ENTERS INTO BINDING LETTER OF INTENT WITH WFS PHARMAGREEN FOR DEVLOPMENT OF THE BOTANY CENTRE
Alliance Growers Corp. (ACG.C) has entered into a binding letter of intent with WFS Pharmagreen Inc. 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 an equity interest in Pharmagreen's subsidiary B.C. New Co.
The execution of this LOI, to be followed by a formal definitive agreement, initiates the development of the Cannabis Botany Centre that Alliance and Pharmagreen have been working on for over one year. Pharmagreen principals have purchased the land required to build the Cannabis Botany Centre, east of Mission, B.C. The land will be leased to own to B.C. New Co.
Alliance Growers will purchase B.C. New Co. shares equal to 15 per cent of the issued B.C. New Co. shares for total consideration of $1.5-million by March 15, 2018. Alliance Growers will have an option to increase its non-dilutive interest in B.C. New Co. to 30 per cent by the investment of a further $1.5-million by June 15, 2018. Alliance Growers made an initial payment of $250,000 toward the first obligation on Dec. 21, 2017. Alliance Growers will elect one of the three directors of B.C. New Co., which 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 Access to Cannabis for Medical Purposes Regulations-licensed cannabis producers. Alliance Growers has already acquired interests in two ACMPR applicants, most notably Canwe, a private company based in Ontario that has applied for its ACMPR licence 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 chief executive officer, noted: "We are very fortunate to be able to commence construction as soon as reasonably possible, rather than having to wait several months under the typical ACMPR application scenario. This shortens our timeline to receive approval for an ACMPR application.
"Finalizing the Pharmagreen deal is one of the most significant milestones 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. Now that Alliance Growers has secured funding of over $1-million from the recent private placement and the exercise of warrants and options, the company will be executing on additional acquisitions of interests in ACMPR applicants, development of the Canna-App and finalization of its pharmaceutical-grade CDB Oil partnership with the Israeli Medical Cannabis Company. We are extremely pleased that the market has come to understand and appreciate our diversified global business model as evidenced by the strong performance in the company's recent stock price. The company has already received significant interest in additional financings slated for January and February of 2018 to ensure the company is adequately capitalized to execute on all aspects of our business model. All stakeholders of Alliance Growers will benefit from the arrangements we are making in the cannabis cultivator space. We look forward to announcing our new complementary acquisitions and as we move forward. Alliance Growers wishes everyone a happy, healthy and prosperous new year."
About Alliance Growers Corp.
Alliance Growers is a diversified cannabis company driven by the company's four-pillar organization plan: cannabis botany centre, strategic ACMPR (Access to Cannabis for Medical Purposes Regulations) investments, CBD (cannabidiol) 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 licence 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.
Alliance Growers has rights to 50 per cent of BCMM, a late-stage applicant that submitted its ACMPR application to Health Canada in 2014, and is also making a strategic investment in another private company preparing to apply for an ACMPR producer licence.