How Aurora Cannabis’ shift to global medical market led to higher margins

Aurora Cannabis, a near-$300 million, publicly traded Canadian producer and distributor of medical marijuana, has positioned itself as a global leader with operations across Canada, Europe and Australia. The company recently reported being free cash flow positive for the first time, a milestone that reflects its pivot away from recreational sales toward higher-margin medical products in international markets.

The path has not been easy. Aurora has faced steep competition, shifting regulations and the volatility that comes with operating in a global emerging industry. CFO Simonwho brings a rare blend of CPA discipline and MBA strategy to the role, spoke with CFO.com about how the business’s shift towards pursuing higher margins, her new ERP system and forecasting is shaping Aurora’s growth. She also discusses how the company is preparing for a future that could include both U.S. federal and global regulatory reform.


Simon

Optional Caption

Permission granted by Simona King

Cfo, Auratori Cannabis

Notable previous employers:

  • Passage Bio
  • Tmunity Therapeutics
  • Emergent BioSolutions
  • Bristol-Meyers Squibb

This interview has been edited for brevity and clarity.

ADAM ZAKI: The company covers multiple markets with different regulatory frameworks. What is the biggest opportunity for Aurora right now, and what are some of the challenges in forecasting a business like this?

SIMION IN: We are the leaders in global medical cannabis, and that’s been our focus for several years. A few years ago, we made the decision to transition away from recreational and concentrate almost entirely on medical because it offered more stability, higher margins and better alignment with our expertise.

The biggest opportunities today are in international markets, especially Europe and Australia. Both regions are medical-only markets, and the regulatory frameworks are much closer to what you’d find in pharmaceuticals. That makes the environment more predictable and gives us confidence in investing. We’re already seeing growing physician and patient demand in those markets, which positions us to capture long-term, sustainable growth.


“Better forecasting has given us sharper decision-making, more confidence in capital allocation and the ability to support the business in a more strategic way.”

Simon

Cfo, Auratori Cannabis


The challenge is that cannabis remains one of the hardest industries to forecast. Every country moves at its own pace, regulations can shift suddenly and demand is still influenced by cultural and political factors. What gives us confidence is that medical cannabis, unlike recreational, has consistent barriers to entry, less price compression and stronger patient demand. So while the sector is volatile, narrowing our focus has allowed us to build a much more stable growth strategy.

Margins in medical cannabis are much higher than in recreational cannabis. Why is that?

There’s less price compression because the number of competitors is lower and barriers to entry are much higher. Medical is regulated more like pharma, which keeps pricing stronger and more stable.

On the recreational side, there are far more players, all chasing a limited market share, which drives prices down. The result is significant price compression and much thinner margins. We’ve actually seen some stabilization in recreational margins recently, which is encouraging, but overall, the economics remain much stronger in medical.

There’s also a patient access factor. In medical, patients often go through legitimate healthcare channels, which sustains pricing. In recreational, people may turn to the illicit market, which puts further downward pressure on prices. So when you put all of that together, medical provides the more attractive, sustainable business model.

In the U.S., rescheduling cannabis is being debated. You don’t operate here today, but how would federal changes affect Aurora?

It’s an area we monitor very closely. What we’ve seen in other countries is that medical legalization usually comes before broader recreational reform, and we believe that if the U.S. moves toward federal change, it will likely follow that same path.

If and when that happens, Aurora will be well-positioned. We already have the infrastructure, the regulatory expertise and the credibility in medical cannabis to step into that market quickly and responsibly. The U.S. is a massive opportunity, but it’s also a complex one — entering too early could risk our NASDAQ listing and expose us to regulatory uncertainty.

From a financial standpoint, rescheduling in the U.S. would attract significant capital into cannabis globally.

Every CFO is under pressure to show ROI on technology investments. Can you share an example of where finance tech has made a difference at Aurora?

For us, technology starts with process. You can’t slap tech on top of a broken process and expect results. So our priority has been continuous improvement and building processes that support efficiency.

We’re in the process of implementing a new ERP system, which will bring consistency and integration across the business. At the same time, we’re actively evaluating how to incorporate AI into finance and into the company more broadly. AI has the potential to drive efficiency, improve accuracy and free up capacity for value-added work, so that’s very much on our radar.