Alliance Growers Corp (CSE:ACG) is pleased to report that it has expanded its binding Letter of Intent (“LOI”) with WFS Pharmagreen Inc. (“Pharmagreen”), and its proposed subsidiary BC New Co, to create a strategic relationship, together with equity participation by Alliance Growers and Pharmagreen, whereby Alliance Growers will acquire a 30% non-dilutive equity interest in Pharmagreen’s subsidiary BC New Co (the “Proposed Transaction”). The binding LOI was first reported in a news release dated December 28, 2017.
The expansion will see the Cannabis Botany Centre expand from a 40,000 sq. ft facility with 20,000 of finished floor space to a semi-automated 58,000 sq. ft facility with all finished floor space. The upgraded design can be expanded from the main building in all direction and the new semi-automated functions for upscale production. The projected cost of the building is $15 Million Cdn and the projected annual plantlet production is 10 Million, a significant increase over the previous estimated production of 3 Million. The plantlets are anticipated to sell for a price of $5 per unit for $50 Million in gross revenues, while the cost per plantlet is anticipated at $1 Cdn. The projected annual profit $40 Million Cdn.
The execution of this expanded LOI, to be followed by a formal Definitive Agreement, furthers the development of the Cannabis Botany Centre that Alliance and Pharmagreen have been working on for nearly one and a half years. Pharmagreen principals have purchased the land required to build the Cannabis Botany Centre East of Mission, BC (the “Land”). The Land will be leased to own to BC New Co.
Under the new expanded terms of the LOI, Alliance Growers will purchase up to 30% of BC New Co Shares for total consideration of $4.5 Million within the next nine months. Alliance Growers will derive its proportionate amount of net revenue and resulting cash flow from the facility for its 30% interest.
Alliance Growers will elect one of the three Directors of BC New Co, the company that will build and operate the Cannabis Botany Centre to permit the growth and sale of tissue culture plantlets, and storage of strains and nursery plants to wholesale, retail and medical markets.
The development of the Cannabis Botany Centre is consistent with Alliance Growers business plan to be in partnership with a range of cannabis sector business opportunities including strategic investments in ACMPR licensed cannabis producers. Alliance Growers has already acquired interests in two ACMPR applicants, most notably 100% of BiocannaTech, a late-stage ACMPR applicant based in Quebec and Canwe, a private company based in Ontario that has applied for its ACMPR license and is currently in the review and security clearance stage.
Commenting on the development of the Cannabis Botany Centre, Dennis Petke, Alliance Growers’ President and CEO, noted “We anticipate breaking ground in the very near future and are truly excited to be creating Canada’s first high-tech Cannabis Botany Centre. We will be fast tracking the build to shorten our timeline to receive approval for an ACMPR application. Consummating the Cannabis Botany Centre deal with Pharmagreen is a bell weather milestone in the Company’s business plan. It represents the beginning of the execution of multiple initiatives that Alliance Growers has been developing over the last year. In December of 2017 and into January of 2018, Alliance Growers secured funding of over $1M from a private placement and the exercise of warrants and options. Following a small financing in April and a larger financing in May of between $5 and $10 Million, the Company will be financing the “initial build stage” of BiocannaTech, executing on additional acquisitions of interests in ACMPR applicants, development of the Canna-App and finalization of its Pharmaceutical Grade CDB Oil partnership with an Israeli Medical Cannabis Company as well as further development of the Botany Centre. The Company has received significant strong interest in financings and we will be announcing the details in the coming weeks”.
About Alliance Growers
Alliance Growers is a diversified cannabis company driven by the Company’s ‘Four Pillars’ Organization Plan — Cannabis Botany Centre, Strategic ACMPR Investments, CBD Oil Supply and Distribution, and Research and Development.
Alliance Growers has finalized its a new business partnership with WFS Pharmagreen Inc., to jointly develop and operate a 40,000-square foot facility to be the first of its kind in Western Canada to house a DNA Botany lab, extraction facility and Tissue Culture Plantlet Production facility to service the Cannabis market and agriculture market in general. The proposed Cannabis Botany Centre will grow Cannabis plantlets using proprietary tissue culture propagation, specifically the “Chibafreen Invitro Plant Production System”, which assures consistent composition and purity of each plantlet for the growers.
Alliance Growers has entered into an exclusive agreement to acquire a late stage licensed producer applicant, Biocannatech, to become a licensed producer under Health Canada’s access to cannabis for medical purposes regulations (“ACMPR”) in Quebec. Alliance Growers will supply financing and resources to build out the medical marijuana facility in preparation for the inspection required to obtain a growing license. Once Health Canada is satisfied with a successful crop, Alliance Growers will be granted its distribution license. This acquisition allows the Company an opportunity to become a licensed producer in the Province of Quebec and gain an in-road to provide tissue culture plantlets to all licensed producers in Quebec.
Further, Alliance Growers has been negotiating to obtain other exclusive Canadian distribution agreements for certain proprietary products for support of the Cannabis growing industry in addition to possible partnerships with Licensed Producer Applicants at various stages in the Health Canada License process.
For further information, please visit the Company’s website at www.alliancegrowers.com or the Company’s profile at www.sedar.com.
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On behalf of the board of directors of
ALLIANCE GROWERS CORP.
President and CEO
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FORWARD LOOKING INFORMATION
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. More particularly and without limitation, the news release contains forward-looking statements and information relating to Company’s corporate strategy. The forward-looking statements and information are based on certain key expectations and assumptions made by management of the Company, including, without limitation, the Company’s ability to carry out its business plan. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward-looking statements and information address future events and conditions, by their very nature they involve risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the Company’s ability to identify and complete additional suitable acquisitions to further the Company’s growth as well as risks associated with the medical marijuana industry in general, such as operational risks in development and production delays or changes in plans with respect to development projects or capital expenditures; the uncertainty of the capital markets; the uncertainty of receiving the required licenses, production, costs and expenses; health, safety and environmental risks; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of the potential market; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws and regulated regulations. Accordingly, readers should not place undue reliance on the forward-looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.
The forward-looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Canadian Securities Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
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