Auxly stock has been consolidating after gaining 15% over the past three weeks. Let's analyze the recent business developments from Auxly Cannabis Group Inc. (TSXV:XLY) (OTCQX:CBWTF).
Important Deals and Partnerships
The cannabis industry may be going through a lot of pain at this point of time due to a range of factors, and naturally, many stocks have recorded significant declines from their highs in February and March. Like many other companies in the sector, Auxly stock has suffered as well, but it remains one of the more interesting companies in the sector. The primary reason behind that is the fact that Auxly Cannabis Group is not merely a cannabis cultivator.
Auxly has forged a string of partnerships, signed a range of deals, and also gone into joint ventures in order to further grow its business.
The company’s decision to invest in various areas is now proving to be wise, and this was demonstrated in the Q2 2019 earnings. Auxly generated revenues to the tune of $2.8 million CAD, a significant improvement from the prior-year period when it had no revenues to show.
Auxly stock is down 1% at $0.92 CAD on Tuesday's trading session.
Although it is true that Auxly Cannabis Group is still a very small operation, the company is moving in the right direction. It is important to point out that the company has an 80% stake in Inverell, a hemp grower in Uruguay. It will help Auxly in cornering a part of the CBD market in South America eventually.
The company’s diversified strategy finally brought the big rewards when tobacco company Imperial Brands picked up a 19.9% stake in Auxly for $123 million CAD.
That is not all. In early September, the company announced that two of its wholly-owned subsidiaries have been granted licenses to sell cannabis oil products in Canada later on this year. The subsidiaries in question are Dosecann and Kolab.
The legalization of edibles and other derived products in Canada later on this year is being referred to as ‘legalization 2.0.’ This is another big opportunity for cannabis companies and one that could help them reach new heights in the months to come.
Auxly stock has performed well and jumped 30% over the past couple of months.
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