Aurora Cannabis (TSX: ACB) has finalized the losses on its Aurora Sky facility in Edmonton, revealing this morning that it has finally sold the facility, sixteen months after it announced the closure of the operation.
The facility has reportedly been sold for $15 million, crystallizing the major loss that the company has taken on the building. The development of the facility was announced in February 2019, with the 300,000 square foot facility slated to open months later in late 2019.
Two years after opening though, it was clear the company was not in need of the logistics and warehousing space that the building was intended to provide. Two years after opening, the facility in September 2021 was marked for closure as Aurora looked to streamline its operations in a toughening cannabis market.
For the year ended June 30, 2022, the firm took a $21.1 million impairment on the facility in connection with the closure, at the time leaving a value of $18.7 million on the books for the facility while at the same time classifying it as an asset held for sale. Additional impairments occurred in 2021 for the facility, however this figure was blended with other impairments that the company took during the fiscal year to the tune of $273.0 million, obfuscating the true impact that facility caused to the firms books.
Estimates on Alberta’s major projects page suggest that the facility itself cost approximately $50 million to develop. This figure would imply a loss of $35 million just on the development of the facility, and not including any related equipment within the building.
Going forward, Aurora is said to have a cash position of $320 million following the sale of the facility, a figure which includes $63 million in restricted cash. The firm also currently anticipates achieving adjusted EBITDA profitability for the quarter ended December 31, 2022.
Aurora Cannabis last traded at $1.25 on the TSX.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.