Alliance Growers plans to expand project

Alliance Growers expands partnership with Pharmagreen

2018-04-25 10:44 ET - News Release

Mr. Dennis Petke reports
ALLIANCE REPORTS CBD PRODUCTION ECONOMICS FROM CANNABIS BIOTECH COMPLEX
Alliance Growers Corp. has made vertically integrated additions to its revenue model and profit potential through expansion of its business partnership with Pharmagreen. The two companies have agreed to the joint development of the proprietary high-yield cannabidiol (CBD) DANA strain in a profitable industrial hemp operation that begins with tissue culture plantlets produced and grown on what is now referred to as the Cannabis Biotech Complex on the property in Mission, B.C.
Alliance and Pharmagreen will jointly execute on a two-stage commercial hemp operation to generate $60M in revenue on an annual basis in addition to the revenue generated from tissue culture sales. The advantage Alliance has is two-fold. First the Company has the advantage of starting off with genetically perfect and disease and bug free "female only" plantlets generated from the Botany Centre, the basis of the Cannabis Biotech Complex. Second the proprietary CBD DANA strain will provide a significant yield in CBD production from hemp.

According to Pharmagreen, the content of the CBD DANA strain is significantly higher than traditional hemp strains which typically have 1% CBD content. Additional increase in the CBD yields is achieved when no males are present to pollinate the females which increases the flower content by an additional 80%. The Cannabinoids are mainly produced in the flower portion of the female plant, therefore planting female plantlets instead of planting from seed eliminates the males and keeps the flower production at maximum. The commercial production of hemp starts with planting 200,000 female-only tissue cultured plantlets of the proprietary CBD Dana strain in 5 acres of glass greenhouses. Stage two involves moving the plants to a leased, secure open field of a minimum 20 acres with a contract hemp farmer. The 200,000 plants will yield approximately 100,000 kilos of CBD flower which in turn will yield 3,000 kilos of 99% CBD Crystals of the proprietary Dana Strain. At approximately $20,000 per kilo, that yields $60 million in gross revenue with costs ranging from $20 million to $30 million depending on the lease and contract farming arrangement and the cost of extraction.

"Expanding our partnership with Pharmagreen by co-development of the commercial hemp operation provides for much greater revenue and profit sharing opportunity. It expands the business model where Alliance Growers already has an incredible investment with the largest Canadian state-of-the-art tissue culture production facility- the Cannabis Botany Centre. This partnership adds relationships with cultivators and extractors to assist in building vast revenue model and exceptional profit potential. It is one of the best triangular business models for the Cannabis industry, it truly stands out," exclaimed Dennis Petke, Alliance Growers' President and CEO.

About Alliance Growers
Alliance Growers is a diversified cannabis company driven by the Company's 'Four Pillars' Organization Plan — Cannabis Botany Centre, Strategic ACMPR Investments, CBD Oil Supply and Distribution, and Research and Development. Alliance Growers has finalized its 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 Invitro Plant Production System", which assures consistent composition and purity of each plantlet for the growers.

Alliance Growers has entered into an exclusive agreement to acquire a late stage licensed producer applicant, Biocannatech, to become a licensed producer under Health Canada's access to cannabis for medical purposes regulations ("ACMPR") in Quebec. 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. This acquisition allows the Company an opportunity to become a licensed producer in the Province of Quebec and gain an in-road to provide tissue culture plantlets to all licensed producers in Quebec.

Further, Alliance Growers has been negotiating to obtain other exclusive Canadian distribution agreements for certain proprietary products for support of the Cannabis growing industry in addition to possible partnerships with Licensed Producer Applicants at various stages in the Health Canada License process.
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