TORONTO, July 12, 2021 — Auxly Cannabis Group Inc. (TSX – XLY) (“Auxly” or the “Company”), a leading consumer packaged goods company in the cannabis products market, is excited to present its product line-up for a summer season filled with brand-new offerings and inspired flavours across multiple categories, including dried flower, vapes, edibles, oil, capsules and concentrates.

Today’s announcement comes as the Company is experiencing success with its previously announced strategic expansion into the dried flower market, including the introduction of dried flower offerings under its Back Forty brand. Auxly’s Back Forty Pine Kush launched in March and it has quickly become one of the most popular flower brands in Canadaⁱ. The success of the Back Forty flower launch has helped Auxly capture approximately 2% of the entire national cannabis flower market (dried flower and pre-rollsⁱⁱ) for the month of June. The Company is delighted with its early success in a segment (dried flower) that accounts for nearly 75% of all Canadian cannabis sales to-date this quarter, or more than $2 billion in sales annuallyⁱⁱⁱ.

With its leadership position in cannabis 2.0 products and the added success of dried flower sales, Auxly has achieved a 5.2% share of the national market for the month of June, as confirmed by Headset Canadian Insights. Further, the Company has moved up to the #6 position among Canadian Licensed Producers for the month of June^iv.

Now, Auxly looks ahead to a summer 2021 lineup designed to delight Canadian cannabis consumers and capture even more of the dried flower market, including exciting new cultivars under the Back Forty brand and the launch of Back Forty pre-rolls.

“Through a focused strategy built on deep consumer insights and executional excellence, we are proud to continue to grow our market share and make a successful entry into the dried flower segment,” said Hugo Alves, CEO of Auxly. “We are excited to continue introducing new products that are responsive to our consumers’ needs, including a more robust line-up of dried flower and pre-roll offerings under our Back Forty and Kolab brands.”

“Canadians deserve something special after a year and a half of pandemic life, and we wanted to make sure our brands rose to the occasion,” said Andrew MacMillan, Senior Vice President, Commercial, Auxly. “Our team of product developers and marketing experts have leveraged consumer insights this summer to bring a suite of high-quality and unique cannabis products that we believe will continue to drive sales and gain meaningful market share for Auxly.”

Here’s a look at the new products Canadian cannabis consumers can look forward to this summer from Auxly’s in-house brands Kolab Project, Back Forty, Foray and Dosecann. More information about these product launches will be announced over the coming weeks. The following products will be available across Canada:

Flower & Pre-rolls:

• Back Forty Animal Mints and Wedding Pie flower. Organically grown, Animal Mints and Wedding Pie are exceptional strains with high THC potencies. These new cultivars will land in the Back Forty where consumers find a better experience for less.
• Back Forty 40s pre-rolls. 40s are machine-rolled straight joints manufactured with state-of-the-art pre-roll technology for a consistent, quality pre-roll that burns evenly with enhanced airflow and flavour. Back Forty 40s will launch with Back Forty’s new organically grown strains Animal Mints and Wedding Pie.
• Kolab Project x Robinsons Growers Series Purple Kush. This summer crossover sees Robinsons’ heavy hitting Purple Kush joining the popular Kolab Project Growers Series, providing cannabis enthusiasts with Robinsons’ superior quality cannabis uplifted by the Kolab Project Growers Series platform.

Edibles:

• Kolab Project 132 Series Live Resin Black Cherry Punch soft chew. A broad-spectrum experience, Canada’s first live-resin soft chew includes aromatic Black Cherry Punch live resin with cherry and floral undertones.
• Back Forty S’mores chocolate. Back Forty’s first edible captures the iconic Canadian campfire treat by combining the flavours of marshmallow, graham crackers and, of course, chocolate.

Kolab Project 232 Series maximizes the flavour and natural expression of the plant for a true-to-strain experience across multiple categories. This summer, Kolab Project puts Slurricane in the spotlight in the following categories:

• Vapes: 1g Live Terpene 510 vape cartridge. Slurricane joins Ice Cream Cake and Black Cherry Punch – both newly launched in the Ontario market.
• Concentrates: Fans of Kolab Project’s best-selling THCA Diamonds will be excited to learn that the brand is issuing a new installment with the Slurricane strain.     

Oils & Capsules:

• Dosecann expands its offerings featuring Auxly’s exclusive, proprietary Ahiflower® Seed Oil and CBD this summer. CBD Omega Lemon Lavender oil and CBD 50 Omega capsules combine high-potency, broad-spectrum cannabinoids with Ahiflower for a sustainably sourced, plant-based, non-GMO source of essential Omega 3 and 6.         

In addition to the above national product launches, Auxly is making the following unique edible products available to select provinces. More information about the distribution of these products will be announced in coming weeks:

• Back Forty Sour Grape and Sour Cherry soft chews. These vegan soft chews join S’mores as the inaugural edibles for Back Forty, in flavours that recall simpler times.
• Foray Strawberry Milkshake White Chocolate. Nothing says summer like a strawberry milkshake. Perhaps Foray’s tastiest edible yet, Strawberry Milkshake White Chocolate is a fresh take on an old-fashioned favourite, perfectly blended to create and rich and creamy mouthfeel, bursting with delicious berry flavour and notes of white chocolate.

