Auxly Cannabis Group is a low-cost Canadian cannabis turnaround where improving margins, debt cleanup, and pre-roll/export catalysts create an asymmetric recovery setup from a CAD 0.18 share price.
Overview
Auxly Cannabis Group Inc. is a vertically integrated Canadian cannabis CPG company that has evolved from a leveraged cultivator into a more disciplined branded operator with improving profitability and balance sheet strength. The company sells branded flower, pre-rolls, vapes, edibles, and medical oil products across all ten provinces and two territories, with Ontario, Alberta, and British Columbia representing roughly 71% to 74% of cannabis sales. Its portfolio is anchored by Back Forty, which was the **#1 cannabis brand in Canada throughout 2025**, while Auxly itself ranks as the **#3 Canadian licensed producer by total recreational retail market share**. The investment case is increasingly tied to scale economics: Leamington’s 1.1 million-square-foot greenhouse produces over 100,000 kilograms annually at cash costs estimated 30% to 40% below indoor peers, supporting value-price leadership and margin resilience. Financially, Q1 2026 net revenue rose 22% year over year to CAD 39.8 million, adjusted EBITDA climbed 65% to CAD 12.3 million, and the EBITDA margin expanded to 31%. The major strategic inflection was the 2024-2025 Imperial Brands debt conversion and settlement, which removed a longstanding overhang and helped reduce total debt-to-TTM adjusted EBITDA to 0.9x. Near-term catalysts include pre-roll category growth, medical exports to Europe, NCIB execution, and a potential 20-to-1 share consolidation to improve institutional accessibility.