Auxly to Participate in the Lytham Partners Spring 2026 Investor Conference on May 28, 2026
TORONTO, May 26, 2026 – Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (“Auxly” or the “Company“), a leading consumer packaged goods company in the cannabis products market, today announced that it will participate in a webcast presentation and host one-on-one meetings with investors at the Lytham Partners Spring 2026 Investor Conference, taking place virtually on Thursday, May 28, 2026.
Company Webcast The webcast presentation will take place at 3:00 p.m. ET on Thursday, May 28, 2026. The webcast can be accessed by visiting the conference home page at https://lythampartners.com/spring2026/ or directly at https://app.webinar.net/Q3aZGBpmNA5. The webcast will also be available for replay following the event.
1×1 Meetings Management will be participating in virtual one-on-one meetings throughout the event. To arrange a meeting with management, please contact Lytham Partners at 1×1@lythampartners.com or register for the event at https://lythampartners.com/spring2026invreg/.
About Auxly Cannabis Group Inc.
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love.
Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at X (Twitter): @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
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.
TORONTO, May 14, 2026 – Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (“Auxly” or the “Company“) a leading consumer packaged goods company in the cannabis products market, today released its financial results for the three months ended March 31, 2026. These filings and additional information regarding Auxly are available on SEDAR+ at www.sedarplus.ca.
Highlights for the quarter ended March 31, 2026 (Q1 2026) compared to the prior period (Q1 2025):
Net revenue of $39.8 million, an increase of 22%
Gross Margin on Finished Cannabis Inventory Sold of 55%, compared to 48% in 2025
Adjusted EBITDA of $12.3 million, an increase of 65% and representing 31% of net revenue
Net income of $3.5 million or $0.003 per basic and diluted share
Cash flow from operations before working capital changes of $11.3 million, an increase of 102%, representing 92% conversion from Adjusted EBITDA.
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
Hugo Alves, CEO of Auxly commented: “Auxly delivered a strong first quarter, with net revenue of $39.8 million, up 22% year-over-year, and Adjusted EBITDA of $12.3 million, up 65% year-over-year. Our top line success can be attributed to the value proposition offered by Back Forty, contributions from new innovations like South Point and All-in-One Boosted Vapes and improved distribution. Our world-class production and manufacturing operations combined with a culture of financial discipline continue to yield industry leading profitability, with Gross Margin on Cannabis Inventory Sold of 55% and an Adjusted EBITDA margin of 31%. We generated $11.3 million of cash flow from operations, up 102% year-over-year and finished the quarter with a cash balance of over $42 million, giving us a strong balance sheet to support our capital program, repurchase Auxly common shares under the NCIB and consider opportunistic uses of capital that meet our return thresholds.”
First Quarter 2026 Financial Overview
Net revenue was $39.8 million in Q1 2026 as compared to $32.7 million in Q1 2025, representing an increase of 22%. The year-over-year growth in net revenue was primarily driven by higher incremental volumes across the core portfolio, improved pricing across the flower portfolio, partially offset by price compression on vape products. The increase was particularly supported by strong performance in the Company’s flower segment, which benefited from increased demand and improved distribution.
Gross Margin on Finished Cannabis Inventory Sold for Q1 2026 improved to 55% from 48% in Q1 2025. In addition to the factors impacting net revenue, the higher Gross Margin on Finished Cannabis Inventory Sold resulted from the improvements made in our manufacturing process to reduce operating costs, higher cultivation yields, efficiency improvements at our Auxly Charlottetown facility and strategic procurement initiatives that further reduced costs.
Selling, general and administrative expenses were $11.4 million, or 28.6% of net revenue in Q1 2026, compared to $9.7 million, or 29.6%, in Q1 2025. The increase in absolute SG&A reflects investments made to support higher sales, while the decline as a percentage of net revenue indicates improved operating efficiency.
Net income was $3.5 million in Q1 2026, a decrease of $8.6 million compared to Q1 2025. Q1 2025 included $8.1 million of deferred tax recovery related to the change in estimated useful life of intangible assets. Excluding the deferred tax recovery, net income decreased by $0.5 million primarily driven by higher fair value loss on biological transformation and inventory. Excluding the impact of fair value adjustments on biological transformation and inventory and the deferred tax recovery in 2025, net income increased $5.8 million primarily due to improved gross profits and the reduction in interest and accretion expenses, partially offset by higher SG&A.
