Mr. Dennis Petke reports

ALLIANCE GROWERS FINALIZES DEFINITIVE AGREEMENT WITH B.R.I.M.

Alliance Growers Corp. has released the principal terms of the agreements with Botanical Research In Motion International Inc. (BRIM) for: (i) an exclusive licence to use BRIM's proprietary technology for large commercial-scale micropropagation of cannabis plantlets; and (ii) a consulting agreement to provide BRIM's expertise. These agreements were ratified by the board of directors of the company on Jan. 22, 2017.

As disclosed in news releases on Oct. 26, 2016, and Nov. 7, 2016, Alliance Growers had entered into a memorandum of understanding with BRIM, whereby BRIM would grant a licence that will allow Alliance Growers to jointly develop and operate multiple cannabis-focused botany centres in Canada. Alliance Growers and BRIM have executed a definitive exclusive licence agreement and corresponding consulting services agreement, whereby BRIM has granted Alliance Growers an exclusive licence to develop cannabis botany centres in Canada.

BRIM projects the development of the cannabis botany centre will add value to Alliance Growers by providing the following:

• BRIM forecasts the potential for the botany centre to produce in excess of three million cannabis plantlets per year with a potential margin of $4 per plantlet;
• Generate revenue from the extraction, processing and resale of cannabidiol (CBD) oil in Canada, United States and offshore, of potentially several million dollars per year;
• Providing cold storage facilities utilizing the one-of-a-kind Cryotissue cold storage technology for tissue culture preservation and regeneration as needed on long-term basis;
• Provide extraction services as retail services for cultivators and create custom profiles for extraction of botanicals oils for the retail market.

Commenting on the definitive agreement, Dennis Petke, Alliance Growers president and chief executive officer, said: "We are very pleased to have executed these agreements so that we can now purchase the property upon which we will build the cannabis botany centre. As part of Alliance's business model, we have begun negotiating with growers at various stages in the licence process to purchase interests in their operations in exchange for long-term-supply-plantlet supply contracts and offtake agreements, even before the centre is built. This guarantees immediate sales, which will continue well into the future. In addition to the services offered by the cannabis botany centre, BRIM and Alliance have identified significant additional revenue streams in the medical and cannabis space that we are very excited to begin implementing after we complete this current round of funding.

"Alliance continues to develop its business model to take advantage of the imminent legalization of recreational cannabis in Canada, as well as the existing states that have legalized cannabis in the U.S. We would like to thank our existing shareholders and all new investors for their continued support as we work towards realizing our vision of becoming a successful global cannabis company."

The exclusive licence agreement includes the following significant terms.

Exclusive licence agreement

In consideration of the granting of this exclusive licence, Alliance Growers will pay to BRIM the following:

• Issue to BRIM a total of six million common shares and three million warrants, to be released in stages;
• Cash payments of $75,000 on execution of the MOU (paid), $25,000 on execution of the definitive agreement, and $50,000 on closing, on or berfore Feb. 28, 2017;
• Pay a royalty to BRIM of 5 per cent of gross sales for each month, provided however that payment will not be made where it would result in an operating loss unless gross sales exceed $100,000 each month;
• Closing will be subject to completion of all due diligence by Jan. 31, 2017, and Alliance Growers raising a minimum of $2-million;
• BRIM has a first right of refusal to acquire the land and botany centre if Alliance Growers is unable to compete construction at a price equal to the greater of fair market value and all expenses incurred by Alliance Growers.

Concurrent with execution of the exclusive licence agreement, Alliance Growers and BRIM have entered into a consulting agreement and the usual non-disclosure agreement pertaining to the proprietary technology.

Consulting agreement

This agreement is about BRIM's duties and compensation. The principal terms are as follows:

• One-year renewable term;
• Advise during the preconstruction phase of the botany centre, planning of the location, and assistance in the application for zoning and building permits;
• Supervise the construction and engineering according to the specifications in the work agreement;
• Assist in all phases of the construction of a botany centre in the Lower Mainland of British Columbia;
• Assist Alliance Growers in its applications to obtain appropriate permits from Health Canada in order for the botany centre to legally produce and extract cannabis products and sell them;
• Assist Alliance Growers to manage and operate the botany centre.

Alliance Growers shall accrue a consulting fee payable to BRIM at the rate of $3,000 per month, commencing Jan. 17, 2017, until Jan. 31, 2017.

Thereafter, Alliance Growers shall pay BRIM a consulting fee of $6,000 per month, commencing Feb. 1, 2017, for the duration of the preconstruction phase until the completion of the acquisition of the property for the botany centre. These fees may be accrued until the botany centre is fully permitted and licensed for commercial production and commercial sale of cannabis products.

Upon acquisition of the property and completion of all building plans, including all engineering and permitting and the receipt of all licences and permits required to operate the botany centre (excluding MMPR (marijuana for medical purposes regulations) or comparable licence from Health Canada), Alliance Growers shall enter into contracts with BRIM for the provision of the necessary management services as agreed to by both parties to construction completion, in any case not to exceed $18,000 per month. Monthly fees in excess of $12,000 shall be accrued until the botany centre is fully permitted and licensed for commercial production and commercial sale of cannabis products.

Upon receipt of the MMPR or comparable licence from Health Canada, Alliance Growers shall enter into contracts with BRIM for the provision of the necessary management services as agreed to by both parties for the management of the botany centre, based on commercial rates of pay for work performed. All other personnel will be hired or contracted directly by Alliance Growers or its wholly owned subsidiary.

Right of first refusal

BRIM has the right of first refusal to purchase the botany centre prior to completion of construction if the corporation cannot complete the construction of the botany centre. The purchase price will be the greater of (i) the fair market value as determined by Alliance Growers' professional advisers, and (ii) not less than input costs expended or owing by Alliance Growers in acquiring the lands and all costs of designing, developing and building the botany centre to the date of purchase plus Alliance Growers' borrowing costs, if any.

Non-disclosure agreements

BRIM and the company have signed agreements to protect their confidential information.

Future employment agreement

The company has signed an agreement with BRIM and its chief scientist, Dr. Fawzia Afreen, that in the event she ceases employment with BRIM that she can be employed directly by Alliance Growers.

An arms-length finders' fee shall be payable in cash and/or shares in the amount of $68,250 equal to 10 per cent of the first $300,000 and 7.5 per cent on the remainder of the deemed value of the acquisition of $810,000 to David J. Kwiatkowski, Vancouver, B.C.

We seek Safe Harbor.