6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2022

Commission File No. 001-38691

AURORA CANNABIS INC.
(Translation of registrant's name into English)

500-10355 Jasper Avenue,

Edmonton, Alberta,

Canada T5J 1Y6
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F  [ ] Form 40-F  [X]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)  [ ]

SUBMITTED HEREWITH

Exhibits	Description
99.1	Condensed Consolidated Interim Financial Statements for the three and nine months ended March 31, 2022 and 2021
99.2	Interim Management’s Discussion and Analysis for the three and nine months ended March 31, 2022 and 2021
99.3	Certification of Chief Executive Officer
99.4	Certification of Chief Financial Officer

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AURORA CANNABIS INC.

/s/ Glen Ibbott
Glen Ibbott

Chief Financial Officer

Date: May 12, 2022

EX-99.1

Exhibit 99.1

 

AURORA CANNABIS INC.

Condensed Consolidated Interim Financial Statements

(Unaudited)

For the three and nine months ended March 31, 2022 and 2021

(in Canadian Dollars)

Table of Contents

Condensed Consolidated Interim Statements of Financial Position	3
Condensed Consolidated Interim Statements of Comprehensive Loss	4
Condensed Consolidated Interim Statements of Changes in Equity	6
Condensed Consolidated Interim Statements of Cash Flows	8
Notes to the Condensed Consolidated Interim Financial Statements

Note 1	Nature of Operations	9	Note 15	Lease Liabilities	23
Note 2	Significant Accounting Policies and Judgments	9	Note 16	Share Capital	23
Note 3	Restructuring Provision	12	Note 17	Share-Based Compensation	24
Note 4	Accounts Receivable	12	Note 18	Loss per share	26
Note 5	Government Grant	12	Note 19	Other Gains (Losses)	26
Note 6	Investments	12	Note 20	Supplemental Cash Flow Information	27
Note 7	Marketable Securities and Derivatives	14	Note 21	Commitments and Contingencies	27
Note 8	Investments in Associates and Joint Ventures	16	Note 22	Revenue	29
Note 9	Biological Assets	16	Note 23	Segmented Information	30
Note 10	Inventory	17	Note 24	Fair Value of Financial Instruments	31
Note 11	Property, Plant and Equipment	18	Note 25	Financial Instruments Risk	32
Note 12	Assets and Liabilities Held for Sale and Discontinued Operations	19	Note 26	Asset Acquisition and Non-controlling Interests	34
Note 13	Intangible Assets and Goodwill	20	Note 27	Subsequent Events	34
Note 14	Convertible Debentures	22

AURORA CANNABIS INC.

Condensed Consolidated Interim Statements of Financial Position

As at March 31, 2022 and June 30, 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars)

	Notes	March 31, 2022	June 30, 2021
		$	$
Assets
Current
Cash and cash equivalents		429,894	421,457
Restricted cash	20	50,658	19,394
Accounts receivable	4, 5, 25(a)	38,437	56,261
Income taxes receivable		37	221
Marketable securities	7(a)	2,313	3,751
Biological assets	9	27,318	20,250
Inventory	10	102,582	117,471
Prepaids and other current assets		9,063	11,169
Assets held for sale	12(a)	36,329	15,918
		696,631	665,892
Property, plant and equipment	11	343,822	606,093
Derivatives	7(b)	29,737	59,382
Deposits		2,569	3,538
Loan receivable	25(a)	-	10,096
Investments in associates and joint ventures	8	-	289
Lease receivable		4,786	4,256
Intangible assets	13	346,577	367,448
Goodwill	13	146,130	887,737
Total assets		1,570,252	2,604,731
Liabilities
Current
Accounts payable and accrued liabilities	25(b)	53,981	57,944
Income taxes payable		658	-
Deferred revenue	22	4,321	4,169
Convertible debentures	14	38,102	34,749
Lease liabilities	15	6,487	6,188
Contingent consideration payable		225	374
Provisions	3	636	2,077
Other current liabilities		12,434	10,874
Liabilities held for sale	12(a)	2,221	-
		119,065	116,375
Convertible debentures	14	295,858	293,182
Lease liabilities	15	47,695	65,431
Derivative liability	14, 16(c)	17,424	91,939
Other long-term liability		122	104
Total liabilities		480,164	567,031
Shareholders’ equity
Share capital	16	6,570,995	6,424,296
Reserves		145,163	141,500
Accumulated other comprehensive loss		(207,082)	(207,011)
Deficit		(5,419,488)	(4,321,085)
Total equity attributable to Aurora shareholders		1,089,588	2,037,700
Non-controlling interests	26	500	-
Total equity		1,090,088	2,037,700
Total liabilities and equity		1,570,252	2,604,731

Nature of Operations (Note 1)

Commitments and Contingencies (Note 21)

Subsequent Events (Note 27)

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

 3

AURORA CANNABIS INC.

Condensed Consolidated Interim Statements of Comprehensive Loss

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

		Three months ended March 31,		Nine months ended March 31,
			Recasted Note 2(d)		Recasted Note 2(d)
	Notes	2022	2021	2022	2021
		$	$	$	$
Revenue from sale of goods	22	56,490	63,555	194,380	224,428
Revenue from provision of services	22	377	490	1,369	1,639
Excise taxes		(6,433)	(8,884)	(24,625)	(35,640)
Net revenue		50,434	55,161	171,124	190,427
Cost of sales	10	60,437	123,712	165,453	219,666
Gross (loss) profit before fair value adjustments		(10,003)	(68,551)	5,671	(29,239)
Changes in fair value of inventory sold		42,927	50,368	80,873	98,596
Unrealized gain on changes in fair value of biological assets	9	(38,741)	(37,483)	(92,037)	(93,632)
Gross profit (loss)		(14,189)	(81,436)	16,835	(34,203)
Expense
General and administration		23,696	28,516	82,699	85,433
Sales and marketing		15,934	13,168	45,648	42,300
Acquisition costs		585	-	969	1,104
Research and development		2,637	3,398	7,933	8,413
Depreciation and amortization	11, 13	11,802	7,180	36,850	35,090
Share-based compensation	17(a)(b)(c)	3,538	5,233	10,285	18,081
		58,192	57,495	184,384	190,421
Loss from operations		(72,381)	(138,931)	(167,549)	(224,624)
Other income (expense)
Legal settlement and contract termination fees	21(a), (b)(i)	(90)	(2,235)	(296)	(46,307)
Interest and other income		935	1,467	3,847	4,450
Finance and other costs	25(a)	(25,798)	(16,990)	(57,042)	(50,464)
Foreign exchange (“FX”) loss		(1,395)	(7,035)	(3,302)	(135)
Other gains (losses)	19	9,966	8,319	54,131	3,125
Restructuring charges	3	(281)	(801)	(2,155)	(1,011)
Impairment of deposits		-	-	-	(10,266)
Impairment of property, plant and equipment	11, 12(a)	(176,110)	(4,548)	(180,391)	(226,850)
Impairment of investment in associates		(5,479)	-	(5,479)	-
Impairment of intangible assets and goodwill	13	(741,744)	-	(741,744)	(3,777)
		(939,996)	(21,823)	(932,431)	(331,235)
Loss from operations before taxes and discontinued operations		(1,012,377)	(160,754)	(1,099,980)	(555,859)
Income tax recovery (expense)
Current		(220)	10	(475)	235
Deferred, net		422	119	1,253	(3,884)
		202	129	778	(3,649)
Net loss from continuing operations		(1,012,175)	(160,625)	(1,099,202)	(559,508)
Net gain (loss) from discontinued operations, net of tax		-	-	-	(433)
Net loss		(1,012,175)	(160,625)	(1,099,202)	(559,941)

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

 4

AURORA CANNABIS INC.

Condensed Consolidated Interim Statements of Comprehensive Loss

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

(Continued)

		Three months ended March 31,		Nine months ended March 31,
			Recasted Note 2(d)		Recasted Note 2(d)
	Notes	2022	2021	2022	2021
		$	$	$	$
Other comprehensive (loss) income (“OCI”) that will not be reclassified to net loss
Deferred tax recovery		-	229	-	229
Unrealized (gain) loss on marketable securities	7(a)	636	1,431	(1,085)	(12,669)
		636	1,660	(1,085)	(12,440)
Other comprehensive (loss) income that may be reclassified to net loss
Share of income (loss) from investment in associates	8	-	1	(2)	251
Foreign currency translation (gain) loss		3,610	(2,396)	1,016	(6,263)
		3,610	(2,395)	1,014	(6,012)
Total other comprehensive (gain) loss		4,246	(735)	(71)	(18,452)
Comprehensive loss from continuing operations		(1,007,929)	(161,360)	(1,099,273)	(577,960)
Comprehensive loss from discontinued operations		-	-	-	(433)
Comprehensive loss		(1,007,929)	(161,360)	(1,099,273)	(578,393)
Net loss from continuing operations attributable to:
Aurora Cannabis Inc.		(1,012,177)	(160,625)	(1,098,837)	(558,044)
Non-controlling interests		2	-	(365)	(1,464)
Net loss from discontinued operations attributable to:
Aurora Cannabis Inc.	12(b)	-	-	-	(433)
Comprehensive loss attributable to:
Aurora Cannabis Inc.		(1,007,929)	(161,360)	(1,098,906)	(577,724)
Non-controlling interests		-	-	(367)	(669)
Loss per share - basic and diluted
Continuing operations	18	($4.72)	($0.83)	($5.40)	($3.50)
Discontinued operations	18	$ -	$ -	$ -	$ -
Total operations	18	($4.72)	($0.83)	($5.40)	($3.50)

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

 5

AURORA CANNABIS INC.

Condensed Consolidated Interim Statements of Changes in Equity

Nine months ended March 31, 2022

(Unaudited - Amounts reflected in thousands of Canadian dollars, except share amounts)

		Share Capital		Reserves					AOCI
	Note	Common Shares	Amount	Share-Based Compensation	Compensation Options/ Warrants	Convertible Notes	Change in Ownership Interest	Total Reserves	Fair Value	Deferred Tax	Associate OCI Pick-up	Foreign Currency Translation	Total AOCI	Deficit	Non-Controlling Interests	Total
		#	$	$	$	$	$	$	$	$	$	$	$	$	$	$
Balance, June 30, 2021		198,068,923	6,424,296	200,214	27,667	419	(86,800)	141,500	(211,327)	18,919	210	(14,813)	(207,011)	(4,321,085)	-	2,037,700
Shares released for earn out payment		193,554	1,000	-	-	-	-	-	-	-	-	-	-	-	-	1,000
Shares issued through equity financing	16(b)	25,672,749	142,004	-	-	-	-	-	-	-	-	-	-	-	-	142,004
Equity financing transaction costs		-	(3,278)	-	-	-	-	-	-	-	-	-	-	-	-	(3,278)
Deferred tax on transaction costs		-	(1,253)	-	-	-	-	-	-	-	-	-	-	-	-	(1,253)
Exercise of RSUs and DSUs	17(b)	297,510	6,697	(6,697)		-	-	(6,697)	-	-	-	-	-	-	-	-
Share-based compensation (1)	17	-	-	10,360	-	-	-	10,360	-	-	-	-	-	-	-	10,360
NCI contribution	26	-	-	-	-	-	-	-	-	-	-	-	-	434	865	1,299
Shares issued from treasury		97,009	1,529	-	-	-	-	-	-	-	-	-	-	-	-	1,529
Comprehensive loss for the period		-	-	-	-	-	-	-	(1,085)	-	(2)	1,016	(71)	(1,098,837)	(365)	(1,099,273)
Balance, March 31, 2022		224,329,745	6,570,995	203,877	27,667	419	(86,800)	145,163	(212,412)	18,919	208	(13,797)	(207,082)	(5,419,488)	500	1,090,088

⁽¹⁾ Included in share-based compensation is nil and $0.5 million relating to milestone payments for the three and nine months ended March 31, 2022 (three and nine months ended March 31, 2021 - nil and $1.3 million).

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

 6

AURORA CANNABIS INC.

Condensed Consolidated Interim Statements of Changes in Equity

Nine months ended March 31, 2021

(Unaudited - Amounts reflected in thousands of Canadian dollars, except share amounts)

	Share Capital		Reserves					AOCI					Recasted Note 2(d)
	Common Shares	Amount	Share-Based Compensation	Compensation Options/ Warrants	Convertible Notes	Change in Ownership Interest	Total Reserves	Fair Value	Deferred Tax	Associate OCI Pick-up	Foreign Currency Translation	Total AOCI	Deficit	Non-Controlling Interests	Total
	#	$	$	$	$	$	$	$	$	$	$	$	$	$	$
Balance, June 30, 2020	115,228,811	5,785,395	188,803	42,973	419	(86,800)	145,395	(194,637)	18,919	(27)	(11,452)	(187,197)	(3,596,011)	(24,356)	2,123,226
Shares issued for earn out payments	2,691,759	35,902	-	(15,791)	-	-	(15,791)	-	-	-	-	-	-	-	20,111
Shares issued through equity financing	78,559,118	612,101	-	-	-	-	-	-	-	-	-	-	-	-	612,101
Equity financing transaction costs	-	(26,253)	-	-	-	-	-	-	-	-	-	-	-	-	(26,253)
Shares issued for service	73,712	1,005	-	-	-	-	-	-	-	-	-	-	-	-	1,005
Deferred tax on transaction costs	-	3,777	-	-	-	-	-	-	-	-	-	-	-	-	3,777
Exercise of stock options	32,167	351	(187)	-	-	-	(187)	-	-	-	-	-	-	-	164
Exercise of warrants	491,500	9,748	-	(675)	-	-	(675)	-	-	-	-	-	-	-	9,073
Exercise of RSUs	122,671	6,423	(6,423)	-	-	-	(6,423)	-	-	-	-	-	-	-	-
Share-based compensation	-		15,797	1,279	-	-	17,076	-	-	-	-	-	-	-	17,076
Shares returned to treasury	(50,282)	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Change in ownership interests in subsidiaries	830,287	5,629	-	-	-	-	-	-	-	-	-	-	(31,450)	25,820	(1)
Comprehensive income (loss) for the period	-		-	-	-	-	-	(12,669)	229	251	(6,263)	(18,452)	(558,477)	(1,464)	(578,393)
Balance, March 31, 2021	197,979,743	6,434,078	197,990	27,786	419	(86,800)	139,395	(207,306)	19,148	224	(17,715)	(205,649)	(4,185,938)	-	2,181,886

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

 7

AURORA CANNABIS INC.

Condensed Consolidated Interim Statements of Cash Flows

Nine months ended March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars)

		Nine months ended March 31,
			Recasted Note 2(d)
	Notes	2022	2021
		$	$
Operating activities
Net loss from continuing operations		(1,099,202)	(559,508)
Adjustments for non-cash items:
Unrealized gain on changes in fair value of biological assets	9	(92,037)	(93,632)
Changes in fair value included in inventory sold		80,873	98,596
Depreciation of property, plant and equipment	11	47,403	45,586
Amortization of intangible assets	13	25,167	26,670
Share-based compensation		10,285	18,081
Impairment of deposits		-	10,266
Impairment of property, plant and equipment	11	180,391	226,850
Impairment of investments in associates	8	5,479	-
Impairment of loans receivable	25(a)	10,509	-
Impairment of intangible assets and goodwill	13	741,744	3,777
Accrued interest and accretion expense	14	19,660	17,377
Interest and other income		(9,061)	(893)
Deferred tax expense (recovery)		(1,253)	3,649
Other (gains) losses	19	(42,950)	(3,125)
Foreign exchange (gain) loss		3,219	(17,849)
Restructuring charges		400	-
Changes in non-cash working capital	20	36,177	(2,844)
Net cash used in operating activities from discontinued operations		-	(3,001)
Net cash used in operating activities		(83,196)	(230,000)
Investing activities
Proceeds from disposal of marketable securities	7	-	6,135
Loan receivable		(413)	(6,870)
Purchase of property, plant and equipment and intangible assets		(23,151)	(41,823)
Disposal of property, plant and equipment		24,586	5,388
Acquisition of businesses, net of cash acquired		1,296	-
Payment of contingent consideration		(152)	-
Deposits		970	(2,817)
Net cash provided by investing activities from discontinued operations		-	1,543
Net cash provided by (used in) investing activities		3,136	(38,444)
Financing activities
Repayment of long-term loans		-	(28,792)
Repayment of convertible debenture	14	(17,636)	-
Payments of principal portion of lease liabilities	15	(5,615)	(3,987)
Restricted cash	2(d)	(31,264)	(50,000)
Financing fees		-	(1,427)
Shares issued for cash, net of share issue costs		140,255	665,591
Net cash used in financing activities from discontinued operations		-	(331)
Net cash provided by financing activities		85,740	581,054
Effect of foreign exchange on cash and cash equivalents		2,757	(4,551)
Increase in cash and cash equivalents		8,437	308,059
Cash and cash equivalents, beginning of period		421,457	162,179
Cash and cash equivalents, end of period		429,894	470,238

Supplemental cash flow information (Note 20)

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

 8

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 1 Nature of Operations

Aurora Cannabis Inc. (the “Company” or “Aurora”) was incorporated under the Business Corporations Act (British Columbia) on December 21, 2006 as Milk Capital Corp. Effective October 2, 2014, the Company changed its name to Aurora Cannabis Inc. The Company’s shares are listed on the Nasdaq Global Select Market (“Nasdaq”) and the Toronto Stock Exchange (“TSX”) under the trading symbol “ACB”, and on the Frankfurt Stock Exchange (“FSE”) under the trading symbol “21P”.

The Company’s head office and principal address is 500 - 10355 Jasper Avenue, Edmonton, Alberta, Canada, T5J 1Y6. The Company’s registered and records office address is Suite 1500 - 1055 West Georgia Street, Vancouver, British Columbia V6E 4N7.

The Company’s principal strategic business lines are focused on the production, distribution and sale of cannabis related products in Canada and internationally. Aurora currently conducts the following key business activities in the jurisdictions listed below:

• Production, distribution and sale of medical and consumer cannabis products in Canada pursuant to the Cannabis Act;

• Distribution of wholesale medical cannabis in the European Union (“EU”) pursuant to the German Medicinal Products Act and German Narcotic Drugs Act;

• Distribution of wholesale medical cannabis in various international markets, including Australia, Caribbeans, South America and Israel; and

• Distribution and sale of hemp-derived CBD products in the United States (“U.S.”) market.

Note 2 Significant Accounting Policies and Judgments

(a)       Basis of Presentation and Measurement

The condensed consolidated interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and International Accounting Standards 34, “Interim Financial Reporting” (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”), and interpretations of the IFRS Interpretations Committee (“IFRIC”). Unless otherwise noted, all amounts are presented in thousands of Canadian dollars, except share and per share data.

The condensed consolidated interim financial statements are presented in Canadian dollars and are prepared in accordance with the same accounting policies, critical estimates and methods described in the Company’s annual consolidated financial statements, except for the adoption of new accounting policies (Note 2(e)) and estimates for restructuring provisions (Note 3). Given that certain information and footnote disclosures, which are included in the annual audited consolidated financial statements, have been condensed or excluded in accordance with IAS 34, these condensed consolidated interim financial statements should be read in conjunction with our annual audited consolidated financial statements as at and for the year ended June 30, 2021, including the accompanying notes thereto.

(b)       COVID-19 Estimation Uncertainty

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. The COVID-19 pandemic has impacted revenue in the Canadian consumer market, particularly in Ontario, as governments imposed retail access restrictions to curbside pickup at points during the pandemic, and have changed their purchasing patterns to reflect the slow-down in the market. The production and sale of medical and consumer cannabis have been recognized as essential services across Canada. All of the Company’s facilities in Canada and internationally continue to be operational and the Company continues to work closely with local, national and international government authorities to ensure that the Company is following the required protocols and guidelines related to COVID-19 within each region.

Due to the rapid developments and uncertainty surrounding COVID-19, it is not possible to predict the impact that COVID-19 will have on the Company’s business, financial position and operating results in the future. In addition, it is possible that estimates in the Company’s financial statements will change in the near term as a result of COVID-19 and the effect of any such changes could be material, which could result in, among other things, impairment of long-lived assets including intangibles and goodwill. The Company is closely monitoring the impact of the pandemic on all aspects of its business.

(c)       Basis of Consolidation

The condensed consolidated interim financial statements include the financial results of the Company and its subsidiaries. Subsidiaries include entities which are wholly-owned as well as entities over which Aurora has the authority or ability to exert power over the investee’s financial and/or operating decisions (i.e. control), which in turn may affect the Company’s exposure or rights to the variable returns from the investee. The condensed consolidated interim financial statements include the operating results of acquired or disposed entities from the date control is obtained or the date control is lost, respectively. All intercompany balances and transactions are eliminated upon consolidation.

 9

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The Company’s principal subsidiaries during the three and nine months ended March 31, 2022 are as follows:

Major subsidiaries	Percentage Ownership	Functional Currency
1769474 Alberta Ltd. (“1769474”)	100%	Canadian Dollar
2105657 Alberta Inc. (“2105657”)	100%	Canadian Dollar
Aurora Cannabis Enterprises Inc. (“ACE”)	100%	Canadian Dollar
Aurora Deutschland GmbH (“Aurora Deutschland”)	100%	European Euro
Aurora Nordic Cannabis A/S (“Aurora Nordic”)	100%	Danish Krone
Reliva, LLC (“Reliva”)	100%	United States Dollar
Whistler Medical Marijuana Corporation (“Whistler”)	100%	Canadian Dollar
ACB Captive Insurance Company Inc.	100%	Canadian Dollar

All shareholdings are of ordinary shares or other equity. Other subsidiaries, while included in the condensed consolidated interim financial statements, are not material and have not been reflected in the table above.

(d)       Biological Assets and Inventory Non-Material Prior Period Error

During the year ended June 30, 2021, a non-material error was identified in the valuation methodology for biological assets. As part of the fair value measurement, management incorporated the cannabis plant’s stage of growth in determining the fair value less costs to sell (“FVLCS”). In the period of harvest, the balance in biological assets was transferred directly to inventory at the average 48% stage of growth without adjusting for the incremental fair value to grow the plant through the full lifecycle. The Company now includes the incremental fair value of the plants in the valuation and transfers the biological assets to inventory at the full stage of growth at the point of harvest. Additionally, the Company revised certain key inputs used in determining FVLCS, including the incorporation of an effective yield factor based on the potency of cannabis produced. These changes primarily impacted unrealized fair value gains on biological assets and changes in fair value of inventory sold, both of which are non-cash impacts and are not material to the Company.

