Aurora Cannabis Inc. (NASDAQ:ACB) Q2 2023 Earnings Call Transcript

Miguel Martin: You’re welcome, Fred. No, no, there’s no change in strategy. But I will say, one thing that people should take away from this quarter is in Aurora, almost has a unique ability to be opportunistic. So when there’s a medical opportunity globally, we can take advantage of it when there’s a medical opportunity domestically in Canada, we can take advantage of it. And so most of the change in what happened and Glen referenced this in his is we found ourselves in a very interesting situation where we grew some flower for Daily Special, and it came in at a 28 or 29 potency, which is absolutely a super premium potency band, but because it was already registered with the provinces, do we really have the choice? Do we want to sell it and see the benefit or do we want to hold on to it and relist it?

We didn’t want to relist it. And so, the reality was that product that was in extreme high potency and great quality went out under the Daily Special brands, and had a little bit of compression in our overall margin. So the Thrive team is doing an awesome job. And we do see incremental opportunities to continue to do what we said we’re going to do, but where we see things hit in that rec market on the discount play, because we’re focusing on operating cash flow, we’ll take those advantages we can. So no, change in strategy. It was opportunistic because of unique situation. And listen, and you’re thrilled to have that and it’s a testament to great genetics and good cultivation, that we found ourselves in that situation where we are thrilled to be able to have those sales.

Operator: Our next question comes from the line of John Zamparo with CIBC. Please proceed with your question.

John Zamparo: Thanks. Good afternoon. I wanted to ask about the Canada Health acquisition. I know this isn’t hugely material, but $20 million in cash is not meaningless in this space either. So just I’d like to get an update on what this asset brings to the table and what the financial implications of it have been so far?

Miguel Martin: Sure. I will happy to. I’ve been talking for a bit, Glen, do you want to talk about Canada Health in that deal.

John Zamparo: Yes, the folks at Canada Health are very closely attached to some of the key that influencers in that population, they’ve been extremely good at building relationships and supporting veteran patients in the medical system, finding the right medicines for them. And just actually kind of almost offering a little bit the counseling service. We thought that they’re a very important part of our supply chain. And we thought since that business was so incredibly important to our profitability, we needed to make sure that we had that relationship locked up for the long-term. So I think the acquisition there is really about solidifying the long-term value of our medical business, in particular, the funnel of veteran patients and our ability to get very close to those patients, which obviously is critically important to understand their needs.

And it is — it has started paying off we actually launched a new product in our medical portfolio in the last month, a product called Valor have, which was the cultivars selected by veterans from our coast facility for terpene profile and various attributes. They picked the name and it launched and, again, it’s just being that close to really critical patient population has been an important for U.S and Canada Health is a big part of that equation.

Operator: Thank you. Thank you. And the next question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.