Last year, Alliance Growers Corp (OTCMKTS:ALGWF) endeavored to capitalize on the anticipated growth of the cannabis sector. This was after the passing of the U.S. 2018 Farm Bill that legalized hemp. One of the strategic steps taken was to acquire a stake in Pharmagreen’s project building a biotech complex.
Initially, the Cannabis Biotech Complex was under the control of 1155097 BC Ltd., a subsidiary of Pharmagreen. Alliance Growers entered an agreement where it would acquire up to 30% of the project. In essence, this meant that Alliance Growers would fund at least 30% of the project. Before reaching the agreement, Alliance had invested over $1.3 million in the project.
The Deroche Biotech Complex to be ready by 2020
In a recent statement, Alliance revealed that the deal is now complete according to the terms agreed upon. According to the statement, the deal first came to light in December 2017 and was amended twice in April and December 2018. As earlier mentioned, Alliance already invested over $1.3 million in the project. This represents 10% of the whole project and that implies that the firm will still need to finalise the remaining 20%.
The valuation of the 30% stake in the project that Alliance can acquire is based on the actual costs of equipment and construction. As per the developers, the project is advancing well. The complex, which is going up at Deroche, BC, will be ready for use within the first quarter of 2020.
The complex is already part of the CTLS
According to Alliance and Pharmagreen, the Deroche Biotech Complex is already a part of Health Canada’s Cannabis Tracking and Licensing System (CTLS). Notably, the CTLS is a platform through which firms can submit applications for new licenses, amendments or even license renewal. Basically, the web portal brings together services for the cannabis sector for efficiency and speed.
Dennis Petke, Alliance Growers President and CEO commented on the developments saying, the facility is instrumental to their growth. “This relationship is instrumental to the Alliance Growers Four Pillars Organizational Plan as it integrates all four components to help Alliance achieve its revenue objectives to create shareholder value,” Petke said.