viewAustralis Capital Inc

Australis Capital building asset base in the ever-growing US cannabis sector


The Nevada-headquartered firm has nine assets in the cannabis industry, six of which it wholly owns

Australis Capital Inc -

Quick facts: Australis Capital Inc

Price: 0.51 CAD

Market: CSE
Market Cap: $89.86 m
  • Focused on building companies through early-stage, opportunistic, and diversified investments in cannabis space
  • Spun off from Aurora in late 2018
  • Aims to establish a foothold in the US before US federal legalization shifts

What Australis Capital does:

Australis Capital Inc (CSE:AUSA) (OTCMKTS:AUSAF) aims to build companies through early-stage, opportunistic, and diversified investments in the cannabis value chain in the US and abroad.

Australis was spun out from cannabis behemoth Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) in September 2018 as its US investment vehicle. Despite boasting a C$9.2 billion market cap, Aurora is not allowed to invest in US cannabis assets due to Toronto Stock Exchange and NYSE listing rules. Australis is therefore Aurora’s arm to establish a foothold in the US, before a potential US federal legalization shift.

Whereas Aurora is headquartered in Canada and has global assets, Australis’s US headquarters reflect its strategic focus on the burgeoning American marijuana industry.

The Nevada-headquartered firm has ten assets in the cannabis industry, four of which are wholly owned. This includes brands, such as Body & Mind, Mr Natural and Green Therapeutics. In addition to this, the company has invested in cannabis tracking and loyalty app developer rthm and in Wagner Dimas, which holds a number of patents for industrial-scaled pre-roll machines.

The current jewel in its portfolio is Cocoon Technology LLC, which manufactures consumer-facing kiosks as stand-alone units or multi-unit pods for consumers and a mobile application and tablet for employees of cannabis retail locations.

Cocoon is expected to generate US$1.4 million in annual recurring revenue via a deal with THRIVE Cannabis Marketplace, a Nevada retailer. Total revenue over the agreement’s four-year term is expected to surpass US$7.1 million.

Australis also owns the brands and cultivation assets of Nevada’s Green Therapeutics, including Tsunami, Provisions, and GT Flowers, as well as the right to assume and expand the construction of a 55,000 square foot cultivation and production facility in North Las Vegas, Nevada.

How is it doing:

Australis kicked off 2020 with an award-winning run at the High Times Cannabis Cup in Nevada.

The company revealed awards in four categories -  first-place position for Best Indica Concentrates and also pole position in Best Sativa Concentrates. It won second place in Best Hybrid Concentrates and third placing in the Vape Cartridges section. 

In January, the firm said it would not proceed with the previously announced acquisition of Folium Biosciences, citing “new information” as the reason behind its decision.

But staying on the acquisition trail, Australis acquired payment services provider Paytron LLC, which offers merchant services, including credit and debit card processing, secure gateway processing, point of sale hardware, card terminals and business loans.

It said Paytron will continue to operate as an independent sales organization while also becoming the payment branch for Cocoon Technology.

Meanwhile, Cocoon is closing in on launching its proprietary kiosks with one of Nevada’s largest cannabis retailers. 

It has completed the final phase of development and testing ahead of the platform’s deployment at THRIVE Cannabis Marketplace, the state’s largest independent retailer.

Cocoon’s pods are expected to be ready in-store by April 2020. THRIVE has ordered 32 CocoonPod kiosks for the eight locations, starting with a pilot location in North Las Vegas.

Inflection points:

  • Launch of Cocoon pods in Nevada retail stores
  • US Federal legalization of cannabis
  • Completion of organic cultivation and production facility in Las Vegas (expected in September 2020)

What the boss says:

Ahead of Cocoon’s upcoming deployment, Max Aceituno, Australis’s senior vice president, marketing and product development said the firm was “excited” to launch the platform in Las Vegas.

“As the world's most robust Platform-as-a-Service specifically designed for dispensaries, Cocoon enables customers to research products, place orders, and make payments directly through their desired point-of-interaction,” Aceituno said in a statement.

“THRIVE's high-traffic locations are the perfect environment for the initial launch of this platform and we're happy to collaborate with (THRIVE CEO) Mitch (Britten) and team in crafting this unique feature set."

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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