Auxly Cannabis Group Inc OTCMKTS: CBWTF is a vertically integrated cannabis company with diverse operations across Canada and Uruguay and a platform spanning the entire cannabis value chain. The Company relies upon its diversified cannabis cultivation platform, its leading research and development infrastructure, its domestic and international distribution platform and its experienced team of industry leaders and strategic partners in order to serve an evolving global cannabis market.
On March 29th, 2019 Auxly released its fourth quarter and full year 2018 financial results. These filings and additional information regarding Auxly are available for review on SEDAR at www.sedar.com. All amounts are stated in thousands of Canadian dollars except common shares (“Shares”) and per Share amounts.
Chuck Rifici, CEO and Chairman of Auxly commented: “2018 was an important year for us, as we made substantial progress towards our objective to become a vertically integrated cannabis company. We were successful in building a diverse and robust cultivation pipeline, have made progress on adding value through the research and development of derivative cannabis products through Dosecann, and expanded our distribution channels for bringing cannabis products to market. We added key strategic assets and partnerships to our portfolio, have over $200 million of cash and cash equivalents, and are well positioned to execute on our objectives for this year.”
Auxly is a vertically integrated cannabis company with diverse operations across Canada and Uruguay and a platform spanning the entire cannabis value chain. The Company relies upon its diversified cannabis cultivation platform, its leading research and development infrastructure, its domestic and international distribution platform and its experienced team of industry leaders and strategic partners in order to serve an evolving global cannabis market.
Vision & Strategy
Since the Company’s inception, it has worked closely with its partners to develop a secure, cost-efficient and diversified source of cannabis. To accelerate market participation in the medical cannabis market, and prior to the legalization and creation of the adult-use cannabis markets in Canada in October 2018, Auxly invested in cultivation opportunities, more commonly referred to as “streaming” transactions, with the goal of supply diversification and efficient use of capital. These cultivation partners remain important to the Company’s predictable supply of diverse, cost efficient raw cannabis.
Auxly has been realsing big press releases lately, On March 11, 2019 Auxly announced that its streaming partner, Lotus Ventures Inc. (“Lotus”), has been granted a “standard cultivation” licence and a “sale for medical purposes” licence by Health Canada pursuant to the Cannabis Act and Cannabis Regulations. The licences give Lotus the ability to begin cultivation at its fully constructed 22,500 square-foot facility in Armstrong, British Columbia (the “Facility”).
Hugo Alves, President of Auxly said: “We want to congratulate Dale, Stephen, Scott, Carl, Monica and the rest of the Lotus team on obtaining their Cannabis Act licences! This is an important step for Auxly as we continue to diversify our supply chain, utilizing a network of subsidiaries and partners to provide reliable sources of diverse raw product. Lotus is a partner that we value deeply, being one of Auxly’s first streaming partners. We look forward to continuing to work closely with the team at Lotus during these exciting new phases of their business.”
Deal Terms with Lotus
Pursuant to the definitive agreement entered into on September 11, 2018 (the “Transaction”), Auxly advanced $4,000,000 to Lotus to partially fund the completion of the Facility, which was in addition to Auxly’s $1,000,000 subscription of units of Lotus completed in January 2018. After completion of the Transaction, Auxly owned 5,755,868 common shares of Lotus and 1,000,000 five-year share purchase warrants exercisable at a price of $0.70. Additionally, Auxly is entitled to purchase or otherwise direct the sale of 50% of the Facility’s total production, which is expected to be 2,000 kg of cannabis per annum. Auxly also retains a right of first refusal to purchase the remaining 50% of cultivation output from the Facility, as well as a right of first refusal to finance a prescribed portion of the first expansion to the Facility and all or a portion of any further expansions of the Facility.