Management evaluated the materiality of the errors, both quantitatively and qualitatively, and concluded that the changes were not material to the annual consolidated financial statements taken as a whole for any prior period. The Company has revised opening deficit at June 30, 2020 by $3.2 million and corrected the error by recasting the prior period information in these condensed consolidated interim financial statements. The following is a summary of the impacts to the statement of comprehensive loss and the statement of cash flows for the three months ended March 31, 2021, prior to the impact of discontinued operations:

	Three months ended March 31, 2021 As previously reported	Biological Assets and Inventory Adjustments	Three months ended March 31, 2021 Recasted
Consolidated Statement of Comprehensive Loss
Cost of sales	127,545	(3,833)	123,712
Gross profit before fair value adjustments	(72,384)	3,833	(68,551)
Changes in fair value of inventory sold	29,583	20,785	50,368
Unrealized gain on changes in fair value of biological assets	(16,506)	(20,977)	(37,483)
Gross profit (loss)	(85,461)	4,025	(81,436)
Deferred tax expense (recovery)	(119)	-	(119)
Net loss from continuing operations	(164,650)	4,025	(160,625)
Net loss attributable to Aurora shareholders	(164,650)	4,025	(160,625)
Loss per share (basic and diluted)	($0.85)	$0.02	($0.83)

	Three months ended March 31, 2021 As previously reported	Biological Assets and Inventory Adjustments	Three months ended March 31, 2021 Recasted
Consolidated Statement of Cash Flows
Unrealized gain on changes in fair value of biological assets	(16,506)	(20,977)	(37,483)
Changes in fair value of inventory sold	29,583	20,785	50,368
Deferred tax expense (recovery)	(129)	-	(129)
Changes in non-cash working capital	71,959	(3,833)	68,126
Net cash used in operating activities	(57,327)	-	(57,327)

 10

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The following is a summary of the impacts to the statement of comprehensive loss and the statement of cash flows for the nine months ended March 31, 2021, prior to the impact of discontinued operations:

	Nine months ended March 31, 2021 As previously reported	Biological Assets and Inventory Adjustments	Nine months ended March 31, 2021 Recasted
Consolidated Statement of Comprehensive Loss
Cost of sales	221,483	(1,333)	220,150
Gross profit before fair value adjustments	(30,837)	1,333	(29,504)
Changes in fair value of inventory sold	38,829	59,767	98,596
Unrealized gain on changes in fair value of biological assets	(28,175)	(65,457)	(93,632)
Gross profit	(41,491)	7,023	(34,468)
Deferred tax expense (recovery)	3,884	-	3,884
Net loss from continuing operations	(564,598)	7,023	(557,575)
Net loss attributable to Aurora shareholders	(565,500)	7,023	(558,477)
Loss per share (basic and diluted)	($3.54)	$0.04	($3.50)

	Nine months ended March 31, 2021 As previously reported	Biological Assets and Inventory Adjustments	Nine months ended March 31, 2021 Recasted
Consolidated Statement of Cash Flows
Unrealized gain on changes in fair value of biological assets	(28,175)	(65,457)	(93,632)
Changes in fair value of inventory sold	38,829	59,767	98,596
Deferred tax expense (recovery)	3,649	-	3,649
Changes in non-cash working capital	8,620	(1,333)	7,287
Net cash used in operating activities	(229,999)	-	(229,999)

(e) New Accounting Policy

Segregated Cell Insurance

Insurance coverage for the Company’s directors and officers has been secured through a segregated cell program (“Segregated Cell”). The Segregated Cell was effected by entering into a participation agreement with a registered Segregated Accounts Company for the purposes of holding and supporting the Company’s insurance risk transfer strategies. The Company applies IFRS 10 Consolidated Financial Statements in its assessment of control as it relates to the Segregated Cell and the Company’s accounting policy is to consolidate the Segregated Cell. The funds held in the Segregated Cell are held as cash with the possibility of reinvestment. As the funds cannot be transferred to other parts of the group, the funds are disclosed as Restricted Cash.

(f) New Accounting Pronouncements

The following IFRS standards have been recently issued by the IASB. Pronouncements that are irrelevant or not expected to have a significant impact have been excluded.

Amendments to IFRS 9: Financial Instruments

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendments to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

The amendment clarifies the requirements relating to determining if a liability should be presented as current or non-current in the statement of financial position. Under the new requirement, the assessment of whether a liability is presented as current or non-current is based on the contractual arrangements in place as at the reporting date and does not impact the amount or timing of recognition. The amendment applies retrospectively for annual reporting periods beginning on or after January 1, 2022. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

 11

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Amendments to IAS 37: Onerous Contracts and the Cost of Fulfilling a Contract

The amendment specifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. The amendment is effective for annual periods beginning on or after January 1, 2022 with early application permitted. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Amendments to IAS 41: Agriculture

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendments to IAS 41. The amendment removes the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flow when measuring the fair value of a biological asset using a present value technique. This will ensure consistency with the requirements in IFRS 13. The amendment is effective for annual reporting periods beginning on or after January 1, 2022. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Note 3 Restructuring Provision

During the nine months ended March 31, 2022, the Company announced an operational efficiency plan including the centralization of the Company’s Canadian manufacturing processes to the Aurora River facility and the resultant closure of the western Canada manufacturing facility.

The provisions for restructuring and other charges represent the present value of the best estimate of the future outflow of economic benefits that will be required to settle the expected liabilities and may vary as a result of new events affecting the amounts that will need to be paid.

	March 31, 2022		June 30, 2021
	$		$
Opening balance	-		557
Additions	$	2,155	1,011
Payments	$	(1,755)	(1,568)
Ending balance	400		-

Note 4 Accounts Receivable

	Notes	March 31, 2022	June 30, 2021
		$	$
Trade receivables	25(a)	25,455	42,030
Sales taxes receivable		1,993	1,625
Lease receivable	25(a)	1,305	978
Consideration receivable from divestiture		2,407	2,167
Government grant receivable	5	3,379	6,617
Other receivables (1)		3,898	2,844
		38,437	56,261

⁽¹⁾ Includes interest receivable from the convertible debenture investments.

Note 5 Government Grant

In April 2020, the Government of Canada announced the Canada Emergency Wage Subsidy (“CEWS”) program. CEWS provides a wage subsidy on eligible remuneration, subject to limits per employee, to eligible employers based on certain criteria, including the demonstration of revenue declines. The Company has determined that it has qualified for this subsidy and has applied for CEWS. For the three and nine months ended March 31, 2022, the Company has recognized government grant income of $0.4 million and $11.6 million, respectively, in government grant income, within other gains (losses) in the statement of comprehensive loss. During the three and nine months ended March 31, 2022, the Company received $10.0 million and $19.4 million cash from CEWS, respectively.

Note 6 Investments

(a) Choom Holdings Inc. (“Choom”)

Choom is a consumer cannabis company that is developing retail networks across Canada. Choom is publicly listed on the Canadian Securities Exchange.

(i) Convertible Debenture

Effective July 8, 2021, the Company restructured its debt with Choom by extinguishing its existing $20.0 million unsecured convertible debenture and accrued interest in exchange for: (i) 79,754,843 common shares in Choom with a fair value of $5.2 million; and (ii) a $6.0 million secured convertible debenture (“2021 Debenture”) which approximated fair value. The 2021 Debenture is secured by a second ranking security interest in all of Choom’s present and future acquired property. The 2021 Debenture bears interest at 7.0% per annum, matures on December 23, 2024, and is convertible into common shares in Choom at $0.10 per share. Additionally, the Company and Choom (i) amended the Investor Rights Agreement providing the right to nominate up to two directors to Choom’s Board of Directors and a participation right to maintain Aurora’s pro-rata ownership, and (ii) established a debt restructuring fee payable by Choom to Aurora based on products sold at Choom’s retail stores. As a result of the amendment, the $20.0 million unsecured convertible debenture with a fair value of $18.2 million and $2.1 million interest receivable was derecognized, resulting in a loss of $9.1 million recognized in other gains (losses) on the statement of comprehensive loss.

 12

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

As of March 31, 2022, the 2021 Debenture had a fair value of $0.0 million resulting in an unrealized loss of $5.2 million and $6.0 million for the three and nine months ended March 31, 2022, respectively. The fair value of the 2021 Debenture was estimated using the FINCAD model based on the following assumptions: closing share price of $0.02; credit spread of 23%; dividend yield of - %; stock price volatility of 86%; and an expected life of 3 years. The Company also considers the probability of collection in its assessment of fair value.

On April 22, 2022, Choom and certain of its subsidiaries obtained an order (the “Initial Order”) of the Supreme Court British Columbia providing Choom protection from their creditors pursuant to the Companies’ Creditors Act (Canada) (“CCAA”). As part of the Initial Order, the Company has agreed to advance Choom up to an aggregate of $0.8 million (“Loan”) to fund Choom’s ongoing operations and CCAA proceedings. The Loan accrues interest at a rate of 12% per annum, and matures, at the latest, on August 31, 2022. The Loan is secured against all assets of Choom and certain of its subsidiaries pursuant to the Initial Order.

(ii) Common Shares and Investment in Associate

As a result of the convertible debenture amendment, the Company obtained significant influence over the management of Choom based on its 19.9% ownership interest in Choom and qualitative factors described above. The 9,859,155 common shares previously held in Choom was reclassified from marketable securities (Note 7(a)) to investment in associates (Note 8) at its fair value of $0.6 million based on the quoted market price of $0.065 per share on the amendment date.

As of March 31, 2022, the Company held 89,613,998 (June 30, 2021 - 9,859,155) common shares in Choom, representing a 19.19% (June 30, 2021 - 3.03%) ownership interest. During the three and nine months ended March 31, 2022, the Company assessed the carrying value of the investment against the estimated recoverable amount and as a result, recognized an impairment charge of $5.5 million (three and nine months ended March 31, 2021 - nil) which has been recognized through the statement of comprehensive loss (Note 8).

(b) Australis Capital Inc. (“ACI”)

ACI is a public company that is focused on investments and acquisitions in the cannabis space and more specifically, investment in the growing U.S. cannabis market. ACI was previously wholly-owned by Aurora and was spun-out to Aurora shareholders on September 19, 2018. As of March 31, 2022, the Company holds the following restricted back-in right warrants:

(a) 22,628,751 warrants exercisable at $0.20 per share expiring September 19, 2028; and

(b) The number of warrants equal to 20% of the number of common shares issued and outstanding in ACI as of the date of exercise. The warrants are exercisable at the five-day volume weighted average trading price (“VWAP”) of ACI’s shares and have an expiration date of September 19, 2028.

Aurora is restricted from exercising the back-in right warrants unless all of ACI’s business operations in the U.S. are permitted under applicable U.S. federal and state laws and Aurora has received consent of the TSX and any other stock exchange on which Aurora may be listed, as required. As of March 31, 2022, the warrants remain un-exercisable.

As of March 31, 2022, the warrants had a fair value of $1.7 million (June 30, 2021 - $5.7 million) estimated using the Binomial model with the following assumptions: share price of $0.11 (June 30, 2021 - $0.32); risk-free interest rate of 6.48 (June 30, 2021 - 1.66%); dividend yield of - % (June 30, 2021 - 0%); stock price volatility of 113% (June 30, 2021 - 116.44%); an expected life of 6.48 years (June 30, 2021 - 7.23 years); and adjusted for a probability factor of legalization of cannabis in the U.S. under federal and certain state laws. As a result, the Company recognized $1.3 million and $4.0 million of unrealized loss on fair value during the three and nine months ended March 31, 2022 (three and nine months ended March 31, 2021 - $4.3 million and $4.0 million) (Note 7(b)).

 13

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 7 Marketable Securities and Derivatives

(a) Marketable securities

At March 31, 2022, the Company held the following marketable securities:

Financial asset hierarchy level	Level 1	Level 1	Level 1	Level 1	Level 3	Level 3
Marketable securities designated at fair value through other comprehensive income (“FVTOCI”)	Radient	Cann Group	Choom	CTT Pharmaceutical Holdings	Capcium	Other immaterial investments	Total
			Note 6(a)
	$	$	$	$	$	$	$
Balance, June 30, 2021	3,010	-	741	-	-	-	3,751
Transfer (to) from investment in associates	-	-	(642)	289	-	-	(353)
Unrealized loss on changes in fair value	(941)	-	(99)	(45)	-	-	(1,085)
Balance, March 31, 2022	2,069	-	-	244	-	-	2,313
Unrealized gain (loss) on marketable securities
Three months ended March 31, 2022
OCI unrealized gain	565	-	-	71	-	-	636
Three months ended March 31, 2021
OCI unrealized gain (loss)	941	-	493		-	(3)	1,431
Nine months ended March 31, 2022
OCI unrealized loss	(941)	-	(99)	(45)	-	-	(1,085)
Nine months ended March 31, 2021
OCI unrealized gain (loss)	(1,882)	(9,512)	493	-	(1,851)	83	(12,669)

 14

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

(b) Derivatives

At March 31, 2022, the Company held the following derivative investments:

Financial asset hierarchy level	Level 2	Level 2	Level 2	Level 3	Level 2	Level 3	Level 2
Derivatives and convertible debentures at fair value through profit or loss (“FVTPL”)	TGOD	ACI	Choom	Investee-B	High Tide	Investee-C	Other immaterial investments	Total
		Note 6(b)	Note 6(a)
	$	$	$	$	$	$	$	$
Balance, June 30, 2021	-	5,661	18,151	14,393	18,665	2,512	-	59,382
Additions	-	-	6,000	-	-	-	-	6,000
Disposals	-	-	(18,151)	-	-	-	-	(18,151)
Repayment	-	-	-	-	(892)	-	-	(892)
Unrealized gain (loss) on changes in fair value	-	(3,960)	(6,000)	(1,127)	(5,615)	(32)	-	(16,734)
Foreign exchange	-	-	-	132	-	-	-	132
Balance, March 31, 2022	-	1,701	-	13,398	12,158	2,480	-	29,737
Unrealized gain (loss) on derivatives (Note 19)
Three months ended March 31, 2022
Foreign exchange	-	-	-	(259)	-	-	-	(259)
Unrealized gain (loss)  on changes in fair value	-	(1,309)	(5,151)	(111)	270	(9)	-	(6,310)
	-	(1,309)	(5,151)	(370)	270	(9)	-	(6,569)
Three months ended March 31, 2021
Foreign exchange				(89)				(89)
Unrealized gain (loss) on changes in fair value	(381)	4,320	2,870	(7)	19,306			26,108
	(381)	4,320	2,870	(96)	19,306	-	-	26,019
Nine months ended March 31, 2022
Foreign exchange	-	-	-	132	-	-	-	132
Unrealized gain (loss) on changes in fair value	-	(3,960)	(6,000)	(1,127)	(5,615)	(32)	-	(16,734)
	-	(3,960)	(6,000)	(995)	(5,615)	(32)	-	(16,602)
Nine months ended March 31, 2021
Foreign exchange	-	-	-	(1,076)	-		-	(1,076)
Unrealized loss on changes in fair value	(1,132)	4,026	(1,756)	(184)	20,546		(11)	21,489
	(1,132)	4,026	(1,756)	(1,260)	20,546	-	(11)	20,413

 15

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 8 Investments in Associates and Joint Ventures

The carrying value of investments in associates and joint ventures consist of:

		CTT Pharmaceutical	Choom	Total
	Note	Holdings Inc.	Note 6(a)
		$	$	$
Balance, June 30, 2021		289	-	289
Additions		-	5,825	5,825
Share of net income(1)	19	-	(344)	(344)
Disposition		(289)	-	(289)
Impairment	6(a)	-	(5,479)	(5,479)
OCI FX and share of OCI loss		-	(2)	(2)
Balance, March 31, 2022		-	-	-

⁽¹⁾ Represents an estimate of the Company’s share of net income based on the latest available information of each investee.

Note 9 Biological Assets

The following inputs and assumptions are all categorized within Level 3 on the fair value hierarchy and were used in determining the fair value of biological assets:

Inputs and assumptions	Description	Correlation between inputs and fair value
Average selling price per gram	Represents the average selling price per gram of dried cannabis net of excise taxes, where applicable, for the period for all strains of cannabis sold, which is expected to approximate future selling prices.	If the average selling price per gram were higher (lower), estimated fair value would increase (decrease).
Average attrition rate	Represents the weighted average number of plants culled at each stage of production.	If the average attrition rate was lower (higher), estimated fair value would increase (decrease).
Weighted average yield per plant	Represents the weighted average number of grams of dried cannabis inventory expected to be harvested from each cannabis plant.	If the weighted average yield per plant was higher (lower), estimated fair value would increase (decrease).
Standard cost per gram to complete production	Based on actual production costs incurred divided by the grams produced in the period.	If the standard cost per gram to complete production was lower (higher), estimated fair value would increase (decrease).
Weighted average effective yield	Represents the estimated percentage of harvested product that meets specifications in order to be sold as a dried cannabis product.	If the weighted average effective yield were higher (lower), the estimated fair value would increase (decrease).
Stage of completion in the production process	Calculated by taking the weighted average number of days in production over a total average grow cycle of approximately twelve weeks.	If the number of days in production was higher (lower), estimated fair value would increase (decrease).

The following table highlights the sensitivities and impact of changes in significant assumptions on the fair value of biological assets:

Significant inputs & assumptions	Range of inputs		Sensitivity	Impact on fair value
	March 31, 2022	June 30, 2021		March 31, 2022	June 30, 2021
Average selling price per gram	$5.31	$5.69	Increase or decrease of $1.00 per gram	$7,244	$5,067
Weighted average yield (grams per plant)	38.67	30.69	Increase or decrease by 5 grams per plant	$5,446	$3,337
Weighted average effective yield	95 %	84 %	Increase of decrease by 5%	$1,171	$890
Standard cost per gram to complete production	$1.68	$1.72	Increase or decrease of $1.00 per gram	$7,423	$6,323

The Company’s estimates are, by their nature, subject to change, and differences from the anticipated yield will be reflected in the gain or loss on biological assets in future periods.

The changes in the carrying value of biological assets during the period are as follows:

	$
Balance, June 30, 2021	20,250
Production costs capitalized	61,059
Sale of biological assets	(164)
Foreign currency translation	(638)
Changes in fair value less cost to sell due to biological transformation	92,037
Transferred to inventory upon harvest	(145,226)
Balance, March 31, 2022	27,318

 16

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

As of March 31, 2022, the weighted average fair value less cost to complete and cost to sell a gram of dried cannabis was $3.36 per gram (June 30, 2021 - $2.22 per gram).

During the three and nine months ended March 31, 2022, the Company’s biological assets produced 21,390 kilograms and 55,058 kilograms of dried cannabis, respectively (three and nine months ended March 31, 2021 - 14,484 kilograms and 95,044 kilograms, respectively). As at March 31, 2022, it is expected that the Company’s biological assets will yield approximately 17,192 kilograms (June 30, 2021 - 18,599 kilograms) of cannabis when harvested. As of March 31, 2022, the weighted average stage of growth for the biological assets was 46% (June 30, 2021 - 49%).

Note 10 Inventory

The following is a breakdown of inventory:

	March 31, 2022			June 30, 2021
	Capitalized cost	Fair value adjustment	Carrying value	Capitalized cost	Fair value adjustment	Carrying value
	$	$	$	$	$	$
Harvested cannabis
Work-in-process	34,887	22,316	57,203	30,693	10,433	41,126
Finished goods	9,108	1,186	10,294	13,405	4,676	18,081
	43,995	23,502	67,497	44,098	15,109	59,207
Extracted cannabis
Work-in-process	12,779	1,923	14,702	18,884	2,420	21,304
Finished goods	8,530	682	9,212	17,355	2,181	19,536
	21,309	2,605	23,914	36,239	4,601	40,840
Hemp products
Raw materials	-	-	-	773	-	773
	-	-	-	773	-	773
Supplies and consumables	10,038	-	10,038	15,095	-	15,095
Merchandise and accessories	1,133	-	1,133	1,556	-	1,556
Ending balance	76,475	26,107	102,582	97,761	19,710	117,471

During the three and nine months ended March 31, 2022, inventory expensed to cost of goods sold was $103.4 million and $246.3 million, respectively (three and nine months ended March 31, 2021 - $174.1 million and $318.3 million, respectively), which included $42.9 million and $80.9 million, respectively (three and nine months ended March 31, 2021 - $50.4 million and $98.6 million, respectively) of non-cash expense related to the changes in fair value of inventory sold.

During the three and nine months ended March 31, 2022, the Company recognized $63.6 million and $110.5 million, respectively, in inventory impairment losses (three and nine months ended March 31, 2021 - $123.7 million and $155.7 million, respectively) consisting of $36.5 million and $56.7 million, respectively (three and nine months ended March 31, 2021 - $40.8 million and $68.5 million, respectively) recognized in changes in fair value of inventory sold and $27.1 million and $53.8 million, respectively (three and nine months ended March 31, 2021 - $82.9 million and $87.2 million, respectively) recognized in cost of sales.

 17

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 11 Property, Plant and Equipment

The following summarizes the carrying values of property, plant and equipment for the periods reflected:

	March 31, 2022				June 30, 2021
	Cost	Accumulated depreciation	Impairment	Net book value	Cost	Accumulated depreciation	Impairment	Net book value
Owned assets
Land	14,082	-		14,082	27,357	-	(3,380)	23,977
Real estate	388,845	(71,802)	(147,656)	169,387	413,589	(76,744)	(8,582)	328,263
Construction in progress	54,688	-	(8,915)	45,773	327,073	-	(249,434)	77,639
Computer software & equipment	31,283	(27,280)	(532)	3,471	34,001	(24,321)	(1,865)	7,815
Furniture & fixtures	9,874	(5,421)	(386)	4,067	11,938	(5,744)	(285)	5,909
Production & other equipment	166,652	(80,759)	(22,902)	62,991	182,946	(72,258)	(9,443)	101,245
Total owned assets	665,424	(185,262)	(180,391)	299,771	996,904	(179,067)	(272,989)	544,848
Right-of-use lease assets
Land	11,562	(1,551)	-	10,011	23,748	(971)	-	22,777
Real estate	47,145	(14,103)	-	33,042	48,134	(11,277)	-	36,857
Production & other equipment	5,053	(4,055)	-	998	5,045	(3,434)	-	1,611
Total right-of-use lease assets	63,760	(19,709)	-	44,051	76,927	(15,682)	-	61,245
Total property, plant and equipment	729,184	(204,971)	(180,391)	343,822	1,073,831	(194,749)	(272,989)	606,093

The following summarizes the changes in the net book values of property, plant and equipment for the periods presented:

	Balance, June 30, 2021	Additions	Disposals	Other (1)	Depreciation	Impairment	Foreign currency translation	Balance, March 31, 2022
Owned assets
Land	23,977	5,558	(1,210)	(14,074)	-	(1)	(168)	14,082
Real estate	328,263	1,182	211	3,326	(15,863)	(147,647)	(85)	169,387
Construction in progress	77,639	8,902	(6,449)	(24,958)	-	(8,901)	(460)	45,773
Computer software & equipment	7,815	348	(203)	1,538	(5,483)	(532)	(12)	3,471
Furniture & fixtures	5,909	114	199	(383)	(1,376)	(355)	(41)	4,067
Production & other equipment	101,245	1,003	2,581	778	(19,476)	(22,955)	(185)	62,991
Total owned assets	544,848	17,107	(4,871)	(33,773)	(42,198)	(180,391)	(951)	299,771
Right-of-use leased assets
Land	22,777	-	-	(12,187)	(580)	-	1	10,011
Real estate	36,857	1,680	(1,442)	-	(3,997)	-	(56)	33,042
Production & other equipment	1,611	19	-	-	(628)	-	(4)	998
Total right-of-use lease assets	61,245	1,699	(1,442)	(12,187)	(5,205)	-	(59)	44,051
Total property, plant and equipment	606,093	18,806	(6,313)	(45,960)	(47,403)	(180,391)	(1,010)	343,822

⁽¹⁾ Includes reclassification of construction in progress cost when associated projects are complete. Includes the transfer of facilities to assets held for sale to assets held for sale as at March 31, 2022 (Note 12(a)).

During the three and nine months ended March 31, 2022, no borrowing costs were capitalized (three and nine months ended March 31, 2021 - nil and $2.1 - million at a weighted average interest rate of 13%) to construction in progress.

Depreciation relating to manufacturing equipment and production facilities for owned and right-of-use leased assets is capitalized into biological assets and inventory, and is expensed to cost of sales upon the sale of goods. During the three and nine months ended March 31, 2022, the Company recognized $13.6 million and $45.7 million of depreciation expense, respectively (three and nine months ended March 31, 2021 - $12.0 million and $46.8 million, respectively), of which $6.8 million and $27.6 million was reflected in cost of sales, respectively (three and nine months ended March 31, 2021 - $10.0 million and $29.2 million).

As a result of the Company’s change in strategy during the three months ended March 31, 2022 to focus on lower volume, higher margin premium categories, management made the decision that it will close its Aurora Sky facility in Edmonton, Alberta, which is an indicator of impairment. The fair value of the manufacturing facility was determined based on a third-party appraisal using a FVLCD approach including market and cost approaches. Consideration is given to information from historical data and industry standards which constitute both observable and unobservable inputs (level 2 and level 3). As a result, the Company recognized a $154.5 million impairment loss for the manufacturing facility for the three months ended March 31, 2021. The manufacturing facility and the corresponding impairment loss is allocated to the Canadian cannabis operating segment (Note 23).

 18

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

During the three months ended March 31, 2022, management recorded an impairment of $21.1 for a Canadian manufacturing facility as a result of observable indications that its market value has declined more than would be expected as a result of the passage of time or normal use, which is an indicator of impairment. The fair value of the manufacturing facility was determined based on offers to purchase received from third-parties. The manufacturing facility and the corresponding impairment loss is allocated to the Canadian cannabis operating segment (Note 23).

