Completes Acquisition of MJ ACMPR Applicant BiocannaTech Inc.
Alliance Growers Corp. (ACG.C) has executed the exclusive agreement to acquire the licensed producer applicant, BiocannaTech Inc. to become a licensed producer under Health Canada's access to cannabis for medical purposes regulations ("ACMPR") in Quebec. Closing will be on or before April 25, 2018, five business days after the fully executed agreement. Alliance Growers will supply financing and resources to build out the medical marijuana facility in preparation for the inspection required to obtain a growing license. Once Health Canada is satisfied with a successful crop, Alliance Growers will be granted its distribution license.
Quebec is considered the optimal locale for an ACMPR for many reasons. The province is host to 20% of Canada's population and has only had two ACMPR licenses approved to date with only one currently producing. Quebec is currently vastly under represented relative to many other provinces in Canada. The Quebec government has always maintained an aggressive approach to attaining 25% of whatever Canada's intentions are with business. Specifically regarding ACMPR licenses, Quebec has publicly stated they want Health Canada to process all 16 of the license applications in Quebec and have them approved expeditiously. When it comes time for Quebec licensees to purchase their supply, they will have a high priority on purchasing from Quebec growers. In Canada there are many politicians who act on the premise that Quebec deserves continual special policy treatment and defenders of the foregoing justify the exceptions with an observation that French language and culture in Quebec makes that province unique; that merits special treatment.
Alliance Growers will immediately acquire the Quebec late stage licensed producer applicant, with payments issued in stages. The terms of the BiocannaTech acquisition are as follows:
A down payment of $238,637, which has been paid.
a) The issuance of $50,000 in shares to Canna Technology Inc. and 1,200,000 shares to 1134778 BC Ltd (5/6) and Erick Factor (1/6) ("the Recipients") will take place within five days following execution of the purchase agreement and filing with the CSE;
b) $250,000 in shares to Canna Technology and 1,200,000 shares to the Recipients to be released immediately upon receipt of Health Canada approval for Ready to Build stage on or before December 31, 2019;
c) $500,000 paid to Canna Technology and 1,200,000 shares to the Recipients upon receipt of municipal building permits to start construction on or before December 31, 2019;
d) $500,000 in shares to Canna Technology and 1,200,000 shares to the Recipients upon receipt of Health Canada approval of Cultivation stage on or before December 31, 2019;
e) $500,000 in shares to Canna Technology and 1,200,000 shares to the Recipients upon receipt of Health Canada LP License on or before December 31, 2019.
The initial BiocannaTech facility is configured at 10,000 sq. ft. and is attached to a 120,000-sq. ft. warehouse to provide for phased expansion. BiocannaTech will have the capacity to produce up to 1,000 kg per year initially and be able to increase that output in subsequent phases of expansion. The building is in the Town of Mount Royal ("T.M.R.") in Montreal. This site is zoned for Medical Cannabis Production and BiocannaTech has the confirmation letter from the city of T.M.R. It is important to note that the lease provides the option to buy the facility and build equity for Alliance Growers and its shareholders.