Adjusted EBITDA was $12.3 million in Q1 2026, an improvement of $4.8 million or 65% compared to $7.4 million in Q1 2025. Adjusted EBITDA improved primarily as a result of improved gross profits, partially offset by higher selling expenses and higher wages and benefits to support higher net revenue.
Outlook
Auxly remains focused on delivering sustainable, profitable growth by building on its leadership in the Canadian cannabis market. Auxly continues to advance its strategy through focused innovation, operational excellence, and prudent financial management. With a strengthened balance sheet, we are well-positioned to drive long-term shareholder value.
We expect the Canadian recreational cannabis market will continue to benefit from the tailwinds of increasing social acceptability, capture of market share from the illicit market, the divergence of existing supply to international markets and limited capital availability to the cannabis sector. We believe many of these trends could persist over the long-term.
Auxly continues to see long-term potential in international markets and is actively evaluating export opportunities. We are well-positioned to succeed internationally, supported by our strong brands, scalable production, and a strategic partnership with Imperial Brands. Auxly intends to invest in its international export capabilities over the course of 2026 to prepare and position us for long-term international growth. Our deliberations towards international sales are purposefully rigorous and measured to ensure that international cannabis activities are accretive to profitability and that our focus on winning at home is not compromised.
Auxly believes it can continue to grow net revenue above market rates through product innovation, further investment in distribution and increased capacity at Auxly Leamington. Both innovation and output increases are expected to be funded from operating cash flow for the foreseeable future. Auxly plans to maintain profitability through focused innovation, investment in efficiency and quality, and rigorous cost control. Furthermore, the conversion of profitability to cash flow from operations is expected to improve through the reduction of interest expense and stabilization of working capital investments.
Auxly expects to allocate between $10 million to $12 million of cash flow from operations towards capital projects at Auxly Leamington in 2026. In combination with previous capital investments, these investments are expected to increase quality, capacity and efficiency throughout cultivation and processing and add capabilities that will allow for direct international shipments.
Over the long-term, Auxly remains confident in its ability to deepen its leadership position in Canada and make meaningful advances towards our vision of global leadership while maintaining profitability. With its consumer-trusted brands, best-in-class operating assets, national distribution, and data-driven approach to innovation, Auxly is well-positioned to meet evolving consumer preferences and deliver strong financial performance.
Balance Sheet and Capital Allocation
As of March 31, 2026, current assets were $109.2 million, including cash and cash equivalents of $42.7 million. Total Debt outstanding was $45.0 million and total Debt to TTM Adjusted EBITDA was 0.9x. Cash flow from operations before working capital changes was $11.3 million, representing 92% conversion from Adjusted EBITDA.
Total basic and diluted weighted average shares outstanding for the three months ended March 31, 2026 were 1,376.6 million shares and 1,611.6 million shares, respectively.
On April 14, 2026, the Company announced a share repurchase program of up to 68.9 million common shares, representing less than 5% of the issued and outstanding shares as of April 7, 2026, to be conducted through to April 19, 2027.
Non- GAAP Measures
EBITDA and Adjusted EBITDA are non-GAAP financial measures used in the cannabis industry and by the Company to assess operating performance removing the impacts and volatility of non-cash and other adjustments. The definition may differ by issuer. EBITDA and Adjusted EBITDA used by the Company are reconciled with net income or loss from continuing operations of the Company, an IFRS measure, in the section “Results of Operations” in the MD&A dated May 13, 2026.
“Gross Margin on Finished Cannabis Inventory Sold” is a supplementary financial measure and is defined as net revenue less cost of finished cannabis inventory sold divided by net revenue. “Gross Profit Margin” is defined as gross profit divided by net revenue. Gross Profit Margin is a supplementary financial measure. “Debt” is defined as current and long-term debt and is a supplementary financial measure. It is a useful measure in managing the Company’s capital structure and financing requirements.
