Auxly stock has been falling over the past month due to weak sentiment in the cannabis sector. Let's analyze the recent developments from Auxly Cannabis Group Inc. (TSXV:XLY) (OTCQX:CBWTF).
Credit Facility
Over the past months, the cannabis sector has gone through its fair share of ups and downs. The same has happened with many cannabis companies, but most of those companies have continued to work towards expanding their businesses. One of those firms is Auxly Cannabis Group, but back on September 24, the company made a major announcement that caused Auxly stock to record further declines. The company announced that it had managed to close an $84 million CAD credit facility and in addition to that, foreclosed on the company named Curative Cannabis.
According to the announcement made by the company, the credit facility was closed by Sunens Farms, its joint venture partner, from the Bank of Montreal. The total credit facility is going to be made up of a three-year debt facility worth $71.5 million and a leasing facility worth $12.5 million.
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Back in August, Auxly sent a foreclosure notice to Curative Cannabis, which is among the first cannabis companies to go bankrupt. Having picked up a stake in the company in early 2019, Auxly is now going to pick up the company on the cheap and raise its own production levels significantly.
At this point in time, Auxly stock is one of the most promising stocks in the cannabis market. The company has made shrewd investments, partnerships, and joint ventures; all of which could pay off handsomely someday. In addition to that, it has prudently shifted its focus beyond the Canadian market and has already picked up an 80% stake in Inverell, an Uruguayan hemp producer.
Inverell could prove to be an excellent investment for Auxly Cannabis Group as it will help the company in spreading across the potentially lucrative CBD market in South America. Additionally, the investment of tobacco giant Imperial Brands (OTCQX:IMBBF) into Auxly could also prove to be a major positive for Auxly stock in the long run.
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