Australis Capital Inc. (CSE:AUSA) (OTC:AUSAF) CEO Terry Booth, who famously began Aurora Cannabis in 2006 earlier than departing beneath duress in 2019, has quite a bit on his thoughts and his plate today as he undertakes for the second time in his profession the actually formidable activity of steering a big hashish enterprise into market relevance. This time, nevertheless, he’s competing on a fragmented and unstable U.S. stage stuffed to the rafters with equally decided a number of state operators (MSOs) angling for prime billing (and a dominant market cap). January will mark one 12 months since Booth, 57, assumed management of the rechristened Audacious, a moniker clearly meant to specific each an perspective and its enterprise mannequin going ahead. Well underway establishing itself in a handful of states, Audacious celebrated its official debut at MJBizCon, the place Booth made the media rounds speaking up his latest venture. “It was the most times I’ve ever been interviewed at MJBizCon,” he enthused on a latest name with CBE, throughout which the veteran entrepreneur talked at size in regards to the providers and merchandise he’s bringing to market that he believes will set Audacious aside from the pack, and why he’s so decided to do issues very in another way this time round.

“I was effectively not a part of Aurora almost exactly two years ago,” stated Booth when requested in regards to the timeline of his departure from Aurora. “It was November [2019] after we made the choice for me to do my retirement, and that was bounced forwards and backwards as to once I was going to retire. We ended up on the date that they’d the primary cutbacks. I retired shortly thereafter, and I resigned from the board in May, the day they removed a younger man who was our Chief Product Development Officer, Shane Morris, as a result of he would have been one among my final 10 workers, and I simply couldn’t be with a board that made these forms of choices on folks like him. So that was kind of my final foray, however it was only a board place.

“You know when you’re out as CEO of a public company,” he continued. “We have a lifespan in Florida of seven years, and Steve [Dobler] and I lasted eight, so we’re pretty proud of that. We did last longer than the others, but you just started to get the feeling, and you know someone has to go when you go from 10 bucks to two, period. But it was a tremendous company, even though it was not executed well in the last couple of years. I don’t think that’s just because of me; I think it was because of a number of people that remain there that don’t get it. But it’s still growing great cannabis at amazing facilities, the best facilities in the world, it still leads the medical cannabis space in Canada, it still leads the global medical space, which isn’t nearly as big as adult, and I wish them the very, very best.”

When requested what classes he took from his time at Aurora that he retains in his hip pocket, Booth had a prepared reply. “You don’t want to buy a Tonka Truck, and have it break, because a broken Tonka Truck costs a lot more to fix,” he stated. “We’re not any firms that aren’t at the least within the optimistic. We have this chance name as soon as per week that lasts three hours, and there are such a lot of alternatives within the area, it’s unimaginable. These guys and gals will pitch me, and if they bring about one to the desk that’s shedding cash, I don’t need to discuss it. They’ll be, like, ‘But what about…’ No, I don’t need to discuss it! There’s sufficient alternative with firms – and I take my hat off to them – which are earning profits on this surroundings. Those are our goal firms, and let’s try to do paper offers the very best we will.

“Another lesson I learned; don’t do too many deals, Terry,” he stated emphatically. “Integration is essential; even whenever you purchase the little firms, it’s primarily since you purchased the thoughts of the people who began the little, worthwhile firm. You don’t need to alienate them by going to purchase three extra firms with out even speaking to them once more; integration is essential to cut back attrition. If you don’t combine correctly, you’ll lose what made the corporate nice, usually the folks or the market that it helps. So that’s one other lesson I’d have realized. Spending a bunch of dough on enormous amenities whenever you’re considering that demand goes to be a certain quantity is harmful, and that’s what occurred in Canada. Canada informed us there would solely be fifty licensed producers, and now there’s 400, so the availability of hashish clearly outstripped demand, and the nimbler firms, the smaller ones, have been capable of get into the retailers higher than the massive one, imagine it or not. Maybe Aphria did, too, as a result of they employed an out of doors gross sales drive. That’s what Aurora ought to have finished. That was one among my huge issues; I used to be pounding my fist on the desk. They didn’t do it. They’ve finished it now, however a bit bit too late.

