Auxly Cannabis Group Reports Growth, Lowered Costs in Q3

The company saw a positive adjusted EBITDA for the period.

Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) reported a sharp rise in its third-quarter revenue alongside meaningful cost reductions.

The Toronto-based company announced that its net revenues for the quarter ending Sept. 30 soared to $28.2 million, a 42% jump from the same period last year.

Auxly’s success in the third quarter wasn’t just limited to revenue growth. The company also successfully reduced its SG&A expenses by $1.5 million, or 13%, from the same period in 2022. The reduction is part of Auxly’s broader strategy to streamline operations and enhance profitability.

The company also saw a positive adjusted EBITDA of $100,000, an upswing of $5.9 million compared to the same period last year “primarily as a result of improvements in gross profits and SG&A.”

“During the quarter we continued to take positive steps to focus our operations, reduce costs, and improve profitability,” CEO Hugo Alves said in a statement.

He added, “We saw increased demand for our products due to strong operational execution, the persistent efforts of a dedicated internal sales force and the increasing popularity of our Back Forty and Parcel brands. The successful consolidation of our manufacturing activities, enhancements in pre-roll automation and disciplined spending have directly improved margins and resulted in better overall financial performance.”

The company stated that it maintained its ranking as the fifth-largest licensed producer in Canada, holding a 4.8% market share by quarter-end, which edged up to 5% by October. The company’s products, particularly in the pre-roll segment, have seen growing popularity, with Back Forty Wedding Pie and Banana OG pre-rolls leading sales.

Auxly has also made strides in product innovation and operational improvements. The introduction of new Back Forty all-in-one vapes and enhancements in post-harvest operations at its Leamington cultivation facility will help the firm meet demand and maintain quality.

The company managed to strengthen its runway by extending a convertible debenture with Imperial Brands plc by two years, boosting its balance sheet.

Looking ahead, Auxly aims to grow net revenues by 15% in 2023, focusing on key product categories and leveraging its large-scale cultivation facility for cost efficiency. The company also plans to manage its SG&A effectively, targeting a margin below 40% of net revenues.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at

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