Note 12 Assets and Liabilities Held for Sale and Discontinued Operations

(a)       Assets and Liabilities Held for Sale

Assets held for sale are comprised of the following:

	Colombia Property	Restructuring Facilities	Uruguay Facility	Nordic Sky	Aurora Sun	Total
	$	$	$			$
Balance, June 30, 2021	1,925	13,993	-	-	-	15,918
Transferred from property, plant and equipment	-	-	669	-	-	669
Net proceeds from disposal	-	(6,274)	-	-	-	(6,274)
Loss on disposal (1)	-	(110)	-	-	-	(110)
Balance, September 30, 2021	1,925	7,609	669	-	-	10,203
Transferred from property, plant and equipment	-	(355)	-	5,643	-	5,288
Foreign exchange	-	-	-	-		-
Net proceeds from disposal	-	(5,166)	(602)	-	-	(5,768)
Loss on disposal (1)	-	(2,088)	(67)	-	-	(2,155)
December 31, 2021	1,925	-	-	5,643	-	7,568
Transferred from property, plant and equipment	-	-	-	3,180	34,404	37,584
Net proceeds from disposal	-	-	-	(7,519)	-	(7,519)
Loss on disposal (1)	-	-	-	(1,304)	-	(1,304)
March 31, 2022	1,925	-	-	-	34,404	36,329

⁽¹⁾ The loss on disposal is recognized in other gains (losses) (Note 19) in the statement of comprehensive loss.

Restructuring Facilities

During the nine months ended March 31, 2022, the Company sold a production facility located in Saskatchewan for net proceeds of $6.3 million (comprised of $6.5 million purchase price net of commissions paid of $0.2 million) with a carrying value of $6.4 million. As a result, the Company recognized a $0.1 million loss on disposal. The Company also sold a production facility located in Cremona, Alberta for net proceeds of $5.0 million with a carrying value of $7.0 million. As a result, the Company recognized a $2.0 million loss on disposal. Additionally, the Company sold equipment for net proceeds of $0.2 million with carrying value of $0.3 million and recognized a $0.1 million loss on disposal which is recognized in other gains (losses) in the statement of comprehensive loss (Note 19).

Uruguay Facility

During the nine months ended March 31, 2022, management committed to sell its recreational production facility located in Uruguay and listed the property for sale. As a result, the Company reclassified the asset with a carrying value of $0.7 million from property, plant, and equipment to assets held for sale. The Company sold the facility for net proceeds of $0.6 million and recognized a $0.1 million loss on disposal within other gains (losses) in the statement of comprehensive loss (Note 19).

Nordic Sky

During the nine months ended March 31, 2022, management committed to sell its production facility located in Denmark and listed the property for sale. As a result, the Company reclassified the asset with a carrying value of $5.6 million from property, plant, and equipment to assets held for sale. On March 15, 2022 net proceeds of approximately $7.5 million were received by the Company resulting in a loss of disposal of $1.3 million which is recognized in other gains (losses) in the statement of comprehensive loss (Note 19).

 19

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Aurora Sun

During the nine months ended March 31, 2022, the Company entered into a share purchase agreement (the “Agreement”) to sell 2105657 Alberta Ltd., a wholly owned subsidiary which owns the Aurora Sun facility located in Alberta. Total consideration for the Transaction is for $46.8 million, comprised of $20 million on closing and a vendor take back promissory note of $26.8 million (the “Promissory Note”). The Promissory Note is due and payable within five years of closing the Transaction. The closing of the Transaction is subject to certain standard closing conditions for both parties. The transaction in expected to close in Q4 2022. The assets and liabilities of the subsidiary have been reclassified to assets and liabilities held for sale following the execution of the Agreement and are comprised of the following as at March 31, 2022:

	$
Property, plant and equipment	34,404
Assets held for sale	34,404
Accounts payable and accrued liabilities	221
Provisions	2,000
Liabilities held for sale	2,221

(b) Discontinued Operations

There were no transactions within discontinued operations during the three and nine months ended March 31, 2022. The following table summarizes the Company's consolidated discontinued operations for the three and nine months ended March 31, 2021:

	Three months ended March 31, 2021	Nine months ended March 31, 2021
Revenue	-	717
Cost of sales	-	1,028
General and administration expenses	-	676
Sales and marketing	-	57
Other expenses (income)	-	77
Other gains (losses)	-	(2,556)
Loss on disposal of discontinued operations	-	1,868
Net gain (loss) from discontinued operations, before and after taxes	-	(433)

Note 13 Intangible Assets and Goodwill

The following is a continuity schedule of intangible assets and goodwill:

	March 31, 2022				June 30, 2021
	Cost	Accumulated amortization	Impairment	Net book value	Cost	Accumulated amortization	Impairment	Net book value
Definite life intangible assets:
Customer relationships	89,480	(46,855)	-	42,625	96,838	(40,155)	(7,408)	49,275
Permits and licenses	109,118	(37,529)	-	71,589	109,127	(33,841)	-	75,286
Patents	2,006	(797)	-	1,209	1,895	(659)	-	1,236
Intellectual property and know-how	78,099	(46,831)	-	31,268	78,099	(37,588)	-	40,511
Software	41,418	(14,787)	-	26,631	41,708	(9,385)	(3,777)	28,546
Indefinite life intangible assets:
Brand	146,699	-	-	146,699	146,699	-	-	146,699
Permits and licenses	26,556	-	-	26,556	25,895	-	-	25,895
Total intangible assets	493,376	(146,799)	-	346,577	500,261	(121,628)	(11,185)	367,448
Goodwill	887,874	-	(741,744)	146,130	921,494	-	(33,757)	887,737
Total	1,381,250	(146,799)	(741,744)	492,707	1,421,755	(121,628)	(44,942)	1,255,185

 20

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The following summarizes the changes in the net book value of intangible assets and goodwill for the periods presented:

	Balance, June 30, 2021	Additions	Amortization	Impairment	Foreign currency translation	Balance, March 31, 2022
Definite life intangible assets:
Customer relationships	49,275	-	(6,694)	-	44	42,625
Permits and licenses	75,286	-	(3,691)	-	(6)	71,589
Patents	1,236	110	(137)	-	-	1,209
Intellectual property and know-how	40,511	-	(9,243)	-	-	31,268
Software	28,546	3,487	(5,402)	-	-	26,631
Indefinite life intangible assets:
Brand	146,699	-	-	-	-	146,699
Permits and licenses (1)	25,895	2,014	-	-	(1,353)	26,556
Total intangible assets	367,448	5,611	(25,167)	-	(1,315)	346,577
Goodwill	887,737	-	-	(741,744)	137	146,130
Total	1,255,185	5,611	(25,167)	(741,744)	(1,178)	492,707

⁽¹⁾ Indefinite life permits and licenses are predominantly held by the Company’s foreign subsidiaries. Given that these permits and licenses are connected to the subsidiary rather than a specific asset, there is no foreseeable limit to the period over which these assets are expected to generate future cash inflows for the Company.

As at March 31, 2022, $146.7 million and $26.6 million indefinite life intangibles were allocated to the group of cash generating units (“CGUs”) that comprise the Canadian Cannabis Segment and the International Cannabis Segment, respectively (June 30, 2021 - $172.6 million allocated to the group of CGUs that comprise the Cannabis segment (Note 23). As at the July 1, 2021 date of the operating segment reorganization (Note 23), $741.7 million and $146.0 million of goodwill was allocated to the Canadian Cannabis Segment and the International Cannabis Segment, respectively (June 30, 2021 - $887.7 million of goodwill was allocated to the Cannabis operating segment). As at March 31, 2022, $146.1 million of goodwill was allocated to the International Cannabis Segment.

CGU and Goodwill Impairments

At the end of each reporting period, the Company assesses whether events or changes in circumstances have occurred that would indicate that a CGU or group of CGUs were impaired. The Company considers external and internal factors, including overall financial performance and relevant entity-specific factors, as part of this assessment.

As at March 31, 2022, management had noted indicators of impairment present within its Canadian Cannabis CGU and as a result performed an indicator-based impairment test as at March 31, 2022. The following factors were identified impairment indicators for the Canadian Cannabis CGU as at March 31, 2022:

• Change in strategy for the Canadian consumer business - during the three months ended March 31, 2022, the Company changed its strategy to focus on lower volume, higher margin premium categories.

• Revenue decline in Canadian consumer market - driven by increased competition and irrational wholesale pricing; and

• Decline in stock price and market capitalization - As at March 31, 2022, the carrying amount of the Company’s total net assets exceeded the Company’s market capitalization.

As the Canadian Cannabis CGU is allocated to the Canadian Cannabis Operating Segment, management also tested the Canadian Cannabis Operating Segment.

The recoverable amounts of the Canadian Cannabis CGU and the Canadian Cannabis Operating Segment were determined based on FVLCD using Level 3 inputs in a discounted cash flow analysis. As the Canadian Cannabis Operating Segment is comprised of the Canadian Cannabis CGU, management tested the Canadian Cannabis CGU for impairment before the Canadian Cannabis Operating Segment. Where applicable, the Company used its market capitalization and comparative market multiples to corroborate discounted cash flow results. The significant assumptions applied in the determination of the recoverable amount are described below:

i. Cash flows: Estimated cash flows were projected based on actual operating results from internal sources as well as industry and market trends. Estimated cash flows are primarily driven by sales and operating costs. The forecasts are extended to a total of 4.25 years (and a terminal year thereafter);

ii. Terminal value growth rate: The terminal growth rate was based on historical and projected consumer price inflation, historical and projected economic indicators, and projected industry growth;

iii. Post-tax discount rate: The post-tax discount rate is reflective of the CGUs Weighted Average Cost of Capital (“WACC”). The WACC was estimated based on the risk-free rate, equity risk premium, beta adjustment to the equity risk premium based on a direct comparison approach, an unsystematic risk premium, and after-tax cost of debt based on corporate bond yields; and

iv. Tax rate: The tax rates used in determining the future cash flows were those substantively enacted at the respective valuation date.

The following table outlines the key assumptions used in calculating the recoverable amount for each CGU and operating segment tested for impairment as at March 31, 2022:

 21

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

	Canadian Cannabis CGU	Canadian Cannabis Operating Segment
March 31, 2022
Terminal value growth rate	3.0 %	3.0 %
Discount rate	13.0 %	13.0 %
Budgeted revenue growth rate (average of next 4.25 years)	33.4 %	33.4 %
Fair value less cost to dispose	$711,158	$634,861
	Canadian Cannabis CGU	Cannabis Operating Segment
6/30/2021 (1)
Terminal value growth rate	3.0 %	3.0 %
Discount rate	13.8 %	14.0 %
Budgeted revenue growth rate (average of next 4 years)	54.4 %	53.7 %
Fair value less cost to dispose	$1,587,207	$1,915,366

(1) Reflects the Canadian Cannabis CGU and Cannabis Operating Segment prior to the operating segment reorganization as at July 1, 2021 (Note 23).

CGU impairment

Canadian Cannabis CGU

The Company’s Canadian Cannabis CGU represents its operations dedicated to the cultivation and sale of cannabis products within Canada and forms part of the Company’s Canadian Cannabis Operating Segment. Management concluded that the recoverable amount was higher than the carrying value as at March 31, 2022, and no impairment was recognized within the Canadian Cannabis CGU (three and nine months ended March 31, 2021 - nil).

Operating segment impairment

Canadian Cannabis Operating Segment

Management concluded that the recoverable amount was lower than the carrying value as at March 31, 2022, and an impairment of $741.7 million was recognized within the Canadian Cannabis Operating Segment (three and nine months ended March 31, 2021 - nil).

International Cannabis Operating Segment

Management concluded that there were no impairment indicators during the three and nine months ended March 31, 2022.

Note 14 Convertible Debentures

	$
Balance, June 30, 2021	327,931
Interest paid	(23,847)
Accretion	25,667
Accrued interest	17,718
Debt repurchased	(16,510)
Unrealized loss on foreign exchange	3,001
Balance, March 31, 2022	333,960
Current portion	(38,102)
Long-term portion	295,858

On January 24, 2019, the Company issued $460.6 million (US$345.0 million) in aggregate principal amount of Convertible Senior Notes due 2024 (“Senior Notes”) issued at par value. Holders may convert all or any portion of the Senior Notes at any time. The Senior Notes are unsecured, mature on February 28, 2024 and bear cash interest semi-annually at a rate of 5.5% per annum. The initial conversion rate for the Senior Notes is 11.53 common shares in the capital of the Company (“Common Shares”) per US$1,000 principal amount of Senior Notes, equivalent to an initial conversion price of approximately US$86.72 per Common Share. As of March 31, 2022, $411.3 million (US$328.9 million) principal amount of the Senior Notes are outstanding.

In accordance with IFRS 9, the equity conversion option embedded in the Senior Notes was determined to be a derivative liability, which has been recognized separately at its fair value. Subsequent changes in the fair value of the equity conversion option are recognized through profit and loss (i.e. FVTPL). The equity conversion option was classified as an option liability as it can be settled through the issuance of a variable number of shares, cash or a combination thereof, based on the exchange rate and or trading price at the time of settlement.

 22

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

As of March 31, 2022, the conversion option had a fair value of $0.1 million (June 30, 2021 - $3.1 million) and the Company recognized a $0.4 million and $3.0 million unrealized gain on the derivative liability for the three and nine months ended March 31, 2022 (three and nine months ended March 31, 2021 - $2.3 million loss and $2.2 million loss). The fair value of the conversion option was determined based on the Kynex valuation model with the following assumptions: share price of US$4.00 (June 30, 2021 - US$9.04), volatility of 82% (June 30, 2021 - 87%), implied credit spread of 831 bps (June 30, 2021 - 1,302 bps), and assumed stock borrow rate of 10% (June 30, 2021 - 10 %). As of March 31, 2022, the Company has accrued interest payable of $3.4 million (June 30, 2021 - $8.6 million) on these Senior Notes.

During the three months ended March 31, 2022, the Company repurchased a total of 13.4 million (US$10.6 million) in principal amount of the Senior Notes at a total cost, including accrued interest, of $11.8 million (US$9.3 million), and recorded a loss of $(0.7) million within other gains (losses) in the statement of comprehensive loss.

During the nine months ended March 31, 2022, the Company repurchased a total of $20.5 million (US$16.1 million) in principal amount of the Senior Notes at a total cost, including accrued interest, of $17.9 million (US$14.1 million), and recorded a loss of $1.0 million within other gains (losses) in the statement of comprehensive loss.

Note 15 Lease liabilities

The changes in the carrying value of current and non-current lease liabilities are as follows:

	$
Balance, June 30, 2021	71,619
Lease additions	1,699
Disposal of leases	(2,068)
Lease payments	(7,545)
Lease term reduction and other items	(12,187)
Changes due to foreign exchange rates	(66)
Interest expense on lease liabilities	2,730
Balance, March 31, 2022	54,182
Current portion	(6,487)
Long-term portion	47,695

Note 16 Share Capital

(a) Authorized

The authorized share capital of the Company is comprised of the following:

i. Unlimited number of common voting shares without par value.

ii. Unlimited number of Class “A” Shares each with a par value of $1.00. As at March 31, 2022, no Class “A” Shares were issued and outstanding.

iii. Unlimited number of Class “B” Shares each with a par value of $5.00. As at March 31, 2022, no Class “B” Shares were issued and outstanding.

(b) Shares Issued and Outstanding

At March 31, 2022, 224,329,745 Common Shares (June 30, 2021 - 198,068,923) were issued and fully paid.

(c) Share Purchase Warrants

A summary of warrants outstanding is as follows:

	Warrants	Weighted average exercise price
	#	$
Balance, June 30, 2021	18,447,389	15.68
Balance, March 31, 2022	18,447,389	15.78

During the year ended June 30, 2021, the Company issued 11,500,000 and 6,600,000 U.S. dollar denominated share purchase warrants as part of the November 2020 and January 2021 Unit Offering, respectively (“Offering Warrants”). In accordance with IAS 32 - Financial Instruments: Presentation, these warrants were determined to be derivative liabilities as the proceeds receivable upon exercise may vary due to fluctuations in the foreign exchange rates. The Offering Warrants are recognized at their fair values based on quoted market prices with gains and losses recognized in other gains (losses) (Note 19) on the statement of comprehensive loss.

 23

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The following summarizes the warrant derivative liabilities:

				US$ equivalent
	November 2020 Offering	January 2021 Offering	Total	November 2020 Offering	January 2021 Offering	Total
	$	$	$	$	$	$
Balance, June 30, 2021	59,162	29,698	88,860	47,726	23,958	71,684
Unrealized gain on derivative liability	(45,947)	(25,572)	(71,519)	(37,159)	(20,658)	(57,817)
Balance, March 31, 2022	13,215	4,126	17,341	10,567	3,300	13,867

The following table summarizes the warrants that remain outstanding as at March 31, 2022:

Exercise Price ($)	Expiry Date	Warrants (#)
11.11 - 16.36	January 26, 2024 - November 30, 2025	17,919,197
112.46 - 116.09 (1)	August 9, 2023 to August 22, 2024	528,192
		18,447,389

⁽¹⁾ Includes the November 2020 and January 2021 Offering Warrants exercisable at US$9.00 and US$12.60, respectively.

Note 17 Share-Based Compensation

(a) Stock Options

A summary of stock options outstanding is as follows:

	Stock Options	Weighted Average Exercise Price
	#	$
Balance, June 30, 2021	4,108,006	$ 68.46
Granted	989,452	$ 7.97
Expired	(499,593)	$ 74.14
Forfeited	(367,640)	$ 31.01
Balance, March 31, 2022	4,230,225	$ 56.69

⁽¹⁾ No stock options were exercised during the three and nine months ended March 31, 2022. The weighted average share price on the date stock options were exercised during the three and nine months ended March 31, 2021 was $15.60 and $15.37.

The following table summarizes the stock options that are outstanding as at March 31, 2022:

Exercise Price ($)	Expiry Date	Weighted Average Remaining Life	Options Outstanding (#)	Options Exercisable (#)
4.86 - 30.00	August 25, 2021 - September 30, 2026	3.77	2,230,837	715,607
30.72 - 99.60	January 19, 2022 - January 17, 2025	1.42	844,163	759,539
100.80 - 133.80	January 2, 2023 - March 13, 2026	3.08	985,214	967,025
135.00 - 163.56	January 2, 2023 - May 21, 2024	1.41	170,011	153,404
		3.05	4,230,225	2,595,575

During the three and nine months ended March 31, 2022, the Company recorded aggregate share-based compensation expense of $1.5 million and $3.6 million (three and nine months ended March 31, 2021 - $1.8 million and $10.2 million) for all stock options granted and vested during the period. This expense is reflected in the share-based compensation line on the statement of comprehensive loss.

Stock options granted during the respective periods highlighted below were fair valued based on the following weighted average assumptions:

	Three months ended March 31,		Nine months ended March 31,
	2022	2021	2022	2021
Risk-free annual interest rate (1)	1.56%	0.25%	0.69%	0.27%
Expected annual dividend yield	- %	- %	- %	- %
Expected stock price volatility (2)	85.89%	110.32%	83.70%	104.80%
Expected life of options (years) (3)	2.47	2.42	2.50	2.39
Forfeiture rate	19.34%	18.98%	20.02%	18.03%

⁽¹⁾ The risk-free rate is based on Canada government bonds with a remaining term equal to the expected life of the options.

⁽²⁾ Volatility was estimated by using the average historical volatilities of the Company and certain competitors.

⁽³⁾ The expected life in years represents the period of time that options granted are expected to be outstanding.

 24

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The weighted average fair value of stock options granted during the three and nine months ended March 31, 2022 was $2.48 and $3.95 per option (three and nine months ended March 31, 2021 - $10.42 and $7.56 per option).

(b) Restricted Share Units (“RSU”) and Deferred Share Units (“DSU”)

A summary of the RSUs and DSUs outstanding are as follows:

	RSUs and DSUs	Weighted Average Issue Price of RSUs and DSUs
	#	$
Balance, June 30, 2021	1,040,544	$ 16.46
Issued	625,510	$ 7.94
Vested, released and issued	(297,510)	$ 22.50
Forfeited	(98,904)	$ 10.99
Balance, March 31, 2022	1,269,640	$ 11.27

⁽¹⁾ As of March 31, 2022, there were 1,145,832 RSUs and 123,808 DSUs outstanding (June 30, 2021 - 983,161 RSUs and 57,383 DSUs).

During the three and nine months ended March 31, 2022, the Company recorded share-based compensation of $1.6 million and $5.2 million (three and nine months ended March 31, 2021 - $2.1 million and $5.1 million) for RSUs and DSUs granted and vested during the period. This expense is included in the share-based compensation line on the statement of comprehensive loss.

The weighted average fair value of RSUs and DSUs granted in the three and nine months ended March 31, 2022 was $4.94 and $7.94 per unit (three and nine months ended March 31, 2021 - $16.36 and $11.15 per unit).

The following table summarizes the RSUs and DSUs that are outstanding as at March 31, 2022:

Weighted Average Issue Price ($)	Expiry Date	Outstanding (#)	Vested (#)
4.65 - 24.96	February 10, 2023 - February 10, 2025	1,253,525	240,000
33.48 - 88.68	August 3, 2021 - March 13, 2023	2,457	-
90.12 - 113.16	July 12, 2021 - September 10, 2022	13,658	8,202
		1,269,640	248,202

(c) Performance Share Units (“PSUs”)

A summary of the PSUs outstanding is as follows:

	PSUs	Weighted Average Issue Price of PSUs
	#	$
Balance, June 30, 2021	387,369	10.06
Issued	410,996	8.15
Forfeited	(37,256)	9.64
Balance, March 31, 2022	761,109	9.05

The following table summarizes the PSUs that are outstanding as at March 31, 2022:

Weighted Average Issue Price ($)	Expiry Date	Outstanding (#)	Vested (#)
8.22 - 12.96	September 10, 2023 - September 30, 2024	751,024	1,909
13.35 - 23.96	December 8, 2023 - February 11, 2024	10,085	-
		761,109	1,909

During the three and nine months ended March 31, 2022, the Company recorded share-based compensation of $0.5 million and $1.6 million (three and nine months ended March 31, 2021 - $0.3 million and $0.5 million) for PSUs granted during the period. This expense is included in the share-based compensation line on the statement of comprehensive loss.

PSUs granted during the three and nine months ended March 31, 2022 were fair valued based on the following weighted average assumptions:

 25

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

	Three and nine months March 31, 2022
Risk-free annual interest rate (1)	1.23%
Dividend yield	- %
Expected stock price volatility (2)	38.23%
Expected stock price volatility of peer group (2)	28.74%
Expected life of options (years) (3)	3.00
Forfeiture rate	10.30%
Equity correlation against peer group (4)	47.51 %

⁽¹⁾ The risk-free rate is based on Canada government bonds with a remaining term equal to the expected life of the PSUs.

⁽²⁾ Volatility was estimated by using the 20-day VWAP historical volatility of Aurora and the peer group of companies.

⁽³⁾ The expected life in years represents the period of time that the PSUs granted are expected to be outstanding.

⁽⁴⁾ The equity correlation is estimated by using 1-year historical equity correlations for the Company and the peer group of companies.

The weighted average fair value of PSUs granted during the three and nine months ended March 31, 2022 was $5.78 and $10.39 per unit (three and nine months ended March 31, 2021 - $15.71 and $9.44 per unit).

