Cam Battley is stepping down as Chief Corporate Officer of Aurora Cannabis to pursue a role as director of Aurora partner company MedReleaf Australia. A passionate spokesperson for the medical cannabis industry, Cam started with Aurora Cannabis in March 2016 and has been a key driver to Aurora’s emergence as a global leader. With Australia’s dramatic growth in the medical cannabis space over the last 18 months, MedReleaf is well-positioned for an expansive market footprint.
CannaTech was honoured to host Cam at our recent Cape Town event where his keynote address and master class presentation enhanced, elevated and inspired. One of the topics Cam discussed was the recent volatility of the global cannabis market and lessons that can be learned from this.
Here are some Cape Town Takeaways from Cam Battley:
Volatility: Learning from 2019
“2019 has not been a fun year. It has not been fun, but it’s been important. I want to look past the volatility in the stocks, with some reaching 40 to 80% comedowns this year. We haven’t seen that degree of volatility before, but we’ve seen volatility consistently in this sector since the very beginning, since its inception, since the first companies were publicly listed in Canada. So volatility is to be expected for a while and that’s not dismaying. When you’re inventing a new industry, which is what we’re doing – literally inventing a new global industry in real-time – you are going to see these ups and downs. They are to be expected, but we need to learn from them as well, and we need to be prepared for certain developments.
At the beginning of any new industry, from automotive over a century ago to tech companies much more recently, a very large number of companies get into the business at the beginning. Lots of people want to participate in a new industry, especially one as promising as cannabis. Everyone from governments to analysts, to investors and operators agree that this is going to be a massive global market. Analysts in the US typically predict that this sector will be worth tens of billions of dollars a year in perhaps three or four years.
So we know, no matter how great the anticipation is, no matter how much interest, that there will be a lot of companies that come into a new sector. The question to which we need to direct our minds, to scenario plan for and certainly strategize for, is how many companies come out the other side?
Survivors and Thrivers in the Global Cannabis Market
“In Canada, well over 200 companies are licensed to produce cannabis in Canada and over 60 companies are public. Then add on the US companies and the companies in other countries including Israel and elsewhere, that want to participate in this industry. Realistically, how many do we think will actually survive? I think we can all agree it’s a smaller number than 200.
What we’re seeing right now and a reason why 2019 has been an important year, is that we are seeing the beginning of a winnowing process where we can start to catch a glimpse of the companies that will come out the other side. That will be long term survivors, long term thrivers.
There was a phrase used during the dot-com era: “irrational exuberance”. That’s something that is natural in brand new industries where everybody thinks it’s a gold rush. But winnowing happens in every sector, in every industry – it is happening in cannabis right now and it will start with a number of indicators.
Some companies will find it impossible to continue to access capital or at least access capital at a reasonable cost. Some companies will not be able to compete on the shelves where the consumers are making the decisions. Some companies don’t have the credibility to go from country to country and meet with regulators and meet with policymakers and lineup partners. They don’t have that credibility. It hasn’t been earned.
As we start to pick the winners in this sector, some will rise, others will disappear, some will be consolidated, some will be purchased, sometimes for pennies on the dollar. Others will simply go out of business. It’s a sad fact. It’s part of the difficult and carnivorous and red in tooth and claw nature of capitalism. But these are the disciplines that we apply ourselves to when we enter public markets. We have to be ready for the tough days as well as the triumphant days. One of the things that I’ve insisted that Aurora never do is not to tout our stock when it’s up or cry hot tears when it’s down. Just keep the focus on consistent disciplined execution, be among the survivors and be around in five and 10 and 20 years.
Predicting the Mature Cannabis Industry with Cam Battley
“So, what’s the cannabis industry going to look like longterm?
My own prediction is that the cannabis sector will look a lot like the global brewing industry, with a handful of global powerhouses and some regional champions in different parts of the world and a whole lot of, in some cases, really talented craft producers and then of course all the ancillary industries, extractors and technical companies. It will be the same for cannabis.
Want to hear more from Cam Battley at CannaTech?
Check out this presentation from last year’s Tel Aviv event: