Auxly Cannabis (TSXV:XLY) (OTCQX:CBWTF) is up 9.5% at the time of writing. XLY stock is selling for just shy of $0.80 per share.
The company had a massive tumble at the close of the market last Friday. It lost nearly 20% before Christmas week but has managed to pare those losses and then some. Since Christmas Eve, XLY stock has grown from $0.63. That's an impressive climb. Is there a reason? Anything to report from Auxly Cannabis Group?
Auxly Cannabis Business Model
Auxly might catch your attention as it is one of only a handful of streaming royalty cannabis companies. It provides funding to the marijuana industry and in return receives royalty payments or a slice of the company.
It's a pretty handy business model, which ensures diversity for the company. It is this diversity that many investors might find attractive; the company operates in nearly every aspect of the cannabis supply chain. This means less of the company-specific risk that can come with investing in emerging companies.
Currently, XLY has investments in 15 diverse cannabis companies. Its portfolio is steadily growing.
Auxly Cannabis Operational Ventures
The company has made significant operational achievements in 2018, and despite this, XLY stock has struggled. Investors, of course, are put off by ailing stocks but don't short sight Auxly just yet.
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Some of those operations include:
- Entering into a $15 million agreement to purchase 80% of Inverell, a massive Uruguay-based producer of CBD and related products.
- In terms of the CBD industry, Auxly has a deal with Dixie Brands to exclusively produce and distribute Dixie products across Canada.
- The company rounded out 2018 with $236.9 million CAD in cash and cash equivalents at the end of Q3. This is revenue to grow the company and its affiliated companies.
Auxly Cannabis is in a unique position because of its unique business model, and this will be the XLY stock's saving grace moving into 2019. It's hard to ignore such an intriguing model, especially when it sits snug within one of the hottest sectors going.
Agree? Disagree? Let us know in the comments below.
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