Alliance Growers is in advanced discussions with a company that has created a turn-key waste management system for cannabis cultivators that combines the grower's cannabis waste with organic waste to produce an organic fertilizer to be used in their grow operations.
"The waste management system may be implemented independently but integrates well with the HOCl system," the team with the company explains. "The system, which creates a bio-fertilizer for the cultivator, has been developed by the same experienced team managing the company that has recently granted Alliance Growers an exclusive distributorship to the HOCl system. As part of the process, this system uses the Black Soldier Fly Larvae to not only convert organic waste to produce an organic fertilizer, but also to create valuable products that can be sold into a number of different sectors. As part of the arrangement with cultivators, Alliance would purchase the unused by-products thus waste management becomes a revenue stream instead of a cost centre for the cultivators."
“Providing an organic cost-effective fertilizer solution to cultivators furthers the companies’ business plan of providing products and services to cultivators rather than competing with them.” Commented Dennis Petke, President and CEO of Alliance Growers. “Providing cultivators with cost-effective organic fertilizer and green solutions that help protect their crops from bacteria and mold, furthers our “picks and shovels” strategy with the added benefits of being environmentally friendly while getting Alliance closer to near-term revenue at the same time. We are looking forward to closing on our financing initiatives and implementing on the roll-out of these two cash-flow generating services. These two technologically advanced processes further our goal of establishing a long-term presence in the cannabis industry through diversity, science and technology.”
Postponement of Warrant Exercise Incentive Program
Given the current status of the cannabis market at all levels, the Company has decided to postpone its warrant exercise incentive program to a date later this fall to enhance the effectiveness of the program. The program, announced in a news release on August 29, 2019, was designed to encourage the early exercise of warrants at a significantly reduced exercise price per warrant. As a result of the postponement, of the program, the Company did not accept any of the notices to exercise warrants under the program. All outstanding warrants will continue to be exercisable on the same terms applicable to such warrants as they existed prior to the Program until the Company re-instates the program later this fall as market conditions allow.
Additional Information Regarding the Cost-Effective Organic Fertilizer System
As of May 1, 2019, 33 of the states have legalized medical cannabis and 10 states have legalized cannabis for adult use. At the federal level, however, cannabis remains illegal. Canada legalized adult use of cannabis in 2018 and is slated to legalize cannabis-infused edibles by October 2019. In the European Union, the legal status of cannabis varies by country. Medical cannabis is legal in Germany, the Czech Republic, Italy and Malta. The UK is also moving to legalize medical cannabis. Australia has legalized medical cannabis, and New Zealand is expected to legalize both medical and adult-use cannabis in 2020. It is mostly legal in India and Sri Lanka but is still illegal in many Asian countries. Countries that have legalized medical cannabis present revenue opportunities for Alliance by providing the waste-management/organic fertilizer system.
Regulations in the respective countries will require very strict monitoring, recording and visibility of the plant throughout the whole process or from ‘seed to sale’. This includes the issue of the management of cannabis waste. However, disposing of cannabis waste is not straight forward, the dumping of cannabis waste in landfills is expensive and not satisfactory, other methods are costly, inefficient and not environmentally friendly. Now many regulatory bodies, particularly in Canada and the US, are insisting that cannabis waste is treated in such a way so as to become unusable and unrecognizable.
In Europe, USA and Canada the infrastructure is available for cultivators to dispose of waste in a manner that satisfies regulations despite the fact it is very expensive. However, in order to satisfy the demand for medical cannabis, these countries are now looking to import medical cannabis from other regions where the same strict regulatory requirements must be in place. This creates an additional problem in developing countries where there is no satisfactory solution for waste disposal.
"The turn-key system is designed specifically to cope with cannabis waste and to meet the current requirements of EU, US and Canadian regulators."