Going to respond to both of your posts here with the facts as I believe them to be: They may actually end up paying up to $39 million (about $30 million USD after applying the currency exchange rate) for CanvasRX. They've already paid them around $3.5 million in cash and almost $8 million in Aurora stock, so they've already given them $11.5 million. The total amount the company ends up paying depends on how many pre-determined milestones CanvasRX ends up hitting over the next 2 years I believe, which they can pay with cash and/or stock at Aurora's discretion.
Here's my understanding based on the #'s:
70,000,000 grams in future production capacity is correct, avg price per gram is actually probably around $7 IMO. So we'd have $490,00,000. However, if you're a U.S. investor (which I assume most here are since they're on the U.S. ticker symbol) all of their figures are in Canadian currency so you have to apply the current exchange rate of .76, then you have $372,400,000 in potential revenues annually at max capacity after the entire new production facility is built out, which will be fully completed in approx. 2 years.
My understanding is that the first 200k sq feet will be completed and producing by summer of 2017 and the other 400k sq feet will be completed in Summer 2018. They already have the capacity to produce 7,000,000 grams in their existing 55k sq foot production facility, so the remaining amount that will be contributed by the new 600k sq foot production facility is 63,000,000 grams. All things being equal, each 200k sq feet would produce 21,000,000 grams per year. Since the initial 200k sq feet won't be on line until mid-2017, cut that 21,000,000 grams in half for 2017, so they should get 10,500,000 grams from the additional 200k sq feet plus the 7,000,000 grams from their existing facility and they should be able to produce 17,500,000 grams in 2017. At $7/gram, they would generate approx $93,000,000 in revenue after applying the .76 currency exchange rate. I have no idea what their net margins will be so I'll assume 10%, and that would be approx $9,300,000 in net income. That sounds great except there are three caveats:
#1) You're going to want to close your eyes for this, but after the latest $23 million capital raise, the company now has 300,000,000 fully-diluted shares. Granted, some of these are options and warrants that would generate additional cash for the company were they all to be exercised, but that's a lot of shares
#2) even though the federal legislation to legalize marijuana for recreational use in Canada will be introduced in Spring 2017 and will likely pass, it likely won't be enacted until at least Spring 2018
which brings us to:
#3) unless the Canadian federal government increases the amount of medical marijuana the company is authorized to sell between now and then, I believe they're currently authorized to sell approx 3,500,000 grams annually until the recreational use legislation is passed and enacted. As the number of people prescribed medical marijuana continues to grow exponentially, it would make sense that they will increase the amount the company (and probably some of the other companies as well) will be able to sell, it's highly unlikely that the authorized amount will increase enough for the company to be able to sell their entire estimated 2017 production capacity of 17,500,000 grams. My guess is that the Canadian federal government will double the authorized amount to around 7,000,000 grams, which is about the amount Aurora is currently producing. So, to make a long story longer, I'd temper my enthusiasm for 2017, but beginning mid-2018 and forward, the company should be starting to generate huge revenues, especially when you start to take sales of extracts into account.
I'm buying a few shares here and there for now so I have some exposure, but my best guess is that these stocks will really start to move about a year from now in anticipation of the huge increase in revenues and profits from the recreational use market beginning in 2018, though they will all probably get a nice bump around the time that the recreational use legislation is about to be passed. In case anyone's interested, my price target for Aurora is $5.50-6.00 (U.S. dollars) within the next 2-3 years assuming everything goes according to plan. My estimate for Organigram is $7.00-7.50 in the next 2-3 years. My estimate for Mettrum is $14-15 in the next 2-3 years. They should basically all be at least 5 baggers, assuming revenues from only the Canadian medical and recreational marijuana market. Long-term, I like Aurora the best. Short term I like Organigram the best and mid-term I like Mettrum the best, but they're all worth investing fairly heavily in within the next year or so IMO. GLTA.
