Canada’s cannabis market looks in danger of hitting the skids following the news that one of the country’s biggest investors is selling off large swathes of its assets – and at any price. Aurora is arguably Canada’s most high-profile listed cannabis company, so the news that it has sold its Jamaica asset for around 75 percent of its CDN$4.5 million value for the purpose of liquidating cash has created understandable unrest in the market.
A market filing from the Ontario-based company said that the business had accepted an offer of CDN$3.4 million for its Jamaica business. It is one of several overseas assets that Aurora has recently divested in what it says is a strategic decision to dedicate its focus and resources on domestic production in Canada.
Is the market slowing?
The logic is sound enough, but Aurora’s subsequent acquisition of Reliva to enter the US market flies in the face of this Canada-centric change of direction. The point of interest about the sale in Jamaica is that this asset was expected to form a base for establishing growth in the Caribbean. In fact, it never even began production and had stood idle for the entire period of Aurora’s ownership.
Taking a broader perspective, it becomes manifest that the company’s decision is part of an industry-wide reassessment of investments in Jamaica. It demonstrates a bizarre disparity. The cannabis market is growing rapidly in the US, as increased legalization and social acceptance open the door to a wave of online retailers selling weed related products. Yet on the sun-kissed island with its long history of kicking back and enjoying a smoke, the marijuana trade seems to be in a state of slow-down. (More)