“So, watch what you build,” he added. “Don’t blow the cash out the door. As far as shopping for one thing, I like doing that. There’s not one acquisition of the massive ones at Aurora that I’d ever take again, as a result of we did what? We constructed up our market cap to such a excessive degree by means of our branding and thru executing that there have been firms that have been in all probability higher than us that have been solely half our price. So, why wouldn’t you deploy that market cap to accumulate? We did one $3.2 billion deal, one other one was $2 billion, however we have been buying and selling at $14 billion.

(L to R): Paul Larsen, General Counsel; Hanoz Kapadia, Chairman of the Board; Terry Booth, CEO; Marc Lakmaaker, SVP Communications & Capital Markets; Leah S. Bailey, Chief Business Development Officer

“I remember the CanniMed and the MedRelief deals,” he added out of the blue. “Two quick stories, and I don’t want to talk about Aurora all day, but CanniMed was a hostile takeover. We didn’t buy them because we were hostile. Their investors came to us, to say, ‘We don’t know why CanniMed is only half your value; please put a bid in for it.’ So, we closed that deal. I’m still friends with the CEO of CanniMed, even though those hostile takeovers are always bitter on both sides. And then we did the MedRelief deal, and I was so happy we bought them because their facilities were better than ours, their technology was better than ours, and they were farther ahead than us; they’d been operating for 16 months longer. I was sad that they were better than us, but happy that we closed the transaction, and now it was ours. It really was the steppingstone that moved Aurora up the pipe as a world leader, because it brought a lot of respect from the medical community on the consistency and quality of the medicine MedRelief was growing.”

I requested Booth if the plan is to develop Audacious organically or tackle debt to gasoline progress. “There are so many different instruments out there, it depends on what the debt looks like,” he replied. “We’ve bought 20 million locked up very shortly. I’ve simply finished $5 million with family and friends – excessive-web value people that got here in fairly straightforward as a result of they imagine in us, and so they imagine within the story going ahead. But our market cap is just 50 million bucks, so it’s my job to maneuver that needle and you’ll solely transfer that needle by means of execution and liquidity. Money is being spent on liquidity, and that’s ensuring that our six IR companies and PR companies and media companies are all aligned and are all giving the identical message, ensuring we get on reddit, get on Robinhood, ensuring our social media is taken care of. I’ve finished this earlier than, and we’re beginning to see the liquidity.

“If you look back when I came in,” he added, “it was like 1000,000 shares a day, and now it’s 600,000 shares. That’s a pleasant transfer, and you bought to proceed that, and also you’ve bought to elevate the chins of the Australis shareholders. They additionally went by means of six months of hell in a dissident battle, strolling round with their heads down, and I need to decide their heads up, and excite, ignite, and delight them, is what we are saying. Because we do have an honest variety of shareholders; we’ve over 150,000 shareholders due to the Aurora spin-out, so that you get these 150 speaking the speak, you usher in your new shareholder base by means of raises, and also you don’t do your huge raises within the entrance finish. You’ve bought to construct the share value, and the one manner to do this, for my part, is thru execution of first rate offers, having quarter over quarter improve, having some revenue – wouldn’t that be cool – and that’s what we’re doing now.

“Again,” he concluded, “I’ve been here since March and what the team has accomplished… we were only in Nevada in March, and what we have accomplished and the deals that we’re looking at, and what the lobbyists are doing in New York, it’s a very professional team. But it’s not a big one. There’s not a lot of people; the C-suite is only four people. I think we have about 120 people combined, so it’s manageable, and it’s not a big burn rate. Am I scared of any big deals? Hell, no. We’re looking at one right now that’s 200 million bucks in Florida. I’d be crazy to do that with paper, so maybe you do a reverse SPAC; a SPAC comes in and buys the article and the article buys us. I mean, there’s lots of ways.”