Conference Call
Auxly’s management team will host a conference call today, Thursday, May 14, 2026, at 10:00 a.m. EST to discuss its financial results. Participants can access the conference call by telephone by dialing: 1-888-699-1199 (conference ID: 87366) or by audio webcast at: https://app.webinar.net/0YwVgEegekG. Investors are encouraged to send questions to the Investor Relations Team in advance of the call for discussion during the question and answer period. For those unable to participate in the conference call at the scheduled time, it will be available for replay on the Company’s website within 24 hours after the conclusion of the call.
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
Financial Highlights and Key Performance Indicators
For the three months ended:
March 31,
March 31,
(000’s)
2026
2025
Change
% Change
Net revenue
$ 39,753
$ 32,669
$ 7,084
22 %
Gross Margin on Finished Cannabis Inventory Sold*
21,872
15,831
6,041
38 %
Gross Margin on Finished Cannabis Inventory Sold (%)*
55 %
48 %
7 %
15 %
Net income/(loss)
3,466
12,111
(8,645)
-71 %
Adjusted EBITDA*
12,256
7,433
4,823
65 %
Weighted average shares outstanding – basic
1,376,550,373
1,310,291,543
66,258,830
5 %
As at:
March 31,
December 31,
(000’s)
2026
2025
Change
% Change
Cash and cash equivalents
$ 42,663
$ 32,279
$ 10,384
32 %
Total assets
279,682
271,636
8,046
3 %
Debt*
45,043
46,279
(1,236)
-3 %
*Non-IFRS or supplementary financial measure. Refer to the Non-GAAP Measures section for definitions.
Results of Operations
For the three months ended March 31:
(000’s)
2026
2025
Revenue
Revenue from sales of cannabis products
$ 59,738
$ 49,212
Excise taxes
(19,985)
(16,543)
Total net revenue
39,753
32,669
Costs of sales
Costs of finished cannabis inventory sold
17,881
16,838
Inventory impairment
234
123
Gross profit/(loss) excluding fair value items
21,638
15,708
Unrealized fair value gain/(loss) on biological transformation
9,758
12,312
Realized fair value gain/(loss) on inventory
(13,086)
(9,337)
Gross profit
18,310
18,683
Expenses
Selling, general, and administrative expenses
11,384
9,672
Equity-based compensation
1,011
1,505
Depreciation and amortization
1,218
1,296
Interest and accretion expenses
1,092
2,147
Total expenses
14,705
14,620
Other income/(loss)
Interest and other income
58
47
Gain/(loss) on settlement of assets and liabilities and other expenses
–
39
Foreign exchange gain/(loss)
(197)
(163)
Total other income/(loss)
(139)
(77)
Net income/(loss) before income tax
3,466
3,986
Income tax recovery/(expense)
–
8,125
Net income/(loss)
$ 3,466
$ 12,111
Adjusted EBITDA
$ 12,256
$ 7,433
Net income/(loss) per common share – basic and diluted ($)
$ 0.00
$ 0.01
Weighted average shares outstanding – basic
1,376,550,373
1,310,291,543
Weighted average shares outstanding – diluted
1,611,596,497
1,365,880,272
EBITDA and Adjusted EBITDA Reconciliation
(000’s)
Q2/24
Q3/24
Q4/24
Q1/25
Q2/25
Q3/25
Q4/25
Q1/26
Net income/(loss)
$ 2,002
$ 3,239
$ 4,423
$ 12,111
$ 8,310
$ 20,491
$ 943
$ 3,466
Interest and accretion expenses
2,749
3,133
2,291
2,147
1,866
1,423
1,222
1,092
Interest and other income
(140)
(54)
(27)
(47)
(32)
(26)
(25)
(58)
Income tax expense/(recovery)
–
–
–
(8,125)
–
(1,213)
–
–
Depreciation and amortization included in cost of sales
1,780
1,382
1,338
1,274
1,785
1,544
1,844
1,768
Depreciation and amortization included in expenses
1,067
1,197
990
1,296
1,276
1,224
1,204
1,218
EBITDA
7,458
8,897
9,015
8,656
13,205
23,443
5,188
7,486
Impairment of inventory
473
674
729
123
147
235
364
234
Unrealized fair value loss/(gain) on biological transformation
(8,817)
(9,964)
(11,073)
(12,312)
(15,842)
(18,093)
(10,857)
(9,758)
Realized fair value loss/(gain) on inventory
4,464
7,703
11,625
9,337
13,274
12,071
15,911
13,086
Restructuring and acquisition costs
655
(75)
271
–
–
–
–
–
Equity-based compensation
701
1,324
1,103
1,505
1,092
1,293
1,830
1,011
Non-recurring recovery
–
(123)
–
–
(193)
–
(217)
–
Loss/(gain) on settlement of assets, liabilities and disposals
62
(183)
(1,461)
(39)
243
(6,775)
245
–
Foreign exchange loss/(gain)
177
33
797
163
(381)
95
76
197
Adjusted EBITDA
$ 5,173
$ 8,286
$ 11,006
$ 7,433
$ 11,545
$ 12,269
$ 12,540
$ 12,256
