Auxly Cannabis has closed its Robinsons cultivation facilities located in Kentville and Hortonville, Nova Scotia, as the Company continues to focus its efforts on streamlining and simplifying its cultivation platform, reducing costs and achieving its goal of becoming adjusted EBITDA positive by the first half of this year.
This strategic decision comes after careful consideration in identifying opportunities for the Company to optimize its vertically integrated platform and effectively reduce operating costs, while ensuring no material impact on its cultivation or processing capabilities and forecasted sales revenue. Through streamlining its cultivation footprint, the Company wants to focus efforts and resources on optimizing the output of high-quality cannabis from its newly acquired large-scale greenhouse cultivation facility located in Leamington, Ontario. Auxly Leamington, formerly called Sunens Farms, is a 1.1 million sq. ft. facility producing unique cannabis strains that are currently being used in the Company’s full suite of industry-leading branded cannabis products. Auxly Leamington also provides the Company with considerable additional cultivation, storage, processing and manufacturing space, affording Auxly the ability to scale its operations in concert with the increasing demand for its portfolio of quality branded products and gain further economies of scale.
Robinsons Cannabis, located in Kentville, Nova Scotia, operated a 27,700 sq. ft. indoor cultivation facility that focused on the production of high-quality craft cannabis. Robinsons Outdoor Grow is an outdoor cannabis cultivation project comprised of over 158 acres of land located in Hortonville, Nova Scotia. The Company never commenced cultivation activities at Robinsons OG, instead of utilizing the space for additional storage and processing capacity. The Company intends to divest these non-core assets and apply the proceeds from any such sale to support Auxly’s ongoing operations.
“While we believe that taking these steps ultimately makes Auxly a more focused company that is better positioned to achieve its strategic goals, it was an extremely difficult decision because of the impact on our talented and hard-working Robinsons employees. We are grateful for all of their efforts and will do our best to help support them through this period of transition,” said Hugo Alves, CEO of Auxly. “We are diligently working to ensure that we achieve our goal of reaching adjusted EBITDA positive by the first half of 2022 and deliver stable and profitable financial performance for our stakeholders. Optimizing our vertically integrated platform allows us to strengthen our capital position, increase the overall efficiency of our operations and enhance our ability to continue to meet the growing demand for Auxly branded products.”