ALLIANCE GROWERS. Investor Presentation - July 2018 CSE: ACG - FWB: 1LA - OTCQB: ALGWF Alliance Growers Inc.

Transcription

1 ALLIANCE GROWERS Investor Presentation - July 2018 CSE: ACG - FWB: 1LA - OTCQB: ALGWF Alliance Growers Inc.

2 Forward-Looking Statements Disclaimer Certain information regarding Alliance Growers Corp. (the Company) contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The company cautions that actual performance will be affected by a number of factors, many of which are beyond the company s control, and that future events and results may vary substantially from what the company currently foresees. The Company s forward-looking statements are expressly qualified in their entirety by this cautionary statement. 2

3 Medical Marijuana Industry Potential The global legal marijuana market is expected to grow at a compound annual growth rate of 37.38% from 2016 to Unlike THC, CBD is non-psychoactive so it can be more widely marketed for medical use, including children. 3

4 Cannabidiol (CBD) Cannabidiol (CBD) is an organic chemical compound that can be extracted as an oil from cannabis and hemp plants. These molecules act on cannabinoid receptors in cells that alter neurotransmitter release in the brain. CBD has been shown to be effective in treating: y epilepsy y anxiety / depression y schizophrenia y type 2 diabetes y heart disease y certain forms of cancer More research continues to be done to expand the potential of CBD and its applications. The Hemp Business Journal reports that the CBD market is growing at a rate of 30% per annum, and forecasts that sales of CBD Oils from marijuana-based sources are expected to reach $1.6 billion or 79% of the Total CBD Market of $2.1 billion by

5 Canada & USA In 2012 the state of Washington legalized the sale and use of recreational marijuana. There are now more than 300 retail outlets, generating hundreds of millions of dollars in sales. Across the US, recreational sales are estimated to grow from $2.6 billion in 2016 to $11.2 billion by In the USA, the CBD market is growing at a rate of 30 percent per year, forecast to reach $2.1 billion by Medical marijuana sales are projected to grow from $4.7 billion in 2016 to $13.3 billion in states, plus the District of Columbia, have legalized medical marijuana and 15 other states that currently allow for the sale of CBD products. AK YT NT NU In August 2016, Canada enacted the Access to Cannabis for Medical Purposes Regulations (ACMPR) which allows commercial production by licensed producers. Federal legalization of retail distribution and sale of cannabis is planned for July The Province of Quebec is anxious to develop a base of skilled licensed producers to provide a self-sustaining supply for province-based demand of both recreational and medical cannabis. As Quebec represents approximately 20% of Canada s population it is currently under-represented in regards to ACMPR licensed companies. Alliance Growers believes it is advantageous to capitalize on the mandate to increase the number of ACMPR licensed companies in Quebec. We are pleased to have now entered the grow space in Quebec as we negotiate additional license applicants in this province. Recreational Medical CBD Oil Only Decriminalized BC WA OR NV CA AZ AB MT CO NM SK MB ND MN NE IA MO OK ON WI MI IL OH KY TN MS AL GA SC FL QC ME VT NH NY MA CT RI PA NJ MD DE VA NC NL NB PE NS 5

6 Worldwide y Israel has permitted the medical use of cannabis since the early 1990 s. y Portugal decriminalized the possession of all drugs for personal use in y Czech Republic passed a medical cannabis bill in y Italy legalized cannabis as a prescribed medication in y Uruguay voted to create a national legal marijuana market in y Mexico passed a bill to legalize the use of marijuana and cannabis for medical and scientific needs in April y Germany passed an act to legalize the use of marijuana for medicinal purposes which came in to effect March Partially or Essentially Legal Decriminalized Unenforced Determend by State or Region Illegal or Unknown 6

7 ALLIANCE GROWERS The Four Pillar Strategy Alliance Growers has organized into four divisions in order to focus our potential for success in the medical marijuana market. Cannabis Biotech Complex Licenced Cannabis Growers CBD Oil Supply & Distribution Research & Technology 7

8 Alliance Growers Plantlet-to-Sale Vertical Integration Biocannatech has potential to provide sales of plantlets to all ACMPR producers in Quebec. ACMPR Applicants Biocannatech Quebec 100% Select Cannabis Strains Cannabis Biotech Complex Genomics Lab Distribution Stores Average annual wholesale of commercially produced tissue culture plantlets: 50M Tissue Culture Plantlets 60M CBD Dana Canwe Ontario 5% Others Ready to Grow Plantlets Tissue Culture Lab Plant Nursery Manufacturers The Cannabis Biotech Complex is a state of the art engineered facility 4 years in the making: value added service to ACMPR producers increased cultivation space cultivator schedule Greenhouses Extraction Lab CBD Extracts 8