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 Auxly, its subsidiaries and partners; the intention to grow the business, operations and existing and potential activities of Auxly; proposed timelines for the build‐out, expansion, licencing or commercialization of the Company’s facilities and projects; the Company’s execution of its innovative product development, commercialization strategy and expansion plans; the Company’s intention to introduce innovative new cannabis products to the market and the timing thereof; the anticipated benefits of the Company’s partnerships, research and development initiatives and other commercial arrangements; the expectation, timing and quantum of future revenues, Gross Margin on Finished Cannabis Inventory Sold, SG&A and of positive Adjusted EBITDA; expectations regarding the Company’s expansion of sales, operations and investment into foreign jurisdictions; future legislative and regulatory developments involving cannabis and cannabis products; the timing and outcomes of regulatory or intellectual property decisions; the ability of the Company to maintain and grow its market share; the relevance of Auxly’s subsidiaries’ current and proposed products with provincial purchasers and consumers; consumer preferences; political change; 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 will be able to execute on its business strategy or achieve its goals; Auxly’s subsidiaries are able to maintain the necessary governmental and regulatory authorizations to conduct business; the Company is able to successfully manage the integration of its various business units with its own; the Company’s subsidiaries obtain and maintain all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the Company will be able to increase and maintain revenues, maintain positive Adjusted EBITDA, and/or achieve and maintain its target Gross Margin on Finished Cannabis Inventory Sold; risks relating to the overall macroeconomic environment, which may impact customer spending, the Company’s costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company and its subsidiaries and partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2025 dated March 25, 2026.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information. 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 the Company. The forward‐looking information is being provided for the purposes of assisting the reader in understanding the Company’s financial performance, financial position and cash flows as at and for periods ended on certain dates and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned that such forward‐ looking information may not be appropriate for any other purpose. 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.
Auxly to Report First Quarter 2026 Financial Results on May 14, 2026
TORONTO, May 7, 2026 – Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (“Auxly” or the “Company“), a leading consumer packaged goods company in the cannabis products market, today announced that it will report financial results for its first quarter ended March 31, 2026, on Thursday, May 14, 2026, before the financial markets open.
Auxly’s management team will host a conference and webcast the same day at 10:00 a.m. EST to discuss its financial results. Participants can access the conference call by telephone by dialing: 1-888-699-1199 (conference ID: 87366) or by audio webcast at: https://app.webinar.net/0YwVgEegekG. Investors are encouraged to send questions to the Investor Relations Team in advance of the call for discussion during the question and answer period. For those unable to participate in the conference call at the scheduled time, it will be available for replay on the Company’s website within 24 hours after the conclusion of the call.
About Auxly Cannabis Group Inc.
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love.
Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at X (Twitter): @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
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.
Auxly Cannabis Group Inc. (“Auxly” or the “Company”) (TSX: XLY) (OTCQB: CBWTF) is pleased to announce that it has filed with the Toronto Stock Exchange (the “TSX”), and the TSX has accepted, the Company’s notice of intention to make a normal course bid (the “NCIB”).
