ALPS - a company in the process of being acquired by AUSA - through its wholly owned subsidiary Larssen Greenhouse Consulting has signed an updated agreement with Cann Group Limited to confirm the delivery of end-to-end design, construction and (post) commissioning services for Cann's planned 363,000 sqft, high-tech greenhouse near Mildura in north-west Victoria, Australia. Furthermore, as part of the update to the Original Agreement, ALPS will be assisting Cann in the deployment of a computerised compliance and maintenance management system, APIS. Cann also has the ability to enter into an ongoing service and maintenance contract.
Supporting Cann's Facility Construction
ALPS and Cann originally collaborated in 2018 under the Original Agreement when Aurora Cannabis had an ownership interest in Cann. Subsequently, ACB exited its position in ALPS and Cann. During this time, Cann decided on Mildura for its new flagship cannabis cultivation and processing facility. In March 2017, Cann was issued Australia's first medicinal cannabis cultivation license, and has now embarked on the construction of a state-of-the-art facility.
Cann announced in November 2020 that the company hadsecured A$50 million (approximately CAD$49 million) secured debt facility with National Australia Bank to be used for construction of the A$112 million first stage of its Mildura project. Phase I of the project, with first product expected to be processed and released by March 2022, is projected to produce approximately 12,500 kg of GMP certified medical cannabis annually. The high-quality flower and extracts from Mildura will be used to supply both the Australian medical market and export markets, such as the EU, UK, New Zealand, South America and other jurisdictions.
Under the terms of the contract with Cann, as varied, ALPS will deliver end-to-end services and solutions related to:
- Design & engineering, including (EU) GMP compliancy
- Budget management
- Construction/project management
- Commissioning
- Cultivation support & optimization
- Workflow automation & optimization
- (Preventative) maintenance programs
The $2.5 million contract with Cann builds on work undertaken while both companies were affiliated with ACB and under the Original Agreement. The facility will benefit from ALPS-developed IP, including the installation of an APIS compliance system, further enhancing the considerable anticipated return on investment.
Building on ALPS' Experience
Building on over 30 years of experience in the horticulture industry, ALPS' has become an exceptionally strong brand, known for the delivery of innovation-driven solutions. Growing premium-quality medical and adult use cannabis is very susceptible to environmental conditions, and ALPS, with its constellation of technology partners, is an expert in controlled environments, incorporating the latest solutions for the optimization of a GMP compliant facility's operational parameters, such as preferred mediums, optimum nutrient delivery per cultivar, photo synthetically active radiation levels (PAR), CO2, humidity, air flow, trim, dry and prep for packaging. Furthermore, the ALPS approach puts a strong emphasis on workflow optimization, utilizing a high degree of automation. Consequently, projects supported by ALPS are characterized by high-yielding facilities that deliver high-quality products consistently, at low operational costs, significantly lower OpEx compared to similar facilities elsewhere in the industry. This provides a competitive advantage and has resulted in many cannabis companies seeking out ALPS for their new facility initiatives.
Based on this expertise and the strength of its brand, ALPS, in the past seven years, has been involved in over 50 projects in the cannabis industry. In total, the company has been involved in cannabis projects across the globe with a total grow area in excess of 340 acres (~15 million square ft), representing a total cultivation capacity of approximately 2,000,000 kg of high-quality cannabis per annum.
Contract Revision Provides Cann with First Access to APIS System
The Mildura facility will now also benefit from the installation of an APIS system. APIS is a service offering that delivers industrial level compliance solutions for production facilities of any size with particular application to medium to large scale cultivation. APIS also delivers significant value outside of regulated industries through optimization of facility operations including preventative maintenance and KPI tracking. APIS delivers a recurring revenue stream to ALPS, that will make a significant contribution to the revenues and profitability of AUSA. Since launching APIS, ALPS has already received considerable interest, and the company anticipates converting a considerable portion of its business development pipeline into APIS contracts. The contract with Cann includes climate and room monitoring functionality with supportive CSV (Computer Systems Validation) SOPs in support of GMP requirements, as stipulated by Australia's TGA (Therapeutic Goods Administration).
Management Commentary
Thomas Larssen, President of ALPS, stated, "This is a significant contract for us in terms of size, and acknowledges the respect ALPS has garnered in the global cannabis space. It also marks the installation of our recently launched APIS offering. We are very pleased to sign this updated and revised agreement with Cann to continue to expand its footprint and revenue generating potential. Australia has one of the most heavily regulated and fastest growing medical cannabis markets in the world, creating challenges that ALPS more than meets through its exemplary track record in developing EU GMP compliant facilities and its APIS compliance and service solution. We are very excited about APIS, which provides us with an offering that generates recurring revenues, and is anticipated to become a significant contributor to our bottom line. Interest in ALPS and APIS is significant, and we anticipate signing numerous deals in the near-term future. "
Peter Crock, CEO of Cann, added, "We are delighted to have signed this contract with ALPS to establish a significant production footprint for Cann to service our rapidly growing domestic and export markets. The choice for ALPS was simple as we know they deliver the best-in-class cultivation facilities in terms of quality, consistency and low-cost of operations. We are also very excited with the implementation of the APIS system which will greatly reduce time and costs involved with meeting compliance requirements while ensuring our facility will operate at with optimized economic efficiencies, ensuring an excellent ROI."
Dr. Duke Fu, Interim CEO of AUSA, commented, "ALPS have developed an amazing network throughout both the cannabis and traditional horticulture industries. As ALPS' innovative approach consistently delivers on quality, timing, low operational costs and yield, this has resulted in a steady flow of new projects. This contract with Cann confirms that ALPS truly is a global player in the cannabis industry. We are progressing well towards completing the acquisition of ALPS (see press release dated January 5, 2021). I look forward to when we formally can welcome Thomas, Terry and their team as an integral part of AUSA, and jointly and successfully execute on our strategy to drive accelerated growth."
For more information:
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