Auxly stock is down 2% today as the company has announced it has closed on credit facilities worth $84 million CAD, and also foreclosed on Curative Cannabis.
Auxly Stock Trading Down Despite Good News
Auxly Cannabis Group Inc. (TSXV:XLY) (OTCQX:CBWTF) has today announced that its joint venture partner Sunens Farms Inc. has closed the previously announced $84 million CAD credit facilities with Bank of Montreal (BMO). The credit will be split into a $71.5 million CAD senior debt facility over a three-year term, and a $12.5 million leasing facility. Auxly stock is currently trading down at $0.65 per share.
Sunens is a 1.4 million square foot cannabis greenhouse currently under construction in Leamington, Ontario and the credit facility secured today will be used to fund the completion of phase one, which is expected by December 2019. Auxly will be keen to complete construction on the facility as soon as possible, particularly after analysts predicted Auxly stock to be the fastest-growing pot stock in 2020. With expected sales of around $5.8 million CAD in 2019, experts predict this should increase substantially to $184.3 million CAD once this facility comes online.
Auxly Stock Boosted By Curative Bankruptcy?
Auxly stock could also be further boosted as the company looks set to seize all the assets of Curative Cannabis, which appears to be the first major bankruptcy in the Canadian cannabis market. Back in January, Auxly Cannabis Group took a 46% take in the Ontario firm and agreed to help fund the building of its 30,000 square foot facility in Chatham-Kent. However, the plant remains only 90% complete, and so in August, Auxly filed a notice of foreclosure to acquire its owed funds.
On September 12, Auxly filed for Farber & Partners to be appointed as receivers for Curative, which was subsequently approved by the Ontario Superior Court on Septemeber 19. It should represent a positive move for Auxly stock and its investors, as the increased production capacity will help the company achieve its production and sales goals for 2020.
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