Under the NCIB, the Company is permitted to purchase for cancellation, on the open market, during the period commencing April 20, 2026 and ending on the earlier of April 19, 2027 and the completion of purchases under the NCIB, up to 68.9 million common shares of the Company (the “Common Shares”), representing less than 5% of the issued and outstanding Common Shares of the Company as of April 7, 2026, subject to the policies of the TSX.
The Company believes that, from time to time, the market price of its Common Shares does not adequately reflect the Company’s underlying value and prospects and that, at such times, the purchase of the Company’s Common Shares represents an appropriate use of the Company’s financial resources and will enhance shareholder value.
Daily purchases on the TSX under the NCIB will be limited to 206,920 Common Shares, other than purchases made pursuant to the block purchase exception, based on the applicable average daily trading volume on the TSX for the six months ending March 31, 2026 of 827,683 Common Shares. The actual number of Common Shares which may be purchased under the NCIB and the timing of any such purchases will be determined by the management of the Company, subject to applicable law and the policies of the TSX.
Purchases under the NCIB are expected to be made at prevailing market prices through the facilities of the TSX and/or alternative Canadian trading systems, or by such other means as may be permitted by applicable securities laws. The NCIB will be funded using the Company’s cash resources, and any Common Shares repurchased by the Company under the NCIB will be cancelled.
As of April 7, 2026, the Company had 1,405,038,794 issued and outstanding Common Shares and a “public float” (within the meaning of the rules of the TSX) of 1,053,217,980 Common Shares.
In addition, the Company has entered into an automatic share purchase plan (an “ASPP“) with a designated broker to allow for the purchase of Common Shares under the NCIB at times when the Company would ordinarily not be permitted to purchase shares due to regulatory restrictions or self-imposed blackout periods.
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
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 contained in this new release includes, but is not limited to, statements related to proposed purchases by the Company under the NCIB and statements with respect to the anticipated benefits of the NCIB. These forward-looking statements are subject to numerous risks and uncertainties including, but not limited to, the risk that the anticipated benefits of the NCIB may not be achieved. Readers are cautioned that the foregoing list of factors is not exhaustive. Although the forward-looking statements contained in this press release are based upon assumptions which the Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this press release, the Company has made assumptions regarding, among other things, the ability of the Company to achieve the benefits of the NCIB. These forward-looking statements are made as of the date of this press release and, 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 the 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.
Auxly Provides Update on Stalking Horse Bid for Ayurcann
April 13, 2026
Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (“Auxly” or the “Company“), a leading consumer packaged goods company in the cannabis products market, today announced that its stalking horse bid for the assets of Ayurcann Holdings Corp. (“Ayurcann”) was not selected as the successful bid in the court-supervised sale process.
As previously disclosed, the stalking horse bid was submitted in the Ayurcann sale process concurrently with Auxly providing debtor‑in‑possession financing to Ayurcann in a principal amount of up to $2.0 million (the “DIP Facility”). The DIP Facility is non‑revolving, bearing interest at 12% per annum, with a 2.0% upfront commitment fee earned and paid to the Company upon execution. The DIP Facility is secured by way of a Court‑ordered super‑priority charge in favour of the Company over all of Ayurcann’s property.
Pursuant to the terms of the sales process, Auxly’s bid has been selected as the “Back-Up Bid” in accordance with the sale process rules and, should the successful bid not close by May 15, 2026, will be the winning bidder at its original stalking horse bid amount.
As part of the closing of the successful bid, the DIP Facility will be repaid, including interest, by the successful bidder. Additionally, the Break Fee and Expense Reimbursement contemplated in the stalking horse bid will be paid to the Company as part of the closing of the successful bid.
Hugo Alves, CEO of Auxly commented: “Our stalking horse bid for Ayurcann was opportunistic in nature and contingent on exceeding our internal return thresholds. Our team will continue to pursue non-organic growth opportunities with vigilance where there is a strong strategic fit and, in the meantime, we can continue to focus on growing our business organically. We expect to generate significant free cash flow in 2026 and we are evaluating all our capital allocation alternatives to maximize shareholder value.”
