As we have discussed numerous times in our recent analysis, Auxly Cannabis Group Inc (OTCMKTS:CBWTF) has finally started to make good on the promise that it purported two years ago, when it seemed like a universally revered Canadian pot play that somehow managed to fall flat through a misguided franchise strategy – it has since rebooted with a far more effective approach to market. The stock has recently been sharply outperforming the space, and the narrative keeps developing in positive ways. The latest is the company’s announcement this week that its wholly-owned subsidiaries, Dosecann Inc. and Kolab Project Inc., have both been authorized by Health Canada to sell cannabis oil under the Cannabis Regulations.
According to the release, “The issuance of these sales licenses marks a significant milestone for Auxly in furthering its strategy to deliver branded derivative cannabis products to market when such products become legal later this year. The licenses enable each of Dosecann and Kolab to commence initial sales of cannabis oil products to provincial and territorial purchasers; through Kolab’s flagship retail store in Saskatchewan; and to registered medical patients across the country through Kolab’s 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, CBWTF just announced that its wholly-owned subsidiaries, Dosecann Inc. and Kolab Project Inc., have both been authorized by Health Canada to sell cannabis oil under the Cannabis Regulations.
The chart shows 13% tacked on to share pricing for the listing in the past month. Furthermore, the company has seen interest climb, with an increase in recent trading volume of 23% beyond what we have been seeing over the larger time frame.
Hugo Alves, CEO of Auxly, commented: “These sales licenses are key regulatory milestone for Auxly in executing our business plan of launching derivative products later this year. I applaud the tremendous efforts of our teams at Kolab, Dosecann and Auxly’s regulatory affairs department in securing these critical licenses. We are firmly on track for our broader derivative product launch and look forward to bringing our portfolio of innovative derivative products to Canadian consumers later this year.”
Currently trading at a market capitalization of $457M, CBWTF has a significant war chest ($119.5M) of cash on the books, which is balanced by about $122.4M in total current liabilities. One should also note that debt has been growing over recent quarters. CBWTF is pulling in trailing 12-month revenues of $4.7M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 238.1%. We will update the story again as soon as further details emerge. 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.