Australis Capital Inc (CSE:AUSA, OTCQB:AUSAF), doing business as Audacious, has commenced cultivating cannabis on its wholly-owned Broome County property with its partner Hempire, initially focused on outdoor cultivation to ensure swift availability of products and to control production costs.
The cannabis multi-state operator said harvesting of the plants is expected in October.
"Initially entering the derivative market in NYS (New York state) is a smart plan and I applaud the team in executing this strategy,” Audacious CEO Terry Booth said in a statement.
READ: Australis Capital is scaling up its award-winning brands across the US and global cannabis markets
Audacious said the partners intend to freeze the harvested products for processing into derivatives and used in the manufacturing of vapes and edibles. Vapes and edibles will mark Audacious' first products introduced into the New York adult usage retail market.
“Storage of derivatives is obviously safer considering the time lag between first harvest and the time to first sales anticipated we are faced with. It will also allow for high quality products, eliminating the potential variables that come with outdoor grown cannabis flower,” Booth added.
The Broome cultivation project received its first New York State Office of Cannabis Management (OCM) Audit, with one minor observation which has been addressed, Audacious said.
Roger Sykes, Audacious COO said: "We are very happy with the outcome of the audit, which is another validation of the high quality we deliver in terms of operations, products and compliance. The positive outcome means that we now have a clear runway towards getting our products on the NYS market. It also bodes well in developing a trusted relationship with the OCM.”
Socially responsible initiative
The company said it has started an educational initiative with its partner Bertha Lewis and the Black Institute Group in anticipation of the award of adult-use retail licenses by the state of New York to applicants who qualify through the social equity program.
Apart from educational sessions, Audacious is also helping potential dispensary applicants write and/or provide strategic input for their applications at no cost.
Audacious chief business development officer Leah Bailey said: "The objective of the program is to provide an educational overview of the cannabis industry, ancillary opportunities and NY regulations for people interested in opportunities in the industry.
“Our Regulatory Affairs specialist is providing support at the regulatory webinars, while Audacious will also be addressing the abundance of other opportunities that exist to support the industry. The event also provides us with considerable networking opportunities to strengthen our ties with other current and future participants in the NY cannabis market."
Bertha Lewis, founder of the Black Institute Group, added: "Education is at the heart of helping this new group of entrepreneurs be successful, and we are grateful to have found Audacious, whose culture is closely aligned with helping further inclusion in the industry.
"What's more, Audacious not only provides financial support for our endeavors, they walk the walk and talk the talk by providing very valuable, actionable insights to our participating entrepreneurs, as well as providing access to highly-experienced operators who share their experiences. We are very pleased with how the program is going and we look forward to hosting a rapidly growing group of aspiring NY cannabis entrepreneurs to our seminars."
Massachusetts cannabis plant
The company said its partner in the construction of a cannabis cultivation and manufacturing facility in Massachusetts, Belle Fleur, has opted to initially focus on concentrate-based products, instead of a full indoor facility as originally planned, as this allows for cannabis to be grown in lower-cost greenhouse facilities.
To this end, an amended application has been submitted to the municipality where the facility is located and has been approved, clearing the project to proceed. The groundwork for the facility is materially complete, it added.
"With this amendment approved, we are now well-positioned to progress with our project and bring high-quality concentrates to the Massachusetts market. We look forward to continuing our partnership with Audacious, complete construction of our facility and serve our market with the high-quality products the Rapper Weed brand is synonymous with," said Belle Fleur CEO Rolandy Romelus.
Cash burn reduction
Audacious said it has made considerable strides towards reducing cash burn over the past few months. Since March last year, it has reduced selling, general and administrative expenses by nearly 50%.
“At the same time, we have managed to expand the Audacious footprint in the US cannabis space significantly,” it added.
Contact the author at jon.hopkins@proactiveinvestors.com