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ACG continued: proprietary CBD Dana strain planted in 5 acres of glass greenhouses on the same property as the Cannabis Botany Centre. Stage two involves moving the plants to a leased, secure field. The 200,000 plants will yield approximately 100,000 kilos of CBD flower which in turn will yield 3,000 kilos of 99% CBD Crystals of the proprietary Dana Strain. At approximately $20,000 per kilo, that yields $60,000,000 in gross revenue with costs ranging from $20m to $30m depending on the lease arrangement and the cost of extraction.
Other Cannabis CBD Oil extraction and sales will occur primarily via the Botany Centre. As indicated in the most recent FRC Research Report, in 2019 we estimate small level of production at 1,800 litres increasing to approximately 7,200 litres in 2020 selling for $1250 per litre with an expected cost of $250/litre. By 2021 we expect to be able to produce 12,500 litres annually with some consistency going forward year after year. Click here to access reports on Alliance Growers
Production in our Quebec facility for 2019 will initially be based on the original 7,000 square feet, yielding between 700 and 800 kilos annually. This would generate between $3.5M and $5.6M depending on the number of kilos and the price per gram ranging from $5 to $7. Costs are consistent with other ACMPRs of similar size. We will likely begin the expansion of an additional 20,000 square feet in 2019. At full capacity we would be doing 3 times the numbers above.
CCIM: That is very impressive. Will some or all service the medical market or is the focus primarily on the soon to be adult recreational market?
ACG: Initially we are focused primarily on the medical cannabis market. The demand for tissue cultured plantlets for ACMPR growers alone is expected to be over 40m plantlets annually by 2019. Recreational sales of plantlets will be a bonus. We expect to do extremely well in producing commercial hemp CBD Crystals serving both medical and the recreational markets.
CCIM: ACG recently announced it has taken a 5% ownership of New Maple Holdings Ltd. New Maple in turn owns New Maple Consulting Inc. and Canwe Growers Inc. ("Canwe"), which is a licensed producer applicant in the enhanced review stage under the ACMPR. Does ACG intend to increase its ownership above 5%?
ACG: Canwe has already proven to be a strong investment with a current increased value of 400%. Alliance Growers is highly likely to undertake additional equity investment in Canwe.