50 Different Countries

This time round, Booth is singularly targeted on the fragmented U.S. market. “We see this as 50 different countries, for sure,” he stated. “In 35 of those countries, you can sit on your stump right now and smoke a joint, and whether it be for medical or adult use, you’re not going to be arrested in that state for doing it, and that’s a huge step and it continues to grow. Other states are coming online, and time heals all wounds, but you do have to take a very strict regulatory approach, and that’s my background. I don’t know if you’ve seen the MJBiz book that has state-by-state descriptions [of regulations], but we have those times five. And this is historical – a lot of it was from the Aurora days – but we went into every single state that currently has cannabis as well as the ones that are projecting to have cannabis for sale, whether it be medical or adult usage, and we looked at what verticals we want to be in in each state, and what verticals we are allowed to be in in each state. Washington state is a good example; you have to be a resident. So, there are all sorts of different rules that you need to understand before you decide on how you prioritize which states to be in. California is an interesting one – difficult to navigate towards profitability, but at the same time, California is the state you can’t not be in, and if you are in California, you’d better be vertically integrated, you’d better be in each segment, and we are, and that was one of our goals.”

I requested Booth what number of states Audacious is presently in. My checklist included Arizona, Nevada, Washington, Michigan, Missouri, Oklahoma, and California, however I used to be a bit unclear. “If we define it as the sale of adult-use cannabis products being Audacious, we would be in Nevada, California, Missouri, Oklahoma, Washington, and Missouri,” stated Booth. “In the other state you mentioned, Arizona, ALPS is doing something big for the guys at Copperstate [Farms]. ALPS also is doing something pretty big in Massachusetts for Belle Fleur, which includes us getting cannabis and us taking down their manufacturing contract. We also have a lot of people working in a lot of states, including three lobbyists in New York right now working to see if the regs can be tweaked and the bar can be raised. It’s been a bit of a disappointing year, because New York is going to be a way down the road yet, but it’s someplace you cannot not be. In California, I think we’ve done three deals now, so we can say we’re fully integrated, but we need to integrate those companies we bought in the edible space. Herbs in San Jose with the Eaze deal is I think an amazing deal. We’ve already sold out of our product that we had in county, and with this raise that we’re doing, we have to buy product, because we’re not growing enough of it to support a brand build.”

I requested Booth to drill down a bit on their plans for California. “The strategy so far in California has been to acquire cherries, smaller cherries, and to build on those cherries,” he defined. “We acquired LOOS, an edibles company, which also has an excellent sales force, so we bought the people as much as we bought the product. The Herbs deal in San Jose brought in Eaze, which is the top delivery company probably in North America, and certainly in California. Eaze had a deal with Herbs, so they took on 16 of our SKUs and we sold out all of our product immediately. We have cartridges right now in California and we have the two-ounce shot with LOOS, and we’re working on deals to bring flower to California. It’s pretty easy to get flower in Cali right now, but you’ve really got to watch who you’re getting it from. I know a lot of great players in the California market. I know Berner very well, and Mr. Natural knows Berner very well. Berner used to sell dope for Mr. Natural. These essential relationships put us on shelves. We need top shelf, front shelf, side shelf, and that’s really what a sales force should be working on once they have the product. So, we’re there as far as the license requirements, and now we’ve got to start building our brands. We’ve got some great bands – Tsunami, Mr. Natural, Provisions – and if you look at the state, there is not a lot of brand building going on. Cookies has done a good job, truly a good job, and Charlotte’s Web has done a pretty good job, but nothing really state-to-state, and you don’t see the consistency of the cultivars crossing state lines, like we did in Colorado with the guys from Green River, where we were able to move our genetics state-by-state in petri dishes, which is not seen as cannabis, so at least you’re bringing in a product. So, the California strategy is to build on what we’ve acquired, and most of those deals were paper, and most of the people we brought on are sticking around.”

