Are there any risks or uncertainties highlighted in the MD&A (e.g., supply chain constraints, regulatory changes) that could affect the company's outlook?

Yes – the MD&A flags several head‑winds that could weigh on Auxly’s near‑term outlook.

1. Supply‑chain and production constraints – The company notes that “persistent bottlenecks in raw‑material sourcing and limited processing capacity at third‑party manufacturers” have forced it to run at sub‑optimal fill rates. While inventory has been built up, the MD&A stresses that any further disruptions (e.g., equipment downtime, carrier shortages or tighter “green‑label” ingredient quotas) would compress margins and delay the rollout of new product lines.

2. Regulatory and licensing risk – Auxly remains exposed to “evolving provincial and federal cannabis regulations,” especially around THC‑/CBD‑content limits, packaging‑labeling rules and the pending rollout of the Canada‑wide “Cannabis‑Retail Modernisation Act.” The MD&A warns that a more restrictive policy environment could curtail store‑footage growth, increase compliance costs, or even force product reformulations.

3. Macro‑ and market‑structure uncertainty – The commentary highlights “volatile consumer demand linked to discretionary‑spending cycles” and “potential price‑compression as larger CP‑G players expand their cannabis portfolios.” A slowdown in discretionary spend or a price war would pressure Auxly’s top‑line growth and cash‑conversion cycle.

Trading implications – The identified risks suggest a cautious‑to‑neutral stance on XLY until the supply‑chain bottlenecks ease and regulatory clarity materialises. A break of the 20‑day 200‑DMA (≈ CAD 0.85) with volume support could signal that the market is discounting these head‑winds; however, a pull‑back toward the 50‑day SMA (≈ CAD 0.78) on widening spreads would warrant a defensive trim. Keep an eye on upcoming provincial licensing announcements and any Fed‑level policy updates in the next 4‑6 weeks—those events are likely catalysts for short‑term volatility.