Canadian giant Aurora has succeeded in winning the latest contract to supply the Italian medical cannabis market.
The Edmonton-based company announced it was the sole winner of the Italian government’s public tender. Aurora won its first tender to supply Italy in January 2018. The Marijuana Business Daily website reported that it came out ahead of fellow Canadian companies Canopy, Tilray and Wayland, as well as Medicinal Organics Cannabis of Australia in the Italian Government’s tender process.
Second Largest European Market
Aurora will supply a minimum of 400 kilograms of medical cannabis over the two-year contract with the cannabis coming from its Canadian EU GMP certified facilities and imported to Italy through Aurora Deutschland, its wholly-owned European subsidiary, said the company.
Neil Belot, Aurora’s Chief Global Business Development Officer, said in market statement: “We want to continue to build our connection with patients and pharmacies in the Italian market, who have come to know and appreciate our products over most of the past two years.”
Italy was the second-largest European medical cannabis market in 2018, with sales totalling about 600 kg. It is a European leader when it comes to progressive cannabis legislation with medical cannabis being available since 2013.
Struggling To Meet Patient Demand
In recent years, the Italian medical cannabis system has been struggling to meet patient demand, reported at over 20,000 patients in 2018. As well as securing supplies from Aurora Italy also imports large quantities of medical cannabis from the Netherlands, produced by Bedrocan.
Prior to the recent supply contracts all cannabis production had been exclusively carried out by the Italian Ministry of Defense, which still produces almost 150 kg per year of medical cannabis. The Marijuana Business Daily website reported that the average price at which Aurora is supply the Italian market – at 1.73-euros-per-gram is barely above the company’s average cash cost of sales.
Aurora Burning Through ‘Too Much Cash’
Meanwhile concerns that Aurora is overvalued and is burning through ‘too much cash’ have surfaced in recent days. Bank of America Merrill Lynch’s Christopher Carey and his team fear the company could run out of cash by the first quarter of 2020.
They highlighted around $177 million of convertible debentures coming due in the first quarter of next year which may have to be paid in cash if the stock price lags. It anticipates that the company will need to raise additional capital soon, reported Yahoo Finance in Canada.