Aurora Cannabis has acquired the remaining 90% equity interest of MedReleaf Australia it didn’t already own, giving the Canadian marijuana producer a bigger foothold in one of the world’s biggest federally regulated medical markets.

Aurora paid 50 million Australian dollars ($43.7 million), including AU$9.45 million in cash and the rest via the issuance of common shares, the Edmonton, Alberta-based company said in its Thursday announcement.

In an interview with MJBizDaily, CEO Miguel Martin said he sees a lot of upside in the Australian market as regulations become more progressive and the country’s industry continues to expand.

“Australia has grown steadily and now is about the same size as Canada – so it’s probably one of the top two federally legal medical cannabis markets in the world,” he said.

The move gives Aurora a meaningful foothold in the two biggest nationally regulated medical marijuana markets in the world – the only cannabis company with such a footprint.

But while Australia’s medical sales are growing steadily year-over-year, Canada’s industrywide medical marijuana sales have been gradually falling since adult-use legalization in 2018.

Aurora on Thursday also announced its financial results for the quarter ended Dec. 31, 2023, reporting a net loss of 25.2 million Canadian dollars ($18.7 million), which is a 60% improvement from the comparable period a year earlier.

Aurora’s medical cannabis sales stood out, growing 16% year-over-year to CA$45.1 million in the third quarter.

That helped push total net revenue to CA$64.4 million in the quarter, up from CA$61.1 million in the previous year’s quarter.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were CA$4.3 million for the three months ended Dec. 31, 2023, compared with CA$3 million one year earlier.

Aurora said it expects to achieve positive free cash flow in calendar year 2024.

The recreational cannabis industry continued to be a challenge.

Consumer cannabis net revenue was CA$11.6 million in the third quarter, compared with CA$14.6 million in the previous year’s quarter.

Martin told MJBizDaily that stemmed primarily from the company allocating its flower, which is predominately EU Good Manufacturing Practice (GMP) certified, to international markets that have higher margins.

“Because the vast majority of our production is EU-GMP, it doesn’t make sense to put that into Canada, where you’re getting a 25-30% (gross) margin, as opposed to sending it somewhere internationally, where you’re getting a 60% (gross) margin,” he said.

“We’re hopeful the Canadian market is going to improve, and when it does, we would do more (sales). But right now, there’s just too many compelling opportunities internationally,” he said.

Aurora said its remaining convertible debenture balance of approximately CA$7.3 million will be settled in cash in late February, at which point the company’s cannabis business will be debt-free.

“It demonstrates financial fortitude to say to investors, ‘We’re healthy.’ We don’t have debt, we’re going to be free cash flow positive, and we have CA$200 million on the balance sheet,” he said.

“There are not many people who can say that. These debt loads and the interest payments connected to them are really going to crush people.”

Martin said the interest rates for cannabis companies right now are punitive.

“Any debt you’re holding as a cannabis company has a significant downward pressure on profitability and flexibility,” he said.

“We get to flip the script, because we receive very good interest rates on our cash and can be opportunistic with acquisitions.”

Germany plans to liberalize marijuana rules this spring, and Martin characterized the planned regulatory model as “modest.”

“It will be the medical changes that will have the most impact, but those changes will take time,” he said.

“Once they deschedule, new doctors need to apply, patients need to apply, pharmacists need to look at the regulations.”

Martin said removing the narcotics designation from cannabis will be a significant development.

“For someone like us, it’s going to be a big win,” he said.

“It speaks to what’s most predictable right now, which is the growth globally of medical cannabis.”

In the quarter, Aurora sold its interest in Aurora Netherland B.V. for gross proceeds of roughly CA$8.3 million.

Aurora Netherland B.V. was a subsidiary that owned a research and development facility and related assets of Growery, the Dutch cannabis producer that Aurora pulled out of last summer.

During the nine months ended Dec. 31, 2023, Aurora said it reversed a provision of CA$12.4 million recorded in “other current liabilities” as a result of a Canada Revenue Agency audit over the Canada Emergency Wage Subsidy payments with no proposed adjustments.

The company had established the provision to account for uncertainty with respect to eligibility of the government grant.

Aurora shares trade as ACB on the Toronto Stock Exchange and Nasdaq.

Matt Lamers can be reached at