Alliance Growers Corp. has closed the first tranche of installment of its subscription for common shares in New Maple Holdings Ltd., the parent company of Canwe Growers Inc.
Canwe is an Ontario-based company preparing to apply for a producer’s license under the Access to Cannabis for Medical Purposes Regulations (ACMPR). Canwe has access to a 22 acre property 1.5 hours north-west of Toronto, where it plans to build a facility focused on producing clean, premium quality cannabis. Canwe has amassed a team which includes licensed producer MedReleaf Corp.’s former Head Grower and his number two aide, both of whom are expert cannabis growers who intimately know the cannabis cultivation cycle from seed to sale.
With Alliance Growers’ four-pillar strategy and Canwe’s experienced team, the two companies plan to work together to form business synergies with the goal of creating a strong presence in Canada’s fast-growing medical cannabis space.
Alliance Growers has subscribed for a total of 375,000 common shares of New Maple at a cost of $1.00 per share, which would represent approximately 5% of the outstanding shares of New Maple if the subscription was filled in its entirety today. Alliance Growers acquired an initial common share of New Maple upon incorporation and has acquired an additional 25,000 common shares for $25,000. Alliance Growers is expected to fulfil its commitment to acquire the remaining 350,000 shares by April 30, 2017 for an additional $350,000, failing which New Maple can repurchase all of its shares from Alliance Growers at the original issuance price. The funds are expected to be used by Canwe to prepare its application for a producer’s license in accordance with the ACMPR.
In conjunction with the investment, New Maple and Alliance Growers have entered into a non-binding letter of intent for the negotiation of a business arrangement for the purchase and sale between the parties of live cannabis plants, tissue culture plantlets and other cannabis products and services subject to applicable law and the availability of products between the parties. Alliance Growers will not be able to acquire any such products from Canwe unless Canwe obtains its producer’s license from Health Canada and agrees to enter into a business arrangement with Alliance Growers.
Commenting on the investment in New Maple/Canwe, Dennis Petke, Alliance Growers’ President and CEO said, “I am pleased that we have initiated an investment with such an experienced group applying to become a licensed producer applicant in Ontario. This relationship is expected to provide synergies and mutual opportunities for going forward for developing business arrangements concerning the purchase and sale between the parties of live cannabis plants and other cannabis products”.