Shady Colorado CBD company Folium Biosciences described in Lawsuit attempting reverse merger with Australis : $AUSA $AUSAF

A Colorado Springs wholesale CBD company, Folium Biosciences, announced it is going public via a reverse merger with Australis Capital ($AUSA) this week. Australis Capital is a spin-off of Aurora Cannabis ($ACB) a large Canadian cannabis company. I have reported extensively on some troubling behavior of Folium’s CEO Kashif Shan at Cannabis Law Report. This includes allegations of siphoning off company cash to his own family bank accounts, sidestepping regulations and risking employee safety in pursuit of profits, using hot hemp, faking COA reports and even attempting a murder for hire when a former executive left to start a competitive CBD company. Folium is currently battling at least three lawsuits from former executives who alleged Shan cheated them out of ownership in the company that they have contractual rights to. Shan was former mortgage broker who filed bankruptcy during the financial crisis and was sued by the trustee of the bankruptcy for fraudulent conveyance. He started Folium in 2015 under the llc Whole Hemp Company, which is structured as partnership of membership units (not equity).

Folium’s relationship with Scott Dowty of Australis started earlier in the year when Dowty’s company made a $3 million investment into Folium. I have previously reported that Dowty was part of a false and misleading press release that alleged cause the stock price to jump. Dowty is a native of Las Vegas with no previous experience in the cannabis business. Australis is listed on the Canadian Stock Exchange which has weak reporting requirements and trades in the U.S. as a foreign issuer on the OTC Markets ($AUSAF). The stock hasn’t done well since Dowty spun out the company trading under $1. This merger appears to be a last ditch effort for both men to exit their investment.

Folium announced a new llc they set up this year called Folium Equity Holding will merge with a new llc Australis set up called Folium Merger Sub. The agreement was signed on Tuesday December 10. Here is the thing tough, according to people who hold Folium membership units the company didn’t send out a notice for a vote of membership unit holders. To approve a reverse merger with an llc all unit holders have to approve the merger with an unanimous vote and that appears to not have happened.

Additionally, Folium is currently battling a lawsuit that is trying to remove Shan and appoint a receivership to run the company because a membership unit holder is worried he is moving assets out of the company. Any of the three former Folium employee suing could also make a move to file an emergency injunction motion to stop the merger or file a FINCIN complaint with the Securities and Exchange Commission if they think Shan didn’t follow the bylaws of the company in signing the merger deal.

When Kashif Shan first learned that he was going to be personally named in a lawsuit accusing him of taking money out of Folium for personal gain he moved his 5 bedroom, 6 bath, 11,000 square foot home into an llc called Motu llc on August 12th 2019, according to Colorado Springs public records. During the first year of starting Folium, Shan paid $1.4 million for the mansion in 2016. The name of the person running the llc that owns the mansion now is a Denver lawyer from Holland & Hart, David E Crandall who is know for helping individuals manage their wealth and reduce their tax liabilities.

Folium’s Kashif Shan has refused to respond to emails and phone calls requesting comment and the company’s former general counsel Craig Brand appears to be missing from the company and refuses to comment.

Update: I have reported the third part of my investigation into Folium Biosciences at Cannabis Law Report. If you are a former or current Folium employee or investor in the company who wants to speak out about wrong doing you have seen at the company you can contact me anonymously at

UPDATE 2.19.20: Scott Dowty, the CEO of Australis, announced his company has called off the merger with Folium Biosciences. Dowty said new information came to light that influenced his decision but did not list the reason in the company press release. Folium recently went through massive layoffs according to staff who said Folium founders/executives said the company is having financial problems.

Folium CEO office poster

This is a poster Kashif Shan had made which use to hang in his office at Folium Biosciences. The caption says “Around this camp their is only one Chief. The rest are Indians.” Shan’s family is from Pakistan and is not Native American.


Enter your email address to subscribe to and receive notifications of new articles by email.


  1. Bill McKnight says

    I own the secret property in Rocky Ford Colorado that hid the chemicals for Folium Bioscience

Share Your Voice

This site uses Akismet to reduce spam. Learn how your comment data is processed.