Note 18 Loss Per Share

The following is a reconciliation of basic and diluted loss per share:

Basic and diluted loss per share

	Three months ended March 31,		Nine months ended March 31,
	2022	2021	2022	2021
Net loss from continuing operations attributable to Aurora	($1,012,177)	($160,625)	($1,098,837)	($558,044)
Net loss from discontinued operations attributable to Aurora	$ -	$ -	$ -	($433)
Net loss attributable to Aurora shareholders	($1,012,177)	($160,625)	($1,098,837)	($558,477)
Weighted average number of Common Shares outstanding	214,656,230	193,882,255	203,559,555	159,544,790
Basic loss per share, continuing operations	($4.72)	($0.83)	($5.40)	($3.50)
Basic loss per share, discontinued operations	$0.00	$ -	$0.00	$0.00
Basic loss per share	($4.72)	($0.83)	($5.40)	($3.50)

Note 19 Other Gains (Losses)

		Three months ended March 31,		Nine months ended March 31,
	Note	2022	2021	2022	2021
		$	$	$	$
Share of net income (loss) from investment in associates	8	(961)	(9)	(344)	(499)
Gain (loss) on deemed disposal of significant influence investment		-	204	-	(1,239)
Loss on extinguishment of derivative investment	6(a)	-	-	(9,096)	-
Unrealized gain (loss) on derivative investments	7(b)	(6,569)	26,019	(16,602)	20,413
Unrealized gain (loss) on derivative liability	14, 16(c)	20,470	(22,467)	74,515	(41,745)
Unrealized gain (loss) on changes in contingent consideration fair value	24	-	-	(3)	(12)
Gain (loss) on debt modification		-	(986)	-	(765)
Gain (loss) on disposal of assets held for sale and property, plant and equipment		(612)	1,595	(3,656)	1,434
Government grant income	5	443	4,692	11,624	28,370
Provisions		-	-	-	(2,000)
Realized loss on repurchase of convertible debt	14	(691)	-	(1,005)	-
Other gains (losses)		(2,114)	(729)	(1,302)	(832)
Total other gains (losses)		9,966	8,319	54,131	3,125

 26

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 20 Supplemental Cash Flow Information

The changes in non-cash working capital are as follows:

	Nine months ended March 31,
	2022	2021
	$	$
Accounts receivable	16,809	10,644
Biological assets	(60,307)	(31,253)
Inventory	79,243	54,462
Prepaid and other current assets	2,840	(377)
Accounts payable and accrued liabilities	(4,979)	(36,664)
Income taxes payable	842	143
Deferred revenue	152	557
Provisions	-	(556)
Other current liabilities	1,577	200
Changes in operating assets and liabilities	36,177	(2,844)

Additional supplementary cash flow information is as follows:

	Nine months ended March 31,
	2022	2021
	$	$
Property, plant and equipment in accounts payable	2,997	3,759
Right-of-use asset additions	1,699	2,396
Capitalized borrowing costs	-	-
Amortization of prepaids	26,577	28,969
Interest paid	28,000	28,795
Interest received	578	1,596

Included in restricted cash is $4.1 million attributed to collateral held for letters of credit and corporate credit cards, $15.0 million for self- insurance, and $31.4 million of funds reserved for the Segregated Cell (Note 2(e)).

Note 21 Commitments and Contingencies

(a) Claims and Litigation

From time to time, the Company and/or its subsidiaries may become defendants in legal actions and the Company intends to take appropriate action with respect to any such legal actions, including by defending itself against such legal claims as necessary. Other than the claims described below, as of the date of this report, Aurora is not aware of any other material or significant claims against the Company.

On November 21, 2019, a purported class action proceeding was commenced in the United States District Court for the District of New Jersey against the Company and certain of its current and former directors and officers on behalf of persons or entities who purchased, or otherwise acquired, publicly traded Aurora securities between October 23, 2018 and February 6, 2020. An amended complaint was filed on September 21, 2020 which alleges, inter alia, that the Company and certain of its current and former officers and directors violated the federal securities laws by making false or misleading statements, materially overstated the demand and potential market for the Company’s consumer cannabis products; that the Company’s ability to sell products had been materially impaired by extraordinary market oversupply, that the Company’s spending growth and capital commitments were slated to exceed our revenue growth; that the Company had violated German law mandating that companies receive special permission to distribute medical products exposed to regulated irradiation techniques, and that the foregoing, among others, had negatively impacted the Company’s business, operations, and prospects and impaired the Company’s ability to achieve profitability. A motion to dismiss was filed on November 20, 2020 and granted by the court on July 7, 2021, however, the plaintiffs were given an opportunity to file a second amended complaint no later than September 7, 2021. Pursuant to the July 7, 2021 order, the plaintiffs filed a second amended complaint on September 7, 2021 which included new allegations pertaining to certain alleged financial misrepresentation and improper revenue recognition by the Company. The Company subsequently filed a motion to dismiss on December 6, 2021 and, and a reply to plaintiffs’ opposition on March 25, 2022. The Company is currently awaiting a decision on the motion to dismiss. While this matter is ongoing, the Company disputes the allegations and intends to continue to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matters described above. No provision has been recognized as at March 31, 2022 (December 31, 2021 - nil).

The Company and its subsidiary, ACE, have been named in a purported class action proceeding which commenced on June 18, 2020 in the Province of Alberta in relation to the alleged mislabeling of cannabis products with inaccurate THC/CBD content. The class action involves a number of other parties including Aleafia Health Inc., Hexo Corp, Tilray Canada Ltd., among others, and alleges that upon laboratory testing, certain cannabis products were found to have lower THC potency than the labeled amount, suggesting, among other things, that plastic containers may be leeching cannabinoids. While this matter is ongoing, the Company disputes the allegations and intends to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matter described above. No provision has been recognized as at March 31, 2022 (December 31, 2021 - nil).

 27

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

A claim was commenced by a party to a former term sheet on June 15, 2020 with the Queen's Bench of Alberta against Aurora and a former officer alleging a claim of breach of obligations under said term sheet, with the plaintiff seeking $18.0 million in damages. While this matter is ongoing, the Company believes the action to be without merit and intends to defend the claim. No provision has been recognized as of March 31, 2022 (December 31, 2021 - nil).

On August 10, 2020, a purported class action lawsuit was filed with the Queen's Bench of Alberta against Aurora and certain executive officers in the Province of Alberta on behalf of persons or entities who purchased, or otherwise acquired, publicly traded Aurora securities and suffered losses as a result of Aurora releasing statements containing misrepresentations during the period of September 11, 2019 and December 21, 2019. The Company disputes the allegations and intends to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matter described above. No provision has been recognized as at March 31, 2022 (December 31, 2021 - nil).

On October 2, 2020, a purported class action lawsuit was commenced in the United States District Court for the District of New Jersey against the Company and certain current and former executive officers on behalf of persons or entities who purchased or otherwise acquired Aurora securities between February 13, 2020 and September 4, 2020. The complaint alleges, inter alia, that the Company and certain current and former executive officers violated the federal securities laws by making false and/or misleading statements and/or failing to disclose that the Company had significantly overpaid for previous acquisitions and experienced degradation in certain assets, including its production facilities and inventory; the Company’s business transformation plan and cost reset failed to mitigate the foregoing issues; it was foreseeable that the Company would record significant goodwill and asset impairment charges; and as a result, the Company’s public statements were materially false and misleading. The Company disputes the allegations. On November 2, 2021, the plaintiffs voluntarily dismissed this action without prejudice as to all claims. This matter is now concluded. No provision has been recognized as at March 31, 2022 (December 31, 2021 - nil).

On January 4, 2021, a civil claim was filed with the Queen’s Bench of Alberta against Aurora and Hempco by a former landlord regarding unpaid rent in the amount of $8.9 million, representing approximately $0.4 million for rent in arrears and costs, plus $8.5 million for loss of rent and remainder of the term. The Company filed a statement of defense on March 24, 2021. While this matter is ongoing, the Company intends to continue to defend against the claims. No provision has been recognized as of March 31, 2022 (December 31, 2021 - nil).

The Company is subject to litigation and similar claims in the ordinary course of our business, including claims related to employment, human resources, product liability and commercial disputes. The Company has received notice of, or are aware of, certain possible claims against us where the magnitude of such claims is negligible, or it is not currently possible for us to predict the outcome of such claims, possible claims or lawsuits due to various factors including: the preliminary nature of some claims; an incomplete factual record; and the unpredictable nature of opposing parties and their demands. Management is of the opinion, based upon legal assessments and information presently available, that it is unlikely that any of these claims would result in liability to the Company, to the extent not provided for through insurance or otherwise, would have a material effect on the consolidated financial statements, other than the claims described above.

(b) Commitments

(i) Pursuant to a manufacturing agreement, the Company is contractually committed to purchase a minimum number of softgels each calendar year. If the Company fails to meet the required purchase minimum, then it is required to pay a penalty fee equal to the difference between the actual purchased quantity and the required purchase minimum multiplied by cost of the softgels. The Company expects to meet the purchase minimum for calendar 2022.

(ii) The Company has various lease commitments related to various office space, production equipment, vehicles, facilities and warehouses expiring between October 2021 and June 2033. The Company has certain leases with optional renewal terms that the Company may exercise at its option.

In addition to lease liability commitments disclosed in Note 25(b), the Company has the following future capital commitments and purchase commitments payments, which are due in the next five years and thereafter:

	$
Next 12 months	3,855
Over 1 year to 2 years	2,066
Over 2 years to 3 years	2,066
	7,987

 28

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 22 Revenue

The Company generates revenue from the transfer of goods and services over time and at a point-in-time from the revenue streams below. Net revenue from sale of goods is reflected net of actual returns and estimated variable consideration for future returns and price adjustments of $0.4 million and $4.8 million for the three and nine months ended March 31, 2022 (three and nine months ended March 31, 2021 - $3.2 million and $6.7 million). The estimated variable consideration is based on historical experience and management’s expectation of future returns and price adjustments. As of March 31, 2022, the net return liability for the estimated variable revenue consideration was $2.3 million (June 30, 2021 - $1.5 million) and is included in deferred revenue on the condensed consolidated interim statements of financial position.

Three Months Ended March 31, 2022	Point-in-time	Over-time	Total
	$	$	$
Cannabis
Revenue from sale of goods	56,490	-	56,490
Revenue from provision of services	-	377	377
Excise taxes	(6,433)	-	(6,433)
Net Revenue	50,057	377	50,434

Three Months Ended March 31, 2021	Point-in-time	Over-time	Total
	$	$	$
Cannabis
Revenue from sale of goods	63,555	-	63,555
Revenue from provision of services	-	490	490
Excise taxes	(8,884)	-	(8,884)
Net Revenue	54,671	490	55,161

Nine months ended March 31, 2022	Point-in-time	Over-time	Total
	$	$	$
Cannabis
Revenue from sale of goods	194,380	-	194,380
Revenue from provision of services	-	1,369	1,369
Excise taxes	(24,625)	-	(24,625)
Net Revenue	169,755	1,369	171,124

Nine months ended March 31, 2021	Point-in-time	Over-time	Total
	$	$	$
Cannabis
Revenue from sale of goods	224,428	-	224,428
Revenue from provision of services	-	1,639	1,639
Excise taxes	(35,640)	-	(35,640)
Net Revenue	188,788	1,639	190,427

 29

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Note 23 Segmented Information

During the year ended June 30, 2021, the Company had two reportable operating segments: (i) Cannabis and (ii) Horizontally Integrated Businesses. The goodwill associated with all acquisitions were allocated to the Cannabis operating segment. During the nine months ended March 31, 2022, the Company changed its internal management reporting and accordingly, identified the following two reportable operating segments: (i) Canadian Cannabis; and (ii) International Cannabis. The reorganization of the Company’s reporting structure changed the composition of its reportable segments and required that goodwill be reassigned to the operating segments using a relative fair value allocation approach. Assets and liabilities were also reassigned to the reporting segments based on the assets that would be employed in, or the liabilities related to, the operations of each reporting segment, and the assets or liabilities that would be considered in determining the fair value of each reporting segment. After reorganization, the Company’s reporting segments with goodwill include: (i) Canadian Cannabis; and (ii) International Cannabis. There were no indicators of impairment prior to the change in operating segments. Prior period disclosures have been restated based on the new operating segments.

Operating Segments	Canadian Cannabis	International Cannabis	Corporate (1)	Total
	$	$	$	$
Nine months ended March 31, 2022
Net revenue	120,495	50,629		171,124
Gross profit before fair value adjustments	(19,863)	25,534		5,671
Selling, general, and administrative expense	101,110	15,632	11,605	128,347
Income (loss) from operations before taxes and discontinued operations	(1,036,440)	7,089	(70,629)	(1,099,980)
Nine months ended March 31, 2021
Net revenue	163,829	25,372	1,226	190,427
Gross profit before fair value adjustments	(39,714)	9,842	633	(29,239)
Selling, general and administrative expense	103,539	15,783	8,411	127,733
Income (loss) from operations before taxes and discontinued operations	(403,224)	429	(153,064)	(555,859)

⁽¹⁾ Net (loss) income under the Corporate allocation includes fair value gains and losses from investments in marketable securities, derivatives and investment in associates. Corporate and administrative expenditures such as regulatory fees, share based compensation and financing expenditures relating to debt issuances are also included under Corporate.

Operating Segments	Canadian Cannabis	International Cannabis	Corporate (1)	Total
	$	$	$	$
Three months ended March 31, 2022
Net revenue	35,857	14,577	-	50,434
Gross profit before fair value adjustments	(17,954)	7,951	-	(10,003)
Selling, general, and administrative expense	30,853	5,075	3,702	39,630
Income (loss) from operations before taxes and discontinued operations	(950,672)	(2,720)	(58,985)	(1,012,377)
Three months ended March 31, 2021
Net revenue	45,459	8,476	1,226	55,161
Gross profit before fair value adjustments	(73,139)	3,955	633	(68,551)
Selling, general and administrative expense	33,053	4,953	3,678	41,684
Income (loss) from operations before taxes and discontinued operations	(139,279)	8,442	(29,917)	(160,754)

⁽¹⁾ Net (loss) income under the Corporate allocation includes fair value gains and losses from investments in marketable securities, derivatives and investment in associates. Corporate and administrative expenditures such as regulatory fees, share based compensation and financing expenditures relating to debt issuances are also included under Corporate.

 30

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

Geographical Segments	Canada	EU	Other	Total
	$	$	$	$
Non-current assets other than financial instruments
March 31, 2022	630,507	189,267	19,324	839,098
June 30, 2021	1,774,154	49,164	41,787	1,865,105
Three months ended March 31, 2022
Net revenue	35,857	14,311	266	50,434
Gross profit	(17,954)	8,410	(459)	(10,003)
Three months ended March 31, 2021
Net revenue	45,459	8,476	1,226	55,161
Gross profit (loss)	(73,139)	3,955	633	(68,551)
Nine months ended March 31, 2022
Net revenue	120,495	49,698	931	171,124
Gross profit	(19,863)	27,046	(1,512)	5,671
Nine months ended March 31, 2021
Net revenue	163,263	24,007	3,157	190,427
Gross profit (loss)	(40,736)	9,697	1,800	(29,239)

Included in net revenue arising from the Canadian Cannabis operating segment for the three months ended March 31, 2022 are net revenues of approximately $4.9 million from Customer A (three months ended March 31, 2021 - Customer A $6.7 million, Customer B - $6.0 million), each contributing 10% or more to the Company’s net revenue. All of these customers are government bodies for sales of cannabis in the consumer market.

There were no customers that individually contributed 10% or more to the Company’s net revenues arising from the Canadian cannabis operating segment for the nine months ended March 31, 2022 (nine months ended March 31, 2021 - Customer A $22.7 million).

There were no single customers that contributed 10 per cent of more to the Company’s net revenue arising from the International Cannabis operating segment for the three and nine months ended March 31, 2022 (three and nine months ended March 31, 2021 - nil).

No other single customers contributed 10 per cent or more to the Company’s net revenue during the three and nine months ended March 31, 2022 and 2021.

Note 24 Fair Value of Financial Instruments

Financial instruments are measured either at fair value or at amortized cost. The table below lists the valuation methods used to determine the fair value of each financial instrument.

	Fair Value Method
Financial Instruments Measured at Fair Value
Marketable securities	Closing market price of Common Shares as of the measurement date (Level 1)
Derivatives	Closing market price (Level 1) or Black-Scholes, Binomial, Monte-Carlo & FINCAD valuation model (Level 2 or 3)
Contingent consideration payable	Discounted cash flow model (Level 3)
Derivative liability	Closing market price of warrants (Level 1) or Kynex valuation model (Level 2)
Financial Instruments Measured at Amortized Cost
Cash and cash equivalents, restricted cash, accounts receivable, loans receivable	Carrying amount (approximates fair value due to short-term nature)
Accounts payable and accrued liabilities, other current and long-term liabilities	Carrying amount (approximates fair value due to short-term nature)
Lease receivable, convertible debentures, lease liabilities	Carrying value discounted at the effective interest rate which approximates fair value

 31

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The carrying values of the financial instruments at March 31, 2022 are summarized in the following table:

	Amortized cost	FVTPL	Designated FVTOCI	Total
	$	$	$	$
Financial Assets
Cash and cash equivalents	429,894	-	-	429,894
Restricted cash	50,658	-	-	50,658
Accounts receivable, excluding sales taxes and lease receivable	35,139	-	-	35,139
Marketable securities	-	-	2,313	2,313
Derivatives	-	29,737	-	29,737
Lease receivable	6,091	-	-	6,091
Financial Liabilities
Accounts payable and accrued liabilities	53,981	-	-	53,981
Convertible debentures	333,960	-	-	333,960
Contingent consideration payable	-	225	-	225
Other current liabilities	12,434	-	-	12,434
Lease liabilities	54,182	-	-	54,182
Derivative liability	-	17,424	-	17,424
Other long-term liabilities	122	-	-	122

.

The following is a summary of financial instruments measured at fair value segregated based on the various levels of inputs:

	Note	Level 1	Level 2	Level 3	Total
		$	$	$	$
As at March 31, 2022
Marketable securities	7(a)	2,313	-	-	2,313
Derivative assets	7(b)	-	13,859	15,878	29,737
Contingent consideration payable		-	-	225	225
Derivative liability	14, 16(c)	17,341	83	-	17,424
As at June 30, 2021
Marketable securities	7(a)	3,751	-	-	3,751
Derivative assets	7(b)	-	42,477	16,905	59,382
Contingent consideration payable		-	-	374	374
Derivative liability	14, 16(c)	88,860	3,079	-	91,939

There have been no transfers between fair value categories during the period.

Note 25 Financial Instruments Risk

The Company is exposed to a variety of financial instrument related risks. The Board mitigates these risks by assessing, monitoring and approving the Company’s risk management processes.

(a) Credit risk

Credit risk is the risk of a potential loss to the Company if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company is moderately exposed to credit risk from its cash and cash equivalents, accounts receivable and loans receivable. The risk exposure is limited to their carrying amounts reflected on the statement of financial position. The risk for cash and cash equivalents is mitigated by holding these instruments with highly rated Canadian financial institutions. Certain restricted funds in the amount of $31.4 million are retained by an insurer under the Segregated Accounts Companies Act governed by the Bermuda Monetary Authority. As the Company does not invest in asset-backed deposits or investments, it does not expect any credit losses. The Company periodically assesses the quality of its investments and is satisfied with the credit rating of the financial institutions and the investment grade of its Guaranteed Investment Certificates (“GICs”). The Company mitigates the credit risk associated with the loans receivable by managing and monitoring the underlying business relationship.

The Company provides credit to certain customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. Credit risk is generally limited for receivables from government bodies, which generally have low default risk. Credit risk for non-government wholesale customers is assessed on a case-by-case basis and a provision is recorded where required. As of March 31, 2022, $13.8 million of accounts receivable, net of allowances, are from non-government wholesale customers (June 30, 2021 - $7.0 million). As of March 31, 2022, the Company recognized a $5.3 million provision for expected credit losses (June 30, 2021 - $5.4 million).

 32

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

The Company’s aging of trade receivables was as follows:

	March 31, 2022	June 30, 2021
	$	$
0 - 60 days	20,347	36,195
61+ days	5,108	5,835
	25,455	42,030

During the three and nine months ended March 31, 2022, the Company recorded an impairment of $10.5 million against the outstanding loans receivable balance related to the Company’s joint venture, Auralux Enterprises Ltd.

The Company’s contractual cash flows from lease receivables is as follows:

	Note	March 31, 2022
		$
Next 12 months		1,900
Over 1 year to 2 years		2,237
Over 2 years to 3 years		1,264
Over 3 years to 4 years		385
Over 4 years to 5 years		281
Thereafter		315
Total undiscounted lease payments receivable		6,382
Unearned finance income		(291)
Total lease receivable		6,091
Current	4	(1,305)
Long-term		4,786

(b) Liquidity risk

The composition of the Company’s accounts payable and accrued liabilities was as follows:

	March 31, 2022	June 30, 2021
	$	$
Trade payables	8,570	13,277
Accrued liabilities	27,182	29,883
Payroll liabilities	15,475	9,247
Excise tax payable	870	4,672
Other payables	1,884	865
	53,981	57,944

In addition to the commitments outlined in Note 21, the Company has the following undiscounted contractual obligations as at March 31, 2022, which are expected to be payable in the following respective periods:

	Total	≤1 year	Over 1 year - 3 years	Over 3 years - 5 years	> 5 years
	$	$	$	$	$
Accounts payable and accrued liabilities	53,981	53,981	-	-	-
Convertible notes and interest (1)(2)	456,495	22,619	433,876	-	-
Lease liabilities (2)	70,870	9,455	24,720	19,648	17,047
Contingent consideration payable (3)	225	225	-	-	-
	581,571	86,280	458,596	19,648	17,047

⁽¹⁾ Assumes the principal balance of the debentures outstanding at March 31, 2022 remains unconverted and includes the estimated interest payable until the maturity date.

⁽²⁾ Includes interest payable until maturity date.

⁽³⁾ Includes $0.1 million payable in cash, with the remainder payable in cash, shares, or a combination of both at Aurora’s sole discretion.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations associated with its financial liabilities when they are due. The Company manages liquidity risk through the management of its capital structure and resources to ensure that it has sufficient liquidity to settle obligations and liabilities when they are due. Our ability to fund our operating requirements depends on future operating performance and cash flows, which are subject to economic, financial, competitive, business and regulatory conditions, and other factors, some of which are beyond our control, such as the potential impact of COVID-19. Our primary short-term liquidity needs are to fund our net operating losses, capital expenditures to maintain existing facilities, and lease payments. Our medium-term liquidity needs primarily relate to debt repayments and lease payments. Our long-term liquidity needs primarily relate to potential strategic plans.

 33

AURORA CANNABIS INC.

Notes to the Condensed Consolidated Interim Financial Statements

Three and nine months March 31, 2022 and 2021

(Unaudited – Amounts reflected in thousands of Canadian dollars, except share and per share amounts)

As of March 31, 2022, the Company has access to the following capital resources available to fund operations and obligations:

• $429.9 million cash and cash equivalents; and

• US$887.6 million securities registered for sale under the 2021 Shelf Prospectus filed on March 30, 2021 (the “2021 Shelf Prospectus”) for future financings or issuances of securities, including US$$187.6 million remaining securities for sale under the 2021 at-the-market (ATM) program (the “ATM Program”). Volatility in the cannabis industry, stock market and the Company’s share price may impact the amount and our ability to raise financing under the 2021 Shelf Prospectus.

From time-to-time, management may also consider the sale of its marketable securities and shares held in publicly traded investments in associates to support near term cash and liquidity needs.

Based on all of the aforementioned factors, the Company believes that its reduction of operating costs, current liquidity position, and access to the 2021 Shelf Prospectus are adequate to fund operating activities and cash commitments for investing, financing and strategic activities for the foreseeable future.

Note 26 Asset Acquisition and Non-controlling Interest (“NCI”)

Growery B.V.

On November 12, 2021, the Company, through its wholly-owned indirect subsidiary, Aurora Nederland B.V., entered into a sale and purchase agreement to purchase 40% of the issued and outstanding shares in Growery B.V. (“Growery”). The Company controls Growery as it has the right to nominate two of three members of the Supervisory Board of Growery, and decisions require a simple majority. Based on having a controlling interest, the Company has consolidated Growery’s results in these consolidated financial statements.

The Company accounted for this purchase as an asset acquisition. In connection with the asset acquisition, the Company made an upfront cash payment of $0.6 million (EUR 0.4 million). In addition, the Company is obligated to make aggregate cash milestone payments of up to $5.8 million (EUR $4.0 million) upon Growery achieving sufficient profits available for distribution, and up to $4.3 million (EUR 3.0 million) upon Growery achieving certain revenue targets. The Company recognized NCI of $0.9 million (EUR 0.6 million) based on its proportion share of Growery’s net assets. The difference between the purchase price and the net assets acquired has been allocated to intangible assets. A definite life intangible asset license of $2.0 million (EUR 1.4 million) has been recognized in these financial statements. The Company incurred transaction costs of $0.1 million (EUR 0.1 million) which have been capitalized to the net assets acquired.

