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Sourcing & Procurement

High Intentions: Auxly Is Improving its Operations and Supply Chain

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Headquartered in Toronto, Auxly strives to be a leader in the “cannabis 2.0” sector of the market. Pictured here is Auxly’s Prince Edward Island manufacturing hub, Dosecann.

When building a business, it can be easy to lose sight of the original mission and get distracted by new demands. But Auxly Cannabis Group Inc. thrives by keeping its attention focused on the goals set by its management team.

“We have a laser focus on our vision and how we develop and manufacture products,” Vice President of Domestic and International Supply Chain and Operations Alan Cooke says. “[We want to] be the best at what we do.”

Headquartered in Toronto, Auxly (TSX.V – XLY OTCQX: CBWTF) specializes in cannabis products for the wellness and recreational markets. The firm, which originally started operations as Cannabis Wheaton Income Corp., strives to be a leader in the “cannabis 2.0” sector of the market, which consists of cannabis derivatives products such as edibles and concentrates used in vaping.

“We have strived to build a business ready to go on day one of 2.0, which we achieved last December,” Cooke says. He notes that Auxly has built up an array of assets, including advanced manufacturing operations and a research arm. “It’s about taking every element, blending it together and getting this very well-balanced business.”

Its research and development, processing and manufacturing assets include its Dosecann LD Inc. subsidiary on Prince Edward Island, where it manufactures derivatives such as chocolate and chewable products. Auxly also has its KGK Science Inc. subsidiary in London, Ontario, where it researches cannabis and its effects. Kolab Project is another Auxly facility, based in Ottawa, Ontario, facility, which processes cannabis pre-rolls.

On the cultivation side, Auxly has Robinsons, a 27,700 square foot, purpose-built facility in Nova Scotia, which is also expanding to include a massive outdoor growing operation. Auxly is also building a 1.1 million-square-foot greenhouse facility in in Leamington, Ontario, that will be a joint venture with Sunens Farms Inc. “It’s going to be one of the most state-of-the-art cultivation facilities in North America,” Cooke predicts. “We’re always looking at new and better ways to do things.”

On a Good Path

Auxly aims to make its supply chain more flexible and agile. “That’s one of our big projects this year,” Cooke says. “We’re taking the company from the inbound and outbound and streamlining it. We’re going to have a world-class supply chain function in every area.”

As part of this focus, the company invested in new ERP technology that it is currently rolling out, as well as equipment it is adding to the Sunens location. Cooke is pleased in the company’s progress so far. “I’ve been in the industry for three years and I can’t tell you how impressed I am with this facility,” he declares. “This will be an incredibly automated facility that will give us the ability to grow the best quality cannabis.”

This reflects the standards the company set with its Dosecann facility; Cooke says. “We have always looked through the lens of where is the best place to go for the technology,” he says. “Everything we do is based around innovation and we believe we are on a very good, strong path for both of these facilities.”

‘A Beneficial and Rewarding Relationship’

Auxly has benefited from its recent partnership with Imperial Brands PLC, one of the largest tobacco companies in the world. More than a year ago, the firm invested in Auxly. “It brought membership from the Imperial team to our board, which brings expertise from a different sphere of the industry,” Cooke says.

It also has given Auxly a partner for potential development, manufacturing and commercialization around the world. “They give us access to a completely different field to play on,” he continues. “They have been incredibly supportive.”

“It’s been a beneficial and rewarding relationship for both businesses,” he states. “It gives us access to a mature R&D, branding, marketing and manufacturing expertise that exists globally, along with the ability to tap into some of the best minds in the consumer-packaged-goods industry. We’ll continue to see that grow over time.” In just one part of the partnership with Imperial Brands, Auxly gains access to Imperial’s global licenses for vaping technology.

Incredible Work

Auxly’s key assets include its staff, which consists of people who are “focused on being No. 1 at what we do,” Cooke says. Auxly’s co-founder and CEO, Hugo Alves, is an industry pioneer who has assembled the right mix of experience and talent to ensure that Auxly executes on its strategy. The commercial team at Auxly, headed by Chief Commercial Officer Jeff (J.J.) O’Neill, brings experience in consumer-packaged-goods to this new industry. Cannabis is also a heavily regulated industry in Canada, and Cooke highlights the contribution of key members including Vice President of Regulatory Affairs and Associate General Counsel Vladimir Klacar.

“He not only does an incredible job with his team and making sure we’re always compliant, but also that we are operating at the highest quality level in every single thing we do,” Cooke says. “He is an incredible guy who drives that agenda every single day.”

Going forward, Auxly will pursue its vision of being a global leader in branded cannabis products that deliver on the company’s consumer promise of quality, safety and efficacy. The company came out of the gates strong for 2.0, posting the highest first quarter cannabis 2.0 sales of its peer group, beating out big players like Canopy Growth, Aphria and Aurora. “That was through great planning, great innovation and great teamwork,” Cooke says. The company continues to work hard to keep up with strong consumer demand.

“As we grow, it’s not just about how we scale,” he states. “It’s about how we meet that demand and how we continue to push the envelope, get faster and more productive whilst continuing to maintain our extremely high standards on the quality of our products and introducing new, exciting additions to our product offering.”

However, the company has no intentions of limiting itself to the Great White North. As it pushes its boundaries, “We will look at new geographical options when the opportunities arise,” Cooke says. “We expect our products will be well received in many countries across the world.”

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