Auxly stock has started 2020 with some impressive gains, but is Dry January the driving force behind this strong start to the year? One study conducted by Auxly Cannabis Group (TSXV:XLY) (OTCQX:CBWTF) seems to suggest it's certainly a factor.
Auxly Stock Up 10% in January
A study conducted by Foray, an Auxly brand that makes cannabis derivatives for inexperienced users, has found that one-third of Canadians were planning on participating in Dry January, a popular trend where people avoid drinking alcohol for the first month of the year. Of the 1,500 people surveyed, 60% said that an alternative to alcohol, such as cannabis, would help make Dry January easier to complete. Could this be the reason for the 10% gain in Auxly stock since the turn of the year?
“We have known that Dry January was a phenomenon that was increasing in importance amongst Canadians over the last few years but we were actually surprised by the number of Canadians that indicated that they’re planning to do it or seriously thinking about doing it," said Mike Lickver, Auxly Cannabis Group’s senior vice president of strategy. Interestingly, the survey also found that 77% of people believe that cannabis is an equal or better alternative to consuming alcohol. Auxly stock is currently trading for $0.58 after a positive start to the year.
Big Year Ahead?
Dry January just happens to coincide with the launch of the cannabis 2.0 market, which will see derivative products such as vapes, edibles, and infused beverages arrive in stores over the coming weeks. In cooperation with its biggest shareholder, tobacco heavyweight Imperial Brands (OTCQX:IMBBF), which invested $123 million USD in the company, Auxly has prepared an extensive range of 2.0 products. With December seeing a spike in sales for the company, the gains in Auxly stock could be set to extend throughout the next few weeks.
The strong start to the year for the Vancouver-based firm lends further credence to some analysts' speculation that Auxly stock could be the fastest-growing pot stock of 2020. Auxly Cannabis Group sales for fiscal 2019 were projected to be just $5.8 million CAD, although we are still awaiting the release of its Q4 earnings; however, some expect that figure to jump to $184 million CAD this year. An eye-watering increase of over 3,000% might just be too hard for investors to ignore.
Featured Image: Canva