Auxly Cannabis Group Inc.

industry, but BMO (Bank of Montreal) did our last financing and is open to cannabis businesses. Canada’s largest bank, RBC, is still closing ac- counts for cannabis companies at times, so it’s not perfect. But we are able to bank and take credit card transactions for sales; it’s a much better en- vironment than south of the border. “However, the U.S. prohibition and banking issues do hit us. Transferring funds outside the country, in our instance, going to Uruguay, you can’t do that in U.S. dollars because you get caught in an American banking system filter. In the past, I had a supplier that wouldn’t send me fluorescent bulbs from the U.S. because we were a (legal) cannabis company. But they were happy to send the bulbs across the street to one of our suppliers.” BVM: How do you differentiate yourselves from competitors? Rifici: “Where we differ from Canopy Growth, Aurora, Aphria, and a few other top Canadian cannabis companies, and where we think our advantage lies, is in a couple of distinct items. One, being our cultivation platform; by working with partners, which is really the core difference across everything we do.When we put together our Auxly team, we thought we’d own everything, do everything ourselves. But that’s usually not a recipe for success. You have to pick where your strengths will be. Our tag line is ‘growth by diver- sity,’ and it’s really through diversity of our part- AUXLY CANNABIS GROUP INC. ners. The majority of our production is through joint ventures and partnership arrangements, where we’re providing capital and specific can- nabis expertise or regulatory expertise to great growers, and having them build the facilities, operate them, and grow that product. “With that done, we’re much more nimble and able to apply a lot more leverage from our team to those facilities - build them fast- er, on budget, on time, because in some ways it’s a large field trial. If we have 13 partners in Canada, some will do better than others. Over time, as they’re able to expand, we get to back the winners in our platform and take product from the ones that aren’t quite as good but are good enough.We have a built-in actionality in our production to hone that. Because of those arrangements, we essentially buy that product at a fixed cost, set terms that are advantageous and, as price compression enters the market