Booth’s retail technique is equally fluid. “I guess it depends on if you’re talking about owning or operating,” he stated in response to a query about what number of shops they presently have. “We function two shops now, I believe, however we’re actually working greater than we personal, as a result of we again-finish for different outlets. Where we’re concerned in retail, I’d put it at 10. Where we’ve acquired retail, it could be two.

“Your entry point has to be through getting a license,” he additional defined. “We acquired a California retail license by means of the acquisition of Herbs, and now we’re going to construct it out. We’re additionally one other store in San Jose as a result of the town stated, ‘We’ll offer you guys 16 extra,’ however they’re solely giving them to the 16 current license holders, so then they’ll have 32 in San Jose. Big whoopie. But additionally they took the barrier down on the place they could possibly be in San Jose, so we’re going to be in an excellent space, and there’s an instance of what we’re doing. We’re working with indigenous reservations in New York state; there’s one other three shops that match into the fold. The deal we did with Massachusetts on the social fairness license with Belle Fleur; they bought 4 licenses with that. So, your entry into the state must be through license, after which it’s a must to construct it out, whether or not it’s by means of acquisition of buildings and including on new shops, or the acquisition of profitable retailers. You want shelf presence to have the ability to model, after all, so we additionally will likely be on Cookies’ cabinets, and [Berner is] one of many prime retailers in America, so there’s a spot to place our merchandise and our model. Now, what it’s good to do with the intention to have profitable retail, you additionally must have some product. We’re not simply going to be a retailer of different folks bud and white label it with our model, as a result of that may be a catastrophe, and also you’re seeing that occur to some firms.

“Then again, look at Florida; there’s a different set of rights,” he added. “You can only sell your own product, but if you’re not in Florida yet, good luck making any dent. An entry into Florida would probably mean a major acquisition, spending a bunch of money, and I don’t want to spend a bunch of money while we’re sitting here with a special price. We have got to organically grow this in a smart way. We’re going to have our own grows, of course, but they won’t be big; they’ll be pieces of other grows. A lot of thinking said that’s not going to work, but it’s working. Once people see the ALPS advantage, they want us there after the fact, and if we have cannabis in their facility and we’re good partners with them and structure the deal properly so that we’re not competing with each other, they love it, and we can white label with them. That’s the Rapper Weed guys, who have a bunch of influencers we want to tap into – Machine Gun Kelly, Cardi B – and get them retweeting our stuff. Building a brand has to be across all pieces of the puzzle, including social media and CPG. I know a little bit about building a brand. Aurora was never not the number one brand in Canada with combined medical and adult usage. It’s about building an army of followers not only in the community and the culture, but also in the investment community and the medical establishment, and if you can balance that, you’re in very good shape. I didn’t know that before, but in retrospect you learn what mistakes were made and what you need to do to go forward and avoid the mistakes and still have the same successes.”

The ALPS Advantage

Booth’s Rapper Weed remark referred to a deal struck in June between Australis majority owned ALPS, a Colorado, based mostly engineering and design firm, and Massachusetts-based Belle Fleur. According to a press launch, “Belle Fleur, founded by the powerhouse cannabis and music industry entrepreneurs behind Californian brand Rapper Weed, Rolandy Romelus, Irvin Whitlow and Domenico Cardarelli, are the holders of a license allowing the development of a Tier 11 high-tech indoor grow facility in Blandford. The Tier 11 license, the largest cultivation license tier available in Massachusetts, allows for up to 100,000 sq ft of canopy space.”

