Auxly Cannabis Group (TSXV:XLY) (OTCQX:CBWTF) is predicted to increase sales by 3,056% in 2020, making Auxly stock the fastest-grower on the market.
Auxly sales in 2019 are expected to be around the $5.8 million CAD mark, but analysts expect this to jump massively next year to $184.3 million CAD. The reasons for this significant increase can be attributed to the fact that the company’s major deals and partnerships don’t commence full operation until next year. For example, the majority of the company’s production will come from its joint venture with Sunens to build a 1.4 million square foot greenhouse in Ontario, and this will not be licensed and operational until Q2 next year.
The second wave of cannabis legalization will come into effect on October 18, and it’s expected to provide a huge list to the industry, particularly in the cannabis derivatives sector. Auxly stock is really well-positioned to take advantage of this, given that Auxly Cannabis Group actually withheld production of dried cannabis flower with the intention os using it for derivative products. Dried cannabis flower alone is a relatively low-margin product, so it’s a miserly decision by management to conserve stock for the higher-margin derivatives market.
Deal After Deal
Last week, Auxly signed a cultivation and purchase agreement with PEI hemp farmers that will see the company receive all the hemp produced at a 300-acre farm on Prince Edward Island. Cultivation will begin this fall and positions Auxly stock to thrive off the booming CBD market. “This project ensures our ability to meet the growing market demand for wellness and adult-use cannabidiol (CBD)-based products, and enhances our commitment to bringing innovative, branded derivative cannabis products to Canadian consumers,” a statement from Auxly said.
Auxly shares are currently valued at $0.68, which is down 0.42% during Friday trading. Having lost nearly 40% of its value from a 52-week high of $1.12 right before legalization last October, don’t be surprised if this is one pot stock to really take off in the coming months.
What do you think?
Featured Image: Canva