ON BEHALF OF THE BOARD

“Hugo Alves” CEO

In the country’s largest market, Ontario, Back Forty Pine Kush in 28g units was the #5 dried-flower SKU in the quarter ending June 30, 2021 (source: OCS sales data, as of July 1, 2021); in British Columbia, Back Forty dried flower was the sixth best-seller for Q2, 2021, capturing approximately 3% of the retail market (source: Headset Canadian Insights, British Columbia dried-flower sales, by brand, as of July 1, 2021).
Headset Canadian Insights, Total Canadian Cannabis dried-flower and pre-roll sales, as of July 1, 2021
Source: https://www.bnnbloomberg.ca/cannabis-canada-weekly-canadians-bought-2b-of-dried-flower-last-year-1.1591442

Headset Canadian Insights, Total Canadian Cannabis sales, as of July 1, 2021

About Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF)

Auxly is a leading Canadian cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the wellness and adult-use markets. Auxly’s experienced team of industry first-movers and enterprising visionaries have secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities and leading research and development infrastructure in order to create trusted products and brands in an expanding global market.

Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.

For more information please contact:
Scott Campbell, 647-402-4957, press@35.183.62.152

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 successful production and launch of current and future Company products; the Company’s execution of its product development, commercialization strategy, and expansion plans; the ability of the Company to maintain and grow its market share; the relevance of the Company’s proposed products; consumer preferences; political change, future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting Auxly 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: there is acceptance and demand for current and future Company products by consumers and provincial purchasers; and general economic, financial market, regulatory and political conditions in which Auxly operates will remain the same. 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 sources, the accuracy of which has not been verified by Auxly. 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, Auxly 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.

TORONTO, Ontario, July 6, 2021 – Auxly Cannabis Group Inc. (TSX – XLY) (OTCQX: CBWTF) (“Auxly” or the “Company“) a leading consumer packaged goods company in the cannabis products market, is pleased to announce the implementation of amendments to certain provisions of its previously issued $123 million debenture (the “Debenture”) and investor rights agreement (the “Investor Rights Agreement”) dated September 25, 2019 (collectively, the “Amendments”) with its strategic partner, Imperial Brands PLC (“Imperial Brands”), pursuant to the terms of the previously announced amending agreement dated April 19, 2021.

Pursuant to the Amendments, Imperial and Auxly have: (i) extended the maturity date of the Debenture by 24 months from September 25, 2022 to September 25, 2024; (ii) provided Imperial with the right, on an annual basis, to convert any or all of the accrued and unpaid interest on the Debenture then outstanding into Common Shares (the “Interest Conversion Election”), at a conversion price equal to the five-day volume weighted average trading price of the Common Shares on the date that Interest Conversion Election is made; (iii) provided that the payment of interest under the Debenture, which currently accrues at a rate of 4% per annum and is payable annually, will remain unchanged but will be payable on maturity of the Debenture; and (iv) re-instated certain approval rights of Imperial under the Investor Rights Agreement.

The Amendments were subject to, among other things, the Company obtaining minority shareholder approval in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, which was obtained at the Company’s annual and special meeting of shareholders held on June 28, 2021.

The Company is also pleased to announce that it has completed the sale of its interest in 2368523 Ontario Limited (d/b/a Curative Cannabis) to a private purchaser for total proceeds to the Company of $6 million.   The Company acquired substantially all the shares and assets of Curative Cannabis pursuant to a foreclosure order issued on November 27, 2019, which assets included a cannabis cultivation facility located in Chatham-Kent, Ontario. The facility has remained non-operational since the foreclosure and while exploring all possible options with respect to the use, commercialization and/or sale of the asset the Company determined such asset was not essential to the Company’s operations and strategy. The disposition of this non-core asset allows the Company to strengthen its financial position with non-dilutive capital that it can deploy into its core business.

ON BEHALF OF THE BOARD

“Hugo Alves” CEO

About Auxly Cannabis Group Inc. (TSX: XLY)

Auxly is a leading Canadian cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the wellness and adult-use markets. Auxly’s experienced team of industry first-movers and enterprising visionaries have secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities and leading research and development infrastructure in order to create trusted products and brands in an expanding global market.

Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.

Investor Relations:

For investor enquiries please contact our Investor Relations Team: 

Email: IR@35.183.62.152

Phone: 1.833.695.2414

Media Enquiries (only): 

For media enquiries or to set up an interview please contact:

Email: press@35.183.62.152 

Auxly’s head office is located at 777 Richmond St. W, Unit 002, Toronto, ON M6J 0C2. Imperial Brand’s head office is located at 121 Winterstoke Road, Bristol, UK BS3 2LL.

Early Warning Disclosure

An affiliate of Imperial Brands holds the Debenture and assuming the Debenture is exercised in full as of the date hereof (but excluding any exercise of the Interest Conversion Election by the holder of the Debenture), Imperial Brands and its affiliates would have beneficial ownership of 157,983,592 Common Shares or approximately 16% of the issued and outstanding Common Shares (calculated on a non-diluted basis).

Imperial Brands intends to review its investment in the Company on a continuing basis and may, subject to the terms of the Investor Rights Agreement, purchase or sell common shares, either on the open market or in private transactions, or exercise the Debenture in the future, in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions Imperial Brands deems appropriate.

An amended early warning report will be filed by Imperial Brands with applicable Canadian securities regulatory authorities. To obtain a copy of the early warning report, please contact Daniel Glavin at 416- 869-5500.

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 Company’s execution of its product development, commercialization strategy and expansion plans; consumer preferences; political change; and 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 included in this release including, but not limited to, whether: general economic, financial market, legislative, regulatory, competitive and political conditions in which Auxly operates will remain the same. Additional risk factors are disclosed in the annual information form of Auxly for the financial year ended December 31, 2020 dated April 23, 2021.

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 Auxly’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 news release is based on information currently available and what management believes are reasonable assumptions. The purpose of forward-looking information is to provide the reader with a description of management’s expectations, and 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 news 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.