Indeed, the story of this deal illustrates a core aspect of the Audacious technique. “ALPS got the contract for the Rapper Weed facility in Massachusetts, but they originally called us for cash because they thought, ‘Oh, Australis Capital, maybe they can give us some cash,’” defined Booth. “And we said, no, we’re not a loan company anymore, but what are you guys up to? They were cool guys from Cali, building this facility. They had managed a million square feet of canopy in the gray market in California, they know their cannabis very well, and they had some excellent brands and cultivars. So, I said, maybe we could help you build your facility, but they were, like, ‘No, no, no, we’re cool.’ I said, can you please just take a call with [ALPS founder] Thomas Larssen and [ALPS SVP of Innovation] Joel Fuzat for 15 minutes, and it lasted another two hours and 15 minutes. After that call, the young men knew without a doubt that they needed ALPS to do this facility. It’s an agnostic approach; we don’t make a bunch of money on equipment. It is the design, the engineering, the commissioning, the construction management, and the post-commissioning work they do, from monitoring systems in a place that increases yield, but also de-risk from disease. Diseases are systemic in cannabis and a lot of the cultivars have been modified so much that they’re susceptible to certain diseases like bud rot, powdery mildew, those types of things where we – and it’s not like we’re a bunch of smarty pants, but we’ve done this for 10 years up in Canada, and we took our lumps, and we got punched in the face, and we fixed facilities. We now know, but I could tell you so many stories about where we had failures and made the corrections.”

The providers provided by ALPS and its APIS Compliance and Maintenance providers had the supposed impact. “Good growers like the Belle Fleur guys were like, ‘Holy shit, these guys know what they’re talking about; let’s do it,’ and they signed ALPS before I ever spoke to them about the contract to supply us weed. So, they signed ALPS, and I go back to them and said, ‘What do you think about us taking some of your canopy?’ ‘What do you mean?’ ‘Well, we’d love to have 12.5 percent of your canopy, but we’re going to pay you for the weed. You grow it and we’ll pay your costs, but it’s our cultivars; we’ll get you the genetics, and we’re going to be a part of your facility. They loved it.”

Is it a mannequin they intend to duplicate? “100 percent,” stated Booth. “Thankfully, the capex that we have to spend on building a big facility immediately gives them a future revenue because they signed a contract, so they can go to their bank and say, ‘Look, we’ve already sold 12.5 percent of our pod.’ And we give them a profit on it, so say it costs us 10 or 5 percent – I think it was 5 percent with Belle Fleur – guess what happens after that? They said they also have some manufacturing licenses, and they really don’t know a lot about that, so what do we think about taking that over? Boom.”

Will ALPS additionally construct amenities beneath Audacious-owned licenses? “Yes, but not big ones,” stated Booth. “Just where we need to have them when we need production but we’re not able to build for others. We’re not afraid to build for ourselves – absolutely not – but we have to watch the competitive environment. If we went and built a facility in Massachusetts, I think the guys at Belle Fleur might be a little bit pissed off.”

That could also be true, however each state is completely different, so relying on the circumstances, is every part on the desk? “100 percent,” Booth replied. “But it will depend on where we get with the market cap, and where we are with our structure. Can we manage to build a $35 million facility? Do we have the resources to employ and deploy it? Those are decisions of the future, but we’re looking at building smaller facilities for ourselves. We’re expanding the facility in Nevada as we speak.” The was in reference to Australis’s acquisition this March of Green Therapeutics, which provides over half of Nevada dispensaries with hashish merchandise, based on the corporate, together with the Tsunami and Provisions manufacturers. The acquisition consists of an “8,000 sq ft cultivation and manufacturing facility, as well as a management and brand licensing agreement with an entity in Oklahoma owned by [Green Therapeutics founder] Dr. Duke Fu and licensed for extraction and processing, and a brand licensing agreement with an entity in Missouri owned in part by Dr. Duke Fu, which is completing a process to obtain a license for extraction and processing.”

ALPS is concerned in way more than hashish, together with a partnership deal struck in November with Priva, “a technology company that develops hardware, software and data services in the field of climate control, energy saving and optimal reuse of water.” According to an organization announcement, “The partnership will focus on the joint marketing of ALPS’ advanced compliance and maintenance service solution, APIS, across the global horticulture industry.”

