Aurora Cannabis Buys Safari Flower for C$26.5M as 30% Vet Rate Cut Looms
CRON•Aurora Cannabis acquired Safari Flower for C$26.5 million in April, adding a 59,000 sq ft EU-GMP indoor cultivation facility that should drive positive adjusted EBITDA in FY27 and further benefits in FY28. However, a roughly 30% reduction in Veterans Affairs Canada reimbursement rates to C$6.00/gram will lower gross margins into the mid-to-high 50% range starting FY27.
1. Acquisition of Safari Flower Company
Aurora Cannabis completed the C$26.5 million acquisition of Safari Flower Company in April, paying C$15 million in cash, issuing 2.4 million common shares and providing up to C$2 million of contingent consideration tied to GMP certifications.
2. EU-GMP Capacity and EBITDA Outlook
The deal adds a 59,000-square-foot EU-GMP-certified indoor cultivation and manufacturing facility in Ontario, reducing reliance on third-party sourcing for markets such as Germany, Australia, Poland and the U.K.; management forecasts positive adjusted EBITDA in FY27 with incremental synergies in FY28.
3. International Medical Sales Expansion
Aurora expanded its medical cannabis portfolio across dried flower, pre-rolls and edibles in Canada, Europe, Australia and New Zealand, leveraging its global GMP supply network to strengthen market leadership in Germany and Poland despite growing competition and pricing pressures.
4. Veterans Affairs Canada Reimbursement Cut
Effective April 1, Veterans Affairs Canada reimbursement rates fell by roughly 30% to C$6.00 per gram, which will drive adjusted gross margins down into the mid-to-high 50% range in FY27, though robust international growth is expected to partially offset this headwind.
