Dear Alliance Growers’ Investors,
Thank you for your interest and support for Alliance Growers. We at Alliance Growers are very proud of all our accomplishments through 2017 and into 2018. We anticipate further accelerated growth for the remainder of 2018 and look forward to unveiling all our new developments and successes in the very near future.
At the end of 2017 we completed a strong oversubscribed financing that contributed to bringing in over $1,000,000. We also entered into a binding agreement with Pharmagreen Inc. for a 30% equity investment in the Cannabis Botany Centre. In 2018 we have moved forward on a Quebec late-stage ACMPR candidate, Biocannatech Inc; solidified our investment in Canwe Growers Inc, and begun to assess the viability of an investment in a Jamaican licensed producer.
In short, the Company has been progressing very well in terms of corporate activity, however we have seen a very volatile period in terms of the stock market recently which has delayed our next round of financing. The cannabis market has been victim to recent negative sentiment and uncertainty regarding legislation on legalization. This was exasperated by a recent article on March 30, 2018 in Barons magazine https://www.barrons.com/articles/canada-pioneers-new-industry-in-marijuana-1522421400 that questioned the valuation of cannabis stocks and implied that the prices were too high. We agree that this is true for a certain number of cannabis companies, but clearly this does not apply to Alliance. This article seems to have triggered the most recent sell-off in the sector. In early April, Canopy Growth Corp, viewed by many as the bell weather issuer for the cannabis sector was unable to maintain its 50-Day moving average. This event triggered a massive sell-off in the cannabis sector with hundreds of millions of dollars leaving the sector after several weeks of down draft. https://midasletter.com/2018/04/canopy-growth-50-day-ma-failure-triggers-industry-wide-selling-event/ . Again, we believe this sell-off should not have included Alliance. The cannabis sector seems to be going through a phase of volatility where investors will exercise greater caution in their decision making and move toward companies that provide long-term viability like Alliance Growers. Although we are not happy with this “correction” for lack of a better term, we welcome it as we hope investors will now take a closer look at the cannabis companies they are investing in, rather than just investing in the cannabis sector in general. This closer scrutiny is Alliance’s advantage.
The Alliance Growers Strategy
We at Alliance are working to build a global cannabis company that will be where the market is going, not where the market is today. Alliance is focused on two key streams in the cannabis space which are the most sustainable and that are here to stay; the grow stream and the medical CBD Oil stream, highlighted by our association to an Israeli company that will grow and extract cannabis flower to develop pharmaceutical grade CBD Oil. We also have other complementary projects to build shareholder value. The Company is building for the long-term! To quote an article from April 7, 2018 in the Cantech Letter, “It’s time to get back into marijuana stocks, says Canaccord Genuity”! https://www.cantechletter.com/2018/04/its-time-to-get-back-into-marijuana-stocks-says-canaccord-genuity/ In a news release dated April 4, 2018 we outlined some of the Company’s sustainable and high margin revenue streams that are advancing over the next 12 months:
BiocannaTech Inc., Quebec
Alliance Growers has successfully completed all the due diligence set out in the binding agreement to acquire BiocannaTech Inc., Quebec and is currently in final stages of executing the closing Definitive Agreement documents, expected imminently.
BiocannaTech is a late stage applicant to become a licensed producer under Health Canada’s access to cannabis for medical purposes regulations (“ACMPR”) in Quebec. Alliance Growers is purchasing all the issued and outstanding shares of BiocannaTech and will supply financing and resources to build out the medical marijuana facility in its leased premises in the Town of Mount Royal, Quebec 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.
Cannabis Botany Centre
Further to the update provided on March 19, 2018, Engineers were recently added to the team to move the project forward. Design upgrades of the facility have been completed to include the increased handling of 10 Million plantlets per year from previous annual capacity of 3 Million.
Alliance Growers and Pharmagreen are jointly working to 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.
Additionally, Alliance Growers and Pharmagreen announced the addition of state-of-the-art greenhouses for year-round nurseries of cannabis plants to produce a propriety CBD strain at the Company’s Cannabis Botany Centre. The initial roll out plans for up to 200,000 square feet of automated glass greenhouses with P.L. high-end horticultural lighting. The Alliance Growers’ greenhouses will be capable of producing over 300,000 grams per week or 15,600 kilograms per year of dried CBD cannabis.
