The green rush is on in North America, and all eyes are on marijuana stocks. With Canada becoming the first industrialized country in the world to legalize recreational cannabis, investors are eager to see how the multibillion-dollar revenue windfall (when the industry is up to full speed) will be divvied up among the major players.

One of those key marijuana stocks, Auxly Cannabis Group (NASDAQOTH: CBWTF), partially asnwered that question with the release of its third-quarter operating results on Monday morning, Nov. 12, 2018. While fundamental data remained light, as would be expected from an industry that's just getting its feet wet from a legal perspective, Auxly remains on track in its efforts to expand all three verticals of its business model.

Image source: Getty Images.

Auxly Cannabis Group Q3 results: The raw numbers

Data source: Auxly Cannabis Group and SEDAR filing. All data expressed in Canadian dollars.

As you can see, Auxly recognized a little over 0.5 million Canadian dollars in contract revenue during the third quarter after not recognizing any sales in the year-ago period. Fair-value adjustments to its financial instruments accounted for under FVPTL (fair value through profit or loss) helped narrow the company's adjusted quarterly loss per share to just CA$0.02 from an adjusted loss per share of CA$0.03 in the year-ago quarter.

What happened with Auxly Cannabis Group this quarter?

Being a vertically diversified marijuana company with its fingers in the upstream (production), midstream (value add-in/production diversification), and downstream (sales and distribution) aspects of the industry, it makes sense to break up these verticals into separate components to look at what happened during the third quarter.

• Upstream: Possibly the single-biggest event was the receipt of the company's sales license for the Kolab Project, which will be its first source of production. Auxly also made a strategic investment in Manitoba-based Delta 9 Cannabis and signed a long-term supply agreement with the company. Such an investment provides near-term supply that should help Auxly meet an initial surge of demand in domestic markets. Lastly, its subsidiary Dosecann inked a supply agreement to purchase up to 20,000 kilograms of dried flower or cannabis-oil equivalent from Aphria.

• Midstream: Within the midstream segment, the most important development was the completion of its CA$12.3 million acquisition of KGK Science, a contract services organization that'll work hand-in-hand with Dosecann to ensure quality and safety measures are met. Additionally, Dosecann received its Dealer's License from Health Canada, allowing it to engage in the manufacture of cannabis oils and resins via the extraction of dried cannabis flower. These cannabis alternatives typically bear higher margins than traditional dried marijuana.

• Downstream: The most exciting downstream development was the announcement of a strategic partnership with ICC International Cannabis. ICC has agreements in place to supply a European pharmaceutical distributor that serves roughly 35,000 pharmacies in 16 countries with medical cannabis. Auxly also entered into a strategic partnership with Atlantic Cultivation after the third quarter ended, which should give it access to the Newfoundland and Labrador markets in Eastern Canada.

Image source: Getty Images.

What management had to say

As you can imagine, Auxly's management team is upbeat about the company's progress up and down the cannabis supply chain. Said Chuck Rifici, CEO of Auxly:

Auxly continues to build out its platform at an industry leading pace and make progress on the development of its assets and partners at all touch points of the cannabis value chain ... Needless to say, we are pleased with the steady progress we have made in the last three months as the Company works toward achieving its long-term strategic goals.

President and Director Hugo Alves echoed that sentiment, while focusing on the company's burgeoning differentiation:

The third quarter of 2018 was highlighted by the further progress we have made in developing our assets and securing new accretive relationships across all of our business channels. We are increasingly differentiating ourselves through our focus on science-driven product innovation at Dosecann.

Looking forward

This marks just one step of a marathon for marijuana companies like Auxly Cannabis Group. While investors might have to wait a bit longer before they receive tangible top- and bottom-line results that they can sink their teeth into, understand that this industry is still in the process of maturing. It won't happen overnight.

However, this is a company that's well-capitalized -- it ended the quarter with CA$236.9 million in cash and cash equivalents -- and trusts in its vertically integrated approach to expansion. Now, we simply sit back and watch as the next steps of the legal-cannabis maturation process unfold.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool recommends Auxly Cannabis Group. The Motley Fool has a disclosure policy.