Skip to main content

Auxly Cannabis Inc. lost $67-million last year – $34.8-million in the fourth quarter – after writing off an investment, settling a lawsuit and issuing share compensation to employees.

The company, formerly called Cannabis Wheaton Income Corp., has yet to see revenue from selling cannabis, according to its annual financial statements published Friday. It earned $747,000 in 2018, but all from “research contracts and other” activities conducted by subsidiary KGK Science Inc.

Auxly is invested in a number of assets across the cannabis value chain: Dosecann Inc. (derivative products), Sunens Farms Inc. (greenhouse cultivation), Inner Spirit Holdings Ltd. (retail), to name a few. However, most of its partners are pre-revenue. Its first cultivation asset to receive a license, Kolab Project Inc., commenced sales of medical cannabis products in February, 2019.

Story continues below advertisement

In 2018, the company had selling, general and administrative expenses of $27-million. Its biggest non-SG&A loss came from “share-based expenses.” Around $14.4-million of this was attributable to stock options vesting. A further $6-million was attributable to “common shares [issued] to non-executive employees of the Company as compensation, as part of their employment agreements related to services performed in 2018.”

Auxly’s second largest non-SG&A loss related to an investment in Vivo Cannabis Inc. (formerly ABcann Medicinals Inc). Auxly did not disclose the nature of the $8.8-million write off, stating only that it pertained to an “intangible asset related to the streaming interest.” (Auxly’s business model revolves around providing money to companies in return for a portion of future revenue). The two companies have entered into “a confidential arbitration” process, and neither responded to requests for comment.

Auxly also reported a loss of $1.36-million after settling a lawsuit, of an undisclosed nature.

The results come on the heels of other bad news for the company. In February, its partnership with FSD Pharma to retrofit an old Kraft factory in Coburg, Ont. collapsed, with both companies flinging recriminations at one another. Auxly likewise dropped its plans to retrofit an old Nestle factory in Chesterville several months earlier.

Auxly shares dropped 11.3 per cent on Friday, closing at $0.86.

Related topics

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies