Establishing a Long Term Presence in the Cannabis Industry Through Diversity, Science and Technology
This profile is part of a paid investor education campaign.*
Alliance Growers (CSE:ACG; OTCQB:ALGWF;FSE:1LA) is a vertically-integrated global medical cannabis company, building its business to be positioned where the market is going, not where the market is today. Even though the Company is focusing on medical cannabis, it has a global reach and is politically stable. The Company’s core projects will also benefit from the recreational cannabis market. The Company strategy is driven by its ‘Four Pillars’ Organization Plan – Cannabis Biotech Complex, Strategic Licensed Producer Investments, CBD Oil Supply and Distribution, and Research and Technology.
Alliance Growers 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 CBD Oil stream. In addition, the Company has other complementary projects to build shareholder value. Combined, they continue to build the Company for the long-term.
According to a report by Grand View Research, the global medical cannabis market is expected to reach $146.4 billion by 2025. The oil segment of the market is expected to grow at a CAGR of 40.4 percent due to the safer application methods compared to smoking. In addition, forecasts for CBD oils are expected to reach $1.6 billion by 2020, covering 79 percent of the CBD product market share.
Alliance Growers is working with Pharmagreen Biotech Inc. to jointly develop the Cannabis Biotech Complex on a 25-acre property located near Mission, BC. The main component of the Complex is the 62,000-square foot Cannabis Biotech Centre, to be the first of its kind in Western Canada to house a DNA Botany lab, extraction facility and a Tissue Culture Plantlet Production facility, which is the flagship of the Biotech Centre.
In anticipation of finalizing construction of the Biotech Complex, Alliance is pursuing strategic investments in Licensed Producer applicants. The first of these was a strategic investment in New Maple Holdings Ltd., the parent company of New Maple Consulting Inc. and Canwe Growers Inc. The second of such investments was the acquisition of BiocannaTech, a late stage applicant working toward becoming a Licensed Producer in Quebec. Alliance Growers will supply financing and resources to build out the medical marijuana facility in its leased premises in the Town of Mount Royal, Quebec. The two leased properties are expected to provide combined revenue of $17,000,000 per year.
Under the agreements with the ACMPR Applicants, Alliance has secured long-term plantlet sales for the Cannabis Biotech Centre and, wholesale cost for flower acquired for CBD oil extraction and ongoing support for producers.
Alliance Growers has also been pursuing global opportunities for the development and distribution of pharmaceutical-grade CBD oil.
- Focused on the two key streams in the cannabis space which are the most sustainable and that are here to stay; the grow stream and the CBD Oil stream.
- First Cannabis Biotech Complex under development in Mission, B.C.
- Producing tissue cultured plantlets to provide cannabis growers a superior alternative to clones utilizing the proprietary Chibafreen Process.
- The Culture facility will initially produce 10m plantlets annually at $10 per plantlet, with expansion plans to produce 20m plantlets annually.
- The Biotech Centre will be able to process approximately 100,000 kilograms of raw flower material once completed.
- Owns a proprietary CBD strain named CBD Dana, which contains at least 14 percent CBD and less than 0.3 percent THC.
- Focused on becoming the leader in high-quality, low-impurity CBD oil.
- CBD oil market expected to reach $1.6 billion by 2020.
- Multiple strategic partnerships with BiocannaTech, Pharmagreen, Canwe, BRIM and an Israeli medical cannabis company.
The Cannabis Biotech Complex
In December 2017, Alliance Growers entered into a binding LOI with WFS Pharmagreen Inc. and its subsidiary BC New Co., to create a strategic relationship where Alliance Growers will acquire a 30% equity interest in Pharmagreen’s subsidiary. Plans for construction of the first Complex is now underway. Pharmagreen and Alliance Growers have secured a 25-acre property outside of Mission, BC on which they will co-finance the construction of a 62,000-square foot facility.
Cannabis Biotech Centre
The main component of the Complex is the 62,000-square foot Cannabis Biotech Centre, to be the first of its kind in Western Canada to house a DNA Botany lab, extraction facility and a Tissue Culture Plantlet Production facility, which is the flagship of the Biotech Centre. The Tissue Culture Facility will service the cannabis market by providing the highest quality 100% germ free, disease free genetically perfect plantlets of cannabis of any strain required. The plantlets are grown using proprietary tissue culture propagation, specifically utilizing the “Chibafreen Invitro Plant Production System”, which allows for more tissue cultured plantlets to be produced in less space and less time.
The Biotech Complex will also provide botanical DNA services for certifying plant tissue at the genetic level, cold storage technology for tissue culture preservation and extraction services for CBD oils for the medical and retail markets. The Complex will also house three greenhouses and a 20,000-square-feet extraction and distillation lab that will be able to process approximately 100,000 kilograms of raw flower material to make CBD oil for wholesale purchase.