9 Strategic Partnership with WFS Pharmagreen Alliance Growers strong and continually-evolving relationship with WFS Pharmagreen Inc. (Pharmagreen) offers a range of quality opportunities for Alliance Growers in the cannabis industry. Alliance Growers is finalizing its definitive agreement with Pharmagreen to acquire a 30% interest in Pharmagreen s subsidiary, BC New Co., As Pharmagreen and Alliance Growers will be the only shareholders of BC New Co., this funding will be a nondilutive regarding Alliance Growers interest. Alliance Growers will own 30% of all assets and operations and will share 30% of the Cannabis Biotech Complex income from all revenue streams. BC New Co. will build and operate the Cannabis Biotech Complex, which will include the main Biotech building, three greenhouses and future extraction building on 25 acres of land in the community of Deroche, near Mission, BC. 30% 70% BC New Co. Cannabis Biotech Complex While PharmaGreen is focusing on the production and research, Alliance Growers will be active in acquiring additional strategic investments in ACMPR licence applicants as well as building out the retail aspect of the business via its recently acquired Spyder brand. The stores will promote and distribute PharmaGreen and Alliance branded products. The Cannabis Biotech Complex will be a subsidiary of WFS Pharmagreen and thus not subject to dilution with the raising of funds. 9

10 The Cannabis Biotech Complex With its partner WFS Pharmagreen, Alliance Growers is establishing the first in a series of Cannabis Biotech Complexes with additional industrial scale greenhouses built in Deroche, BC. 10

11 Cannabis Biotech Complex Facilities Main Building y Tissue Culture labs to grow plantlets Bell Road y Genomics Lab for certifying strains Shipping y Cold Storage to preserve mother strains Greenhouses y To grow and flower the CBD Dana hemp strain for CBD extraction y To grow and flower various THC strains Future Greenhouse Future Greenhouse Future Greenhouse Future Extraction Building Car Park Main Building Tussue Culture Labs Genomics Lab Cold Storage Future Additional Tissue Culture Labs y To grow full plants for cultivators wishing for more mature plants instead of plantlets y To grow cannabis plants for ongoing development of growing standards Extraction and Distillation Building y Construction slated for summer of 2019, after occupancy of the main biotech building y Approximately 20,000 square feet y Able to process, extract and distillate 100,000 kg of raw flower material into separated CBD, THC, and terpenes y For wholesale of oils and crystals for medical formulations y To provide wholesale formulations or branded cannabis products 11

12 Cannabis Biotech Complex Main Building The purpose of these facilities is to supply licensed cannabis growers with high quality ready-to-grow starter crops in the form of planet culturing. These plantlets are produced using our own proprietary invitro Chibafreen Process. The facility will also house a cold storage area utilizing a proprietary Cryotissue Cold Storage technology for long-term preservation of plant tissue samples. Completed design of a semi-automated 58,000 sq ft facility all finished floor space. y Semi-automated functions for upscale production y Projected cost $ 15 Million y Projected annual plantlet production 10 Million y Sell price $5 per for $50 Million in gross revenues y Cost per plantlet under $1 Dollar y Projected annual profit $40 Million y Upgraded design can be expanded from the main building in all directions. 12

13 Licensed Medical Marijuana Producers Alliance Growers is investing in and building strategic partnerships with licensed cannabis producers at various stages in the licensing process. 13

14 Biocannatech Alliance Growers has entered into an exclusive agreement to fully acquire Biocannatech Inc., located in Mont Royal, Québec. Biocannatech is in the final expedited phase of Health Canada s Access to Cannabis for Medical Purposes Regulations (ACMPR) approval for the production and sales of Medical Marijuana. Biocannatech has a leased a 10,000 square foot facility in Mont Royal with an option-topurchase agreement. Permits have been filed with the municipality to renovate the facility. The 7000 square foot facility is expected to produce $5,000,000 per year. Biocannatech is also in discussions to lease the adjacent facility with an option-to-purchase agreement. This facility is 17,900 square feet with a growing area of 16,000 square feet. The additional growing area is expected to produce $12,000,000 in revenue for a total $17,000,000 per year in revenue with both facilities. The currently leased facility is expected to be producing product by late fall of 2018 with full production in The adjacent property could be set up and operational in 2019 pending necessary approvals. Canwe Alliance Growers has acquired a 5% equity investment in the Ontario-based cannabis company Canwe. Canwe has access to a property near Toronto up to 22 acres in size and has a team of growers and regulatory experts from a profitable previous venture. The company plans to build a facility focused on producing clean, premium-quality cannabis. Initial investment of $375k shares with Canwe, valuation at $7 million. Canwe currently valued over $12 million. These partnerships secure long-term plantlet sales for the Biotech Complex, wholesale cost for flower to be acquired for CBD oil extraction, and ongoing support for the producers. 14

