May 29, 2018 – Vancouver, B.C. – Alliance Growers Corp. (CSE: ACG; FWB: 1LA; WKN: A2DFYX) (“Alliance Growers” or the “Company”) is pleased to report that it has executed a Letter of Intent (“LOI”) with Spyder Vapes Inc. (“Spyder”) and all of the shareholders of Spyder (collectively, the “Spyder Shareholders”) regarding the acquisition of all the issued shares of Spyder (the “Spyder Shares”) by Alliance Growers. Spyder is an established, upscale, ‘high-end with competitive prices’ retail store chain based in Ontario, with strong revenues and an aggressive growth plan across Canada.
Acquisition of Spyder Vapes
The execution of this LOI, to be followed by the execution of a formal Definitive Agreement (the “Definitive Agreement”), is the first step in the development of a true vertically integrated Seed to Sale business for Alliance Growers. The Company will purchase from the Spyder Shareholders 100% of the Spyder Shares pursuant to a share exchange agreement (the “Transaction”). Following the Transaction, Spyder will be a wholly owned subsidiary of Alliance Growers. Spyder has two wholly owned subsidiary companies, Spyder Vapes (Appleby) Inc. and Spyder Vapes (East) Inc. Alliance Growers will issue to the Spyder Shareholders 10,000,000 common shares of Alliance Growers at a deemed price of $0.25 per share. The consideration is based on the analysis of the assets and business value of Spyder, as at the date of this LOI, as determined by the management of Alliance Growers.
Commenting on the acquisition of Spyder Vapes, Dennis Petke, Alliance Growers’ President and CEO, noted “We are very pleased with the acquisition of Spyder Vapes, as it launches our Seed to Sale strategy in the highly profitable retail cannabis space. We are particularly encouraged by the recent news highlighting the company MedMen, the U.S. marijuana retailer known for its upscale, Apple-like stores. California-based MedMen plans to undertake an RTO listing on the CSE, with a pre-money valuation of US$1.65 billion. Earlier in 2018 we witnessed the market success of the merger that created Hiku Brands Company Ltd., that included the high-end retail stores of Tokyo Smoke. These are two very exiting analogous companies to the Alliance Growers strategy that foretell a tremendous period ahead for Alliance and its stakeholders. We are fortunate to have financing commitments in place in anticipation of this expansion of the Alliance business model, in addition to new funding sources. Alliance Growers continues to execute on its business plan to create a diversified global cannabis company that is focused on where the market is going, not where it is today”.
Spyder expansion across Canada
Alliance and Spyder plan to add additional retail stores this year in jurisdictions where Spyder Vapes can apply for legal cannabis distribution licenses. Spyder’s plan to grow this revenue will come from adding multiple stores, developing a robust on-line store and by adding new mass market products such as CBD oil and cannabis products once recreational use is approved. To that end, applications have commenced in Alberta and leases are being considered in Calgary. Additionally, the application process for Vancouver stores is already underway.
Spyder Vapes, as the retail arm for Alliance Growers, will create a true Seed to Sale business for the Company and its customers. From plantlets produced by the Cannabis Biotech Complex to the Greenhouse production of Dana Strain hemp in BC, to the upcoming ACMPR production in Quebec and other ACMPR investments, this vertical integration strategy will give Alliance Growers and Spyder Vapes a significant advantage in cost and margin compared to competitors.
About Spyder Vapes Inc.
Founded in 2014 by entrepreneur Dan Pelchovitz, Spyder Vapes is an established chain of three high-end vape stores in Ontario. The Spyder brand is defined by its high-quality proprietary line of e-juice, liquids and exclusive retail deals, dispensed in uniquely designed stores creating the optimal customer experience. Revenues for the initial two stores totalled $733,000 for the year ending January 31, 2018. The third store opened in December 2017.
Spyder is currently sourcing retail locations throughout Alberta and British Columbia where it seeks to establish a presence and apply for cannabis retail licences pursuant to recently announced provincial legislation. The additional retail locations will allow Spyder to leverage its retail and brand-building expertise, to offer customers quality cannabis products and, more specifically proprietary CBD products from Alliance as legislation permits. Spyder’s existing revenues and potential growth in the vape business will strengthen its ability to pursue opportunities in the soon to be launched recreational cannabis marketplace.
Spyder’s retail and distribution focus is an ideal fit for Alliance Growers’ mission to build a diversified global cannabis company focused not on where the market is today, but where it is going. Spyder neatly fits into Alliance Growers’ emerging network of interests in licenced cannabis growers, cannabidiol (CBD) oil extractors, new agricultural technologies, and its own Cannabis Biotech Complex. Spyder, as the retail arm for Alliance Growers, will create a true Seed (plantlet farm) to Sale (retail stores) business for the Company and its customers.
For further information, please visit Spyders’ website at www.spydervapes.com.
About Alliance Growers Corp.
Alliance Growers is a diversified cannabis company driven by the Company’s ‘Four Pillars’ Organization Plan – Cannabis Biotech Complex, Strategic ACMPR Investments, CBD Oil Supply and Distribution, and Research and Technology.
Alliance Growers is working with WFS Pharmagreen Inc. advancing a new business partnership, to jointly develop and operate a 58,000-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 Biotech Complex 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.
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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.
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