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Monday, Feb 26, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Auxly boosts revenue with big lead of Canada’s vape segment

The company behind Foray and Kolab Project says it now controls nearly a quarter of Canada’s legal cannabis vape category

Auxly boosts revenue with big lead of Canada's vape segment - kolab project
Image via Auxly

Canadian producer Auxly Cannabis Group Inc.‘s (TSX.V: XLY) (OTCQX: CBWTF) success in gaining nearly a quarter of the country’s weed vape market segment has led to a significant boost in sales.

On Monday, Auxly — maker of the Foray, Kolab Project, Dosecann and Back Forty cannabis brands — said net revenue hit $20.9 million in the three months ended June 30, up 108 per cent over $10 million in the previous quarter.

Adjusted earnings before interest, taxes, depreciation and amortization in the second quarter improved slightly to a loss of $3.3 million, from a loss of $3.4 million in the previous quarter.

Expenses increased slightly to $12.1 million, up 29 per cent from $9.4 million in the first quarter. Selling expenses went up 62 per cent to $2.1 million, share-based compensation increased 366 per cent to $960,000 and wages rose 9 per cent to $4.7 million. In the second quarter 2020, total expenses were $13.6 million.

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The firm reported comprehensive income of $9.2 million, up from a comprehensive loss of $7.2 million, mostly attributable for the $12.5 million sale of subsidiary KGK Science. Auxly bought KGK in 2018 for around $12.3 million.

At the end of the quarter, the company had $31.7 million in cash and cash equivalents, up 55 per cent.

Auxly is chalking up its success to gaining more market share in the cannabis 2.0 market, and specifically the vape category.

The firm says its total market share was 4.9 per cent by the end of the second quarter, rising afterwards to 5.4 per cent in July, while maintaining the top spot in the 2.0 market with around a 15.4 per cent market share.

Auxly boosts revenue with big lead of Canada's vape segment - investor slide

A slide from Auxly’s recent investor presentation

According to Auxly, it now has a 23.5 per cent share of the vape segment.

While vapes are driving the majority of revenue, the company is reporting steady growth in its flower sales, being a top 15 producer on the Ontario Cannabis Store with only three listed SKUs.

Company stock rose 12.5 per cent Monday to $0.27 per share on the TSX Venture Exchange.


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