ON BEHALF OF THE BOARD
“Hugo Alves” CEO
About Auxly Cannabis Group Inc. (TSX: XLY)
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at X: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
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 repayment of the DIP Facility; expectations regarding future non-organic growth opportunities and continued focus on organic growth; expectations regarding the Company’s ability to generate significant free cash flow in 2026; expectations regarding the Company’s ability to maximize shareholder value; and expectations regarding the Company’s leadership position in the branded cannabis product market and ability to deliver on its consumer promise of quality, safety and efficacy.
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: all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the ability of the Company to find organic growth opportunities and grow shareholder value; the successful bidder’s ability to repay the DIP Facility; risks relating to the overall macroeconomic environment, which may impact customer spending, the Company’s costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates and the general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company, its subsidiaries, relevant third parties and Company partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2025 dated March 25, 2026.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information. 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 the Company. The forward‐looking information is being provided for the purposes of assisting the reader in understanding management’s current expectations and plans relating to the future, and the reader is cautioned that such forward‐ looking information may not be appropriate for any other purpose. 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.
Auxly Reviews 2025 Milestones and Provides 2026 Outlook
TORONTO, Ontario, January 8, 2026 – Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (“Auxly” or the “Company“) a leading consumer packaged goods company in the cannabis products market, provides a review of milestones in 2025 and an outlook for 2026.
Management Commentary
Hugo Alves, CEO of Auxly, commented: “When telling the Auxly story, we are often asked about what makes us unique. We like to say it comes down to focus. Our strategy is focused. We are focused on the largest and fastest growing product segments – dried flower, pre-rolls and vapes. We are focused on bringing quality, data-driven innovations to market that are relevant to the everyday recreational cannabis consumers. And we are laser-focused on building meaningful strategic relationships with our long-term retail partners, maintaining cost leadership in flower production and practising financial discipline throughout our organization. The results of our focus were especially pronounced in 2025: Back Forty is the #1 cannabis brand in Canada, Backpackers was a huge success in product innovation, and our financial results continue to improve. I am proud of the entire Auxly team for transforming our company into a formidable and profitable operation.”
Mr. Alves continued, “Auxly has entered a new chapter in its story, and this era will be characterized by building enduring value. To us, that means continuing to win at home – growing and optimizing our success here in Canada, while also preparing Auxly for international growth and maintaining financial strength and flexibility. In 2026, we plan to invest $10 million to $12 million towards growth-related capital expenditures. These investments are expected to support continued growth and position Auxly for direct access to international markets. While this is a meaningful increase from prior years, we expect to generate sufficient cash flow from operations to fully fund this growth capital program, while also maintaining the flexibility to consider additional capital allocation opportunities that are accretive to shareholders. We are confident in our future, building to last and have conviction that we are still just getting started.”
2025 was a Banner Year
Winning through Innovation: Backpacker Pre-rolls
Auxly’s most significant innovation in 2025 was the Back Forty Backpackers pre-roll. Backpackers are a first-to-market innovation delivered in a straight cut 10 x 0.75g format packaged in a resealable, water-resistant tin. Each pre-roll is wrapped in hemp paper that allows the flower strain flavour to shine, while burning steadily and evenly thanks to our precision milled flower.
Quickly after launching, Backpackers soared the charts to become top 10 pre-roll SKUs in Canada[1] while gaining significant distribution throughout Q3 and Q4 2025. An instant consumer choice, Backpackers delivered on the brand promise of consistent, high-quality pre-rolls and exceeded our expectations.
Backpackers are currently available in our top selling cultivars Liquid Imagination and Firebreath, and are available for purchase in British Columbia, Saskatchewan, Manitoba and Ontario. Auxly will continue working to bring Backpackers nationwide.
Innovating Up Market: Introducing South Point
Our new brand, South Point was first shipped to distributors in Ontario and Alberta in November 2025 in three SKUs: 3.5g and 14g Turbo Diesel dried flower, and 5 x 0.5g Turbo Diesel pre-rolls.
