Auxly stock is trading in the green on Tuesday as Auxly Cannabis Group Inc (TSXV:XLY) (OTCQX:CBWTF) announces the appointment of its new Vice President.
Auxly Cannabis Group is one of the more interesting companies in the cannabis industry and has been making a range of strategic moves over the past months. In a new development, the Canadian firm made an announcement about a key appointment today. The company has hired Andrew MacMillan as the Vice President of Commercial Business Development.
MacMillan has extensive experience in the industry and had previously been the Chief Executive Officer at PEI Liquor Control Commission, an outfit which regulates the sale of cannabis through Cannabis Management Corporation, one of its subsidiaries. MacMillan was responsible for the establishment of the retail operation of the company under the PEI cannabis banner.
Last week, there was more good news for Auxly Cannabis Group when its wholly owned subsidiary entered into an agreement with Lonza Group subsidiary Capsugel Inc. Auxly will provide Capsugel with a comprehensive line of machinery meant for filling capsules and sealing. An advanced LEMS machine is also going to be provided. The two entities will also collaborate on the formulation of cannabis capsule products.
CBWTF stock is now up 4% and trading at $0.5770 on the OTC market. On the Canadian side, Auxly stock is trading higher 2% at $0.74.
Auxly Cannabis Group’s business model has recently evolved from being that of a company that provided cannabis growers with capital and greenhouse to one that grows the product themselves. In the past, Auxly used to get a cut of the production at prices lower than the going market price. The company sold the product it got at a cut-price at market rates and generated profits. However, that did not really generate the desired results, and hence, Auxly has now gone into joint ventures in order to grow its own cannabis.
While its earlier business still exists, it has gone into joint ventures in a big way, and the company expects to produce 170,000 kilos of cannabis from the combined businesses every year. If it hits that target, then it will be placed just behind the five biggest producers in the industry.
However, the fact remains that the company needs to be patient since many of the companies with which it has gone into joint ventures might not really ramp up production until later on this year or at some point in 2020. It is also reportedly holding back some of its stock in order to go into the derivative market later on this year and missing out on revenues at this point of time. It is a compelling company, but experts believe there are some risks.
Auxly stock is currently one of the worst performers in the cannabis space with a loss of 55% from its 52-week high of $1.26 USD.
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