Aurora Cannabis Inc (TSE: ACB) is having an incredibly strong day in the market today, and for good reason. The company announced that it has completed the sale of Australis Capital units. At the same time, reports are emerging that high demand is leading to cannabis supply shortages in Canada. Today, we’ll talk about:
- The asset sale;
- the Canadian cannabis shortage;
- what we’re seeing from ACB; and
- what we’ll be watching for with regard to the stock ahead.
ACB Announces Asset Sale Completion
As mentioned above, Aurora Cannabis is having a strong day int he market today. The gains come after the company announced that it has completed the sale of Australis Capital units on behalf of non-resident shareholders.
In the release, ACB said that payment of the net cash proceeds from the sales of Australis units to the non-resident shareholders of record was completed on November 27, 2018. According to the release, 11,222,349 units were sold in the public markets.
ACB reminded investors that it originally completed the spin out of its United States assets through the distribution of one common share and one common share purchase warrant of Australis. As part of the transaction, the Company transferred the units issued to shareholders who were non-residents of canada to a trustee for a controlled sell-off of units in the open market.
ACB Benefits From Cannabis Shortage
Another topic hitting the mainstream media at the moment has to do with a cannabis shortage in Canada. Various provinces in the country are saying that stores are having trouble getting their hands on enough cannabis from producers.
The reports suggest that shortages are expected to continue for months. Various provinces have mentioned that they are only receiving small fractions of the product that they’ve ordered and some are expecting for the issue to last between 6 and 18 months based on discussions with producers.
While this is bad news for those trying to get their hands on the now-legalized cannabis in Canada, it’s a good sign for pot producers like ACB and others. At the end of the day, economics is a game of supply and demand. As supplies continue to fall short of demand, not only will producers be able to easily offload the product they have, they may be able to increase prices in the process.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. When it comes to Aurora Cannabis, the news proved to be overwhelmingly positive on all fronts. With high demand, the company is obviously in the right business at the right time. Also, with the sale of the final Australis units, the ties are broken and the company is free to focus on its core business. So, it’s no surprise to see that excited investors are pushing the stock up in the market this morning. At the moment (12:15), ACB is trading at $7.80 per share after a gain of $0.51 per share or 7.00% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on ACB. In particular, we’re interested in following the company as it continues to scale to meet the demand of legal cannabis users in Canada. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the iWatch Markets mailing list below!