Canwe Growers Inc.
Further to a news release dated February 22, 2018 announcing the closing of the final tranche of its subscription for 375,000 common shares (5% of the current capital of the company) of New Maple Holdings Ltd., Alliance Growers is very pleased with the growth of this investment and is currently considering additional investment. From the time Alliance Growers completed its first tranche of investment, there has been strategic work by the engineers to adjust the build-out plans to obtain the Access to Cannabis for Medical Purposes Regulations (the “ACMPR”) license expeditiously.
New Maple Holdings Ltd. is the parent company and sole shareholder of New Maple Consulting Inc. and Canwe Growers Inc. (“Canwe”), which is a licensed producer applicant in the enhanced review stage under the ACMPR. Canwe submitted its application to produce and sell cannabis under the ACMPR in July 2017. In January 2018, Canwe received confirmation from Health Canada that it has completed the security clearance stage and that it has entered the final Review stage of the application process. In December 2017, Canwe obtained the necessary permits to begin ground works on its 22-acre site in south-western Ontario, and it expects to receive full site plan approval imminently from the local township. Canwe has retained an experienced project management firm to oversee the design and build of its planned state-of-the-art production facility and is projected to be licensed and operational by early 2019.
Jamaican Cannabis Company Investment
Further to a news release dated February 27th, 2018 whereby Alliance announced discussions with a private licensed Jamaican cannabis company for a significant strategic investment. Alliance Growers has commenced due diligence for the investment of this company which is planning for an IPO later this year.
The private Jamaican company has established operations with production facilities with a Tier 1 Cultivator’s license (cultivate land with ganja for medical, scientific and therapeutic purposes) and a Tier 3 Processing license (process ganja for medical, scientific and medical purposes, including the manufacturing of ganja-based products). The company’s mission is to produce quality medicinal products in Jamaica that have the unique qualities of Jamaica’s holistic healing culture. The Jamaican company will be exporting cannabinoids and terpenoids through joint ventures with selective Canadian and European Licensed Distributers, and develop and brand world class cannabis flower, extracts, infused products for the growing international cannabis industry.
Financing Initiatives
Private Placement 6.25M units at 80c
Earlier this year, Alliance announced a non-brokered private placement to issue up to 6,250,000 Units at a price of $0.80 per Unit to raise gross proceeds of up to $5,000,000. Clearly, based on market conditions this financing will be modified as required just as other cannabis issuers have done recently.
Alliance Growers has maintained commitments for the financing from several sources including both institutional and retail shareholders. The market volatility has created a delay on closing the financing as we determine a fair price given current conditions.
Alumina Partners
We continue to have access to a financing commitment from Alumina Partners (Ontario) Ltd., a subsidiary of Alumina Partners LLC, a New York-based private equity firm, for a $5 Million equity facility in a series of private placements, with an option to extend the commitment up to $10 million.
The purpose of the Equity Facility is to provide the Company with continuous funding for working capital and for its integrated projects at progressive intervals that are consistent with the value of the Company at each stage of its development and growth.
We are in communication with Alumina on a weekly basis and they are ready to finance us for another tranche anytime we are ready. When our stock price moves up to an appropriate level, we will execute on another tranche for working capital purposes.
We appreciate the continued support and patience of all stakeholders as we move through this unexpected and difficult period. In my opinion the worst is behind us and we are back on track to close financings in a more stable market. The best is yet to come for Alliance as we move ahead with our high margin projects in conjunction with investments in ACMPR applicants. Its important for investors to recognize how and why we are different from a great majority of cannabis issuers and we are constantly working on getting that message across. We are yet to announce other exciting projects that complement our existing sustainable business model. For now, we are focusing on the Cannabis Botany Centre, BiocannaTech Inc and Canwe. Again, a big thank you to all stakeholders. Keep watching for further developments.
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.
If you would like to be added to Alliance Growers’ news distribution list, please send your email address to newsletter@alliancegrowers.com
On behalf of the board of directors of
ALLIANCE GROWERS CORP.
“Dennis Petke”
Dennis Petke
President and CEO
For more information contact:
Dennis Petke
Tel: 778-331-4266
DennisPetke@alliancegrowers.com
Rob Grace
Communications Consultant
Tel: 778-998-5431
RobDGrace@gmail.com
THE CANADIAN SECURITIES EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.
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. | |