Aurora Cannabis Inc. says it is halting construction of two production facilities to save over $190 million as part of a plan to strengthen its balance sheet.
The Edmonton-based cannabis producer says it will immediately cease construction of its Aurora Nordic 2 facility in Denmark to save about $80 million over the next year.
It is also indefinitely deferring completion of construction and commissioning at its 1.6-million square foot Aurora Sun facility in Medicine Hat, Alta. to conserve $110 million.
Aurora Sun was supposed to be the size of 21 football fields and 50 per cent larger than its Aurora Sky operation at Edmonton International Airport. As of last month, the company said construction was nearing completion.
The under-construction Aurora Sun facility in Medicine Hat, Alta. on August 29, 2019. CNW Group/Aurora Cannabis Inc.
The construction halts come as the company reported net income of $10.4 million for the quarter ending Sept. 30, compared with net income of $104.2 million for the same quarter last year.
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Chief financial officer Glen Ibbott pointed to the slow growth of cannabis retail stores, particularly in Ontario.
It’s been more then a year since Canada legalized cannabis for recreational use, starting with flower, seeds, plants and oils. However, the footprint of legal pot stores has been slower to develop in some provinces than others.
Aurora says net revenue was $75.3 million for its first quarter of fiscal 2020, up from $29.7 million for the same quarter last year, but down from the $94.6 million in the fourth quarter ended in June.
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