CBWTF Stock: Will Auxly Cannabis Group Maintain January’s Gains?

CBWTF stock

As a cannabis financing company, Auxly Cannabis Group (OTCQX:CBWTF) (TSXV:XLY) is one of the industry's more unique stocks. This fact alone could prove fruitful for investors of CBWTF stock as the company has many revenue streams to avail of. But of course, on the flipside of that, Auxly has to put up a lot of cash first, and this could be worrisome for investors.

CBWTF Stock Movement

CBWTF stock hit a 52-week low of $0.47 USD on December 21st on the OTCQX exchange. However, just over a month later, it closed at $0.74 USD, representing a 55% premium over that low.

As a whole, it's safe to say January was fruitful for CBWTF stock.

This past week has seen this stock tick along; bouncing between that high of $0.74 and lows of $0.70. Today, Auxly stock is selling for $0.71 USD and is up 0.35%. These incremental gains and losses suggest investors may finally be stagnating over CBWTF stock.

January was good, but can we expect similar growth in February?

Impetus for Future Growth?

Last week, the company announced an agreement with Curative Cannabis. The stock moved, but not enormously. This deal has potential, but it also brings a major risk factor as Curative focuses on craft cannabis.

Auxly Cannabis Group, as a cannabis financing company, has now closed the deal with Curative to buy 46% of the company along with 50% of the cannabis it grows for the next 20 years. The company will provide all the financing needed to expand facilities and help operations, but will craft cannabis be enough to see this deal turn a profit for investors?

Eager to spend, Auxly also just closed its acquisition of Uruguay's Inverell SA on January 9th.

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According to the press release Auxly "will acquire 80% of the outstanding common shares of Inverell in exchange for aggregate consideration of USD$15,000,000."

Analyst Expectations

Analysts are expecting the company's net revenues for the full-year 2019 to come in at approximately $112.38 million CAD. With a current market cap of $561.411 million CAD, a revenue turnover of that figure should reflect well on CBWTF stock.

If Auxly's investments are solid, then investors have nothing to worry about. But it is still early days in the cannabis industry, so you can understand the apprehension here. Auxly Cannabis Group's business model is effectively to put up a lot of cash and then hope it makes it back.

 

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