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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.

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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.

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