Auxly Announces 14:1 Share Consolidation

Shares to begin trading on the TSX on a post-consolidated basis on July 28, 2026

TORONTO, July 22, 2026 /PRNewswire/ -- Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) ("Auxly" or the "Company") announces today that it will complete a consolidation of the outstanding common shares in the capital of the Company ("Common Shares") on the basis of fourteen (14) pre-consolidation Common Shares to one (1) post-consolidation Common Share (the "Consolidation"). The Consolidation was previously approved by the Company's shareholders at its Annual General and Special Meeting of Shareholders on June 30, 2026 (the "Meeting"). The board of directors subsequently approved a Consolidation ratio of fourteen (14) pre-Consolidation Common Shares for one (1) post-Consolidation Common Share, which is within the range of ratios authorized by shareholders at the Meeting.

Management Commentary

"This is an important step forward for Auxly.  We are one of the fastest-growing, most profitable operators in the Canadian cannabis sector and we are effecting this consolidation from a position of strength to improve Auxly's market quality and align our capital structure with the business we have built. This is not a precursor to a financing or any other dilution – as we have previously said and our actions under our standing NCIB program have shown, we are buyers of our shares, not issuers.  Coming off a record year in 2025, our financial results continue to strengthen, our balance sheet is the strongest it has been in years, and we have a disciplined framework for deploying capital where it can generate the highest returns for our shareholders. We are building to last and our outlook is for continued growth in net revenue, profitability and cash flow generation," said Hugo Alves, CEO of Auxly.

For a detailed commentary on the Company's position with respect to the Consolidation, refer to Auxly's Q1 2026 Letter to Shareholders here.

Additional Details

Notice of the Consolidation has been provided to the Toronto Stock Exchange ("TSX"). The Common Shares will continue to be listed on the TSX under the symbol "XLY" and the OTCQ under the symbol "CBWTF". The Common Shares are expected to begin trading on a post-Consolidation basis on the TSX on or about July 28, 2026. Following the Consolidation, the new CUSIP number for the Common Shares is 05335P703 and the new ISIN for the Common Shares is CA05335P7039.

As a result of the Consolidation, the Company's issued and outstanding Common Shares will be reduced from approximately 1,418,570,505 Common Shares to approximately 101,326,464 Common Shares (disregarding the treatment of any resulting fractional Common Shares). Each shareholder's ownership percentage in the Company and proportional voting power remains unchanged after the Consolidation, except for minor changes and adjustments resulting from the treatment of any resulting fractional Common Shares. The Company will not be issuing fractional post-Consolidation Common Shares. Where the Consolidation would otherwise result in a shareholder being entitled to a fractional Common Share, the number of post-Consolidation Common Shares issued to such shareholder will be rounded down to the nearest whole number of Common Shares.

The Company's registered shareholders holding their Common Shares in certificated form will receive a letter of transmittal from Computershare Investor Services Inc. ("Computershare"), the Company's transfer agent, in respect to the Consolidation, which each registered shareholder will need to sign and complete. The letter of transmittal will contain instructions to registered shareholders on how to surrender the certificates representing their pre-Consolidation Common Shares and authorize Computershare to issue a direct registration advice(s) (DRS) representing their post-Consolidation Common Shares. The Company's registered shareholders whose Common Shares are represented by a DRS will not be required to complete and sign a letter of transmittal, and a DRS statement representing their post-Consolidation Common Shares will automatically be issued to those registered shareholders by Computershare.

Non-registered shareholders who hold their Common Shares through an intermediary such as a bank, trust company, securities dealer or broker should note that these intermediaries may have their own procedures for processing the Consolidation which may differ from those described above for registered shareholders. Non-registered shareholders who have questions should contact their intermediary for more information.

The exercise or conversion price and the number of Common Shares issuable under any of the Company's outstanding convertible securities will be proportionately adjusted to reflect the Consolidation in accordance with the respective terms thereof.

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 global leader quality cannabis products.

Learn more at www.auxly.com and stay up to date at 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.

Forward Looking Statements:

Notice Regarding Forward Looking Information:  

This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking information is frequently characterized by words such as "expect", "anticipate", "intend", "will", "may", "plan", "continue", "believe", "estimate", "potential" and similar expressions, or statements that certain events or conditions "may" or "will" occur.

Forward-looking information in this news release includes, but is not limited to, statements regarding: the anticipated effective date of the Consolidation; the expected commencement of trading of the Common Shares on a post-Consolidation basis; the anticipated reduction in the number of issued and outstanding Common Shares; the treatment of fractional Common Shares; the issuance of replacement DRS advices and processing of the Consolidation by the Company's transfer agent and intermediaries; the adjustment of the Company's outstanding convertible securities; and the expected timing and completion of the Consolidation generally.

Forward-looking information is based on management's current expectations, estimates, projections and assumptions, including, among other things, that all necessary regulatory approvals will be obtained and that the Consolidation will be completed on the anticipated timeline. Although the Company believes these assumptions are reasonable, they may prove to be incorrect.

Actual results may differ materially from those expressed or implied by the forward-looking information as a result of a number of risks and uncertainties, including, without limitation: the failure to obtain or maintain required regulatory approvals; delays in the implementation of the Consolidation; unexpected administrative or operational issues relating to the Consolidation or the processing thereof by the Company's transfer agent or intermediaries; changes in applicable laws or regulatory requirements; and general economic, market or business conditions. 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.

Readers are cautioned not to place undue reliance on forward-looking information. The forward-looking information contained in this news release is made as of the date hereof and is expressly qualified in its entirety by these cautionary statements. Except as required by applicable securities laws, the Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

SOURCE Auxly Cannabis Group Inc.