Auxly stock falls a bit in today's opening session after reducing its conversion price, due in January at the option of debtholders, to $0.74 a share, from $1.55.
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In a fresh development, Auxly Cannabis Group Inc (TSXV:XLY) (OTCQX:CBWTF) today announced that the TSX Venture Exchange has given Auxly the approval to amend the conversion rate on the $100 million CAD worth of debentures, which were originally meant to be converted at the rate of $1.55 per share.
Now, following this approval, the company is going to turn the rate of conversion to $0.74 per share. The debentures are going to mature in January 2020, and this particular development allows Auxly Cannabis Group to preserve the price of its stocks while paying off its debt.
Despite the troubles that the cannabis sector has gone through over the course of the past months, there are still certain stocks that could prove to be beneficial for investors. One such stock is Auxly Cannabis, and the strongest argument in favor of the company is the fact that it has diversified vertically in a big way.
At the time of writing, Auxly stock is down 3% at $0.72.
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The company has not only relied on its core business but instead diversified in an aggressive way. Auxly has managed to grow its business not only through acquisitions but also through investments, joint ventures, and strategic partnerships.
Such diversification has allowed the company to now bring its total production capacity to as much as 100,000 kilos a year, and if Auxly Cannabis Group continues in the same vein, then it should rise further in the foreseeable future.
There are other important things on the pipeline as well. Auxly is all set to enter the cannabis derivatives market in Canada once it is fully operational in the country later this year. This sort of diversification from the company also attracted the attention of the tobacco giant Imperial Brands (OTCQX:IMBBF).
Back in July this year, Imperial Brands put another $123 million CAD into Auxly through the purchase of convertible debentures. It is perhaps one of the biggest votes of confidence that the company has received in recent times.
Auxly stock is down about 25% since the beginning of 2019.
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