15 CBD Oil Production and Distribution Medical grade CBD has become a highly sought-after compound in the treatment of a range of medical issues. 15

16 CBD Oil Production and Distillation Alliance Growers is finalizing terms on a 20% equity investment in an Israeli medical cannabis company. y Alliance Growers will have off-take rights to buy 20% of oil production at or near cost for global distribution y high-tech extraction allows for production of the highest quality pharmaceutical-grade CBD oil. y legal 50-hectare grow operation in an offshore, low operating cost jurisdiction y has secured first government permit to grow cannabis with 4-year exclusivity y continuing clinical research on medical cannabis Israel s government has encouraged cannabis research since the 1960's. In 2017 the government announced it is investing $2.13 million in research projects. The Health Ministry s Medical Cannabis Unit believes cannabis should be considered in the same manner as any other medicinal product. Licensed suppliers provide cannabis to Israel s roughly 26,000 registered patients, creating a domestic market of about $15 million to $20 million. Hebrew University researchers synthesized 22 versions of the cannabinoid THC that have great potential for treating neurological and inflammatory diseases. After some success in using these substances to treat epileptics, Israeli researchers will launch clinical trials to check the effect of cannabis oils on individuals with severe behavioral problems such as autism. International companies regularly join forces with Israeli academic and medical institutions to create new medications. In February of 2017, a government committee approved a plan that would allow medical marijuana companies to export products internationally. 16

17 Research and Technology Developing technologies that will improve upon the quantity, consistency and distribution of cannabis production giving Alliance Growers a competitive edge in this ever expanding industry. 17

18 CBD DANA HEMP STRAIN Named CBD DANA, this stain is unique in its CBD to THC content ratio. The strain has been tested for a content of at least 10% CBD with no more than 0.3% THC. This CBD yield is substantially greater than traditional hemp strains which typically have at most a 1% content. The lower THC content allows the strain to be classified as industrial hemp which makes it ideal for cultivation with less restrictive regulation. As the Cannabinoids are primarily produced in the flower portion of the female plant, eliminating male plants from the crop can allow an additional 80% increased yield in the unpollinated flowers. Selecting for only female plantlets is the best way to ensure this compared to traditional planting from seeds. The female plantlets produced in the Tissue Culture Lab at the Cannabis Biotech Complex will be available for hemp farmers on a global scale. Providing hemp farmers with all female, fully rooted plantlets of the strain will provide a significant yield in CBD production for hemp farmers. 20-Acre Open Field 100,000 kg of Flower 3,000 kg CBD Crystal at $20 per gram wholesale $60 Million Gross Revenue 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 contracted hemp farmer with a secure, 20-acre open field. The plants will yield approximately 100,000 kilograms of CBD flower which in turn will yield 3,000 kilograms of 99% pure CBD Crystals. At approximately $20,000 per kilo this yields a $60 million gross revenue with costs ranging from $20 million to $30 million depending on the lease and contract farming arrangement and the cost of extraction. 18

19 Botanical Research In Motion International (B.R.I.M.) B.R.I.M. develops and currently holds rights to new technologies for controlled and precise production of cannabis plants, such as the Chibafreen Process. WFS Pharmagreen will be utilizing these licensed technologies for the production of plantlets at the Deroche Biotech Complex. The Biotech Complex will also allow B.R.I.M. to do continued research on behalf of WFS Pharmagreen. Tissue-culture cultivation has the potential to become the new standard for the cannabis industry. The consistency of product lends well to future government regulation of molecular composition and potency. There is also further potential to apply these same technologies into other agricultural industries. Peter Wojcik CEO of B.R.I.M. And WFS Pharmagreen BA Economics Dr. Fawzia Afreen B.R.I.M. Chief Scientist PhD Plant Science y CEO and founder of Botanical Research In Motion Inc. (B.R.I.M.) y graduate from University of Regina with a Bachelor of Arts Advanced, Economics y successful entrepreneur with past endeavors including a computer hardware company, an Internet service provider and a software company specializing in on-line gambling y negotiated contracts with high levels of government y 8 years of experience in cannabis cultivation, production and its application in the treatment of disease y involved with the design and construction of large facilities and plant growing systems y acted as a consultant for the implementation of systems design, problem solving, yield maximization and space utilization y expert in plant horticulture, plant tissue culture, and plant production in controlled environments y has a PhD with a focus on plant science from the Department of Applied Biology; University of Hull, UK in 1998 y research associate at the Department of Botany; University of Guelph, Ontario from 2002 to 2004 y research associate, at Chiba University in Japan where she taught graduate (M.Sc) level courses in protected horticulture, plant tissue culture and plant production in controlled environment from 2004 to 2007 y since 2008, has provided consulting services for Hyacinth Planttech, British Columbia y has acted as B.R.I.M.'s chief scientist since January 2014 and will oversee the tissue culture lab of the first Biotech Complex 19

