This post first appeared on Micro Cap Daily
Auxly Cannabis Group Inc. (CVE: CBWTF) stock price is seeing growth once again, and while it may not be a massive surge that the investors might be looking for — any positive development is a welcomed sight. The company has seen a large price decline in October, which resulted in a drop from $1.2 to $0.5 by late December 2018.
Immediately after reaching this low point, the price saw a surge that took it to a resistance at $0.7, which has been one of the major roadblocks for the CBWTF price ever since. After spending the entire January trying to breach this level, the price fell down below $0.6 in mid-February, where it remained until mid-March. At this point, it surged again, and it even briefly breached the resistance at $0.7. However, the next one, sitting at $0.8, stopped its progression and pushed it back to the support level at $0.6 by early April. Ever since then, the price has been going up and down between $0.6 and $0.7, unable to breach the resistance, but still strong enough not to break the support. Now, it sees growth once more, and perhaps this time it might breach $0.7 in days to come.
Who is Auxly Cannabis Group and what does it do?
Auxly Cannabis Group is a Canadian vertically-integrated cannabis company that started out as a provider of financing solutions to cannabis license applicants. However, over the years, the company grew and expanded in pretty much every aspect. Today, its operations are extremely diverse, and the firm operates on an international level.
It has also evolved into a platform that spans throughout the entire cannabis value chain. As a result, it became quite flexible and somewhat immune to economic difficulties. Its new, still-evolving model adapts excellently, and it improves product margin dynamics, all with the goal of creating long-term shareholder value, but also to help the industry itself grow and develop further.
The company was quick to hire some of the industry’s first-movers, as well as visionaries, and those who specialize in any area regarding the cannabis industry. As a consequence, the company has accumulated a vast amount of real-world knowledge which it uses to improve itself and help its partners and shareholders profit.
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Auxly Cannabis Group’s stock price performance
As mentioned, Auxly’s stock price had been highly volatile in 2018, and while the price has been relatively low in 2019, the volatility has definitely dropped by quite a lot. In the second half of 2018, it was not unusual for the price to double its size, or to drop by an equal amount.
These days, however, the fluctuations are much more controlled, and while the price is still struggling to grow — it still shows signs of recovery.
The biggest issue that Auxly experienced in the past six months was the termination of a joint venture with a company known as FSD Pharma. Auxly has entered numerous partnerships before and after this one, but this one proved to be the most damaging. After starting the collaboration, Auxly noticed that FSD Pharma made several contractual breaches, particularly in terms of staffing and management obligations of the JV Facility. In addition, Auxly expressed concerns regarding certain aspects of the building’s infrastructure.
After noticing the issues, Auxly urged FSD Pharma to resolve them, even going as far as to offer help in doing so. However, FSD Pharma failed to remedy the breaches, which could have reflected badly on Auxly itself. As a result, the firm saw no other choice but to terminate the joint venture. And, while it reassured its investors that the termination would not harm Auxly in any significant way, its price still suffered as a result of the termination.
Since then, Auxly continued business as usual, and it also strengthened its management team. Its partners are still constantly obtaining cannabis licenses, including Lotus Ventures, who got a license from Health Canada in early March, as well as Robinsons Cannabis Facility, which received Cultivation and Processing license in April.
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It is clear that Auxly continues to operate with every bit of competence it ever had, and that its stock price does not currently reflect its professional business moves. On the other hand, this is a great opportunity for new investors to purchase the firm’s stock and wait for the price to return to its real value, which can only bring them profit in the long run. We will be updating on Auxly when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with Auxly.
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Disclosure: we hold no position in Auxly either long or short and we have not been compensated for this article.
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This post first appeared on Micro Cap Daily