June 30, 2017 – Vancouver, B.C. – Alliance Growers Corp. (CSE: ACG; FWB: 1LA; WKN: A2DFYX) (“Alliance Growers” or the “Company”) provides an update on financing activities.
Alliance Growers continues discussions with a private Streaming Finance Company that provides non-equity financing solutions for cannabis producers. Payments to the streaming company would be similar to a royalty, but based on a percentage of production rather than revenue. The discussions include funding of the Cannabis Botany Centre as well as the 11,000-square foot production facility in Kelowna, British Columbia the Kelowna, currently under application with Health Canada.
On June 7, 2017, the Company announced our agreement with a German licensed producer applicant, Plantisaneco Gmbh (“Plantisaneco”), whereby Alliance Growers will earn a significant percentage of the equity in Plantisaneco in return for providing certain services and expertise. On the same day the partnership with Plantisaneco, Alliance Growers was approached by the private streaming company.
Alliance will be listing a Class A preferred shares as another non-dilutive financing mechanism. A German financial institution has notified Alliance Growers that a proposal is being prepared for our review in the next two weeks.
Commenting on the financing options, Dennis Petke, Alliance Growers’ President and CEO commented, “Streaming financing looks like the best, most efficient non-dilutive financing option available to fund the Cannabis Botany Centre. We are extremely pleased that we were approached by the streaming financing company. We are very excited about the market potential for tissue cultured marijuana clone plantlets as we continue to confirm the numbers and contact growers to gauge the level of interest. The streaming finance company we are working with has already partially financed a grow operation in Germany and we are confident that the cash flow potential of the Cannabis Botany Centre will be a good fit for the streaming financing model. We continue to build relationships within the investment community through continuous communication with brokers, streaming companies and financial institutions in North America and in Europe. We are getting closer to finding the right combination and the right fit with the various financing sources and expect to fully finance all of our projects in the coming months.”
Market Potential for Tissue Cultured Marijuana Clone Plantlets
According to recent published data, dedicated grow-out space of the top 50 percent of Licensed ACMPR producers require 7,300,000 plants currently with ongoing expansion to 16,000,000 plants by 2019. The additional 50% of producers should add similar quantities bringing the total to 14,000,000 plants currently and with expansion estimated to be 32,000,000 plants required annually, by 2019. New licenses to be added by July 1st 2018 could push the number even higher to an estimated 22,000,000 plants required annually with expansion plans pushing out to over 40,000,000 marijuana plants to meet market supply.
The Cannabis Botany Centre is expected to produce and sell a minimum of 3,000,000 plantlets annually at a gross profit of $4.00 per plantlet for estimated gross profit of $12,000,000. 3,000,000 plantlets represents approximately 20% of the requirements of the top 50% of Licensed ACMPR producers and approximately 10% if all current Licensed ACMPR producers, including planned expansion. Alliance Growers believes that tissue cultured marijuana clone plantlets will become the standard with Health Canada as we move toward legalization. https://www.newcannabisventures.com/tissue-culture-for-cannabis-cultivation-could-replace-cloning-as-the-gold-standard/.
Plantisaneco is currently a license applicant under the Federal Institute for Drugs and Medical Devices, in the Federal State of Germany. After the newly passed law for the prescription of medical cannabis and the loosening of the regulations that classified those people that are suffering as eligible, the estimated consumer market will grow rapidly to over 800,000 people within the next few years. To fill the demand, the federal agencies are seeking potential growers who will provide an excellent, high quality product. To benefit from the market opening, Plantisaneco is in the application process to obtain approval for growing licenses of up to 1400 KG of medical cannabis annually.
About Alliance Growers
Alliance Growers Corp 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 executed an agreement with Botanical Research In Motion International Inc., for a Canada Exclusive License 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.
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.
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On behalf of the board of directors of
ALLIANCE GROWERS CORP.
President and CEO
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