Auxly stock is trading unchanged after Auxly Cannabis Group (TSXV:XLY) (OTCQX:CBWTF) said that it has reached a partnership agreement Delta 9 Cannabis (TSX:DN) (OTCQX:VRNDF).
If the cannabis industry is to grow, then a significant driver of the growth is going to be the partnerships that companies set up with retail chains. In a development that could prove to be a major boost for the cannabis industry, Auxly Cannabis announced today that it has enhanced its partnership with Delta 9 Cannabis.
Delta 9 is a well-known cannabis producer and retailer. By way of this partnership, Auxly Cannabis Group will supply Cannabis 2.0 products to the retail outlets that are operated by Delta 9 in Manitoba. The two companies have been in a strategic partnership since September 2018.
According to the initial strategic partnership that had been signed between the two companies, Delta 9 reached an agreement to send in 5,000 kilos of dried cannabis flower and 500 kilos of trimmed cannabis per year to Auxly.
At the time of writing, Auxly stock is unchanged at C$0.54.
The agreement is in place until July 1, 2030. In addition to this agreement, Auxly Cannabis Group also invested $16.25 million in Delta 9 Cannabis and became one of the biggest early backers of the company. Delta 9 currently owns four stores in Manitoba, but it is looking to expand the number of stores.
In this regard, it is important to note that Auxly stock has tanked by as much as 25% over the past month. Back in January, Auxly stock was added to the influential S&P/TSX Cannabis Index, and that was certainly a boost for the stock. It seems that the steep drop in the stock price could have been due to the sector-wide troubles in the cannabis sector at the time.
The various layoffs that were announced a few weeks back at different companies could have had an effect on the stock price as well. Auxly is making a big move in the cannabis derivatives market, and it could well prove to be the next trigger for growth for Auxly stock.
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