With the technical round trip now completed for shares of Auxly Cannabis Group Inc (OTCMKTS: CBWTF), it may be time to pay very special attention to this stock with a weather eye out for imminent bounce potential. The “round trip” is often a key technical marker. The stock launched higher late last year, springing from the $0.67/share area to score heights exceeding $2.25/share. Now it has spilled stop loss orders back under the origin of that explosive move, which often marks an opportunity for a seller-exhaustion bounce.
This picture is augmented by recent catalysts, including the company’s announcement that its wholly-owned subsidiary, Kolab Project Inc., has received its sales license from Health Canada, pursuant to the Access to Cannabis for Medical Purposes Regulations. According to the release, “The sales license authorizes Kolab to sell dried cannabis to registered Canadian medical patients across the country through its online portal at kolabproject.com.”
Auxly Cannabis Group Inc (OTCMKTS: CBWTF) trumpets itself as an investment company that seeks to provide investor returns through streams and capital appreciation in the Canadian cannabis industry.
The company operates as a cannabis streaming company. It provides funding for cannabis facility expansions, operations, and initial construction in exchange for minority equity interests and a portion of the cultivation production.
The company was formerly known as Knightswood Financial Corp. and changed its name to Cannabis Wheaton Income Corp. in May 2017. Cannabis Wheaton Income Corp. was incorporated in 1987 and is based in Vancouver, Canada, and became known as Auxly Cannabis Group Inc over recent months.
According to company materials, “Auxly Cannabis Group is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.”
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As noted above, this is a recent round trip bounce opportunity sporting some new and interesting catalysts, including the company’s most recent announcement of a sales license from Health Canada.
“The sales license marks a significant milestone in Kolab’s development of a different kind of company – one that rethinks the patient experience,” said Andrew Rock, Chief Operating Officer of Kolab. “As a craft grower, we are passionate about our product and take our commitment as a licensed producer seriously. Through our focus on research and development, we will produce the highest quality medical-grade cannabis. I am grateful to our team for the dedication and hard work that got us here and look forward to building a community that enriches the health and wellness of Canadian patients.”
“We could not be more pleased with the issuance of the sales license to Kolab. The receipt of the sales license is instrumental in allowing Kolab and Auxly to execute on the broader business strategy of the entire platform. We remain convinced that Andrew has assembled the right team and is well equipped to deliver patients an elevated experience by sourcing the best products from across Auxly’s cultivation partners,” said Chuck Rifici, Chairman and CEO of Auxly. “We are also honored to have been selected as a retail cannabis store license applicant in Saskatchewan. This new retail store and e-commerce presence in Saskatchewan serve as an important piece of Auxly’s downstream distribution segment as we look to address both the medical and adult-use markets on a provincial and national basis.”
Earning a current market cap value of $379.5M, CBWTF has a significant war chest ($206.4M) of cash on the books, which must be weighed relative to virtually no total current liabilities. The company has pulled in $1.58M in trailing 12-month revs, with significant sequential quarterly growth on the topline over the past several quarters. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $CBWTF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $CBWTF, either long or short, and we have not been compensated for this article.