The change in non-controlling interest is as follows:

	$
Non-controlling interest on initial capital contribution	865
Share of (loss) profit for the period	(365)
Balance March 31, 2022	500

Netherlands-based Growery is in the business of cultivation, production and sale of recreational cannabis. Growery is one of the few license holders permitted to participate in the Controlled Cannabis Supply Chain Experiment (the “CCSC”). The CCSC is scheduled to be in effect for a minimum of four years, during which the Dutch government will evaluate if the rules of the CCSC should be expanded nationally.

Note 27 Subsequent Events

On March 22, 2022, the Company announced that it has reached an agreement to acquire all of the issued and outstanding shares of TerraFarma Inc. (parent company of Thrive Cannabis) ("Thrive") (the "Transaction"). The Transaction includes the aggregate consideration of $38 million payable in cash and Common Shares, plus two earnout amounts payable in Common Shares or cash (at the election of Aurora), if applicable, based on Thrive achieving certain revenue targets within two years of closing of the Transaction. The Transaction closed on May 5, 2022.

On May 11. 2022, the Company repurchased a total of $128.0 million (US$100.0 million) in principal amount of Senior Notes (Note 14) at a total cost, including accrued interest, of $122.9 million (US$96.0 million).

 34

EX-99.2

Exhibit 99.2

AURORA CANNABIS INC.

Interim Management’s Discussion & Analysis

(Unaudited)

For the three and nine months ended March 31, 2022 and 2021

(in Canadian Dollars)

Interim Management’s Discussion & Analysis

Table of Contents

Business Overview	3
Condensed Statement of Comprehensive Loss	6
Key Quarterly Financial and Operating Results	7
Key Developments During and Subsequent to the Three Months Ended March 31, 2022	7
Financial Review	8
Liquidity and Capital Resources	14
Related Party Transactions	17
Critical Accounting Estimates	17
Change in Accounting Policies	18
Recent Accounting Pronouncements	19
Financial Instruments	19
Financial Instruments Risk	21
Summary of Outstanding Share Data	21
Historical Quarterly Results	22
Risk Factors	23
Internal Controls Over Financial Reporting	24
Cautionary Statement Regarding Forward-Looking Statements	24
Cautionary Statement Regarding Certain Non-GAAP Performance Measures	25

 2  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Interim Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended March 31, 2022

The following Interim Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of Aurora Cannabis Inc. (“Aurora” or the “Company”) should be read in conjunction with both the Company’s annual audited consolidated financial statements as at and for the year ended June 30, 2021 (the “Annual Financial Statements”), and the condensed consolidated interim financial statements as at and for the three and nine months ended March 31, 2022 and the accompanying notes thereto (the “Financial Statements”), which have been prepared in accordance with International Accounting Standards 34 - Interim Financial Reporting (“IAS 34”) of International Financial Reporting Standards (“IFRS”). The MD&A has been prepared as of May 11, 2022 pursuant to the disclosure requirements under National Instrument 51-102 - Continuous Disclosure Obligations (“NI 51-102”) of the Canadian Securities Administrators (“CSA”). Under the United States (“U.S.”) / Canada Multijurisdictional Disclosure System, we are permitted to prepare the MD&A in accordance with Canadian disclosure requirements which may differ from U.S. disclosure requirements.

Given the Company’s recent business transformation initiatives to realign its operational footprint and increase financial flexibility, this MD&A provides comparative disclosures for the third quarter ended March 31, 2022 (“Q3 2022”) to the third quarter ended March 31, 2021 (“Q3 2021”) and to the second quarter ended December 31, 2021 (“Q2 2022”). Management believes that these comparatives provide relevant and current information.

In the fourth quarter ended June 30, 2021 (“Q4 2021”), the Company identified a non-material prior period error for the valuation of biological assets and inventory. Additionally, the Company revised certain key inputs used in determining fair value less costs to sell (“FVLCS”), including the incorporation of an effective yield factor based on the potency of cannabis produced. Management has applied the change retrospectively. Refer to Note 2 of the Financial Statements.

All dollar amounts are expressed in thousands of Canadian dollars, except for share and per share amounts, and where otherwise indicated.

This MD&A contains forward-looking information within the meaning of applicable securities laws, and the use of Non-GAAP Measures (as defined below). Refer to “Cautionary Statement Regarding Forward-Looking Statements” and “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” included within this MD&A.

This MD&A, Financial Statements, and Annual Financial Statements, annual information form (“AIF”) and press releases have been filed in Canada on SEDAR at www.sedar.com and in the U.S. on EDGAR at www.sec.gov/edgar. Additional information can also be found on the Company’s website at www.auroramj.com.

Business Overview

Aurora was incorporated under the Business Corporations Act (British Columbia) on December 21, 2006 as Milk Capital Corp. Effective October 2, 2014, the Company changed its name to Aurora Cannabis Inc. The Company’s shares are listed on the Nasdaq Global Select Market (“Nasdaq”) and the Toronto Stock Exchange (“TSX”) under the trading symbol “ACB”, and on the Frankfurt Stock Exchange (“FSE”) under the trading symbol “21P”.

The Company’s head office and principal address is 500 - 10355 Jasper Avenue, Edmonton, Alberta, Canada, T5J 1Y6. The Company’s registered and records office address is Suite 1500 - 1055 West Georgia Street, Vancouver, British Columbia V6E 4N7.

The Company’s principal strategic business lines are focused on the production, distribution and sale of cannabis and cannabis-derivative products in Canada and internationally. The Company’s primary market opportunities are:

• Global medical cannabis market: Production, distribution and sale of pharmaceutical-grade cannabis products in countries around the world where permitted by government legislation. Currently, there are approximately 50 countries that have implemented regimes for some form of access to cannabis for medical purposes. The Company’s current principal medical markets are in Canada and Germany. Aurora has established a leading market position in both countries;

• Global consumer use cannabis market: Currently, only Canada and Uruguay have implemented federally-regulated consumer use of cannabis regimes and the Company has primarily focused on the opportunities in Canada. Longer-term, the Company believes that the increasing success of medical cannabis regimes globally may lead to increased legalization of consumer markets; and

• Global hemp-derived cannabidiol (“CBD”) market: The Company expects consumer demand for products containing CBD derived from hemp plants to be an exciting growth opportunity in the coming years. The Company believes that the most important near-term market opportunity for hemp-derived CBD is in the U.S. On May 28, 2020, the Company acquired Reliva, LLC (“Reliva”), a U.S. company based in Massachusetts, which specializes in the distribution and sale of hemp-derived CBD products in the U.S. market.

Our Strategy

Aurora’s strategy is to leverage our diversified and scaled platform, our leadership in global medical markets, and our cultivation, science and genetics expertise and capabilities to drive profitability in our core Canadian and international operations in order to build sustainable, long-term shareholder value.

 3  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Medical leadership

Our established leadership in the profitable Canadian and International medical markets positions us well for new regulated medical market openings such as Israel, as well as potential U.S. federal legalization of medical cannabis. At the core of Aurora’s objective to achieve near term positive EBITDA is our focus on maintaining and growing our industry leading Canadian and international medical cannabis operations.

Our Canadian medical platform is characterized by leading market share, high barriers to entry through regulatory expertise, investment in technology and distribution, and unwavering commitment to science, testing and compliance. Our Canadian medical operations allow for a direct-to-patient sales channel that does not rely on provincial wholesalers or private retailers to get product to patients. This direct-to-patient model allows Aurora to achieve sustainable gross profit margins of approximately 60% with substantially better pricing power relative to the Canadian adult-use segment.

Our leadership in International medical cannabis flower provides us with a high growth, highly profitable business segment that consistently delivers cash gross margins exceeding 60% (65% in Q3 2022). Our expertise in managing the complexity of multiple jurisdictions’ regulatory frameworks and relationships, as well as providing export and in-country EU GMP and other key certificated cannabis production, are capabilities that allow us to win new businesses as new medical - and recreational - markets open. For example, Aurora is one of the very few successful exporters of medical cannabis to Israel with what we believe are several of the single largest legal international cannabis shipments ever in July and December 2021. Additionally, in early November 2021, we announced an investment in Growery B.V. (“Growery”), one of 10 successful applicants for a cannabis production license in the Netherlands, the first federally regulated recreational market in Europe.

Science leadership: Genetics, Breeding, Biosynthetics

We believe that our scientific leadership and ongoing investment provides Aurora with a strong position to win in premium consumer categories driven by what we believe to be our industry leading genetics and breeding program. The breeding program, located at Aurora Coast, the state-of-the-art facility in Vancouver Island’s Comox Valley, is expected to drive revenues by injecting rotation and variety into our product pipeline, and has screened over 7,000 unique cultivars in 2021. In August and September 2021, Aurora launched the first three new proprietary cannabis cultivars - Stonefruit Sunset, Driftwood Diesel, and Lemon Rocket, all of which have the distinctive terpene profiles and high THC potency (in the mid 20% range) that are highly desired by cannabis consumers. In Q4 2022, Aurora is launching an additional six new cultivars, across its brand portfolio, which originated from Aurora’s proprietary genetics and breeding program. The genetics and breeding program is also expected, over time, to generate incremental, capital efficient revenue through license agreements for these genetic innovations to other licensed producers. In November 2021, we further strengthened our leadership with the launch our new genetics licensing business unit - Occo.

Finally, we also believe that our intellectual property includes the most efficient path for cannabinoid biosynthetic production, which puts us in what we believe to be a pivotal position with most biosynthetics work being undertaken in the cannabis industry, which we are actively working to build, partner, enforce, and protect.

Global and U.S. expansion

We believe that the global expansion of cannabis medical and recreational markets is just beginning. The Company believes its strengths in navigating complex regulatory environments, compliance, testing and product quality are essential skills that create a repeatable, credible and portable process to new market development. These strengths drive our leadership in international medical markets which should allow us to win as new medical markets emerge and potentially transition to recreational markets. For instance, Aurora and its partner won three of nine awarded tenders, representing all of the available dry flower tenders, in the French medical cannabis trial program. In addition, and as discussed above, Aurora has invested in Growery B.V., located in the Netherlands.

We also believe that the U.S. cannabis market will eventually be federally regulated, with states’ rights respected, in a framework similar to every other comparable market. The timeframe for this is unknown but Aurora is well positioned to create significant value for our shareholders once that federal permissibility allows. Our strategic strengths of medical and regulatory expertise in a federal framework, and our scientific expertise, including genetics, breeding, and biosynthetics, position us as a partner of choice and position us to be successful in lucrative components of the cannabis value chain.

Leadership in a rapidly maturing industry

Aurora believes that profitable growth, smart capital allocation and balance sheet health are critical success factors in such a dynamic and rapidly developing global industry. Our medical business, with country diversification, growth, and strong gross margins provide the foundation for profitability. To complete the progression to profitability, Aurora is continuing to right size SG&A costs, centralize and optimize production facilities, and shift the Company’s portfolio in the Canadian consumer business to the higher quality, higher margin segments of the market.

Aurora has one of the strongest balance sheets in the Canadian Cannabis industry with approximately $283 million of cash on hand as of May 11, 2022, inclusive of the repurchase of an additional $128.0 million in principal amount of Senior Notes at a total cost, including accrued interest, of $122.9 million subsequent to March 31, 2022, and access to securities registered for sale under a base shelf prospectus filed on March 30, 2021 (the “2021 Shelf Prospectus”) currently covering approximately US$887.6 million of issuable securities, including US$187.6 million remaining securities for sale under the 2021 at-the-market (ATM) program (the “ATM Program”). Cash flow continues to improve with $39.3 million used in operations and working capital in Q3 2022, and minimal levels of capital expenditures.

Key Q3 Results

Revenue and Gross Margin Update

Aurora’s leading medical businesses in Canada and Europe continued to perform exceptionally well in Q3 2022 and delivered 78% (Q2 2022 - 76%, Q3 2021 - 66%) of the Company’s revenue and 92% (Q2 2022 - 90%, Q3 2021 - 79%) of adjusted gross profit before fair value adjustments.

 4  |  AURORA CANNABIS INC.            Q3 2022 MD&A

The Canadian consumer business continues to be challenged reflecting the ongoing macro challenges of the market, including significant industry-wide excess inventory and increased pressure on older SKUs, which together have resulted in price compression. Aurora has focused on maximizing gross margins and profitability by leveraging the Company’s low-cost production facilities, and selectively entering categories that have higher margins. During the quarter, the Company also announced the acquisition of Thrive Cannabis, an ultra premium producer and brand (“Greybeard”). The transaction closed on May 5, 2022 and is meant to accelerate the repositioning of the Company’s consumer business to the core and premium segments of the market.

Total cannabis net revenue, net of provisions, decreased to $50.4 million in Q3 2022, compared to $60.6 million in Q2 2022 as the Company shipped lower volumes into the export market as permits from Israel remain difficult to predict quarter to quarter. Also impacting Q3 2022 revenue was lower consumer cannabis net revenue as a result of industry-wide pricing pressures across our portfolio, exacerbated by covid-related retail store closures in key provinces for the Company’s premium offerings.

In Q3 2022, total medical cannabis net revenues of $39.4 million continue to deliver an adjusted gross margin on medical cannabis net revenue in the mid 60% range, with 64% in Q3 2022 (Q2 2022 - 63%, Q3 2021 - 53%). This strong margin profile continues to remain steady in the Company’s target range above 60% and is an important gross profit driver that distinguishes Aurora from its major competitors.

In Q3 2022, Aurora’s international medical cannabis net revenue of $14.6 million (Q2 2022 - $19.8 million, Q3 2021 - $9.4 million) showed 55% growth versus the prior year comparative quarter and decreased 26% versus the previous quarter. The sequential revenue decrease was completely a result of $8.5 million of net sales generated from our Israel supply agreement in the previous quarter. Excluding the impact of Israeli sales, net international medical revenue increased sequentially by $1.8 million and was driven by growth in key markets including Germany, Poland, the UK, and Australia.

The Company’s Canadian medical cannabis net revenue decreased slightly to $24.8 million in Q3 2022 (Q2 2022 - $26.0 million; Q3 2021 - $26.9 million). The Company is repositioning its Canadian medical cannabis business to focus on insured patient groups who exhibit lower price sensitivity which provides more predictable revenue at higher gross margins than most other patient groups. Insured patient groups represented almost 80% of the Company’s Q3 2022 Canadian medical cannabis net revenues.

In Q3 2022, consumer cannabis net revenue was $10.3 million (Q2 2022 - $14.4 million, Q3 2021 - $18.0 million) with an adjusted gross margin of 29% (Q2 2022 - 23%, Q3 2021 - 33%). Sequentially, the decline in consumer cannabis net revenue was due mainly to industry-wide pricing pressures across our portfolio and was exacerbated by covid-related retail store closures in key Canadian provinces for the Company’s premium offerings.

Gross margin before fair value adjustments on cannabis net revenue was negative 20% in Q3 2022 as compared to negative 18% in Q2 2022 which includes $27.1 million in inventory net impairment provisions and destruction (Q2 2022 - $31.6 million, Q3 2021 - $82.9 million) as the Company clears out aged and obsolete inventory as facilities are rationalized and product portfolios are repositioned. Included in Q3 2022 cannabis gross margin before fair value adjustments are also $6.8 million (Q2 2022 - $11.5 million, Q3 2021 - $10.0 million) depreciation charges in cost of sales.

Excluding the inventory impairment provisions and out of period adjustments, adjusted gross margin before fair value adjustments (“adjusted gross margin”) on cannabis net revenue for Q3 2022 remained strong and steady, and well above the industry average, at 54% compared to 53% in Q2 2022 and 44% in Q3 2021.

Medical adjusted gross margin: Adjusted gross margin before FV adjustments on medical cannabis net revenue was 64% in Q3 2022 compared to 63% in the prior quarter, showing the continued strength of the direct-to-patient model in Canada, and the increasing prominence of our high margin international medical business.

Consumer adjusted gross margin: Adjusted gross margin before FV adjustments on consumer cannabis net revenue was 29% for Q3 2022 compared to 23% in the prior quarter as the Company continues to shift toward a premium product portfolio and profitability.

SG&A Update

SG&A and research and development (“R&D”) expense was $42.3 million in Q3 2022 (Q2 2022 - $44.6 million, Q3 2021 - $45.1 million) which includes $2.0 million of restructuring related costs and $0.7 million of prior period employee-related accruals (Q2 2022 - $3.7 million, Q3 2021 - $2.1 million).

Excluding the non-routine items noted above, SG&A and R&D continued to be well controlled and declining at $39.5 million during Q3 2022 (Q2 2022 - $40.9 million, Q3 2021 - $43.0 million).

Capital Expenditures Update

Aurora reported approximately $6.3 million in capital expenditures for Q3 2022 which includes additions to intangible assets of $0.9 million (Q2 2022 - $3.1 million, Q3 2021 - $1.2 million) and cash from the disposal of property, plant and equipment of $16.2 million (Q2 2022 - $1.2 million, Q3 2021 - $(0.2) million).

No government grants related to capital expenditures were received in Q3 2022. In Q4 2021, the Company received a $3.6 million government grant related to the co-generation project at the Aurora River facility to further offset the capital expenditures. Management expects the project to qualify for an additional $3.3 million government grant related to the co-generation project during this fiscal year.

 5  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Adjusted EBITDA

Adjusted EBITDA, a Non-GAAP Measure and is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the “Adjusted EBITDA” section of this MD&A for the reconciliation.

Aurora reported an Adjusted EBITDA loss of $12.3 million in Q3 2022 (Q2 2022 - $9.0 million, Q3 2021 - $20.9 million). The increased Adjusted EBITDA loss as compared to the previous quarter is primarily driven by the $4.7 million reduction in adjusted gross profits before fair value adjustments resulting from the non-recurrence of the prior quarter’s sales into Israel, partially offset with a $1.4 million decrease in SG&A expenses, excluding restructuring out-of-period related expenses.

Non-cash goodwill and asset impairments

Resulting from the purposeful decisions taken by the Company’s management and board to accelerate the repositioning of Aurora’s production footprint and its shift toward a premium product portfolio, as well as the further announced cost reductions, management concluded that the carrying value of goodwill in the Canadian market segment was impaired and that asset specific impairments were required for production facilities being made redundant. Management also examined inventory balances and carrying values and concluded that there was excess inventory that did not fit with the Company’s shift to focus on premium margin products. As a result of these decisions, the Company recorded a number of one-time non-cash charges in Q3 2022 including a write down of goodwill of $741.7 million, asset-specific impairments of $176.1 million, and an inventory provision charge of $63.6 million.

Liquidity Update

At March 31, 2022 the Company reported $480.6 million (Q2 2022 - $383.8 million, Q3 2021 - $520.2 million) of cash and cash equivalents, including $50.7 million (Q2 2022 - $51.3 million, Q3 2021 - $50.0 million) of restricted cash.

During Q3 2022, the Company utilized cash in the following categories:

• Operations used net cash of $39.3 million, including working capital changes and $2.1 million in restructuring and severance payments;

• Investing activities provided cash of $12.5 million, including $16.2 million in proceeds from asset divestitures, offset by investment in capital assets and intangibles of approximately $6.3 million; and

• Financing activities provided cash of $126.9 million, including $139.2 million in net proceeds from the issuance of Common Shares under the ATM Program, offset by $11.5 million for early repurchase of convertible debt at an average of 86.1% of face value.

As of May 11, 2022 the Company had approximately $283 million of cash on hand and approximately $50 million of restricted cash, inclusive of the repurchase of an additional $128.0 million in principal amount of Senior Notes at a total cost, including accrued interest, of $122.9 million subsequent to March 31, 2022. The Company believes its cash on hand is sufficient to fund operations until the Company is cash flow positive. Additionally, the Company has access to US$887.6 million under the 2021 Shelf Prospectus, including the balance of a US$187.6 million pursuant to the ATM Program. During Q3 2022, the Company issued 25,672,749 common shares in the capital of the Company (“Common Shares) for gross proceeds of US$112.3 million under the US$300 million available securities for sale under the ATM Program.

COVID-19 Update

The COVID-19 pandemic has impacted revenue in the Canadian consumer market. As at the date of this report, all of the Company’s facilities in Canada and internationally continue to be operational and we continue to work closely with local, national and international government authorities to ensure that we are following the required protocols and guidelines related to COVID-19 within each region. Due to the rapid developments and uncertainty surrounding COVID-19, it is not possible to predict the impact that COVID-19 will have on the Company’s business, financial position and operating results in the future and as such, the Company cannot provide assurance that there will not be disruptions to its operations in the future. Refer to the “Risk Factors” section in the Annual MD&A for the year ended June 30, 2021 for further discussion on the potential impacts of COVID-19.

Condensed Statement of Comprehensive Loss

	Three months ended			Nine months ended
($ thousands)	March 31, 2022	December 31, 2021	March 31, 2021(1)(2)	March 31, 2022	March 31, 2021(1)(2)
Net revenue (3)	$50,434	$60,586	$55,161	$171,128	$190,427
Gross profit before FV adjustments	($10,003)	($11,067)	($68,551)	$5,675	($29,239)
Gross profit	($14,189)	$5,580	($81,436)	$16,839	($34,203)
Operating expenses	$58,192	$61,373	$57,495	$184,388	$190,421
Loss from operations	($72,381)	($55,793)	($138,931)	($167,549)	($224,624)
Other income (expense)	($939,996)	($19,718)	($21,823)	($932,431)	($331,235)
Net loss from continuing operations	($1,012,175)	($75,143)	($160,625)	($1,099,202)	($559,508)
Net income (loss) from discontinuing operations, net of taxes	-	-	-	-	($433)
Net loss	($1,012,175)	($75,143)	($160,625)	($1,099,202)	($559,941)

⁽¹⁾ Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the “Change in Accounting Policies and Estimates” section below for further detail.

⁽²⁾ As a result of the Company’s dissolution and divestment of its wholly owned subsidiaries, Hempco Food and Fiber Inc. (“Hempco”) and Aurora Hemp Europe (“AHE”) during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for more information about the divestitures.

⁽³⁾ Net revenue represents our total revenue exclusive of excise taxes levied by the Canada Revenue Agency (“CRA”) on the sale of medical and consumer cannabis products.

 6  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Key Quarterly Financial and Operating Results

($ thousands, except Operational Results)	Q3 2022	Q3 2021(1)(2)	$ Change	% Change	Q2 2022	$ Change	% Change
Financial Results
Total net revenue (3)	$50,434	$55,161	($4,727)	(9%)	$60,586	($10,152)	(17%)
Medical cannabis net revenue (3)(4a)	$39,359	$36,378	$2,981	8%	$45,748	($6,389)	(14%)
Consumer cannabis net revenue (3)(4a)	$10,339	$18,023	($7,684)	(43%)	$14,373	($4,034)	(28%)
Adjusted gross margin before FV adjustments on cannabis net revenue (4b)	54%	44%	N/A	10%	53%	N/A	1%
Adjusted gross margin before FV adjustments on medical cannabis net revenue (4b)	64%	53%	N/A	11%	63%	N/A	1%
Adjusted gross margin before FV adjustments on consumer cannabis net revenue (4b)	29%	33%	N/A	(4%)	23%	N/A	6%
SG&A expense	$39,630	$41,684	($2,054)	(5%)	$42,961	($3,331)	(8%)
R&D expense	$2,637	$3,398	($761)	(22%)	$1,625	$1,012	62%
Adjusted EBITDA (4c)	($12,263)	($20,928)	$8,665	41%	($9,040)	($3,223)	(36%)
Balance Sheet
Working capital	$577,566	$646,310	($68,744)	(11%)	$481,574	$95,992	20 %
Cannabis inventory and biological assets (5)	$118,729	$102,637	$16,092	16%	$139,625	($20,896)	(15) %
Total assets	$1,570,252	$2,839,155	($1,268,903)	(45%)	$2,485,384	($915,132)	(37) %
Operational Results - Cannabis
Average net selling price of dried cannabis excluding bulk sales (4)	$5.41	$5.00	$0.41	8%	$4.52	$0.89	20 %
Kilograms sold (6)	9,722	13,520	(3,798)	(28%)	13,043	(3,321)	(25) %

⁽¹⁾ Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the “Change in Accounting Policies and Estimates” section below for further detail.

⁽²⁾ As a result of the Company’s dissolution and divestment of its wholly-owned subsidiaries, Hempco and AHE, during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for additional information.

