold risks in their plans and collaborations for medical and recreational marijuana.