Aurora Cannabis reaches 1000+ marijuana patient milestone
Aurora Cannabis Inc. (CSE: ACB | OTCQB: ACBFF) reported it has registered a roster of 1000 active patients under Health Canada’s Marihuana for Medical Purposes regulations (MMPR) since January 2016. This marks significant business inroads because of the roadblocks imposed by MMPR regulations for patients to secure MMPR prescriptions.
There were 30,547 registered medical cannabis users in Canada at the end of Q2 2015 (there is no newer data provided by Health Canada). Therefore, Aurora has secured roughly 3 % of the market share within 3 months of securing its license to sell. It is unclear whether Aurora’s clients are from new prescriptions or from clients switching over from other Licensed Producers but this data gives us a measure of Aurora’s uptake among patients.
With 30 Licensed Producers already in place, Aurora’s results imply a unique approach to client acquisition and care.
Terry Booth, CEO of Aurora: “We grow and offer to our clients a strain with 24% CBD (Cannabidiol), the second most significant active ingredient in marijuana. Patients are increasingly seeking out high-CBD products for treatment of conditions ranging from severe epilepsy and multiple sclerosis to anxiety and cancer pain.”
CBD-rich marijuana strains have long been overlooked in favour of delta-9-THC (tetrahydrocannabinol)-rich strains—THC is the primary active ingredient in marijuana. But unlike THC, CBD does not produce a psychoactive “high.” CBD is known for anti-spasmodic, anti-epileptic, anti-anxiety, and anti-psychotic properties.
I am a proponent of the Entourage Effect: all cannabinoids and terpenes of marijuana modulate the medicinal benefits of the plant. For example, CBD is less effective when taken alone, yet it has a calming, sedative effect when combined with THC, cutting down on the anxiety, paranoia, and memory impairment that many users find unpleasant or debilitating with high THC-low CBD medicine.
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CBD-rich strains are appealing to medical patients who are uncomfortable with the THC high.
In practice it is hard and confusing for patients to buy medical cannabis in Canada and it is a tribute to Aurora that they were able to secure 1000 clients in a three month period. Licensed producers are not permitted to directly market their products. In essence client acquisition is through word of mouth.
Medical patients must find a medical doctor willing to go the extra mile to fill out paperwork for what is essentially a prescription. The paperwork is then sent to the License Producer of the patient’s choice. In turn the License Producer confirms the prescription amount and enters the client into its database. From that point forward the patient is allowed to place orders for up to 30 days of medicine.
The average medical marijuana prescription is for 1.1 g per day. With a client base of 1000 clients, then Aurora’s sales are potentially 1.1 kg per day, annualized at 401.1 kg per annum.
Aurora sells its medical cannabis at $8/gram with a $3 compassionate discount per gram to users who cannot afford the regularly priced medicine.
At 100% customers paying regular price, Aurora’s current client roster would provides revenues of $3.12 M per annum. At 100% patients paying compassionate pricing, this provides revenues at $ 2 M per annum. Evidently it is not possible that all Aurora patients enjoy compassionate pricing. With 90% of clients paying regular pricing Aurora would gain revenues of $ 3.09 M per annum from its current client roster.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>