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Received another license from Health Canada to produce other products such as cannabis oil.
Aurora Cannabis was founded by Steve Dobler and Terry Booth in Edmonton, AB
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Received a federal license to grow. They also received a license from Health Canada to sell medical marijuana.
Federal legalization on Oct 17 2018 opens recreational market
Aurora Cannabis is a company that produces medical marijuana and recreational products such as Aurora buds.
The Aurora products are grown and produced in Mountain View County, Alberta and other Canadian provinces such as Quebec. It also has other facilities in Europe.
Aurora Cannabis produces both medical and recreational marijuana. If an individual has muscle pain and nausea associated with chemotherapy, they will be able to use medical marijuana. Individuals who enjoy the occasional James joint are able to purchase their recreational products.
By working in the organization's self interest to maximize sales and revenues, renewable resources are produced and made more accessible, they provide jobs and innovate in their field giving us new technology.
A social interest fact would be that Aurora decided to absorb the tax that was imposed on cannabis upon legalization for it's medical patients.
Aurora has capitalized the second largest portion of the cannabis market, it innovates in technology related to the production of cannabis and hemp products.
Aurora has a strong focus on cost reduction, giving them a comparative advantage. They operate efficiently due to resource allocation for hemp, CBD and cannabis products. They also have a strong acquisition strategy, acquiring organizations that have lower opportunity costs.
The price elasticity of demand for medical cannabis is fairly low, because it is an essential good that may have limited substitution options.
The demand for legally sold cannabis is quite elastic, due to the fact that there is a strong, easily accessible black market for cannabis that often offers a much lower price.
The price elasticity of demand on the illegal market has been inelastic in the past, however, if medical and legal recreational marijuana prices were to become competitive with the black market, it may become more elastic.
Aurora's acquisition strategy has helped to expand into many markets and innovate within their operating segments. They have diversified to operate across the channels of the market from engineering and designing facilities, to production, to wholesale and retail distribution options.
Oct 17 2019 marked the legalization of edible cannabis products, it would make sense for Aurora to expand into this market as well, using their already established advantage.
Monopolistic Competition in the market for cannabis.
Oligopoly in the medical marijuana industry
Aurora Cannabis provides consumers with a wide variety of products, and it all depends on the individual buyer.
For example, Aurora's prices for dried cannabis are actually quite low (8.50 to 8.75 per 1 gram) even compared to the black market. This would mean that the demand for this firm’s product is perfectly elastic, and that is because the price is constant but the amount the consumer will buy will vary.
Aurora also provides oils and concentrates to their customers, for oil the price is 85$ per 0.5L cartridge which is a bit higher than their competitors. With an increase in income the customer now has the option to buy more dried cannabis or a cartridge of oil.
Externalities
Negative
Negative Consumption : Impaired driving
Negative production : In remote areas the cultivation of cannabis causes landslides, soil erosion forest fragmentation and also produces V.O.C (Harmful volatile organic compounds) that if mixed with nitrogen oxide and sunlight, form ozone degrading aerosols.
Positive consumption: Reduces stress on healthcare system
Positive production: Oxygen production.
Did you know that one tonne of cannabis produces oxygen equivalent to a jungle?!
Opportunities to trade in new markets
Aurora Cannabis is to trade with Italy and supply about 400 kg of weed which has given a big boost to the company.
Aurora already has a head start over its competitors as it has an extensive presence outside Canada compared with other Canadian companies.
Due to its expansion in the global market and its strategic partnerships with many leading companies, Aurora Cannabis is considered as partner and employer of choice.
Canada will offer 7 to 8 dollars but in Germany it would be 10 to 12 dollars. The difference in price in international markets increases the overall profit for Aurora Cannabis.
Legalization moved the firm to operate in the recreational market, this changed for whom they were producing and the firms ran out of product until equilibrium was regained
Brooker, J. (2008). Aurora Cannabis Inc.’s global initiatives could make it #1. Retrieved from https://smallcappower.com/analyst-articles/aurora-cannabis-global-stocks/
https://forum.cosmoquest.org/archive/index.php/t-21852.html
https://www.newswire.ca/news-releases/aurora-cannabis-selected-as-sole-winner-in-italian-cannabis-tender-831749481.html
Helmer, J. (2019, June 18) The Environmental downside of Cannabis cultivation. Jstor Daily. Retrieved from https://daily.jstor.org/the-environmental-downside-of-cannabis-cultivation/