⁽³⁾ Includes the impact of actual and expected product returns and price adjustments (Q3 2022 - $0.4 million; Q2 2022 - $3.7 million; Q3 2021 - $3.2 million).

⁽⁴⁾ These terms are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the following sections for reconciliation of Non-GAAP Measures to the IFRS equivalent measure:

^a. Refer to the “Revenue” section for a reconciliation of cannabis net revenue to the IFRS equivalent.

^b. Refer to the “Cost of Sales and Gross Margin” section for reconciliation to the IFRS equivalent.

^c. Refer to the “Adjusted EBITDA” section for reconciliation to the IFRS equivalent.

⁽⁵⁾ Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables.

⁽⁶⁾ The kilograms sold is offset by the grams returned during the period.

Key Developments During and Subsequent to the Three Months Ended March 31, 2022

Operational Updates

Convertible Debt Buy Back

During Q3 2022, the Company repurchased a total of $13.4 million in principal amount of Senior Notes at a total cost, including accrued interest, of $11.8 million. Subsequent to March 31, 2022, the Company repurchased an additional $128.0 million in principal amount of Senior Notes at a total cost, including accrued interest, of $122.9 million. Aurora may, from time to time and subject to market conditions, repurchase its convertible notes, including in open market purchases and privately negotiated transactions.

At-The-Market (ATM) Program

During Q3, 2022, the Company issued 25,672,749 for gross proceeds of US$112.4 million under the ATM Program. As disclosed previously, management considers the ATM Program to be available to be utilized for strategic purposes.

Acquisition of Thrive

On March 22, 2022, the Company announced that it has reached an agreement to acquire all of the issued and outstanding shares of TerraFarma Inc. (parent company of Thrive Cannabis) ("Thrive") (the "Transaction"). The Transaction includes the aggregate consideration of $38 million payable in cash and Common Shares, plus two earnout amounts payable in Common Shares or cash (at the election of Aurora), if applicable, based on Thrive achieving certain revenue targets within two years of closing of the Transaction. The Transaction closed on May 5, 2022.

The Transaction is expected to strategically strengthen Aurora's position in the Canadian market by placing the Thrive team in charge of Aurora's Canadian recreational portfolio, advancing the shift in focus to innovative premium products including dried flower, pre-rolls, vapour products, and concentrates. It is anticipated that the Transaction will provide immediate positive Adjusted EBITDA to Aurora, and support the Company's path to Adjusted EBITDA profitability in the first half of fiscal 2023.

 7  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Redundant Facilities

Resulting from the purposeful decisions taken by the Company’s management and board to accelerate the repositioning of Aurora’s production footprint and its shift toward a premium product portfolio, as well as the further announced cost reductions, the Company concluded that its Aurora Sky, Valley, Anandia and Whistler Alpha Lake facilities are redundant. Valley, Anandia and Whisler Alpha Lake are expected to be closed by Q4 2022 and Aurora Sky is expected to be closed by Q3 2023.

Corporate Updates

Appointment of New Independent Director

On January 4, 2022, Chitwant Kohli was appointed to the Company’s Board of Directors.

Financial Review

Net Revenue

The Company primarily operates in the cannabis market. The table below outlines the revenue attributed to medical, consumer and bulk sales channels for the three and nine months ended March 31, 2022 and the comparative periods.

($ thousands)	Three months ended			Nine months ended
	March 31, 2022	December 31, 2021	March 31, 2021(2)	March 31, 2022	March 31, 2021(2)
Medical cannabis net revenue
Canada dried cannabis	12,911	13,483	13,917	39,578	43,543
Canada cannabis derivatives (1)	11,864	12,494	13,029	36,267	37,200
Canadian medical cannabis net revenue	24,775	25,977	26,946	75,845	80,743
International dried cannabis	13,282	21,432	8,830	50,139	26,415
International cannabis derivatives (1)	602	714	602	1,782	1,331
International cannabis provisions	700	(2,375)	-	(1,675)	-
International medical cannabis net revenue	14,584	19,771	9,432	50,246	27,746
Total medical cannabis net revenue	39,359	45,748	36,378	126,091	108,489
Consumer cannabis net revenue
Dried cannabis	8,628	11,828	14,806	34,514	59,858
Cannabis derivatives (1)	2,790	3,835	6,457	12,416	27,640
Net revenue provisions	(1,079)	(1,290)	(3,240)	(3,098)	(6,564)
Total consumer cannabis net revenue	10,339	14,373	18,023	43,832	80,934
Wholesale bulk cannabis net revenue
Dried cannabis	736	465	760	1,201	1,004
Wholesale bulk cannabis net revenue	736	465	760	1,201	1,004
Total net revenue	50,434	60,586	55,161	171,124	190,427

⁽¹⁾ Cannabis derivative net revenue includes cannabis oils, capsules, softgels, sprays, topicals, edibles, vaporizer net revenue and U.S. CBD product sales.

⁽²⁾ As a result of the Company’s dissolution and divestment of its wholly-owned subsidiaries Hempco and AHE during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for more information about the divestitures.

Medical Cannabis Net Revenue

For the three months ended March 31, 2022, the Company’s medical cannabis net revenue decreased by $6.4 million, or 14%, as compared to the prior quarter. The decrease was wholly attributable to lower sales into the Israeli market. Excluding the impact of sales to Israel, Q3 2022 international medical cannabis net revenue was up 16% due to a continuing strong presence in the German and UK markets. Israel continues to be a market that the Company believes has long term potential, however, procurement of export permits from the Israeli government remains difficult to predict and therefore results in uneven quarterly revenue growth from this emerging market.

For the three and nine months ended March 31, 2022, the Company’s medical cannabis net revenue increased by $3.0 million and $17.6 million, respectively, compared to the same periods in the prior year. The increase was primarily attributable to an increase in international cannabis net revenue of $5.2 million, or 55%, and $22.5 million or 81%, for the three and nine months ended March 31, 2022, respectively, as a result of the continued growth of important new markets including Poland, the UK, and Australia.

 8  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Consumer Cannabis Net Revenue

During the three and nine months ended March 31, 2022, consumer cannabis net revenue decreased by $4.0 million, $7.7 million and $37.1 million, respectively, as compared to the prior quarter, and as compared to the same periods in the prior year. The decrease is primarily attributable to increased competition leading to what we believe was irrational wholesale pricing and exacerbated by covid-related retail store closures in key provinces for the Company’s premium offerings.

Cost of Sales and Gross Margin

	Three months ended			Nine months ended
($ thousands)	March 31, 2022	December 31, 2021	March 31, 2021(1)(2)	March 31, 2022	March 31, 2021(1)(2)
Net revenue	50,434	60,586	55,161	171,128	190,427
Cost of sales	(60,437)	(71,653)	(123,712)	(165,453)	(219,666)
Gross profit before FV adjustments (3)	(10,003)	(11,067)	(68,551)	5,675	(29,239)
Changes in fair value of inventory sold	(42,927)	(25,304)	(50,368)	(80,873)	(98,596)
Unrealized gain on changes in fair value of biological assets	38,741	41,951	37,483	92,037	93,632
Gross profit	(14,189)	5,580	(81,436)	16,839	(34,203)
Gross margin	(28%)	9%	(148%)	10%	(18%)

⁽¹⁾ Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the “Change in Accounting Policies and Estimates” section below for further details.

⁽²⁾ As a result of the Company’s dissolution and divestment of its wholly-owned subsidiaries, Hempco and AHE, during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for additional information.

⁽³⁾ Gross profit (loss) before fair value adjustments is a Non-GAAP Measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A for the defined term.

During the three months ended March 31, 2022, gross profit increased by $67.2 million, or 83%, as compared to the same period in the prior year. The increase was primarily driven by a reduction of $55.9 million in inventory destruction and impairment charges, mostly attributable to more effective yields in cultivation and management of inventory, as the Company continues to position towards profitability. In addition, the Company reduced its net production costs by $9.5 million.

During the three months ended March 31, 2022, gross profit decreased by $19.8 million, or 354%, as compared to the prior quarter. During the three months ended March 31, 2022, gross profit was negative $14.2 million which included inventory destruction and impairment charges of $63.6 million, compared to $46.2 million in the prior quarter. The decrease was primarily driven by a $17.4 million increase in inventory destruction and impairment charges, partially attributed to the facility rationalization efforts to position Aurora towards profitability. In addition, there was a $3.2 million decrease in unrealized gain on changes in fair value of biological assets due to lower expected grams to be yielded from plants in production.

 9  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Adjusted Gross Margin

The table below outlines adjusted gross profit and margin before fair value adjustments for the indicated three month periods.

($ thousands)	Medical Cannabis	Consumer Cannabis	Wholesale Bulk Cannabis	Total
Three months ended March 31, 2022
Gross revenue	42,262	13,869	736	56,867
Excise taxes	(2,903)	(3,530)	0	(6,433)
Net revenue	39,359	10,339	736	50,434
Cost of sales	(31,275)	(23,242)	(5,920)	(60,437)
Gross profit (loss) before FV adjustments (1)	8,084	(12,903)	(5,184)	(10,003)
Depreciation	4,198	2,165	482	6,845
Inventory impairment and out-of-period adjustments in cost of sales (4)	12,873	13,749	3,806	30,428
Adjusted gross profit (loss) before FV adjustments (1)	25,155	3,011	(896)	27,270
Adjusted gross margin before FV adjustments (1)	64%	29%	(122%)	54%
Three months ended December 31, 2021
Gross revenue	48,716	19,779	465	68,960
Excise taxes	(2,968)	(5,406)	0	(8,374)
Net revenue	45,748	14,373	465	60,586
Cost of sales	(35,738)	(34,951)	(964)	(71,653)
Gross profit (loss) before FV adjustments (1)	10,010	(20,578)	(499)	(11,067)
Depreciation	6,773	4,468	276	11,517
Inventory impairment and out-of-period adjustments in cost of sales (4)	12,159	19,398	0	31,557
Adjusted gross profit (loss) before FV adjustments (1)	28,942	3,288	(223)	32,007
Adjusted gross margin before FV adjustments (1)	63%	23%	(48%)	53%
Three months ended March 31, 2021 (2)(3)
Gross revenue	39,457	23,828	760	64,045
Excise taxes	(3,079)	(5,805)	0	(8,884)
Net revenue	36,378	18,023	760	55,161
Cost of sales	(50,672)	(71,332)	(1,708)	(123,712)
Gross profit before FV adjustments (1)	(14,294)	(53,309)	(948)	(68,551)
Depreciation	4,107	5,781	138	10,026
Inventory impairment and out-of-period adjustments in cost of sales (4)	29,466	53,446	0	82,912
Adjusted gross profit before FV adjustments (1)	19,279	5,918	(810)	24,387
Adjusted gross margin before FV adjustments (1)	53%	33%	(107%)	44%

⁽¹⁾ These terms are Non-GAAP Measures and are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A.

⁽²⁾ Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the “Change in Accounting Policies and Estimates” section below for further detail.

⁽³⁾ As a result of the Company’s dissolution and divestment of its wholly-owned subsidiaries, Hempco and AHE, during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for more information about the divestiture.

⁽⁴⁾ Included in out-of-period adjustments is: Q3 2022 - $3.4 million related to correction of Q1 2022 and Q2 2022 biological assets fair value measurement; Q4 2021 - $0.9 million out-of-period revenue adjustment to reclassify prior period rebates against net revenue, $5.5 million cost of sales adjustment related to a catch-up of prior year raw material count reconciliations, offset by $0.3 million reallocated bonus accruals recognized in the current period; Q3 2021 - $0.2 million out-of-period revenue adjustment to reclassify prior period rebates against net revenue and $0.3 million reallocated bonus accruals recognized in the current period).

Medical Cannabis Adjusted Gross Margin

Adjusted gross margin before FV adjustments on medical cannabis net revenue was 64% for the three months ended March 31, 2022 as compared to 63% in the prior quarter and 53% for same period of the prior year. The continued strength of the Company’s medical adjusted gross margins reflect the direct-to-patient model in Canada and the increasing prominence of our high margin international medical business. The increase of 1% from Q2 2022 was due primarily to lower volumes of bulk flower sold to international markets in Q3 2022, as compared to the prior quarter which yield slightly lower adjusted gross margins. The increase of 11% from Q3 2021 was 15% attributed primarily to reductions in production costs, offset by a decrease of 4% in price reductions on certain products.

 10  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Consumer Cannabis Adjusted Gross Margin

Adjusted gross margin before FV adjustments on consumer cannabis net revenue was 29% for the three months ended March 31, 2022, compared to 23% in the prior quarter and 33% in the comparable prior year period. The increase of 6% from Q2 2022 was comprised of an increase of 7% related to the Company’s continuing shift toward a premium product portfolio, offset by a decrease of 1% in overall cash costs capitalized into inventory and biological assets. The decrease of 4% from Q3 2021 was primarily due to lower overall cash costs capitalized into inventory and biological assets.

Wholesale Bulk Cannabis Adjusted Gross Margin

Adjusted gross margin before FV adjustments on wholesale bulk cannabis net revenue was negative 122% for the three months ended March 31, 2022, compared to negative 48% in the prior quarter and negative 107% in the comparable prior year period. Wholesale bulk cannabis margins reflects the margins earned on the clear out of primarily aged and low potency cannabis at steep discounts.

Adjusted Gross Margin

The table below outlines adjusted gross profit and margin before fair value adjustments for the indicated nine month periods:

($ thousands)	Medical Cannabis	Consumer Cannabis	Wholesale Bulk Cannabis	Total
Nine Months Ended March 31, 2022
Gross revenue	134,888	59,660	1,201	195,749
Excise taxes	(8,797)	(15,828)	0	(24,625)
Net revenue	126,091	43,832	1,201	171,124
Cost of sales	(84,823)	(73,746)	(6,884)	(165,453)
Gross profit before FV adjustments (1)	41,268	(29,914)	(5,683)	5,671
Depreciation	15,396	11,468	758	27,622
Inventory impairment and out-of-period adjustments in cost of sales (4)	23,867	30,794	3,806	58,467
Adjusted gross profit before FV adjustments (1)	80,531	12,348	(1,119)	91,760
Adjusted gross margin before FV adjustments (1)	64%	28%	(93%)	54%
Nine Months Ended March 31, 2021 (2,3)
Gross revenue	117,642	107,421	1,004	226,067
Excise taxes	(9,153)	(26,487)	0	(35,640)
Net revenue	108,489	80,934	1,004	190,427
Cost of sales	(93,097)	(123,142)	(3,427)	(219,666)
Gross profit (loss) before FV adjustments (1)	15,392	(42,208)	(2,423)	(29,239)
Depreciation	13,672	15,391	167	29,230
Inventory impairment and out-of-period adjustments in cost of sales	30,447	56,719	0	87,166
Adjusted gross profit before FV adjustments (1)	59,511	29,902	(2,256)	87,157
Adjusted gross margin before FV adjustments (1)	55%	37%	(225%)	46%

⁽¹⁾ These terms are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A.

⁽²⁾ Amounts have been retroactively restated for the change in accounting policy for inventory costing relating to by-products and the allocation of production management staff salaries. Refer to the “Change in Accounting Policies” section below for further detail.

⁽³⁾ As a result of the Company’s dissolution and divestment of its wholly-owned subsidiaries, Hempco and AHE, during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for more information about the divestiture.

⁽⁴⁾ Included in out-of-period adjustments is: Q3 2022 - $3.4 million related to correction of Q1 2022 and Q2 2022 biological assets fair value measurement; Q4 2021 - $0.9 million out-of-period revenue adjustment to reclassify prior period rebates against net revenue, $5.5 million cost of sales adjustment related to a catch-up of prior year raw material count reconciliations, offset by $0.3 million reallocated bonus accruals recognized in the current period; Q3 2021 - $0.2 million out-of-period revenue adjustment to reclassify prior period rebates against net revenue and $0.3 million reallocated bonus accruals recognized in the current period).

Medical Cannabis Adjusted Gross Margin

Adjusted gross margin before FV adjustments on medical cannabis net revenue was 64% for the nine months ended March 31, 2022 as compared to 55% for same period of the prior year. The increase in adjusted gross margin before FV adjustments was primarily due to a result of a $9.7 million reduction in production costs, partially offset by overall decline in selling price in both domestic and international medical channels.

 11  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Consumer Cannabis Adjusted Gross Margin

Adjusted gross margin before FV adjustments on consumer cannabis net revenue decreased to 28% for the nine months ended March 31, 2022 as compared to 37% for same period of the prior year, which was primarily a result of a higher cost per gram of dried flower sold as the Company’s standard cost was updated for the impacts of the Sky cultivation reduction.

Wholesale Bulk Cannabis Adjusted Gross Margin

Adjusted gross margin before FV adjustments on consumer cannabis net revenue decreased to (93)% for the nine months ended March 31, 2022 as compared to (225)% for the same period of the prior year. Wholesale bulk cannabis margins represents the margins earned on the clear out of primarily aged and low potency cannabis at steep discounts.

Operating Expenses

	Three months ended			Nine months ended
($ thousands)	March 31, 2022	December 31, 2021	March 31, 2021(1)	March 31, 2022	March 31, 2021(1)
General and administration	23,696	28,698	28,516	82,699	85,433
Sales and marketing	15,934	14,263	13,168	45,652	42,300
Acquisition costs	585	209	-	969	1,104
Research and development	2,637	1,625	3,398	7,933	8,413
Depreciation and amortization	11,802	12,678	7,180	36,850	35,090
Share-based compensation	3,538	3,900	5,233	10,285	18,081

⁽¹⁾ As a result of the Company’s dissolution and divestment of its wholly owned subsidiaries, Hempco and AHE, during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for more information about the divestiture.

General and administration (“G&A”)

During the three months ended March 31, 2022, G&A expense decreased by $5.0 million and $4.8 million as compared to the prior quarter and to the same period in the prior year, respectively. Included in Q3 2022 G&A expense is $1.5 million in restructuring, severance and benefits related to the wind down of certain production facilities as part of our business transformation plan (three months ended March 31, 2021 - $2.3 million). Excluding these impacts, G&A expense for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021 would have been $21.6 million, $25.3 million, and $27.3 million, respectively. Management continues to endeavor to control spending in connection with its business transformation plan.

During the nine months ended March 31, 2022, G&A expenses decreased by $2.7 million as compared to the same nine month period in the prior year. Included in G&A expense for the nine months ended March 31, 2022 is $10.4 million in restructuring, severance and benefits, and prior year bonus accruals (nine months ended March 31, 2021 - $7.7 million). Excluding these impacts, G&A expense for the nine months ended March 31, 2022 and 2021 would have been $72.3 million and $77.8 million, respectively.

Sales and marketing (“S&M”)

During the three months ended March 31, 2022, S&M expense increased by $1.7 million as compared to the prior quarter. Included in S&M expense for the three months ended March 31, 2022 is $0.6 million in restructuring and out of period adjustments (three months ended December 31, 2021 - $0.2 million). Excluding these impacts, S&M expense for the three months ended March 31, 2022 and December 31, 2021 would have been $15.3 million and $14.0 million, respectively, and consistent with the prior quarter. Management continues to control spending in connection with its business transformation plan.

During the three and nine months ended March 31, 2022, S&M expense remained relatively consistent, experiencing a slight increase by $2.8 million and $3.4 million respectively, as compared to the prior year.

Research and development (“R&D”)

During the three months ended March 31, 2022, R&D expenses increased by $1.0 million as compared to the prior quarter, due to additional expenses related to the ramp-up of the Company’s Nordic production facility.

Depreciation and amortization

Depreciation and amortization expense for the three months ended March 31, 2022 has not changed materially from comparative periods as the Company’s operating capital base has remained relatively consistent during these periods.

Share-based compensation

During the three months ended March 31, 2022, share-based compensation expense decreased by $1.7 million as compared to the same period in the prior year. The decrease was primarily due to forfeitures and headcount reduction from our business transformation plan.

During the nine months ended March 31, 2022, share-based compensation expense decreased by $7.8 million for the reasons noted above.

 12  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Other income (expense)

For the three months ended March 31, 2022, other income (expense) was $(940.0) million and consisted mainly of: (i) $741.7 million impairment of goodwill; (ii) $176.1 impairment of property, plant and equipment; (iii) $25.8 million finance and other costs; (iv) $5.5 million impairment of investment in associates; (v) partially offset by other gains of $10.0 million.

For the nine months ended March 31, 2022, other income (expense) was $(932.4) million and consisted of: (i) $741.7 million impairment of goodwill; (ii) $180.4 impairment of property, plant and equipment; (iii) $57.0 million finance and other costs; (iv) $5.5 million impairment of investment in associates; (v) partially offset by other gains of $54.1 million .

Refer to Notes 7(b), 14 and 16(c) of the Financial Statements for a summary of the Company’s derivative investments, convertible debentures, and share purchase warrants, respectively.

Adjusted EBITDA

The following is the Company’s adjusted EBITDA:

($ thousands)	Three months ended			Nine months ended
	March 31, 2022	December 31, 2021	March 31, 2021(1)(2)	March 31, 2022	March 31, 2021(1)(2)
Net income (loss) from continuing operations	(1,012,175)	(75,143)	(160,625)	(1,099,202)	(559,508)
Non-operating expense (income) (3)	16,292	14,779	13,510	3,887	40,192
Income tax expense (recovery)	(202)	(368)	(129)	(778)	3,649
Depreciation and amortization	18,647	24,195	17,206	64,472	64,320
Inventory and biological assets fair value adjustments	4,186	(16,647)	12,885	(11,164)	4,964
Share-based compensation	3,538	3,900	5,233	10,285	18,081
Acquisition costs	585	209	-	969	1,104
Restructuring related charges  (4)	2,406	3,023	5,139	7,323	56,574
Out-of-period adjustments (5)	4,074	1,174	(1,607)	9,947	(1,889)
Asset impairments	950,386	35,838	87,460	981,416	328,059
Adjusted EBITDA (6)	(12,263)	(9,040)	(20,928)	(32,845)	(44,454)

⁽¹⁾ Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the “Change in Accounting Policies and Estimates” section below for further detail.

⁽²⁾ As a result of the Company’s dissolution and divestment of its wholly-owned subsidiaries Hempco and AHE during the year ended June 30, 2021, the operations of Hempco and AHE have been presented as discontinued operations and the Company’s operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements for more information about the divestiture. During the three months ended March 31, 2021, Hempco and AHE incurred an EBITDA loss of $0.5 million and $0.5 million, respectively.

⁽³⁾ Non-operating expense (income) includes: interest and other income; finance and other costs; foreign exchange gain (loss); government grant income; and fair value changes on derivative investments, derivative liabilities, contingent consideration, loss on extinguishment of derivative investment, and (gain) loss on the modification of debt. Refer to Note 19 of the Financial Statements.

⁽⁴⁾ Restructuring related charges includes legal contract termination fees, restructuring charges and severance associated with the business transformation plan and revenue provisions as a result of Company initiated product swap to replace low quality product with higher potency product at the provinces.

⁽⁵⁾ Included in out-of-period adjustments in Q3 2022 are $3.4 million related to a correction of prior quarter biological assets fair value measurement and $0.7 million in prior period related professional services expenses; Q2 2022 are $1.2 million related to prior period payroll related expenses; Q3 2021 are $6.3 million related to prior year employee bonuses offset by $1.6 million other gains related to prior periods.

⁽⁶⁾ Adjusted EBITDA is a Non-GAAP Measure and is not a recognized, defined, or standardized measure under IFRS. Refer to “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of the MD&A. In order to provide more direct comparability to industry peers, management has captured restructuring and out of period costs for prior periods, as well as the current period, in this reconciliation. Previously management reported these costs separately as a further adjustment to EBITDA.

Adjusted EBITDA loss increased by $3.2 million, or 36%, for the three months ended March 31, 2022 as compared to the prior quarter. The increase is primarily attributable to a $4.7 million reduction in adjusted gross profit before fair value adjustments, partially offset with a $1.4 million decrease in SG&A expenses, excluding restructuring out-of-period related expenses.