20 The Chibafreen Process Parent Initiation Multiplication Rooting Acclimatization y Increased growth of plants results in a 30-50% shorter production period. y Yields a high percentage of salable plants (over 95%). y Each plantlet will always have the same genetic makeup as its parent tissue stock. y Plants are produced under a controlled environment free from pests, pathogens and outside weather conditions. An explant (shoot-tip or bud) is excised from the stock plant under sterile conditions. The explant is placed on a growth medium containing an energy source and hormones. The explant rapidly grows new tissue. This process can be repeated several times. Individual shoots are moved to a new growth medium which allows the roots to harden. Plantlets are transferred to soil for conventional growth in a greenhouse. 20

21 Alliance Growers Building a diversified global cannabis company that is focused on where the market is going, not where the market is today. 21

22 CNSX:ACG Close Canadian Securities Exchange CNSX:ACG ,843,890 Shares Outstanding 7,733,889 Shares Fully Diluted Frankfurt Stock Exchange 0.40 FWB:1LA M 6M CNSX:ACG Volume OTC Venture Market 4M OTCQB:ALGWF 2M 0 Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Allliance Growers has applied for a listing. Data correct as of July

23 Financing Proceeds to Date Warrants Outstanding Private placements $1,614,556 Warrants Exercised $1,134,469 Options Exercised $1,231,322 Total raised to date (does not include shares for debt) $3,980,347 Investment In WFS Pharmagreen Price Warrants $ ,000 $ ,000 $0.21 8,211,399 $0.40 1,188,600 Total 9,964,999 Shares in Pharmagreen Biotech Inc. 1,200,000 Currently trading at USD $2.50 Current Total Value $3 Million Share Structure Common shares 64,843,890 Warrants outstanding 9,964,999 Options 4,925,000 Fully Diluted 79,733,889 Options Outstanding Price Options Non-Mgmt $ ,000 $ ,000 $ ,000 $ , ,000 $0.46 2,000,000 $0.90 1,900,000 1,000,000 Total 4,925,000 1,375,000 23

24 Management Directors Advisors Dennis Petke Chartered Accountant CEO and President of Alliance Growers Harvey Lawson Master of Business Administration CFO of Alliance Growers Dennis Petke Chartered Accountant Rupert Shore Barrister and Solicitor Sina Pirooz President of SP RX Services Registered Pharmacist Ian Lambert Bachelor of Commerce CEO, Director of West Nevada Resources Inc. Rob Grace Corporate Development Advisor Robert Carveth Biotechnology and Gov. Relations Advisor Charles Rendina Regulatory and Financial Advisor Edmund Obasi Cannabis Investment Advisor Frontier Merchant Capital Group Investor Relations and Consulting Services 24

25 Investment Highlights Private placement opportunity providing the best value in booming cannabis sector Biocannatech Intial facility ACMPR licence in Nov/Dec Quebec facility expansion estimated to be operational in late Cannabis Botech Complex to be developed in Deroche, BC for production of plantlets to be distributed to licensed producers. Strategic investments in ACMPR applicants that leads to long term tissue culture supply contracts. Medical Grade CBD Oil production via strategic partnership with Israeli Medical Cannabis Company. $ 5 million equity facility in a series of private placements via Alumina Partners (Ontario) Ltd. with an option to extend up to $10 million. Use of Financing Proceeds y Acquisition of 30% of the Cannabis Biotech Complex in Deroche, BC y Acquisition and development of the Biocannatech facility in Québec y Furthering of strategic partnerships y General working capital $ 4M $ 3M $ 1M $ 1M TOTAL: $ 10M 25

26 ALLIANCE GROWERS Canadian Securities Exchange CNSX : ACG Frankfurt Stock Exchange FRA : 1LA Over-the-Counter Venture Market OTCQB : ALGWF For investment contact: Rob Grace For information contact: Dennis Petke Corporate Development RobDGrace@gmail.com President & CEO Dennis@Q4financial.com Alliance Growers Inc.