In line with its strategy to achieve an early-mover advantage in as many new markets as possible, Canadian marijuana giant Aurora Cannabis (ACB) on Tuesday said it would soon start production in Portugal.
The Edmonton-based company has acquired a majority stake in Portuguese license applicant Gaia Pharm Lda, with an aim to establish a local facility in the European country. Terms of the deal were not disclosed.
ACB shares were up almost 1% during pre-market trading. The stock has gained 40% so far this year.
Portugal had last month enacted a regulation that makes the distribution of prescribed medical cannabis legal. The regulation also permits the export of medical cannabis products to other European Union nations, where its use is approved.
CEO Terry Booth said, “With the addition of this new project, we are now active in 24 countries, which we believe represents the largest global footprint of any cannabis company. Aurora’s reputation in the medical cannabis sector provides distinct advantages in establishing significant market share in the rapidly growing European market.”
Gaia Pharm will henceforth be called Aurora Portugal Lda.
Aurora, which is the world’s second largest cannabis producer after Canopy Growth (CGC), said the facility’s construction would take place in a phased manner. Upon completion of the first phase, which is expected around the third quarter of this year, the facility would have a production capacity of about 2000 kilograms per annum. The capacity would be doubled with the completion of the second and final phase.
READ: Thailand legalizes medical use of cannabis, opens up a new region for pot stocks
The latest deal is of great significance, given Portugal’s 10 million population. It also provides a gateway for the pot company to penetrate into the other attractive European markets.
Aurora’s VP Business Development Europe Dr. Axel Gille said, “The formation of this joint venture and the approval of the cultivation facility in Portugal are additional important steps in Aurora’s plan to develop a strong European manufacturing presence, ensuring that patients across Europe have access to the pharmaceutical grade medical cannabis they need.”
Earlier this month, Aurora reported a loss of C$238 million in the second quarter compared to a profit of C$7.7 million in the year-ago quarter. Net revenue of C$54.2 million was up 363% year-over-year and 83% sequentially.
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