Aurora Continues To Make Incremental Progress, but Meaningful Dilution Risk Warrants Caution

Aurora Cannabis cultivates and sells cannabis predominantly in Canada but also exports to the global medical market. It considers itself a medical cannabis company first, as adult use accounts for roughly 25% of net revenue, less than peers. We expect medical cannabis revenue to grow in the high single digits over the next 10 years, with robust international growth offsetting declining Canadian sales. We forecast strong adult-use growth in the midteens, driven by the conversion of illicit-market consumers into the legal market and new cannabis consumers. Still, we expect medical to constitute most of sales by 2033.