For Booth, the deal could possibly be a sport-changer. “That is such a great deal, but it’s been a tough time to sell it to the investor market, because nobody knows who the hell Priva is,” he stated. “But if you read between the lines, they are without a doubt the largest environmental control company for the greenhouse industry in the world. And the reason they signed it exclusively with ALPS is because of the APIS system, which deploys technology into the grows that monitors every single part of the environment, to ultimately increase yield and the safety of products. They have 20,000 facilities that they provide maintenance for, and ALPS is now going to slide in, pitching the APIS system for the facilities. That’s going to be a tremendous source of revenue, but where I worry is if we have the engineers in place to services this. We’re going to have to watch how we pitch it, and to whom, but that’s huge in the in the greenhouse world. When the greenhouse guys read that we signed with Priva, they’re buying our stock.”

The ALPS play is also worldwide in scope. “Thomas is international in sustainable growth, and that space is big,” added Booth. “It’s getting an increasing number of notoriety, as a result of it’s coming near the worth of farming, and the standard is healthier, and it’s higher on the surroundings. One instance of this can be a venture we’ve in Maine. It’s an eight-story constructing with three ranges per story, rising greens, so there’s 24 ranges in a excessive-rise simply rising greens, and doing it at low price with out consuming a bunch of land, with out having a bunch of tractors, and 90 p.c water reclamation by means of environmental management. There’s not a lot water reclamation at farms.

“On the protein side of things,” he added, “we’re going to run out of protein in the world in 2040, and it’s going to get pretty tough to get protein based on animals if the population continues to grow like it is. So, it all sort of ties into the same thinking of our strategy, this global and noble approach to not only medical cannabis and adult usage – why was it made illegal? – but also to reducing our impact on the environment in the cannabis. Again, we could put that into the regs. Imagine if you had to have 90 percent water recovery on your cannabis grow. It would put so many growers out of the picture.”

I requested Booth if Audacious is trying worldwide as nicely. “We have international inquiries all the time,” he stated, “but the medical cannabis internationally is a slow growth. There’s no big rush, and of course, ALPS is not going to say no to a cannabis facility. Alps won’t, but will we as Audacious jump into the medical cannabis industry in Germany? Not anytime soon. We’ve got to sort out this house, I think that would just take some focus off of proper integration and proper planning in America, and America is an amazing opportunity compared to any other medical opportunities internationally. So yes, we could, but are we ready to now? Not yet. Do I want to? 100 percent. Just keeping the eye on the ball for now.”

That stated, Audacious, in a press launch issued November 3, introduced that it has “entered into a term sheet in regard to the formation of a strategic partnership with Golden Triangle Health (GTH), a subsidiary of NR Instant Produce PCL, a leading southeast Asian food manufacturer and distributor based in Thailand, producing its own signature brands private label products and co-packaging lines.”

The announcement added, “The purpose of the partnership is to develop GTH into the most meaningful CBD player in the Asian market. Audacious will provide advisory services, operational intelligence, including cultivation, manufacturing, and product development, and expansion of brand visibility in Thailand and beyond. Further, the potential exists for Audacious to become an export partner for GTH’s Thai product portfolio, to include CBD and Hemp consumables, topicals and other hemp derived commodities. Products will be sold under the GTH brand, as well as through B2B channels under white label agreements.”

Bull Riding and Beyond

In addition to placing down footprints in an rising variety of states, Audacious is also forging relationships with entities not often related to hashish, together with PBR, the world’s main group for bull riders. Based in Pueblo, Colorado, PBR has entered right into a multi-12 months settlement that can make Audacious the “Official CBD of Professional Bull Riders.”

