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Cannabis Summary for Aug. 28, 2020

2020-08-28 19:38 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index gained 3.88 points to 132.41 Friday, ending the week up 5.05 points. The Canadian Securities Exchange Composite Index, meanwhile, gained 9.7 points to 495.38 today, closing the week up 14.47 points. In company news, cannabis-2.0-focused Auxly Cannabis Group Inc. (XLY) dropped three cents to 17 cents on 7.88 million shares -- its highest volume of the year -- after releasing its second quarter results for 2020. Despite Q2 2020 only being the second full quarter for which cannabis 2.0 products (which includes edibles, beverages and vapes) have been legal in Canada, Auxly saw its revenue fall. Specifically, its revenue slipped from $9.9-million in Q1 2020 to $8.6-million in Q2 2020. Auxly chief executive officer Hugo Alves nonetheless called it "another successful quarter," but he and investors seem to disagree on that point.

Mr. Alves chalked up the decline in sales to temporary store closures as a result of COVID-19 as well as new competitor "value brands" entering the market. Perhaps because of the increased competition, Auxly has made "pricing adjustments," presumably a more PR-friendly way of saying the company has lowered its prices. As a result, Auxly says it is seeing better sales volume so far in Q3.

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