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Auxly Cannabis CBWTF Stock Profits and Reasons To Buy

D. H. Taylor
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Joined: 1 year ago
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Auxly Cannabis CBWTF stock is in that middle area where they are performing very well yet are still falling short in other areas.  This may present a solid opportunity.  They are the #6 stated cannabis producer in Canada.  Auxly Cannabis states their goal is to be somewhere in the neighborhood of 7% - 9% Canadian producer by year's end.  That would push revenues above $20M and, that is an interesting trajectory.  If Auxly can increase revenues at that pace then metrics will improve significantly, making Auxly an interesting acquisition.

Simultaneously, Auxly has a strategic partnership with Sundial Growers, SNDL Stock, which that could become another interesting development.  Sundial, of course, recently finished the Inner Spirit Holdings acquisition giving them about 100 dispensaries to work with.  More recently, Sundial just announced another acquisition where they are picking up an alcohol distribution company that also has a 62% ownership of a company that holds 62 dispensaries.  One of the key focuses for management is to get to the 7% - 9% threshold of total market size.  Given the size of Sundial's new reach it would seem an obvious extension that Auxly explore more deeply the relationship with Sundial and expand offerings in these dispensaries.  I am interested in how this may play out.

Cash Raise

But, the downside to what has occurred with Auxly Cannabis this past quarter, of course, is the capital raise they did where they issued some 55M more shares, diluting current shareholders.  Over the past few weeks, CBWTF stock has slid downward and the additional shares may have contributed to that.  However, Auxly Cannabis probably does not have the monopoly on cannabis share prices moving lower.  That being said, if Auxly can hit EBITDA profitability by year's end, they very likely have enough cash on hand to sustain themselves for a long time going forward.


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