Less than a month after Auxly Cannabis Group Inc. (TSX – XLY) (OTCQX: CBWTF) released fourth quarter financial results, the Canadian cannabis consumer packaged goods (CPG) company appointed Andrea Fraser as Chief People Officer (CPO).
As CPO, Andrea will lead all aspects of human resources (i.e crafting talent acquisition strategies, promoting inclusion in the workplace, and further developing and evaluating career paths) and will manage Auxly’s ongoing response to COVID-19 as it relates to its employees and office spaces. Prior to joining Auxly, she worked as the Director, Global Human Resources at Tilray and has extensive experience with leading People and Culture strategy initiatives for multi-national CPG and digital marketing companies.
So far this year, Auxly has been trending to the upside and this is a trend that we are closely following. Although the stock price has come well off its 2021 highs, the trend has been positive and has caught our attention.
An Execution and Growth Story
One of the key goals for Auxly in 2020 was related to strengthening the balance sheet. Last year, the company completed a series of private placements and has more resources to execute on previously announced high impact growth initiatives.
During the fourth quarter, the Canadian cannabis company reported to have generated $18.3 million of net cannabis revenue. This amount of revenue is considerably higher than what was generated in the same period last year and we attribute the increase to Auxly’s cannabis 2.0 business.
According to Headset Canadian Insights data (from January 9th), Auxly has captured 14% of Canada’s cannabis 2.0 market (from a product sales standpoint) and we are favorable on this vertical of the industry.
If 2020 was a Banner Year, What Should we Expect in 2021
2020 was a banner year for Auxly which reported to have generated more than $55 million of revenue ($46.6 million of net cannabis revenue) during this time. When compared to 2019, the company recorded more than 500% of topline growth and we will monitor how the business continues to perform.
Following the earnings report, ATB Capital Markets lowered its price target on Auxly to $0.45 (CAD) from $0.50 (CAD). At current levels, the broker-dealer’s price target implies that Auxly has 25% upside potential. We continue to follow the Canadian Licensed Producer (LP) and will monitor how the story continues to evolve.
Going forward, Auxly’s management team plans to remain laser focused on operating efficiently and cutting costs. The fourth quarter financial results shows that the company is executing on this initiative and we find this trend to be of utmost importance.
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This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws, including statements related to the Company’s ability to support its continued growth and fund the business’ sales and financial goals for at least the remainder of fiscal 2021 with proceeds remaining from its recent offering. While these forward-looking statements represent the Company’s current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially, including risks and uncertainties associated with market conditions. You are cautioned not to place undue reliance on these forward-looking statements, which reflect the opinions of the Company’s management only as of the date of this release. Please keep in mind that the Company is not obligating itself to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as: “potential,” “expect”, “look forward,” “believe,” “dedicated,” “building,” or variations of such words and similar expressions are intended to identify forward-looking statements.