Auxly Announces Cultivation Optimization Plan and Related Cost Savings Initiatives
08 February 2022 - 8:30AM
Auxly Cannabis Group Inc. (TSX - XLY) (“
Auxly” or
the “
Company”), a leading consumer packaged goods
company in the cannabis products market, announced today that the
Company has closed its Robinsons cultivation facilities located in
Kentville and Hortonville, Nova Scotia, as the Company continues to
focus its efforts on streamlining and simplifying its cultivation
platform, reducing costs and achieving its goal of becoming
adjusted EBITDA positive by the first half of this year.
This strategic decision comes after careful
consideration in identifying opportunities for the Company to
optimize its vertically integrated platform and effectively reduce
operating costs, while ensuring no material impact on its
cultivation or processing capabilities and forecasted sales
revenue. Through streamlining its cultivation footprint, the
Company will be able to focus efforts and resources on optimizing
the output of high-quality cannabis from its newly acquired
large-scale greenhouse cultivation facility located in Leamington,
Ontario. Auxly Leamington, formerly called Sunens Farms Inc., is a
1.1 million sq. ft. facility producing unique cannabis strains that
are currently being used in the Company’s full suite of
industry-leading branded cannabis products. Auxly Leamington also
provides the Company with considerable additional cultivation,
storage, processing and manufacturing space, affording Auxly the
ability to scale its operations in concert with the increasing
demand for its portfolio of quality branded products and gain
further economies of scale.
Robinsons Cannabis Incorporated, located in
Kentville, Nova Scotia, operated a 27,700 sq. ft. indoor
cultivation facility that focused on the production of high-quality
craft cannabis. Robinsons Outdoor Grow Incorporated
(“Robinsons OG”) is an outdoor cannabis
cultivation project comprised of over 158 acres of land located in
Hortonville, Nova Scotia. The Company never commenced cultivation
activities at Robinsons OG, instead utilizing the space for
additional storage and processing capacity. The Company intends to
divest these non-core assets and apply the proceeds from any such
sale to support Auxly’s ongoing operations.
“While we believe that taking these steps
ultimately makes Auxly a more focused company that is better
positioned to achieve its strategic goals, it was an extremely
difficult decision because of the impact on our talented and
hard-working Robinsons employees. We are grateful for all of their
efforts and will do our best to help support them through this
period of transition,” said Hugo Alves, CEO of Auxly. “We are
diligently working to ensure that we achieve our goal of reaching
adjusted EBITDA positive by the first half of 2022 and deliver
stable and profitable financial performance for our stakeholders.
Optimizing our vertically integrated platform allows us to
strengthen our capital position, increase the overall efficiency of
our operations and enhance our ability to continue to meet the
growing demand for Auxly branded products.”
ON BEHALF OF THE BOARD
"Hugo Alves” CEO
About Auxly Cannabis Group Inc. (TSX:
XLY) (OTCQX: CBWTF)
Auxly is a leading Canadian cannabis company
dedicated to bringing innovative, effective, and high-quality
cannabis products to the wellness and adult-use markets. Auxly's
experienced team of industry first-movers and enterprising
visionaries have secured a diversified supply of raw cannabis,
strong clinical, scientific and operating capabilities and leading
research and development infrastructure in order to create trusted
products and brands in an expanding global market.
Learn more at www.auxly.com and stay up to date
at Twitter: @AuxlyGroup; Instagram:
@auxlygroup; Facebook: @auxlygroup; LinkedIn:
company/auxlygroup/.
Investor Relations:
For investor enquiries please contact our
Investor Relations Team: Email: IR@auxly.comPhone:
1.833.695.2414
Media Enquiries
(only):
For media enquiries or to set up an interview
please contact:Email: press@auxly.com
Notice Regarding Forward Looking
Information:
This news release contains certain
"forward-looking information" within the meaning of applicable
Canadian securities law. Forward-looking information is frequently
characterized by words such as "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed" and other similar words, or
information that certain events or conditions "may" or "will"
occur. This information is only a prediction. Various assumptions
were used in drawing the conclusions or making the projections
contained in the forward-looking information throughout this news
release. Forward looking information includes, but is not limited
to: the proposed operation of the Company and its subsidiaries; the
Company’s efforts to streamline its cultivation operations and
reduce operating costs; the intention of the Company to sell the
non-core assets and the proposed use of any proceeds; the Company’s
execution of its product development, commercialization strategy
and expansion plans; the relevance of the Company’s current and
proposed products; the expectation and timing of future revenues;
consumer preferences; political change, future legislative and
regulatory developments involving cannabis and cannabis products;
and competition and other risks affecting the Company in particular
and the cannabis industry generally.
A number of factors could cause actual results
to differ materially from a conclusion, forecast or projection
contained in the forward-looking information in this release
including, but not limited to, whether: the Company is able to
execute on its business strategy; the Company is able to sell the
non-core assets; the Company is able to achieve the anticipated
cost savings from the closure of the facilities; the Company’s
subsidiaries are able to maintain the necessary regulatory
authorizations to conduct business; there is acceptance and demand
for current and future Company products by consumers and provincial
purchasers; and general economic, financial market, regulatory and
political conditions in which the Company operates will remain the
same. Additional risk factors are disclosed in the annual
information form of the Company for the financial year ended
December 31, 2020 dated April 23, 2021.
The forward-looking information in this release
is based on information currently available and what management
believes are reasonable assumptions. Forward-looking information
speaks only to such assumptions as of the date of this release. In
addition, this release may contain forward-looking information
attributed to third party industry sources, the accuracy of which
has not been verified by Auxly. Readers should not place undue
reliance on forward-looking information contained in this release.
The forward-looking information contained in this release is
expressly qualified by the foregoing cautionary statements and is
made as of the date of this release. Except as may be required by
applicable securities laws, the Company does not undertake any
obligation to publicly update or revise any forward-looking
information to reflect events or circumstances after the date of
this release or to reflect the occurrence of unanticipated events,
whether as a result of new information, future events or results,
or otherwise.
Neither Toronto Stock Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the Toronto Stock Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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