Adjusted EBITDA loss decreased by $8.7 million, or 41%, and $11.6 million or 26%, for the three and nine months ended March 31, 2022, respectively, as compared to the same periods in the prior year. The decrease is primarily driven by shifts to a higher-margin product portfolio mix contributing increases to adjusted gross profit before fair value adjustments of $2.9 million and $4.6 million for three and nine months ended March 31, 2022, respectively. Excluding restructuring related charges and out-of-period adjustments noted above, SG&A expense reductions contributed decreases of $3.7 million and $4.0 million in three and nine months ended March 31, 2022, respectively, which were largely due to the impacts of the Company’s previously announced cost rationalization efforts.

 13  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Liquidity and Capital Resources

($ thousands)	March 31, 2022	June 30, 2021
Cash and cash equivalents	429,894	421,457
Marketable securities	2,313	3,751
Working capital	577,566	549,517
Total assets	1,570,252	2,604,731
Total non-current liabilities	361,099	450,656
Capitalization
Convertible notes	333,960	327,931
Lease liabilities	54,182	71,619
Total debt	388,142	399,550
Total equity	1,090,088	2,037,700
Total capitalization	1,478,230	2,437,250

During the three and nine months ended March 31, 2022, the Company primarily financed its operations, capital expenditures and growth initiatives through the generation of net revenue and working capital, and cash on hand. For more information on key cash flows related to operations, investing and financing activities during the quarter, refer to the “Cash Flow Highlights” discussion below.

The Company’s objective when managing its liquidity and capital resources is to maintain sufficient liquidity to support financial obligations when they come due, while executing operating and strategic plans. The Company manages liquidity risk through the management of its capital structure and resources to ensure that it has sufficient liquidity to settle obligations and liabilities when they are due. Our ability to fund our operating requirements depends on future operating performance and cash flows, which are subject to economic, financial, competitive, business and regulatory conditions, and other factors, some of which are beyond our control, such as the potential impact of COVID-19. Our primary short-term liquidity needs are to fund our net operating losses, capital expenditures to maintain existing facilities, and lease payments. Our medium-term liquidity needs primarily relate to debt repayments and lease payments. Our long-term liquidity needs primarily relate to potential strategic plans.

As of March 31, 2022, the Company has access to the following capital resources available to fund operations and obligations:

• $429.9 million cash and cash equivalents; and

• US$887.6 million securities registered for sale under the 2021 Shelf Prospectus for future financings or issuances of securities, including US$187.6 million remaining securities for sale under the ATM Program. Volatility in the cannabis industry, stock market and the Company’s share price may impact the amount and our ability to raise financing under the 2021 Shelf Prospectus.

From time-to-time, management may also consider the sale of its marketable securities and shares held in publicly traded investments in associates to support near term cash and liquidity needs.

Based on all of the aforementioned factors, the Company believes that its reduction of operating costs, current liquidity position, and access to the 2021 Shelf Prospectus are adequate to fund operating activities and cash commitments for investing and financing activities for the foreseeable future.

Equity Financings

On March 30, 2021, the Company filed the 2021 Shelf Prospectus in Canada and a corresponding 2021 Registration Statement with the Securities and Exchange Commission (“SEC”) in the U.S. The 2021 Shelf Prospectus and the 2021 Registration Statement allow the Company to make offerings of up to US$1.0 billion in Common Shares, warrants, options, subscription receipts, debt securities or any combination thereof during the 25-month period that the 2021 Shelf Prospectus remains effective. As of March 31, 2022, the Company has access to US$887.6 million under the 2021 Shelf Prospectus, including the balance of US$187.6 million pursuant to the ATM Program. During the three and nine months ended March 31, 2022, the Company issued 25,672,749 Common Shares under the ATM Program for gross proceeds of US$112.3 million.

Cash Flow Highlights

The table below summarizes the Company’s cash flows for the three and nine months ended March 31, 2022 and the comparative periods:

($ thousands)	Three months ended		Nine months ended
	March 31, 2022	March 31, 2021 (1)	March 31, 2022	March 31, 2021
Cash used in operating activities	(38,967)	(57,407)	(83,196)	(230,000)
Cash provided by (used in) investing activities	12,490	(14,875)	3,136	(38,444)
Cash provided by financing activities	126,914	164,387	85,740	581,054
Effect of foreign exchange	(2,947)	(6,253)	2,757	(4,551)
(Decrease) increase in cash and cash equivalents	97,490	85,852	8,437	308,059

⁽¹⁾ Amounts have been recast for the biological assets and inventory non-material prior period error. Refer to the “Change in Accounting Policies and Estimates” section below for further detail.

 14  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Cash used in operating activities for the three months ended March 31, 2022 decreased by $18.4 million as compared to the same period in the prior year. The decrease was primarily due to a $38.4 million change in non-cash working capital. The decrease in non-cash working capital over prior year was mainly driven by a $46.0 million decrease in biological assets and inventory and a $10.4 million increase in accounts payable and accrued liabilities, partially offset by a $4.5 million increase in accounts receivable.

Cash used in investing activities for the three months ended March 31, 2022 decreased by $27.4 million as compared to the same period in the prior year. The decrease was primarily due to $16.4 million higher proceeds from disposal of property, plant, and equipment, and $5.8 million lower property, plant and equipment purchases.

Cash used in financing activities for the three months ended March 31, 2022 decreased by $37.5 million as compared to the same period in the prior year. The decrease was primarily due to a $33.0 million decrease in cash generated from share issuances.

Cash used in operating activities for the nine months ended March 31, 2022 has decreased by $146.8 million as compared to the same period in the prior year. The decrease was primarily due to $57.2 million in prior year’s severance, restructuring and legal settlement charges and $39.0 million changes in non-cash working capital over prior year. The decrease in non-cash working capital over prior year was mainly driven by $4.3 million decrease in biological assets and inventory, and a $31.7 million increase in accounts payable and accrued liabilities.

Cash used in investing activities for the nine months ended March 31, 2022 decreased by $41.6 million as compared to the same period in the prior year. The decrease was primarily attributable to a $18.7 million decrease in property, plant and equipment expenditures and a $19.2 million increase in disposal of property, plant and equipment.

Cash provided by financing activities for the nine months ended March 31, 2022 decreased by $495.3 million as compared to the same period in the prior year. The decrease was primarily attributable to a $525.3 million decrease in cash generated from share issuances, partially offset by a $28.8 million decrease in repayment of long-term loans as the Company fully settled its credit facility with the Bank of Montreal in the prior fiscal year.

Capital Expenditures

The Company’s major capital expenditures for the nine months ended March 31, 2022 primarily consisted of construction activities at its German production facility and enhancements at existing core facilities. The Company is simplifying its network and focusing on core sites to transform Aurora into a company that delivers earnings both in the short-term and long-term. During the three months ended March 31, 2022, capital expenditures including intangible assets was $6.3 million, offset by $16.2 million proceeds from disposals. No government grants related to capital expenditures were received in Q3 2022. In Q4 2021, the Company received a $3.6 million government grant related to the co-generation project at the Aurora River facility to further offset the capital expenditures. Management expects the project to qualify for an additional $3.3 million government grant related to the co-generation project during this fiscal year.

Contractual Obligations

As at March 31, 2022, the Company had the following contractual obligations:

($ thousands)	Total	≤ 1 year	Over 1 year to 3 years	Over 3 years to 5 years	> 5 years
Accounts payable and accrued liabilities	53,981	53,981	-	-	-
Convertible notes and interest (1)	456,495	22,619	433,876	-	-
Lease liabilities (2)	70,870	9,455	24,720	19,648	17,047
Contingent consideration payable (3)	225	225	-	-	-
Capital commitments (4)	1,789	1,789	-	-	-
Purchase commitments (5)	6,198	2,066	4,132	-	-
Business acquisition retention payments	4,820	1,694	3,126	-	-
Total contractual obligations	594,378	91,829	465,854	19,648	17,047

⁽¹⁾ Assumes the remaining principal balance outstanding at March 31, 2022 remains unconverted and includes the estimated interest payable until the maturity date.

⁽²⁾ Includes interest payable until maturity date.

⁽³⁾ Includes $0.1 million payable in cash, with the remainder payable in cash, shares, or a combination of both at Aurora’s sole discretion.

⁽⁴⁾ Relates to remaining commitments that the Company has made to vendors for equipment purchases and capital projects pertaining to existing construction.

⁽⁵⁾ Relates to a manufacturing agreement with Capcium for the encapsulation of softgels.

Contingencies

From time to time, the Company and/or its subsidiaries may become defendants in legal actions and the Company intends to take appropriate action with respect to any such legal actions, including by defending itself against such legal claims as necessary. Other than the claims described below, as of the date of this report, Aurora is not aware of any other material or significant claims against the Company.

On November 21, 2019, a purported class action proceeding was commenced in the United States District Court for the District of New Jersey against the Company and certain of its current and former directors and officers on behalf of persons or entities who purchased, or otherwise acquired, publicly traded Aurora securities between October 23, 2018 and February 6, 2020. An amended complaint was filed on September 21, 2020 which alleges, inter alia, that the Company and certain of its current and former officers and directors violated the federal securities laws by making false or misleading statements, materially overstated the demand and potential market for the Company’s consumer cannabis products; that the Company’s ability to sell products had been materially impaired by extraordinary market oversupply, that the Company’s spending growth and capital commitments were slated to exceed our revenue growth; that the Company had violated German law mandating that companies receive special permission to distribute medical products exposed to regulated irradiation techniques, and that the foregoing, among others, had negatively impacted the Company’s business, operations, and prospects and impaired the Company’s ability to achieve profitability. A motion to dismiss was filed on November 20, 2020 and granted by the court on July 7, 2021, however, the plaintiffs were given an opportunity to file a second amended complaint no later than September 7, 2021. Pursuant to the July 7, 2021 order, the plaintiffs filed a second amended complaint on September 7, 2021 which included new allegations pertaining to certain alleged financial misrepresentation and improper revenue recognition by the Company. The Company subsequently filed a motion to dismiss on December 6, 2021 and a reply to plaintiffs’ opposition on March 25, 2022. The Company is currently awaiting a decision on the motion to dismiss. While this matter is ongoing, the Company disputes the allegations and intends to continue to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matters described above. No provision has been recognized as at March 31, 2022 (Q3 2021 - nil).

 15  |  AURORA CANNABIS INC.            Q3 2022 MD&A

The Company and its subsidiary, ACE, have been named in a purported class action proceeding which commenced on June 18, 2020 in the Province of Alberta in relation to the alleged mislabeling of cannabis products with inaccurate THC/CBD content. The class action involves a number of other parties including Aleafia Health Inc., Hexo Corp, Tilray Canada Ltd., among others, and alleges that upon laboratory testing, certain cannabis products were found to have lower THC potency than the labeled amount, suggesting, among other things, that plastic containers may be leeching cannabinoids. While this matter is ongoing, the Company disputes the allegations and intends to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matter described above. No provision has been recognized as at March 31, 2022 (Q3 2021 - nil).

A claim was commenced by a party to a former term sheet on June 15, 2020 with the Queen's Bench of Alberta against Aurora and a former officer alleging a claim of breach of obligations under said term sheet, with the plaintiff seeking $18.0 million in damages. While this matter is ongoing, the Company believes the action to be without merit and intends to defend the claim. No provision has been recognized as of March 31, 2022 (Q3 2021 - nil).

On August 10, 2020, a purported class action lawsuit was filed with the Queen's Bench of Alberta against Aurora and certain executive officers in the Province of Alberta on behalf of persons or entities who purchased, or otherwise acquired, publicly traded Aurora securities and suffered losses as a result of Aurora releasing statements containing misrepresentations during the period of September 11, 2019 and December 21, 2019. The Company disputes the allegations and intends to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matter described above. No provision has been recognized as at March 31, 2022 (Q3 2021 - nil).

On October 2, 2020, a purported class action lawsuit was commenced in the United States District Court for the District of New Jersey against the Company and certain current and former executive officers on behalf of persons or entities who purchased or otherwise acquired Aurora securities between February 13, 2020 and September 4, 2020. The complaint alleges, inter alia, that the Company and certain current and former executive officers violated the federal securities laws by making false and/or misleading statements and/or failing to disclose that the Company had significantly overpaid for previous acquisitions and experienced degradation in certain assets, including its production facilities and inventory; the Company’s business transformation plan and cost reset failed to mitigate the foregoing issues; it was foreseeable that the Company would record significant goodwill and asset impairment charges; and as a result, the Company’s public statements were materially false and misleading. The Company disputes the allegations. On November 2, 2021, the plaintiffs voluntarily dismissed this action without prejudice as to all claims. This matter is now concluded. No provision has been recognized as at March 31, 2022 (Q3 2021 - nil).

On January 4, 2021, a civil claim was filed with the Queen’s Bench of Alberta against Aurora and Hempco by a former landlord regarding unpaid rent in the amount of $8.9 million, representing approximately $0.4 million for rent in arrears and costs, plus $8.5 million for loss of rent and remainder of the term. The Company filed a statement of defense on March 24, 2021. While this matter is ongoing, the Company intends to continue to defend against the claims. No provision has been recognized as of March 31, 2022 (Q3 2021 - nil).

The Company is subject to litigation and similar claims in the ordinary course of our business, including claims related to employment, human resources, product liability and commercial disputes. The Company has received notice of, or are aware of, certain possible claims against us where the magnitude of such claims is negligible, or it is not currently possible for us to predict the outcome of such claims, possible claims or lawsuits due to various factors including: the preliminary nature of some claims; an incomplete factual record; and the unpredictable nature of opposing parties and their demands. Management is of the opinion, based upon legal assessments and information presently available, that it is unlikely that any of these claims would result in liability to the Company, to the extent not provided for through insurance or otherwise, would have a material effect on the consolidated financial statements, other than the claims described above.

Off-balance sheet arrangements

As at the date of this MD&A, the Company has $0.9 million letters of credit outstanding with the Bank of Montreal. There are no other material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the financial performance or financial condition of the Company.

 16  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Related Party Transactions

The Company’s key management personnel have the authority and responsibility for planning, directing and controlling the activities of the Company and consists of the Company’s executive management team and management directors. Compensation expense for key management personnel was as follows:

($ thousands)	Three months ended		Nine months ended
	March 31, 2022	March 31, 2021	March 31, 2022	March 31, 2021
Short-term employment benefits (1)	1,471	1,167	4,891	3,590
Long-term employment benefits	17	-	47	-
Termination benefits	-	488	-	938
Directors’ fees (2)	85	89	250	370
Share-based compensation (3)	3,048	3,380	7,947	9,772
Total management compensation (4)	4,621	5,124	13,135	14,670

⁽¹⁾ Short-term employment benefits include salaries, wages, and bonuses. Short-term employment benefits are measured at the exchange value, being the amounts agreed to by each party.

⁽²⁾ Includes meeting fees and committee chair fees.

⁽³⁾ Share-based compensation represent the contingent consideration, and the fair value of options, restricted share units, deferred share units and performance share units granted and vested to key management personnel and directors of the Company under the Company’s share-based compensation plans (refer to Note 17 of the Financial Statements).

⁽⁴⁾ As of March 31, 2022, $1.3 million is payable or accrued for key management compensation (June 30, 2021 - $0.8 million).

The following is a summary of the significant transactions with related parties:

($ thousands)	Three months ended		Nine months ended
	March 31, 2022	March 31, 2021	March 31, 2022	March 31, 2021
Production costs (1)	1,241	43	2,481	1,825

⁽¹⁾ Production costs incurred with (i) Gelcan Corporation. (“Gelcan”), a company that manufactures our softgels and in which Aurora holds significant influence; and (ii) Sterigenics Radiation Technologies (“Sterigenics”, formerly Iotron Industries Canada Inc.), an associate of the Company’s joint venture company Auralux Enterprises Ltd (“Auralux”). Aurora does not have the authority or ability to exert power over either Capcium or Sterigenics’ financial and/or operating decisions (i.e. control).

During the nine months ended March 31, 2021, the Company sold AHE to the subsidiary’s President and former owner.

The following amounts were receivable from (payable to) related parties:

($ thousands)	March 31, 2022	June 30, 2021
Equipment loan receivable from investments in associates (1)	-	10,096
Debenture and interest receivable from investment in associate (2)	-	17,170
Production costs with investments in associates (3)(4)	349	-
	349	27,266

⁽¹⁾ Relates to the purchase of production equipment on behalf of the Company’s joint venture, Auralux. The loan bears interest at 5% per annum, payable monthly. The loan is to be repaid in installments on an annual basis in an amount equal to 50% of the associate’s EBITDA. The unpaid balance of the loan matures 10 years from the funding date. During the three and nine months ended March 31, 2022, the Company recorded an impairment of $10.5 million against the outstanding loans receivable balance related to the Company’s joint venture, Auralux.

⁽²⁾ Represents the $6.0 million secured convertible debenture in Choom Holdings Inc. (“Choom”) plus interest receivable bearing interest at 7.0% per annum and maturing on December 23, 2024. Balance at June 30, 2021 represents the $20.0 million unsecured convertible debenture in Choom plus interest receivable, bearing interest at 6.5% per annum and was to mature on November 2, 2022. Refer to Note 6(a) of the Financial Statements for further details. As of March 31, 2022, the 2021 Debenture had a fair value of $0.0 million resulting in an unrealized loss of $5.2 million.

⁽³⁾ Production costs incurred with (i) Gelcan; and (ii) Sterigenics which provides cannabis processing services to the Company and is party to a common joint venture in Auralux. Pursuant to a manufacturing agreement with Gelcan, the Company is contractually committed to purchase a minimum number of softgels during each calendar year from 2020 and thereafter. If the Company fails to meet the required purchase minimum, then it is required to pay a penalty fee equal to the difference between the actual purchased quantity and the required purchase minimum multiplied by the cost of the softgels. The Company is committed to purchase 42.7 million capsules in calendar 2022, and 20.0 million capsules per calendar year until March 31, 2025.

⁽⁴⁾ Amounts are due upon the issuance or receipt of invoices, are unsecured and non-interest bearing.

These transactions are in the normal course of operations and are measured at the exchange value, being the amounts agreed to by the parties.

Critical Accounting Estimates

The preparation of the Financial Statements under IFRS requires management to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

 17  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Other than the estimates used in restructuring provisions (Note 3 in the Financial Statements), there have been no changes in Aurora's critical accounting estimates during the nine months ended March 31, 2022. For additional information on the Company’s accounting policies and key estimates, refer to the note disclosures in the annual consolidated financial statements and MD&A as at and for the year ended June 30, 2021.

Change in Accounting Policy and Estimates

New Accounting Policy

Segregated Cell Insurance

Insurance coverage for the Company’s directors and officers has been secured through a segregated cell program (“Segregated Cell”). The Segregated Cell was effected by entering into a participation agreement with a registered Segregated Accounts Company for the purposes of holding and supporting the Company’s insurance risk transfer strategies. The Company applies IFRS 10 Consolidated Financial Statements in its assessment of control as it relates to the Segregated Cell and the Company’s accounting policy is to consolidate the Segregated Cell. The funds held in the Segregated Cell are held as cash with the possibility of reinvestment. As the funds cannot be transferred to other parts of the group, the funds are disclosed as Restricted Cash.

Change in Estimates

Biological Assets and Inventory Non-Material Prior Period Error

During the year ended June 30, 2021, a non-material error was identified in the valuation methodology for biological assets. As part of the fair value measurement, management incorporated the cannabis plant’s stage of growth in determining the fair value less costs to sell (“FVLCS”). In the period of harvest, the balance in biological assets was transferred directly to inventory at the average 48% stage of growth without adjusting for the incremental fair value to grow the plant through the full lifecycle. The Company now includes the incremental fair value of the plants in the valuation and transfers the biological assets to inventory at the full stage of growth at the point of harvest. Additionally, the Company revised certain key inputs used in determining FVLCS, including the incorporation of an effective yield factor based on the potency of cannabis produced. These changes primarily impacted unrealized fair value gains on biological assets and changes in fair value of inventory sold, both of which are non-cash impacts and are not material to the Company.

Management evaluated the materiality of the errors, both quantitatively and qualitatively, and concluded that the changes were not material to the Annual Financial Statements taken as a whole for any prior period. The Company has revised opening deficit and corrected the error by recasting the prior period information in the Financial Statements. The following is a summary of the impacts to the statement of comprehensive loss and the statement of cash flows for the three months ended March 31, 2021, prior to the impact of discontinued operations:

($ thousands)	Three months ended March 31, 2021 As previously reported	Biological Assets and Inventory Adjustments	Three months ended March 31, 2021 Recasted
Consolidated Statement of Comprehensive Loss
Cost of sales	127,545	(3,833)	123,712
Gross profit (loss) before fair value adjustments	(72,384)	3,833	(68,551)
Changes in fair value of inventory sold	29,583	20,785	50,368
Unrealized gain on changes in fair value of biological assets	(16,506)	(20,977)	(37,483)
Gross profit (loss)	(85,461)	4,025	(81,436)
Deferred tax recovery	(119)	-	(119)
Net loss from continuing operations	(164,650)	4,025	(160,625)
Net loss attributable to Aurora shareholders	(164,650)	4,025	(160,625)
Loss per share (basic and diluted)	($0.85)	$0.02	($0.83)

The following is a summary of the impacts to the statement of cash flows for the three months ended March 31, 2021:

($ thousands)	Three months ended March 31, 2021 As previously reported	Biological Assets and Inventory Adjustments	Three months ended March 31, 2021 Recasted
Consolidated Statement of Cash Flows
Unrealized gain on changes in fair value of biological assets	(16,506)	(20,977)	(37,483)
Changes in fair value of inventory sold	29,583	20,785	50,368
Deferred tax recovery	(129)	-	(129)
Changes in non-cash working capital	71,959	(3,833)	68,126
Net cash used in operating activities	(57,327)	-	(57,327)

 18  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Recent Accounting Pronouncements

The following IFRS standards have been recently issued by the IASB. Pronouncements that are irrelevant or not expected to have a significant impact have been excluded.

Amendments to IFRS 9: Financial Instruments

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendments to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

The amendment clarifies the requirements relating to determining if a liability should be presented as current or non-current in the statement of financial position. Under the new requirement, the assessment of whether a liability is presented as current or non-current is based on the contractual arrangements in place as at the reporting date and does not impact the amount or timing of recognition. The amendment applies retrospectively for annual reporting periods beginning on or after January 1, 2022. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Amendments to IAS 37: Onerous Contracts and the Cost of Fulfilling a Contract

The amendment specifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. The amendment is effective for annual periods beginning on or after January 1, 2022 with early application permitted. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Amendments to IAS 41: Agriculture

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendments to IAS 41. The amendment removes the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flow when measuring the fair value of a biological asset using a present value technique. This will ensure consistency with the requirements in IFRS 13. The amendment is effective for annual reporting periods beginning on or after January 1, 2022. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

Financial Instruments

Financial instruments are measured either at fair value or at amortized cost. The table below lists the valuation methods used to determine the fair value of each financial instrument.

	Fair Value Method
Financial Instruments Measured at Fair Value
Marketable securities	Closing market price of Common Shares as of the measurement date (Level 1)
Derivatives	Closing market price (Level 1) or Black-Scholes, Binomial, Monte-Carlo & FINCAD valuation model (Level 2 or 3)
Contingent consideration payable	Discounted cash flow model (Level 3)
Derivative liability	Closing market price of warrants (Level 1) or Kynex valuation model (Level 2)
Financial Instruments Measured at Amortized Cost
Cash and cash equivalents, restricted cash, accounts receivable, loans receivable	Carrying amount (approximates fair value due to short-term nature)
Accounts payable and accrued liabilities, other current and long-term liabilities	Carrying amount (approximates fair value due to short-term nature)
Lease receivable, convertible debentures, lease liabilities	Carrying value discounted at the effective interest rate which approximates fair value

 19  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Summary of Financial Instruments

The carrying values of the financial instruments at March 31, 2022 are summarized in the following table:

($ thousands)	Amortized Cost	FVTPL	Designated FVTOCI	Total
Financial Assets
Cash and cash equivalents	429,894	-	-	429,894
Restricted cash	50,658	-	-	50,658
Accounts receivable, excluding sales taxes receivable	35,139	-	-	35,139
Marketable securities	-	-	2,313	2,313
Derivatives	-	29,737	-	29,737
Lease receivable	6,091	-	-	6,091
Financial Liabilities
Accounts payable and accrued liabilities	53,981	-	-	53,981
Convertible debentures (1)	333,960	-	-	333,960
Contingent consideration payable	-	225	-	225
Other current liabilities	12,434	-	-	12,434
Lease liabilities	54,182	-	-	54,182
Derivative liability	-	17,424	-	17,424
Other long-term liabilities	122	-	-	122

⁽¹⁾ The fair value of convertible debentures includes both the debt and equity components.

