Auxly Cannabis (Auxly Cannabis Stock Quote, Chart, News, Analysts, Financials TSXV:XLY) is well-positioned to excel in Canada\u2019s emerging Cannabis 2.0 market, according to Mackie Research Capital analyst Greg McLeish, who delivered an update on the company on Tuesday. McLeish maintained his \u201cBuy\u201d rating for the stock with a raised target price of $0.50 (previously $0.40). Toronto-based Auxly Cannabis has a portfolio of Cannabis 1.0 and 2.0 products including derivatives such as vapes, chewables and chocoates under the Kolab Project and Foray brands. Auxly announced on Monday the closing of a bought deal short form prospectus offering where it issued about 54 million units (one common share and one-half of a purchase warrant) at $0.37 per unit for gross proceeds of about $20 million including over-allotment. Auxly said the net proceeds (about $18.9 million) will go towards: incremental costs from the purchase of automated manufacturing and packaging equipment ($2.0 million), $900,000 in additional cash reserves to joint venture partner Sunens to support cannabis production, $11.3 million towards interest expenses payable on December 31, 2021, associated with outstanding convertible debentures and working capital purposes for the balance ($4.7 million). Last month, Auxly, which was one of the first companies in Canada to distribute and sell Cannabis 2.0 products, announced it had the number one market share position for cannabis derivative products in Canada for 2020, according to data from Headset Canadian Insights. Auxly achieved a 19.2-per-cent share of the vape market (the largest 2.0 market) and 12 per cent of the edibles market during 2020, the first year for the newly-opened industry. \u201cWe are extremely proud to be the Number One LP for Cannabis 2.0 in Canada,\u201d said Hugo Alves, CEO, in a press release. \u201cThe amount of support and overwhelmingly positive feedback we have received from Canadian retail consumers throughout this first year of sales has been tremendous.\u201d \u201cOur commitment to delivering high- quality, differentiated and innovative cannabis products has clearly struck a chord with Canadians and our entire team remains highly motivated to continue our growth trajectory as we start a new year,\u201d Alves said. On Auxly, McLeish said the company continues to be a leader in Cannabis 2.0 in Canada. \u201cWe believe that Auxly\u2019s assets and capabilities, in particular the powerful combination of Dosecann and KGK, make them uniquely positioned to become a market leader for Cannabis 2.0 products,\u201d McLeish wrote. \u201cAuxly\u2019s strategic partnership with Imperial Brands will further advance the company\u2019s capabilities in relation to Cannabis 2.0 products. Under the partnership, Imperial Brands has granted Auxly global vape IP licences for cannabis use. Imperial Brands\u2019 subsidiary, Nerudia, has a growing scientific team dedicated to cannabis research and a facility licenced for R&D activities with cannabis,\u201d McLeish said. \u201cIn addition to its vape IP and R&D, Auxly is leveraging Imperial Brands\u2019 expertise to spur new product development and global expansion, including: commercial expansion into new jurisdictions where Imperial Brands\u2019 sales and distribution reach is strongest; global brand building in highly regulated markets; consumer insights and intelligence capabilities; product commercialization expertise; and scalable operational excellence and supply chain management,\u201d McLeish said. By the numbers, the analyst sees Auxly delivering full 2020 net revenue and EBITDA of $46.5 million and negative $31.5 million, respectively, 2021 net revenue and EBITDA of $107.6 million and $2.9 million, respectively, and 2022 net revenue and EBITDA of $170.1 million and $35.6 million, respectively. At press time, McLeish\u2019s $0.50 target represented a projected 12-month return of 49.3 per cent. For 2020, XLY finished the year down 53 per cent while so far in 2021 the stock is up 31 per cent. \u201cFollowing the 2020 US Presidential election there has been a much more positive tone cannabis companies and this has positively impacted industry valuations,\u201d McLeish said. \u201cAs a result, we are increasing our target multiple on Auxly to 12x EV\/EBITDA (previous 10x). To arrive at our new $0.50 target, we applied a 12x EV\/EBITDA multiple to our new 2022 estimate.\u201d Auxly reported its third quarter 2020 earnings on November 30, showing net revenues of $13.4 million for the period ended September 30 compared to $1.6 million a year earlier and an adjusted EBITDA loss of $6.8 million compared to a loss of $11.1 million a year earlier. The company reported SG&A expenses dropping to $11.4 million compared to $16.6 million a year earlier, and Auxly ended the quarter with cash and equivalents of $13.6 million. \u201cOur improved performance was driven primarily by continued improvements in operational and supply chain capabilities, expanding distribution, better alignment of our resources with our commercial objectives and, of course, our continued focus on understanding our consumers and delivering cannabis products that delight them,\u201d said Alves in a press release. Over the third quarter, Auxly introduced a number of new products including Foray\u2019s Hard Maple Caramels, Dosecann\u2019s omega-Rich Ahiflower Oil Capsules, Kolab Kalifornia dried flower as well as the launch of its Back Forty brand.