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The Aurora Cannabis construction site on November 15 - Photo by Charles Lefebvre
Aurora fallout

City reacts to Aurora Cannabis announcement

Nov 15, 2019 | 5:31 PM

MEDICINE HAT, AB — Medicine Hat’s mayor says he was surprised by the announcement from Aurora Cannabis on Thursday regarding its facility in Medicine Hat, but adds he remains optimistic it will eventually be completed.

On Thursday, Aurora released its financial report for the first quarter of 2020, reporting reporting $75.2 million (all figures Canadian) in net revenue, down from $98.9 million in the fourth quarter of 2019.

As a result, the company announced changes to its construction plans. A planned facility in Denmark, Aurora Nordic 2, was immediately put on hold. Aurora Sun, first announced for Medicine Hat in April 2018, will have the majority of the final construction and commission activities deferred “for the foreseeable future.”

Clugston learned the news from Aurora Thursday afternoon, and says he was disappointed.

“I’ve been talking a lot about Aurora around Medicine Hat since April of 2018 and celebrating the fact that they came here, chose us over Quebec or anywhere else in Canada they could have gone, and what a great thing it is for the community and the jobs and just the optimism,” he said. “I’ve sensed an increase of optimism in the community.

“When I heard this news yesterday, it was a setback, and I’m disappointed. They’re a private company, this has nothing to do with the City of Medicine Hat. They’re free to make any decision they need to make.”

In its report, Aurora cited lower than expected revenue from cannabis as a reason for the decision.

The decision about the construction will save Aurora a total of $190 million dollars.

Lisa Kowalchuk, executive director of the Medicine Hat and District Chamber of Commerce, says she believes Aurora remains committed to Medicine Hat.

“Aurora has very much been committed to our community and very invested in our community,” she said. “They re very engaged within our community and with our chamber. So I don’t see them going away anytime soon.”

CHAT News attempted to speak with Aurora Cannabis on Friday, but were instead provided a statement, which clarified its position from Thursday.

“There has been no halt to construction at the facility,” wrote Michelle Lefler, VP Communications at Aurora, on Friday. “We are continuing to build with adjusted timelines that are more closely aligned with how cannabis markets develop.

The statement continues, “We expect to have at least six flower rooms completed and in operation in 2020, for a total of 238,000 square feet, which includes the mother room. As was done with Aurora Sky and is the case with all Sky-Class facilities, we will pursue a phased approach to bringing additional grow rooms online, and still intend to build 30 grow rooms at Sun.”

“Additional operations at the facility will be activated as global demand develops, with a target date for full operations in 2021. Previously, we had intended to build at an accelerated speed. This is a more normalized pace for a project of this size and is aligned with how markets are growing.”

The company adds they remain committed to investment in Medicine Hat, and still intends to hire around 800 people to work at the facility once its completed.

Clugston adds he remains optimistic about the facility being completed.

We remain committed to investment in the Medicine Hat community as planned. At this time, we still intend to hire a final staff complement of around 800 people upon facility completion. We want to make sure that all local and government partners continue to work with us to support our commitments to significant investment in Alberta’s economy.

“As an optimist, they’ve shown interest and invested obviously a lot of money in the facility, and I really do hope and believe that it will be up and running at 100 per cent,” he said.

Clugston says council will meet with Aurora executives in a closed-door session prior to Monday’s city council meeting. He adds the meeting was planned before Thursday’s announcement.