Fair Value Hierarchy

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The three levels of hierarchy are:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2	Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and
Level 3	Inputs for the asset or liability that are not based on observable market data.

The following is a summary of financial instruments measured at fair value segregated based on the various levels of inputs as at March 31, 2022:

($ thousands)	Level 1	Level 2	Level 3	Total
As at March 31, 2022
Marketable securities (1)	2,313	-	-	2,313
Derivative assets (1)	-	13,859	15,878	29,737
Contingent consideration payable	-	-	225	225
Derivative liability (2)	17,341	83	-	17,424
As at June 30, 2021
Marketable securities	3,751	-	-	3,751
Derivative assets	-	42,477	16,905	59,382
Contingent consideration payable	-	-	374	374
Derivative liability	88,860	3,079	-	91,939

⁽¹⁾ For a reconciliation of realized and unrealized gains and losses applicable to financial assets measured at fair value for the three and nine months ended March 31, 2022, refer to Notes 7(a) and (b) in the Financial Statements.

⁽²⁾ For a reconciliation of unrealized gains and losses applicable to financial liabilities measured at fair value for the three and nine months ended March 31, 2022, refer to Note 14 and Note 16(c) in the Financial Statements.

There have been no transfers between fair value levels during the period.

 20  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Financial Instruments Risk

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board mitigates these risks by assessing, monitoring and approving the Company’s risk management processes.

Credit risk

Credit risk is the risk of a potential loss to the Company if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company is moderately exposed to credit risk from its cash and cash equivalents, accounts receivable and loans receivable. The risk exposure is limited to their carrying amounts reflected on the statement of financial position. The risk for cash and cash equivalents is mitigated by holding these instruments with highly rated Canadian financial institutions. Certain restricted funds in the amount of $31.4 million are retained by an insurer under the Segregated Accounts Companies Act governed by the Bermuda Monetary Authority. As the Company does not invest in asset-backed deposits or investments, it does not expect any credit losses. The Company periodically assesses the quality of its investments and is satisfied with the credit rating of the financial institutions and the investment grade of its Guaranteed Investment Certificates (“GICs”). The Company mitigates the credit risk associated with the loans receivable by managing and monitoring the underlying business relationship.

The Company provides credit to certain customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. Credit risk is generally limited for receivables from government bodies, which generally have low default risk. Credit risk for non-government wholesale customers is assessed on a case-by-case basis and a provision is recorded where required. As of March 31, 2022, $13.8 million of accounts receivable are from non-government wholesale customers (June 30, 2021 - $7.0 million). As of March 31, 2022, the Company recognized a $5.3 million provision for expected credit losses (June 30, 2021 - $5.4 million).

For the periods indicated, the Company’s aging of trade receivables were as follows:

($ thousands)	March 31, 2022	June 30, 2021
0 - 60 days	20,347	36,195
61+ days	5,108	5,835
	25,455	42,030

During the three and nine months ended March 31, 2022, the Company recorded an impairment of $10.5 million against the outstanding loans receivable balance related to the Company’s joint venture, Auralux Enterprises Ltd.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations associated with its financial liabilities when they are due. The Company’s objective is to manage liquidity risk through the management of its capital structure and resources to ensure that it has sufficient liquidity to settle obligations and liabilities when they are due, while executing on its operating and strategic plans. Refer to “Liquidity and Capital Resources” section of this MD&A for detailed discussion.

Summary of Outstanding Share Data

The Company had the following securities issued and outstanding as at May 11, 2022 :

Securities (1)	Units Outstanding
Issued and outstanding Common Shares	226,797,166
Stock options	4,015,334
Warrants	18,447,389
Restricted share units	1,128,322
Deferred share units	107,193
Performance share units	759,764
Convertible debentures	3,792,492

⁽¹⁾ Refer to Note 14 “Convertible Debentures”, Note 16 “Share Capital” and Note 17 “Share-Based Compensation” in the Company’s Financial Statements for a detailed description of these securities.

 21  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Historical Quarterly Results

($ thousands, except earnings per share and Operational Results)	Q3 2022	Q2 2022	Q1 2022	Q4 2021 (1)(2)
Financial Results
Net revenue (2)	$50,434	$60,586	$60,108	$54,825
Adjusted gross margin before FV adjustments on cannabis net revenue (3)	54%	53%	54%	54%
Loss from continuing operations attributable to common shareholders (4)	($1,012,177)	($74,776)	($11,884)	($133,969)
(Loss) earnings from discontinued operations attributable to common shareholders	$ -	$ -	$ -	($1,179)
Loss attributable to common shareholders	($1,012,177)	($74,776)	($11,884)	($135,148)
Basic and diluted loss per share from continuing operations	($4.72)	($0.38)	($0.06)	($0.68)
Basic and diluted loss per share	($4.72)	($0.38)	($0.06)	($0.68)
Balance Sheet
Working capital	$577,566	$481,574	$532,612	$549,517
Cannabis inventory and biological assets (4)	$118,729	$139,625	$139,103	$120,297
Total assets	$1,570,252	$2,485,384	$2,560,316	$2,604,731
Operational Results - Cannabis
Average net selling price of dried cannabis (3)	$5.41	$4.52	$4.67	$5.11
Kilograms sold	9,722	13,043	12,484	11,346
	Q3 2021 (1)(2)	Q2 2021 (1)(2)	Q1 2021 (1)(2)	Q4 2020 (1)(2)
Financial Results
Net revenue (2)	$55,161	$67,673	$67,593	$68,426
Adjusted gross margin before FV adjustments on cannabis net revenue (3)	44%	44%	49%	49%
Loss from continuing operations attributable to common shareholders (4)	($160,625)	($300,222)	($97,197)	($1,839,435)
Loss from discontinued operations attributable to common shareholders	$0	$2,298	($2,731)	($15,721)
Loss attributable to common shareholders	($160,625)	($297,924)	($99,928)	($1,855,156)
Basic and diluted loss per share from continuing operations	($0.83)	($1.79)	($0.83)	($16.52)
Basic and diluted loss per share	($0.83)	($1.77)	($0.85)	($16.66)
Balance Sheet
Working capital	$646,310	$592,519	$206,335	$145,258
Cannabis inventory and biological assets (5)	$102,637	$179,275	$171,086	$135,973
Total assets	$2,839,155	$2,829,963	$2,762,181	$2,779,921
Operational Results - Cannabis
Average net selling price of dried cannabis (3)	$5.00	$4.45	$3.86	$3.60
Kilograms sold	13,520	15,253	16,139	16,748

⁽¹⁾ Certain previously reported amounts have been restated to exclude the results related to discontinued operations and recast for the biological assets and inventory non-material prior period error. For further details on discontinued operations, refer to Note 12(b) of the Financial Statements and Note 12(b) of the Annual Financial Statements. For further details on the recast for biological asset and inventory, refer to the “Change in Accounting Policies and Estimates” section above.

⁽²⁾ Net revenue represents our total gross revenue net of excise taxes levied by the CRA on the sale of medical and consumer use cannabis products. Given that our gross revenue figures exclude excise taxes that were levied and billed back to customers, as reflected in accordance with IFRS 15, we believe that the presentation of net revenue more accurately reflects the level of revenue earned during the relevant period.

⁽³⁾ Refer to “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A for the defined terms.

(4) Loss from continuing operations attributable to common shareholders includes asset impairment and restructuring charges. Refer to “Adjusted EBITDA” section.

⁽⁵⁾ Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables.

 22  |  AURORA CANNABIS INC.            Q3 2022 MD&A

Risk Factors

In addition to the other information included in this report, readers should consider carefully the following factors, which describe the risks, uncertainties and other factors that may materially and adversely affect our business, products, financial condition and operating results. There are many factors that affect our business and our results of operations, some of which are beyond our control. The following is a description of important factors that may cause our actual results of operations in future periods to differ materially from those currently expected or discussed in the forward-looking statements (“FLS”) set forth in this report relating to our financial results, operations and business prospects. Except as required by law, we undertake no obligation to update any such FLS to reflect events or circumstances after the date of this MD&A.

These risks include, but are not limited to the following:

• We have a limited operating history and there is no assurance we will be able to achieve or maintain profitability.

• Our business is reliant on the good standing of our licenses.

• Our Canadian licenses are reliant on our established sites.

• We operate in a highly regulated business and any failure or significant delay in obtaining applicable regulatory approvals could adversely affect our ability to conduct our business.

• Change in the laws, regulations, and guidelines that impact our business may cause adverse effects on our operations.

• Failure to comply with anti-money laundering laws and regulation could subject us to penalties and other adverse consequences.

• We compete for market share with a number of competitors and expect even more competitors to enter our market, and many of our current and future competitors may have longer operating histories, more financial resources, and lower costs than us.

• The possibility of, and timing for, federal legalization of cannabis in the United States is not predictable and we may be subject to increased competition when it occurs.

• Selling prices and the cost of cannabis production may vary based on a number of factors outside of our control.

• We may not be able to realize our growth targets.

• The continuance of our contractual relations with provincial and territorial governments cannot be guaranteed.

• Our continued growth may require additional financing, which may not be available on acceptable terms or at all.

• Any default under our existing debt that is not waived by the applicable lenders could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares.

• We may not be able to successfully develop new products or find a market for their sale.

• As the cannabis market continues to mature, our products may become obsolete, less competitive, or less marketable.

• Restrictions on branding and advertising may negatively impact our ability to attract and retain customers.

• The cannabis business may be subject to unfavorable publicity or consumer perception.

• Third parties with whom we do business may perceive themselves as being exposed to reputational risk by virtue of their relationship with us and may ultimately elect to discontinue their relationships with us.

• There may be unknown health impacts associated with the use of cannabis and cannabis derivative products.

• We may enter into strategic alliances or expand the scope of currently existing relationships with third parties that we believe complement our business, financial condition and results of operation and there are risks associated with such activities.

• Our success will depend on attracting and retaining key personnel.

• Certain of our directors and officers may have conflicts of interests due to other business relationships.

• Future execution efforts may not be successful.

• We have expanded and intend to further expand our business and operations into jurisdictions outside of Canada, and there are risks associated with doing so.

• Our business may be affected by political and economic instability.

• We rely on international advisors and consultants in foreign jurisdictions.

• Failure to comply with the Corruption of Foreign Public Officials Act (Canada) (“CFPOA”) and the Foreign Corrupt Practices Act (United States) (“FCPA”), as well as the anti-bribery laws of the other nations in which we conduct business, could subject us to penalties and other adverse consequences.

• We may be subject to uninsured or uninsurable risks.

• We may be subject to product liability claims.

• Our cannabis products may be subject to recalls for a variety of reasons.

• We may become party to litigation, mediation, and/or arbitration from time to time.

• The transportation of our products is subject to security risks and disruptions.

• Our business is subject to the risks inherent in agricultural operations.

• Our operations are subject to various environmental and employee health and safety regulations.

• Climate change may have an adverse effect on demand for our products or on our operations.

• We may not be able to protect our intellectual property.

• We may experience breaches of security at our facilities or in respect of electronic documents and data storage and may face risks related to breaches of applicable privacy laws.

• We may be subject to risks related to our information technology systems, including cyber-attacks.

• We may not be able to successfully identify and execute future acquisitions or dispositions, or to successfully manage the impacts of such transactions on our operations.

• As a holding company, Aurora Cannabis Inc. is dependent on its operating subsidiaries to pay dividends and other obligations.

• The price of our Common Shares has historically been volatile. This volatility may affect the value of your investment in Aurora, the price at which you could sell our Common Shares and the sale of substantial amounts of our Common Shares could adversely affect the price of our Common Shares and the value of your convertible debentures/notes.

• Future sales or issuances of equity securities could decrease the value of our Common Shares, dilute investors’ voting power, and reduce our earnings per share.

• Our management will have substantial discretion concerning the use of proceeds from future share sales and financing transactions.

• The regulated nature of our business may impede or discourage a takeover, which could reduce the market price of our Common Shares and the value of any outstanding convertible debentures/notes.

• There is no assurance we will continue to meet the listing standards of the Nasdaq and the TSX.

• Failure to develop and maintain an effective system of internal controls increases the risk that we may not be able to accurately and reliably report our financial results or prevent fraud, which may harm our business, the trading price of our Common Shares and market value of other securities.

 23  |  AURORA CANNABIS INC.            Q3 2022 MD&A

• We are a Canadian company and shareholder protections may differ from shareholder protections in the United States and elsewhere.

• We are a foreign private issuer within the meaning of the rules under the Exchange Act (as defined below), and as such we are exempt from certain provisions applicable to United States domestic issuers.

• Our employees and counterparties may be subject to potential U.S. entry restrictions as a result of their relationship with us.

• Participants in the cannabis industry may have difficulty accessing the service of banks and financial institutions, which may make it difficult for us to operate.

• Our business may be subject to disruptions as a result of the COVID-19 pandemic.

• Reliva’s operations in the United States may be impacted by regulatory action and approvals from the Food and Drug Administration.

• The controversy surrounding vaporizers and vaporizer products may materially and adversely affect the market for vaporizer products and expose us to litigation and additional regulation.

• Future research may lead to findings that vaporizers, electronic cigarettes and related products are not safe for their intended use.

• We must rely largely on our own market research and internal data to forecast sales and market demand and market prices which may differ from our forecasts.

For additional information regarding the risks that the Company is exposed to, please refer to the disclosures provided under the heading “Risk Factors” in the Company’s AIF dated September 27, 2021, which is available on the SEDAR website at www.sedar.com.

Internal Controls over Financial Reporting

Disclosure Controls and Procedures

As required by National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings and Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2022. Disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the CSA and SEC.

Based upon the evaluation, our CEO and CFO have concluded that, as a result of the material weaknesses in the Company’s internal control described in our Annual MD&A for the year ended June 30, 2021, as of such date, the Company’s DCP were not effective.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15(d)-5(f) under the Exchange Act) during the three and nine months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Management continues to perform additional account reconciliations and other analytical and substantive procedures to ensure reliable financial reporting and the preparation of financial statements in accordance with IFRS. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Cautionary Statement Regarding Forward-Looking Statements

This MD&A contains certain statements which may constitute “forward-looking information” and “forward-looking statements” within the meaning of Canadian securities law requirements (collectively, “forward-looking statements”). These forward-looking statements are made as of the date of this MD&A and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements in this MD&A include, but are not limited to, statements with respect to:

• pro forma measures including revenue, cash flow, adjusted gross margin before fair value adjustments, expected SG&A run-rates, and grams produced;

• the Company’s ability to fund operating activities and cash commitments for investing and financing activities for the foreseeable future;

• expectations regarding production capacity, costs and yields;

• statements made under the heading “Our Strategy”;

• statements made with respect to the anticipated disposition of legal claims disclosed under the heading “Contingencies”;

• the Company’s ability to execute on its business transformation plan and path to Adjusted EBITDA profitability including, but not limited to, anticipated cost savings and planned cost efficiencies;

• growth opportunities including the expansion into additional international markets;

• expectations related to increased legalization of consumer markets, including the United States;

 24  |  AURORA CANNABIS INC.            Q3 2022 MD&A

• the recovery of the Company’s domestic consumer segment;

• the acquisition of Thrive, including the anticipated impact on the consumer business and the Company's path to Adjusted EBITDA profitability in the first half of fiscal 2023;

• consumer demand for products containing CBD derived from hemp plants and the associated growth and market opportunities;

• competitive advantages and strengths in medical, scientific leadership, multi-jurisdictional regulatory expertise , compliance, testing and product quality;

• product portfolio and innovation, and associated revenue growth;

• licensing of genetic innovations to other Licensed Producers and associated revenue growth;

• expectations regarding biosynthetic production and associated intellectual property;

• the use of proceeds generated from the ATM Program;

• future strategic plans; and

• the impact of the COVID-19 pandemic on the Company’s business, operations, capital resources and/or financial results.

Forward looking information or statements contained in this document have been developed based on assumptions management considers to be reasonable. Material factors or assumptions involved in developing forward-looking statements include, without limitation, publicly available information from governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Company believes to be reasonable.

Such forward-looking statements are estimates reflecting the Company’s best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. These risks include, but are not limited to, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of our products, customer experience and retention, the development of third party government and non-government consumer sales channels, management’s estimates of consumer demand in Canada and in jurisdictions where the Company exports, expectations of future results and expenses, the availability of additional capital to complete construction projects and facilities improvements, the risk of successful integration of acquired business and operations, management’s estimation that SG&A will grow only in proportion of revenue growth, the ability to expand and maintain distribution capabilities, the impact of competition, the general impact of financial market conditions, the yield from cannabis growing operations, product demand, changes in prices of required commodities, competition, and the possibility for changes in laws, rules, and regulations in the industry, epidemics, pandemics or other public health crises, including the current outbreak of COVID-19,and other risks as set out under “Risk Factors” contained herein. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements.

Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on the information available to the Company on the date hereof, no assurance can be given as to future results, approvals or achievements. Forward-looking statements contained in this MD&A and in the documents incorporated by reference herein are expressly qualified by this cautionary statement.

Cautionary Statement Regarding Certain Non-GAAP Performance Measures

This MD&A contains certain financial performance measures that are not recognized or defined under IFRS (“Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licensed producers of cannabis and cannabis companies. For an explanation of these measures to related comparable financial information presented in the consolidated financial statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. These Non-GAAP Measures include, but are not limited, to the following:

• Cannabis net revenue represents revenue from the sale of cannabis products, excluding excise taxes. Cannabis net revenue is further broken down as follows:

• Medical cannabis net revenue represents Canadian and international cannabis net revenue for medical cannabis sales only.

• Consumer cannabis net revenue represents cannabis net revenue for consumer cannabis sales only.

• Wholesale bulk cannabis net revenue represents cannabis net revenue for wholesale bulk cannabis only.

• Ancillary net revenue represents non-cannabis net revenue for ancillary support functions only.

Management believes the cannabis net revenue measures provide more specific information about the net revenue purely generated from our core cannabis business and by market type.

• Average net selling price per gram and gram equivalent is calculated by taking cannabis net revenue and removing the impact of cost of sales net against revenue in agency relationships, which is then divided by total grams and grams equivalent of cannabis sold in the period. Average net selling price per gram and gram equivalent is further broken down as follows:

• Average net selling price per gram of dried cannabis represents the average net selling price per gram for dried cannabis sales only, excluding wholesale bulk cannabis sold in the period.

• Average net selling price per gram of international dried cannabis represents the average net selling price per gram for international dried cannabis sales only, excluding wholesale bulk cannabis sold in the period.

• Average net selling price per gram and gram equivalent of Canadian medical cannabis represents the average net selling price per gram and gram equivalent for dried cannabis and cannabis derivatives sold in the Canadian medical market.

• Average net selling price per gram and gram equivalent of medical cannabis represents the average net selling price per gram and gram equivalent for dried cannabis and cannabis derivatives sold in the medical market.

• Average net selling price per gram and gram equivalent of consumer cannabis represents the average net selling price per gram and gram equivalent for dried cannabis and cannabis derivatives sold in the consumer market.

Management believes the average net selling price per gram or gram equivalent measures provide more specific information about the pricing trends over time by product and market type. Under an agency relationship, revenue is recognized net of cost of sales in accordance with IFRS. Management believes the removal of agency cost of sales in determining the average net selling price per gram and gram equivalent is more reflective of our average net selling price generated in the marketplace.

 25  |  AURORA CANNABIS INC.            Q3 2022 MD&A

• Gross profit before FV adjustments on cannabis net revenue is calculated by subtracting (i) cost of sales, before the effects of changes in FV of biological assets and inventory, and (ii) cost of sales from non-cannabis ancillary support functions, from total cannabis net revenue. Gross margin before FV adjustments on cannabis net revenue is calculated by dividing gross profit before FV adjustments on cannabis net revenue divided by cannabis net revenue. Management believes that these measures provide useful information to assess the profitability of our cannabis operations as it excludes the effects of non-cash FV adjustments on inventory and biological assets, which are required by IFRS.

• Adjusted gross profit before FV adjustments on cannabis net revenue represents cash gross profit and gross margin on cannabis net revenue and is calculated by subtracting from total cannabis net revenue (i) cost of sales, before the effects of changes in FV of biological assets and inventory; (ii) cost of sales from non-cannabis ancillary support functions; and removing (iii) depreciation in cost of sales; (iv) cannabis inventory impairment; and (v) out-of-period adjustments. Adjusted gross margin before FV adjustments on cannabis net revenue is calculated by dividing adjusted gross profit before FV adjustments on cannabis net revenue divided by cannabis net revenue. Adjusted gross profit and gross margin before FV adjustments on cannabis net revenue is further broken down as follows:

• Adjusted gross profit and gross margin before FV adjustments on medical cannabis net revenue represents gross profit and gross margin before FV adjustments on sales generated in the medical market only.

• Adjusted gross profit and gross margin before FV adjustments on consumer cannabis net revenue represents gross profit and gross margin before FV adjustments on sales generated in the consumer market only.

• Adjusted gross profit and gross margin before FV adjustments on wholesale bulk cannabis net revenue represents gross profit and gross margin before FV adjustments on sales generated from wholesale bulk cannabis only.

• Adjusted gross profit and gross margin before FV adjustments on ancillary net revenue represents gross profit and gross margin before FV adjustments on sales generated from ancillary support functions only.

Management believes that these measures provide useful information to assess the profitability of our cannabis operations as it represents the cash gross profit and margin generated from cannabis operations and excludes (i) out-of-period adjustments to provide information that reflects current period results; and (ii) excludes the effects of non-cash FV adjustments on inventory and biological assets, which are required by IFRS.

• Adjusted EBITDA is calculated as net income (loss) excluding interest income (expense), accretion, income taxes, depreciation, amortization, changes in fair value of inventory sold, changes in fair value of biological assets, share-based compensation, acquisition costs, foreign exchange, share of income (losses) from investment in associates, government grant income, fair value gains and losses on financial instruments, gains and losses on deemed disposal, losses on disposal of assets, restructuring charges, onerous contract provisions, out-of-period adjustments, and non-cash impairments of deposits, property, plant and equipment, equity investments, intangibles, goodwill, and other assets. Adjusted EBITDA is intended to provide a proxy for the Company’s operating cash flow and is widely used by industry analysts to compare Aurora to its competitors, and derive expectations of future financial performance for Aurora, and excludes out-of-period adjustments that are not reflective of current operating results. Adjusted EBITDA increases comparability between comparative companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of FV adjustments on biological assets and inventory and financial instruments, which may be volatile and fluctuate significantly from period to period.

Non-GAAP Measures should be considered together with other data prepared accordance with IFRS to enable investors to evaluate the Company’s operating results, underlying performance and prospects in a manner similar to Aurora’s management. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

 26  |  AURORA CANNABIS INC.            Q3 2022 MD&A

EX-99.3

Exhibit 99.3

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Miguel Martin, Chief Executive Officer of Aurora Cannabis Inc., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Aurora Cannabis Inc. (the “issuer”) for the interim period ended March 31, 2022.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (COSO Framework 2013) published by The Committee of Sponsoring Organization of the Treadway Commission (COSO).

5.2 ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period:

(a) a description of the material weakness;

(b) the impact of the material weakness on the issuer’s financial reporting and its ICFR; and

(c) the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3 Limitation on scope of design: N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2022 and ended on March 31, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 12, 2022

/s/ Miguel Martin

Miguel Martin

Chief Executive Officer

EX-99.4

Exhibit 99.4

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Glen Ibbott, Chief Financial Officer of Aurora Cannabis Inc., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Aurora Cannabis Inc. (the “issuer”) for the interim period ended March 31, 2022.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (COSO Framework 2013) published by The Committee of Sponsoring Organization of the Treadway Commission (COSO).

5.2 ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period:

(a) a description of the material weakness;

(b) the impact of the material weakness on the issuer’s financial reporting and its ICFR; and

(c) the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3 Limitation on scope of design: N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2022 and ended on March 31, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 12, 2022

/s/ Glen Ibbott

Glen Ibbott

Chief Financial Officer