According to Booth, it’s a match made in heaven. “They have superb fan loyalty and so they’ve bought the retail. We’re the one firm that has entered in a take care of any league or affiliation. But that’s only for CBD. On the THC play in America, each state has a distinct regulation with respect to how one can model, and that’s additionally [a consideration] in our choice of what states to be in. Can we construct a model in Vermont? Can we construct a model in Florida? You can’t, as a result of Florida is much like Canada in that it’s bought some bizarre guidelines; so far as packaging – white, purple, and black, that’s it, and it might’t be completely different out of your neighbor, and you’ll solely promote your individual hashish. That’s fairly tough to model. You could make some huge cash in the event you’re a entrance runner like Trulieve, sitting on a couple of $4.6 billion market cap, however paring down the query, it’s good to have regulatory consultants, and also you don’t need to rent one lawyer to have all that of their cranium on a state-by-state foundation.

“I don’t think I mentioned this already,” he added, “however there’s a fellow we introduced on board, Vince Field, who labored for Justice Grown, and he’s chargeable for securing 56 licenses in a number of states, which is quite a bit. He is aware of the way to navigate in the direction of licensing, and it’s vital that for any of the brand new states which are opening up, or for states like Florida that pop up one other 16 licenses, that we’re entrance and middle if we need to be. It additionally matches our regulatory self-discipline, and as you stated, self-discipline is vital. Stick to your knitting. Know what the place it; have the suitable folks in place that may execute on it; combine correctly, these are the items of the puzzle scale. Watch the way you scale. Read the Rockefeller book on scale-up and scale-down, however guess what, you higher have the money to do this, as a result of you possibly can at all times scale up past your means and be sure that each pigeonhole has failed and then you definately scale down on the correct time, however that’s costly in the event you’re not producing the income to assist it.

“So,” he continued, “we’ve checklist of attorneys who’re the consultants in a selected state within the hashish area – and then you definately add in a Vince Field, who’s navigating by means of laws and laws to get licenses, and in addition advising the lobbyists on the way to tweak laws to boost the bar – and all of that performs into the larger image of how we’re going to construct Audacious.

“Imagine, if you will, in New York, they’re still saying no vertical integration,” continued Booth. The solely folks allowed to vertically combine are the medical firms that exist already. But they stated the identical factor in New Jersey, after which they modified their thoughts, as a result of they noticed it as unfair for brand spanking new entrants, and now you possibly can vertically combine in New Jersey. That was as a result of lobbyists had an affect on remaining regs, and that’s my background. I’m a regulatory man, and I additionally know the way to take care of bureaucrats. You can’t change legislatures, it’s very arduous, that’s regulation, however you possibly can change coverage, and you’ll change regs. So, think about if, in New York, they stated that candidates can solely apply for manufacturing in the event you’re GMP compliant and GACP compliant, and have demonstrated expertise to have these options. Imagine if we have been getting our lobbyists to do this. That would restrict the variety of manufacturing amenities exponentially, as a result of it’s probably not thought of within the States, and it was thought of in Canada, as a result of Canada arrange a system to fail. They made it so strict on the develop aspect that those that have been capable of knock down the boundaries and get it finished know what a excessive bar appears to be like like. So, I’m not afraid of any excessive bars, and neither is the chief workforce, and we’re those that can break the fence down as a substitute of comply with others by means of it, as a result of what? The fence is damaged. But we’re small, we’re little, we’re the little man in a David and Goliath-type of state of affairs.

“I do think because of this consolidation, and because of this critical mass thing that’s happening in the states, because of the money the MSOs, the larger ones, are getting access to, that someone’s going to take a run at us,” he added. “But we’ve arrange poison capsules to guard towards that, and hopefully, we will take them out in three years as a substitute of them taking us out subsequent 12 months.

