Auxly stock gains a bit on Wednesday after Auxly Cannabis Group (TSXV:XLY) (OTCQX:CBWTF) announced the repayment of approximately 97% of its unsecured convertible debentures due January 16, 2020.
The past few months have been quite tough for many cannabis companies, but Auxly Cannabis Group made an announcement today that should come as a positive one for most of its investors. The company today announced that that it has successfully repaid as much as 97% of the money that it had raised through debentures.
The debentures were going to be due for repayment on January 16, 2020. The early payment is an indication that the company’s financial health is sound. It has repaid as much as $79,439,174 of debts and in addition to that, converted $15,985,826 into 21,602,460 common Auxly shares.
Earlier on in October, the company had announced that the TSX Venture Exchange has provided it with the approval to revise the conversion price of its shares for the repayment of these same debentures. The company raised as much as $100,000,000 in debentures, and earlier, it agreed that the conversion for each share was going to be $1.55 per share. However, following the approval from the venture exchange, Auxly has reduced the conversion rate to $0.74 per share.
Auxly stock is up 1.50% at $0.70 on the TSXV.
Auxly Cannabis Group is currently one of the most interesting companies in the cannabis industry, due to the sort of vertical integration that it has managed to establish. It has not only established its core business but also augmented it with acquisitions, associated investments, joint ventures, and other partnerships. It has set up partnerships with Delta 9 Cannabis (TSX:DN) (OTCQX:VRNDF) and Atlantic Cultivation.
The company also has a joint venture with Sunsens Farms. These arrangements have resulted in the company generating as much as 100,000 kilos of product annually. Consequently, this places Auxly in an excellent position to take advantage of cannabis 2.0.
Additionally, the latest investment from tobacco major Imperial Brands (OTCQX:IMBBF) has also made it possible for the Auxly to be in a good position financially. The tobacco giant has invested $123 million in the company through a convertible debenture.
Auxly stock has corrected about 35% since early August due to broader weakness in the cannabis sector.
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