Built on craftsmanship and authenticity, South Point delivers high-quality dried flower and pre-rolls that highlight the origin story of the “Sun County” region of Southwestern Ontario, where Auxly Leamington, our state-of-the-art hybrid greenhouse with full indoor lighting supplemented by the sun, is located. The brand focuses on slow-cured, hang-dried, hand-finished flower that reflects the care and precision of Auxly Leamington cultivation, offering consumers a reliably elevated experience without premium-tier pricing. South Point is positioned to become a foundational pillar in Auxly’s flower and pre-roll business, accelerating incremental growth opportunities and a broader portfolio range.
The launch has been well-received with customers and consumers alike who have referenced the innovative packaging with transparency windows which display the quality and appearance of the product so consumers can make confident purchases. The brand is quickly gaining distribution, and we are excited to watch it grow throughout 2026 as it will continue to deliver high-quality offerings to support consumers on their journeys.
Commercial highlights for the year also include:
#3 largest Canadian Licensed Producer by market share[2]
Back Forty was the #1 cannabis brand in Canada throughout all of 2025
Liquid Imagination and Fire Breath 28g were the top two best-selling SKUs nationwide
Leader in the all-in-one vape category, holding 10 of the top 15 SKUs nationwide
Held three of the top 10 non-infused pre-roll SKUs nationwide
Still Expanding Distribution
In the second quarter of 2025, we entered Quebec, the second largest provincial cannabis market in Canada. We believe the Quebec consumer is an ideal fit for Auxly and our early performance in the market confirms our view. With only three SKUs in market, Back Forty has quickly become the fourth largest brand in Quebec[3] and we are just getting started. Both Liquid Imagination and Fire Breath are in the top four 28g flower SKUs with Fire Breath currently holding the #1 spot. We look forward to building the trust of the Quebec consumer throughout 2026 and beyond, and bringing forward a larger assortment of Auxly products over time.
A Successful Restructuring
In early July 2025, Auxly amended its Credit Facility with the Bank of Montreal and settled all remaining debts owing to our long-term strategic partner, Imperial Brands. Prior to the restructuring, Auxly screened poorly to prospective investors given the going concern note, negative working capital position and interest expense consuming a considerable amount of cash flow.
When Auxly reported its Q3 2025 results in November, the going concern note was gone, we reported positive working capital of $49 million, including $30 million in cash, and, combined with our debt repayments throughout the year, annualized interest expense has reduced by $1.6 million. We consider the improvement in our balance sheet to be a significant strength and a notable differentiator in the cannabis sector where access to capital remains challenging for most producers.
Results Flow to the Bottom Line
Team Auxly continues to deliver strong financial momentum. As of September 2025, Auxly generated trailing twelve-month net revenue of $146 million and Adjusted EBITDA of $42 million. These results are due to successful innovation, improved distribution, cost leadership and financial discipline.
Auxly’s interim results for the three-month period ended September 30, 2025 provide a clear snapshot of this positive trajectory. Net revenues were $39.9 million, representing a 20% increase year-over-year; gross margin on finished cannabis inventory sold improved to 56%, compared to 47% in Q3 2024; Adjusted EBITDA reached $12.3 million, an increase of 48% and representing an Adjusted EBITDA margin of 31%; and cash flow from operations before working capital changes reached $11.0 million, up 82% from the prior year.
Driven by improved profitability and a strengthened balance sheet, Auxly’s Total Debt to Adjusted EBITDA decreased to 1.3x at the end of September 2025, and to 0.6x on a net-of-cash basis. We are comfortable with this leverage position and believe it gives us the balance sheet flexibility to invest in our strategic priorities and allocate capital opportunistically should suitable high-return opportunities arise.
We’ve Got a Story to Tell
For years, the cannabis industry has been characterized by a lack of profitability, dilution and capital allocation decisions that failed to create shareholder value. Auxly has not been immune from those challenges but took decisive action late in 2022 to focus and simplify its business and prioritize profitability above all other metrics of success. Our financial restructuring was a turning point in our marketability to investors. In the last six months, we have attended in person and virtual conferences, garnered interest from institutional investors and developed a pipeline of activity to keep the investor relations momentum going. While we are still in early innings, we are generating interest among shareholders old and new, both individuals and institutional. We have conviction that as we continue to execute on our business strategy and stay active in the investor community that we will continue to gain momentum with investors and add more shareholders to team Auxly.