“That is my thinking, to some extent,” he continued, “however on a state-by-state foundation, you want your regulatory consultants, and it’s good to decide your poison in these states. I’m additionally a giant proponent of postmortem when a deal goes south or doesn’t shut. We simply had one occur in Florida about eight weeks in the past. They pushed us to the aspect and stated, ‘We’re speaking to those new guys on the huge MSO.’ Guess what? They put them right into a standstill for six weeks; after six weeks, the deal fell by means of, and now we’re renegotiating with the identical firm. So, don’t have any enemies. Don’t get mad at folks. Don’t burn bridges. Build them and be sure that the workforce, that the military, if you’ll, of not solely your workers however your traders, your shoppers, and your associates, be certain that they’re getting paid, don’t get a foul identify, don’t run out of cash, and that’s occurring quite a bit in America with the smaller firms. Access to capital is hard.

“Belle Fleur, by the way, would not have gotten a penny if it wasn’t for ALPS doing that job for them, and me being involved” he added. “We additionally introduced in a basic contractor to overview the finances because it goes alongside, an organization referred to as Dawson Wallace that constructed one million-sq.-foot facility in Alberta. With these items of the puzzle, after we went out searching for cash for Belle Fleur, not for us however for them, we bought it. Now, that goes a great distance in constructing an superior relationship with these guys, who’re tremendous related to the social media aspect of issues – the Kardashians, the drummer man marrying Chloe Kardashian – and we’ve a lot of these folks retweeting our hashish within the states the place we’re prevalent? That’s huge stuff.

“I know I’m bouncing around here, but the future is bright for Audacious,” he concluded. “We clearly for my part would take out the opposite 49 p.c of ALPS when the time is true. It’s a dilutive deal, a paper deal, and Thomas has to hit sure targets, but when he hits these income targets, prime line and EBITDA, the inventory value will likely be manner past the $50 million market cap. His first goal is $26 million prime-line. But go take a look at comps of different MSOs. There are MSOs buying and selling north of $500 million that don’t have [ALPS’] prime-line income.

“Here’s a good comparison,” he added, nearly as an afterthought. “I don’t want to dump on them, because I don’t know them, but the company is called Agrify. They do a very, very similar thing to ALPS. They’re not as agnostic, they make a little bit of scratch on their equipment, but they just reported and their market cap is $350 million, and [ALPS’] revenue in just the quarter we’re in doubled theirs. We’re undervalued! That’s my job, though. I have to get that message out by talking to cool guys like you, having our social media, having it explained properly in our releases, and reporting quarter after quarter the differences that we bring to the table, because again, we’re little, we’re a company that has gone through a little bit of a grinder with a dissident battle, but it’s all sunshine on our shoulders now. We’ve just got to roll.”

Q2 2022 Financial Results

Subsequent to our interview, Audacious launched Q2 2022 financial results and held a comply with-up earnings name November 23. Notable bullet factors included:

  • Q2 Revenue Increased 2,068% Year-over-Year to $2.3 Million
    Pro Forma 2,702% YoY Growth (vs Reported)
  • Solidifies Entry into New Markets, together with California and Massachusetts
    Working in the direction of Operationalizing Missouri Asset
  • Expands Brand Portfolio – Continued Growth Initiatives in Nevada
  • ALPS Continues to Expand with Cannabis and Non-Cannabis Contracts Strengthens Leadership in Environment, Sustainability and Governance Driven Horticulture Projects

“We saw continued strong growth,” Booth said on the earnings name. “Sequentially, our reported revenues elevated by 31 p.c, whereas on a 12 months-over-12 months foundation, our progress was nicely in extra of two,000 p.c. Not dangerous, however that is solely the start. To-date, most of our reported progress is coming from ALPS, our engineering and design consultancy, that’s on the coronary heart of our means to execute on our distinctive technique, as we’re not but capable of absolutely consolidate GT, that’s Green Therapeutics. However, we anticipate with the ability to consolidate GT revenues subsequent quarter.

“To provide some insights into the actual size of our business on a pro forma basis, we achieved 3,149 percent growth over what we reported last year,” he added. “In summary, we continue to execute, continue to grow, and we’ll continue to work towards high margin profitable operations. We’re doing well and I’m very pleased with the progress made this quarter.” As of November 29, Australis Capital has a market cap of roughly $40.1 million.

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