Alliance Growers and WFS Pharmagreen, a wholly owned subsidiary of publicly traded Pharmagreen Biotech Inc., have completed the pre-construction phase of the Cannabis Biotech Centre which includes the completion of building engineering, designs for structural loads, electrical, HVAC and geotechnical along with the submission of Health Canada applications for ACMP and dealer’s licensing, which was completed in June 2018.
The greenhouses will be focused on growing and cultivating the flower from Alliance’s proprietary CBD Dana strain for its CBD content and will also be growing and producing flower products from various THC strains for THC cannabinoids and their terpene content. The greenhouses will provide bigger plants for cultivators that do not want to purchase plantlets and the produce plants for any R&D initiatives.
Extraction and Distillation Lab
Construction on this stand-alone facility is slated to begin in early 2020 after the main facility of the complex is in operation. The lab will consist of 20,000-square-feet and will be able to process, extract and distillate approximately 100,000 kilograms of raw flower material for the wholesale of cannabis.
Alliance Growers is tasked with securing the development, investment and acquisition of ACMPR applicants to secure supply contracts for tissue culture plantlets and to develop both medical and recreational distribution channels for the sale of the two company’s branded cannabis products. Pharmagreen will be focusing on tissue culture plantlets and other valuable services for cultivators.
Licensed Cannabis Producers
Canwe Growers Inc.
Alliance is pursuing strategic investments in licensed producer applicants. The first of these was a strategic investment in New Maple Holdings Ltd., the parent company of New Maple Consulting Inc. and Canwe Growers Inc. Canwe is a licensed producer applicant in the enhanced review stage under the ACMPR, now the Federal Regulations. During 2018, Canwe completed security clearance and they have entered the final Review stage. Canwe has retained an experienced project management firm to oversee the design and build their planned state-of-the-art production facility and is projected to be licensed and operational by early 2019. Canwe strategically acquired the original grow team that made MedReleaf the most profitable Licensed Producer in 2016. Due to our strategic relationship, Alliance Growers has access to this grow team.
In 2018, Alliance Growers acquired BiocannaTech, a late stage applicant working toward becoming a licensed producer in Quebec. Alliance Growers will supply financing and resources to build out the medical marijuana facility in its leased premises in the Town of Mount Royal, Quebec. Alliance Growers is finalizing on one of three financing options, leaning toward the non-dilutive option of a lease back transaction to build out the facility in preparation for the inspection required to obtain a growing license. Alliance Growers looks forward to a stronger cannabis stock market to advance this valuable asset.
Biocannatech Inc. has a leased a 10,000 square foot facility in Mount Royal, Quebec with an option-to-purchase agreement. Permits have been filed with the municipality to renovate the facility. This facility is expected to produce $5,000,000 per year. Biocannatech. has also secured the lease in the adjacent facility that is 17,900 square feet with a growing area of 16,000 square feet. The additional growing area is expected to produce $12,000,000 in revenue for a combined total $17,000,000 per year in revenue from both facilities.
Under the agreements with the Licensed Producer applicants, Alliance Growers has secured long-term plantlet sales for the Cannabis Biotech Centre and, wholesale cost for flower acquired for CBD oil extraction and ongoing support for producers.
CBD Oil Production and Distribution
The CBD market is growing at a rate of 30 percent per year, according to the Hemp Business Journal, and is forecast to reach $2.1 billion by 2020. Sales of CBD oils are expected to account for nearly 79 percent of the market. Alliance Growers will initially target the US market where 29 states have legalized medical cannabis and an additional 15 states currently allow for the sale of CBD products.
To further advance its position in the CBD oil market, Alliance Growers will be extracting CBD oil from its own flower gained from its Biocannatech facility and from other Licensed Producer applicants. CBD Oil extraction will be direct and also through the Cannabis Biotech Extraction and Distillation facility in the Biotech Complex. The Company will be able to take advantage of the BRIM extraction technology and share in BRIM’s proprietary CBD formulations, such as CBD Dana.
The plantlet supply contracts the Cannabis Biotech Complex offers will also secure offtake agreements for flowers at wholesale cost to be used in CBD oil extraction. These contracts will be made with both external growers as well as Alliance Growers’ subsidiary producers.
Pharmaceutical-grade CBD Oil
Alliance Growers has been pursuing global opportunities for the development and distribution of pharmaceutical-grade CBD oil. The Company has maintained a relationship with an Israeli medical cannabis company for the development of pharmaceutical-grade CBD oil, access to their high-quality CBD products as well as access to their superior research. One potential joint venture opportunity is the development of a legally-permitted 50-hectare cannabis grow operation in a low cost off shore jurisdiction. The deal would help to differentiate Alliance Growers from its peers in the Canadian cannabis market who are directly impacted by Health Canada regulations, allowing the Company to produce and sell CBD oil from outside Canada.
This Israeli medical cannabis company has extensive expertise cultivating high-quality cannabis in greenhouse operations as well as medical cannabis-based clinical research. In contrast with current commercial extraction methods, the Israeli company’s innovative extraction technology removes impurities allowing for the production of the highest quality CBD oil.
