Last week, Auxly Cannabis Group (TSXV:XLY) (OTCQX:CBWTF) announced the signing of an $84 million term sheet. This week, the Ontario-based cannabis company announced that it's entered into a hemp cultivation and purchase agreement. The news is quite significant for the company, the cannabis industry, and the province of Prince Edward Island. But Auxly stock is still trading in the red.
Here's what we know.
Auxly Stock Down Despite Cultivation and Purchase Agreement
Yesterday, Auxly Cannabis Group announced that it's entered into a hemp cultivation and purchase agreement; for this agreement, the Toronto company will act as the financial sponsor for the creation of a hemp farming co-operative. The co-operative will consist of six different hemp license holders in Prince Edward Island. As a result of the agreement, Auxly's subsidiary, Dosecann Inc., will purchase all of the hemp created in 2019 at a preferential price.
“We are incredibly excited to have the finest farmers in Canada cultivating hemp at home in PEI," commented Hon. Bloyce Thompson, Prince Edward Island's Minister of Agriculture and Land. "I had the great opportunity of visiting the farm and seeing first-hand the 300 acres that have been planted, and I’m incredibly impressed by the technologies and advancements that the Hemp Farmers bring to the Island."
According to Auxly Cannabis Group, the cultivation of hemp is forecasted to start later this fall. "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.”
All positive things for the Canadian cannabis company, but Auxly stock is telling a different story Tuesday. Perhaps it's because it's still early on in the trading day, or maybe it has to do with how mixed cannabis stocks have been this week, especially yesterday. Either way, Auxly stock is trading in the red.
According to Yahoo Finance, as of 11:21 AM EDT, Auxly stock is trading at $0.68 on the OTC market; this puts the stock down 2%.
What do you think of the news? Do you think Auxly stock will find its way into the green later on today? Let us know your thoughts in the comments below.
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