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Spyder Vapes

Alliance Growers Corp. (ACG.C) has executed a letter of intent with Spyder Vapes Inc. and all of the shareholders of Spyder regarding the acquisition of all the issued shares of Spyder 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, 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 per cent of the Spyder shares pursuant to a share exchange agreement. 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 million common shares of Alliance Growers at a deemed price of 25 cents 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 chief executive officer, 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 premoney valuation of $1.65-billion (U.S.). 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 licences. 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 cannabidiol 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 under way.

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 British Columbia, to the upcoming Access to Cannabis for Medical Purposes Regulations 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 with 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 Jan. 31, 2018. The third store opened in December, 2017.