Israel’s government has actively encouraged cannabis research since the 1960s. In 2017, the Israeli government announced that they would invest approximately $2.13 million in research projects. The Health Ministry’s medical cannabis unit believes that cannabis should be treated like any other medicinal product. Israel’s medical cannabis market has approximately 26,000 registered patients who have created a market of approximately $20 million.
Research and Technology
CBD Dana Hemp Strain
Alliance Growers has secured access to a proprietary CBD strain named CBD DANA. CBD is used in the treatment of multiple sclerosis, epilepsy, potent inhibitor of cancer cell proliferation, metastasis, and tumor growth as well as other symptoms.
The unique strain has been tested for a content of at least 10 percent CBD and less than 0.3 percent THC. This CBD yield is substantially greater than traditional hemp strains which typically have at most a 1 percent content. The lower THC content allows the strain to be classified as “industrial hemp” which makes it ideal for cultivation with less restrictive regulation.
The female plantlets produced in the tissue culture lab at the Cannabis Biotech Complex will be available for hemp farmers on a global scale. Providing hemp farmers with all female, fully rooted plantlets of the strain will provide a significant yield in CBD production for hemp farmers.
BOTANICAL RESEARCH IN MOTION (BRIM) Strategic Relationship
Under the guidance of Peter Wojcik and Dr. Fawzia Afreen, B.R.I.M and Alliance Growers will pursue and develop new methods and technologies to establish a presence in the industry’s newest fields.
BRIM will be advising Pharmagreen and Alliance Growers as they develop the Cannabis Biotech Complex including BRIM’s Chibafreen invitro plant production system, extraction lab, botanical DNA services laboratory and BRIM’s Cryotissue Cold Storage technology for long-term preservation of plant tissue samples. This feature will provide cultivators with the ability to preserve desired plant breeds and have specific strains produced as needed.
The Chibafreen process utilizes clean tissue culture to clone new growth while limiting genetic drift. This allows growers to ensure a consistent quality and yield in each growing season. The process is efficient enough to produce over one million plantlets per year of any given strain and can be adapted to all varieties of flora to potentially serve additional agricultural industries.
Dennis Petke, —CEO, President and Director
Dennis Petke has accumulated extensive experience in the area of corporate finance, including negotiating and implementing private and public company mergers, as well as facilitating private placement, preference share, convertible debenture, special warrant and debt financings, his responsibilities include strategic and overall corporate management for Alliance.
Harvey Lawson has had many years of experience in the management of public companies. He served as CFO of Trade Winds Ventures from 2001 to 2011 until the company was purchased by Detour Gold Corp in 2011. Prior to this, Harvey taught Financial Management at the National University of Singapore, Hong Kong Polytechnic and the BC Institute of Technology. Lawson is an active member of several Angel Investor groups in Vancouver and the Pacific North West where he offers his expertise in reviewing the financials of companies presenting to the Angels, as well as in the Due Diligence process of companies under consideration for investment. He also mentors many young entrepreneurs in the Technology sector.
Rupert Shore has been a barrister and solicitor in good standing with the Law Society of British Columbia since November 1989. For the past 26 years, he has practiced in both large and small legal firms and has appeared as counsel in all levels of Court in the Province of British Columbia. Since 2004, Shore has practiced law as a sole practitioner primarily in the area of commercial litigation. During his time at Campney & Murphy, Shore’s practice focused on commercial litigation including strata property issues and he was defense counsel in a landmark decision of the Supreme Court of British Columbia in favor of his client which established law in the area of shareholders’ remedies.
Sina Pirooz is a registered and practicing pharmacist and a professional member of the College of Pharmacists of British Columbia since 2002, with over ten years of pharmaceuticals and pharmacy management experience. As President of SP RX Services, an established pharmacy consulting company, he provides consulting, pharmacist and pharmacy management services to many of Canada’s largest and established drug store chains, pharmacy chains and independent pharmacies and drug stores, including Shoppers Drug Mart, Rexall Drugs, Pharmasave and Guardian Pharmacies. He is also actively engaged in the sales, marketing and export of pharmaceuticals and OTC drugs and health supplements to the Middle East. As owner of a compounding pharmacy in Vancouver, Pirooz has been compounding and dispensing pharmaceuticals for over ten years. He will be assisting Alliance with certain product development with his expertise in compounding, sales, marketing and export of pharmaceuticals.
Ian Lambert has had broad exposure to a wide range of business activities includes oil and gas development, marketing, manufacturing, mobile technology, data processing operations and software development, as well as precious metals and mineral exploration and development. His strengths are in corporate management, structuring and strategic planning, regulatory compliance with both the SEC and Canadian regulatory authorities, public financing arrangements and investor and institutional marketing activities. As CEO and a director of Trade Winds Venture Inc., a TSX Venture Top 50 company developing a 4.65-million-ounce gold project in Ontario, for 21 years, Lambert successfully completed the sale of Trade Winds Ventures to Detour Gold Corporation, valued at $84 million. He is currently the CEO and a director of West Nevada Resources Inc.
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