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ADDS NURSARY PLANT PRODUCTION AND ENHANCES PROJECT UPDATES

 

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Alliance Growers Corp. (ACG.C) has provided clarifications to the company's news release dated March 15, 2018, regarding several key advancements for the Cannabis Botany Centre and is pleased to report the addition of nursery plant production.

Alliance Growers and Pharmagreen reported the following key notable advancements:

  • Design upgrades of the facility have been completed to include the increased handling of 10 million plantlets per year from previous annual capacity of three million plantlets per year.
  • Included in the design upgrades are state-of-the-art semi-automation processes to ensure consistent and high-quality production of plantlets for an ever-growing demand as the number and size of cannabis production facilities keeps expanding. The cap-ex for the 58,000-square-foot Cannabis Botany Centre is continuing to be refined but will not exceed $15-million.
  • The Cannabis Botany Centre and its services offered are high-value-added products and services for both the domestic and international cannabis industry.
  • Annual gross revenue from the tissue culture operations are expected to be $50-million per year with 10 million plantlets produced and sold at $5 per plantlet. The all-in operating and production cost per tissue culture plantlet would be approximately 50 cents each to $1 ($5-million to $10-million annual total cost) and the projected gross profit on an annual basis operating at full capacity would be $40-million to $45-million.

In addition to the production of plantlets, Alliance Growers and Pharmagreen will also be producing nursery plants to provide cultivators larger plants that are vegetated and ready for flowering. This is advantageous to the cultivators and licensed producers because they can then in turn utilize more of their space for flower production. It also reduces the costs for the cultivators if they focus on flower only, as they would not need 18 hours of light cycle. It also increases their frequency and shortens the time for flower production for the licensed producers.

The nursery plants will be in a vegetative state (prior to being in the flower stage) and would be two to four feet in height. Initially, after the completion of the 58,000-square-foot Cannabis Botany Centre, one acre (45,000 square feet) of green house space would be allocated for the nursery plants. The number of plants in a vegetative state in the one-acre green house would be up to 5,600 plants monthly for a total of 67,200 plants on an annual basis. The price per plant would range from $75 to $100 and the all-in operating and production cost per plant is projected to be $10 to $20. Annual gross profit would be more than $4-million per year.

Commenting on the advancements and progress at the Cannabis Botany Centre, Alliance Growers' president and chief executive officer, Dennis Petke, stated: "Our close business relationship with Pharmagreen continues to add highly profitable cash flow opportunities in the Cannabis space in both the medical and recreational areas. In addition to the 30-per-cent ownership in the Botany Centre, which has high profit margins in both tissue culture plantlets and in nursery produced plants, we will be partnering in the production of CBD oil from hemp production on a significant scale. These profitable ventures in addition to various levels of ownership in multiple ACMPR applicants will make Alliance a stable long-term investment for investors. It is well known that medical cannabis is here to stay, and this alone will provide Alliance sustainable cash flow for years to come as we provide products and services to licensed medical cannabis producers. The addition of providing products and services to the recreational space is a bonus with even higher margins. Alliance will be one of the few medical cannabis companies that will continue to grow in value and revenue year after year due to its diversified global business model. To fund our ventures, we are extremely fortunate to have financing commitments in place to ensure we can execute on each phase of each project when required. In a volatile market such as the cannabis space, those commitments are critical. We ask shareholders and future investors to watch for financing and project execution updates in the coming days and weeks."

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 investments, cannabidiol oil supply and distribution, and research and development.

Alliance Growers has finalized 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 in vitro plant production system, which assures consistent composition and purity of each plantlet for the growers.