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Wednesday, December 2, 2020

Why Auxly Cannabis Group Inc (OTCMKTS:CBWTF) May be Back in Growth Mode

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One pattern that is really coming to a head in the cannabis space with some near-term bullish potential is Auxly Cannabis Group Inc (OTCMKTS:CBWTF). The stock has held strong support at the 50-day simple moving average, and could spark a fresh round of interest on a break above the key 200-day average, which is just above at about $0.70/share. To further flesh out the story, the company just announced that its wholly-owned subsidiary, Robinsons Cannabis Inc., has been granted standard cultivation and processing licenses by Health Canada pursuant to the Cannabis Act and Cannabis Regulations.

According to the release, “Led by experienced head grower Andrew Robinson, Robinsons is uniquely positioned to capture the attention of luxury cannabis consumers, with operations built on a devotion to uncompromising quality and a premium cannabis experience. Robinsons products have consistently ranked the highest in terms of cannabinoid content, terpene content and overall quality when independently tested against 5,000 products supplied by various growers licensed in accordance with Canadian cannabis regulations.”

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, CBWTF just announced that its wholly-owned subsidiary, Robinsons Cannabis Inc., has been granted standard cultivation and processing licenses by Health Canada pursuant to the Cannabis Act and Cannabis Regulations.

We’ve witnessed 4% piled on for shareholders of the stock during the trailing week. Furthermore, the name has registered increased average transaction volume recently, with the past month seeing 16% above the average volume levels in play in this stock over the longer term.

Hugo Alves, President of Auxly said: “This is a big milestone for one of our key subsidiaries and member of the Auxly family. We know that Andrew and his team are going to produce some of the best cannabis flower available in Canada and we can’t wait to share it with Canadian consumers. Robinsons is all about an unwavering commitment to quality. We hope to show cannabis connoisseurs, who to date have been generally disappointed with the flower offerings in the market, that passionate artisans operating in the regulated industry can produce an incredible product that reflects their pride and craftsmanship.”

Currently trading at a market capitalization of $386.05M, CBWTF has a significant war chest ($215.1M) of cash on the books, which compares with virtually no total current liabilities. CBWTF is pulling in trailing 12-month revenues of $1.2M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 26.4%. 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.

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