Auxly Cannabis Group Inc. Archives - Green Market Report

StaffMarch 31, 2022


Auxly Cannabis Group Inc. (TSX ‐ XLY) (OTCQX: CBWTF)  released its fourth-quarter and full-year 2021 financial results with revenue rising 20% sequentially to $29.3 million in the quarter. Auxly also reported that the net losses for the fourth quarter were $18.3 million, which rose from the previous quarter’s net loss of $13.5 million.

For the full-year net revenues rose 79% to $83.8 million versus $46.7 million during 2020. Auxly said revenue was comprised of approximately 69% in Cannabis 2.0 Product sales, with the remainder from Cannabis 1.0 Product sales. Net revenues improved as a result of its expansion into Cannabis 1.0 Products and continued leadership in Cannabis 2.0 Products. Consistent with prior periods, as the company does not participate in the Quebec market, approximately 85% of cannabis sales throughout 2021 originated from sales to British Columbia, Alberta and Ontario.

Net losses for the year were $33.7 million representing a net loss of $0.06 per share on a basic and diluted basis. The company said the improvement of approximately $51.7 million relative to the same period in 2020 was primarily a result of net income of $12.2 million related to the sale of KGK, recognition of a gain from the Imperial Brands Debenture amendments, improvements in continuing operating gross profits and income tax recoveries, partially offset by an impairment charge related to the Curative recoverable amount, losses on the investment in Auxly Leamington while it was recorded as a joint venture and higher interest and depreciation and amortization expenses.

“Auxly exited 2021 as the 5th largest LP in Canada by share of market,” said CEO Hugo Alves. “Over the course of 2021 we were able to successfully extend our brands into Cannabis 1.0 formats, significantly enhance our cultivation capabilities and solidify our position within the top 10 licensed producers in both dried flower and pre-roll sales; all while maintaining our #1 overall position in the Cannabis 2.0 product segment and a dominant 23% share of market in vapes. We successfully launched 51 exciting new SKUs over the course of 2021, including 10 first-to-market innovations, and we will continue to work relentlessly to keep you smiling in 2022 with 60 new product innovations planned for release over the course of the year. I am proud of the dedication that our team has shown – at every site and every facility – in pulling together as one organization and achieving these results and I am excited to carry the momentum that we’ve earned over the course of 2021 into the new year and continue to win with our customers and consumers.”

The company noted that cash flows and financing of the business improved dramatically with total net cash used of $5.9 million in 2021 as compared to a use of $22.9 million in 2020.

2022 Outlook

Auxly said its key priority in 2022 is to achieve Adjusted EBITDA profitability by continuing to grow top-line revenue while enhancing gross profit margins through leveraging the increasing flower output from its Auxly Leamington facility, focused and differentiated brand and product offerings, increased depth and breadth of distribution, and cost optimization through investments in automation to increase production capabilities and efficiency and continuous improvement initiatives.

StaffNovember 15, 2021


Auxly Cannabis Group Inc. (OTCQX: CBWTF) released its financial results for the third quarter ending September 30, 2021 with revenues increasing 95% to C$24.5 million for the three months ended September 30, 2021. This was a 17% increase for Auxly over the second quarter. Still, the company reported a net loss of C$13 million in the quarter.

The company addressed its challenges during the quarter citing additional expenses as it scaled operations, commissioned new equipment, introduced new products and innovations to the base product portfolio, and supported the opening of new stores in key provinces like Ontario. The company said it was happy with the continued revenue growth trend and believes its initiatives to improve the cost structure will lead to an increase in cash flows and near-term positive adjusted EBITDA.

Revenue Breakdown

Auxly said that the revenues were approximately 69% of Cannabis 2.0 Products sales, with the remainder from Cannabis 1.0 Product sales. The company noted that revenues improved during the third quarter of 2021 by $11.9 million over the same period of 2020 and by $3.6 million over the second quarter of 2021. “Likewise, net revenues year-to-date were $54.5 million, an improvement of $26.0 million over the same period of 2020 primarily due to increased retail cannabis sales by the company nationally, achieved through continued leadership in Cannabis 2.0 Product sales and continued expansion into Cannabis 1.0 Products. Auxly reminded investors that it is not in the Quebec market and that roughly 85% of cannabis sales during the third quarter of 2021 came from British Columbia, Alberta and Ontario.

“Despite delays in certain automation equipment at the Kolab facility, which would have contributed to further sales and cost reductions, the company saw an increase in national retail sales in the month of October and moved into the #5 LP position with 7.3% share of the market, successfully achieving the company’s 2021 market share objective of 7-9% by the end of 2021.”


The quarterly net losses improved over last year’s third-quarter net loss of C$17 million. Auxly said the improvement was primarily a result of net income of $12.3 million related to the sale of KGK, recognition of a gain from the Imperial Brands Debenture Amendments, improvements in continuing operating gross profits, and income tax recoveries, partially offset by an impairment charge related to the Curative recoverable amount and losses on the investment in the joint venture.

“We continued to see growth in our Canadian cannabis recreational sales in the quarter, driven by our expanding product offering in dried flower and pre-rolls as well as our continued leadership of the 2.0 product segment where we maintained our #1 overall position driven by our dominance in the vapor segment where our consumers rewarded us with 24% of total national market share,” said CEO Hugo Alves. “As we finish building our asset base, we will increase focus on cost optimization and increasing operational throughput efficiencies to enhance margins and increase profitability.”

William SumnerJuly 25, 2019


The tobacco industry is betting big on cannabis. Today, Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: CBWTF) announced that the international tobacco company Imperial Brands PLC will make an investment in the company through a convertible debenture.

Under the agreement, Imperial Brands will make an investment of $123 million, granting the company a 19.9% ownership stake in Auxly. At $0.81 per share, the investment represents an 11% premium on Auxly’s closing share price on July 24, 2019. The debenture has a three-year term and an annual interest rate of 4%.

Imperial Brand is not the first tobacco company to invest in cannabis. Late last year, Altria Group Inc. (NYSE: MO), which owns the Marlboro cigarette maker Phillip Morris USA, purchased a 45% stake in Cronos Group Inc. (NASDAQ: CRON) for C$2.4 billion.

Given that tobacco sales have been on the decline for years, it would only make sense that companies such Imperial Brands and Altria would make investments in a growing industry like cannabis. Not only do their consumer bases often overlap, but also the tobacco industry already has a developed distribution, manufacturing, and cultivating infrastructure that could easily be converted to cannabis.

Once the transaction is complete, Auxly will gain the rights to Imperial Brands’ vaping technology and intellectual property. Auxly will also be given access to Imperial Brands’ vape business, Nerudia, which has a dedicated cannabis research team and a licensed research and development facility.

In addition to becoming the company’s exclusive partner for the future development of cannabis products, Imperial Brands has been given the ability to name one director nominee and one non-voting observer to Auxly’s Board of Directors.

“This investment from Imperial Brands will enhance Auxly’s ability to continue to deliver on our business plans and accelerate our growth initiatives to expand our portfolio of branded derivative products,” said Hugo Alves, President of Auxly. “The timing is ideal as we prepare to bring our portfolio of innovative cannabis products to the Canadian market following the legalization of edibles, extracts and topicals later this year.”

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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