2026 Outlook
Auxly remains focused on delivering sustainable, profitable growth by building on its leadership in the Canadian cannabis market. Auxly continues to advance its strategy through focused innovation, operational excellence, and prudent financial management. With a strengthened balance sheet, we are well-positioned to drive long-term shareholder value.
We expect the Canadian recreational cannabis market will continue to benefit from the tailwinds of increasing social acceptability, capture of market share from the illicit market, the divergence of existing supply to international markets and limited capital availability to the cannabis sector. We believe many of these trends could persist over the long-term.
Auxly continues to see long-term potential in international markets and is actively evaluating export opportunities. We are well-positioned to succeed internationally, supported by our strong brands, scalable production, and strategic partnership with Imperial Brands. Auxly intends to invest in its international export capabilities over the course of 2026 to prepare and position us for long-term international growth. Our deliberations towards international sales are purposefully rigorous and measured to ensure that international cannabis activities are accretive to profitability and that our focus on winning at home is not compromised.
Auxly believes it can continue to grow net revenue above market rates through product innovation, further investment in distribution and increased capacity at Auxly Leamington. Both innovation and output increases are expected to be funded from operating flow for the foreseeable future. Auxly plans to maintain profitability through focused innovation, investment in efficiency and quality, and rigorous cost control. Furthermore, the conversion of profitability to free cash flow is expected to improve through the reduction of interest expense and stabilization of working capital.
Auxly expects to allocate $10 million to $12 million of cash flow from operations towards capital projects at Auxly Leamington in 2026. In combination with previous capital investments, these investments are expected to increase capacity and efficiency throughout cultivation and processing, and add capabilities that will allow for direct international shipments.
Over the long-term, Auxly remains confident in its ability to deepen its leadership position in Canada and make meaningful advances towards our vision of global leadership while maintain profitability. With its consumer-trusted brands, best-in-class operating assets, national distribution, and data-driven approach to innovation, Auxly is well-positioned to meet evolving consumer preferences and deliver strong financial performance.
About Auxly Cannabis Group Inc. (TSX: XLY)
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
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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 Auxly, its subsidiaries and partners; the intention to grow the business, operations and existing and potential activities of Auxly; amount of capital expenditures and any future benefits from such expenditures; proposed timelines for the build‐out, expansion, licensing or commercialization of the Company’s facilities and projects; the Company’s execution of its innovative product development, commercialization strategy and expansion plans; the Company’s intention to introduce innovative new cannabis products to the market and the timing thereof; the anticipated benefits of the Company’s partnerships, research and development initiatives and other commercial arrangements; the expectation, timing and quantum of future revenues, Gross Margin on Finished Cannabis Inventory Sold, SG&A and of positive Adjusted EBITDA; expectations regarding the Company’s expansion of sales, operations and investment into foreign jurisdictions; future legislative and regulatory developments involving cannabis and cannabis products; the timing and outcomes of regulatory or intellectual property decisions; the ability of the Company to maintain and grow its market share; the relevance of Auxly’s subsidiaries’ current and proposed products with provincial purchasers and consumers; consumer preferences; political change; 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 will be able to execute on its business strategy or achieve its goals; Auxly’s subsidiaries are able to maintain the necessary governmental and regulatory authorizations to conduct business; the Company is able to successfully manage the integration of its various business units with its own; the Company’s subsidiaries obtain and maintain all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the Company will be able to increase and maintain revenues, maintain positive Adjusted EBITDA, and/or achieve and maintain its target Gross Margin on Finished Cannabis Inventory Sold; risks relating to the overall macroeconomic environment, which may impact customer spending, the Company’s costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates; whether international legislation continues permitting the export and sale of medical or recreational cannabis; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company and its subsidiaries and partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2024 dated March 20, 2025.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information. 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 the Company. The forward‐looking information is being provided for the purposes of assisting the reader in understanding the Company’s financial performance, financial position and cash flows as at and for periods ended on certain dates and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned that such forward‐ looking information may not be appropriate for any other purpose. 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.
