EDMONTON, Alberta, Jan. 17, 2019 (GLOBE NEWSWIRE) -- Atlas Growers Ltd. (“Atlas”), a wholly owned subsidiary of Atlas Biotechnologies Inc., is pleased to provide the following highlights as an update on recent operational and other developments:
Cultivation and genetics programs
- As previously announced, Atlas received its initial Cultivation License from Health Canada on October 12, 2018, at which point we were then able to commence to source and possess materials (seeds and plant cuttings) to allow us to initiate the planting of our first crop.
- In October, we commenced the process of applying for the importation from Europe of multiple separate lines of unique genetics from long-standing sources. Several exclusive arrangements are being negotiated at this time.
- Our initial shipment of 85,000 cannabis seeds has now cleared the extensive importation regulations and is in process of being shipped from Europe to our Phase 1 Facility in Canada. Atlas plans to immediately commence planting a selection of these genetics lines, which total over 500, with the aim of developing a wide range of cultivars, a portion of which will serve as initial “mothering” plants to provide new “clone” plants used in Atlas’ ongoing cultivations. This extensive database will serve as the initial foundation for our R&D programs which are being designed to create high yields and custom cultivars targeted to meet unique medical market demands.
- Atlas has collaboration arrangements with certain Alberta licensed producers, which have supplied seeds and cannabis cuttings serving as feedstock for Atlas’ initial planting. Our first seeds were planted on December 24, we currently have approximately 2,700 plants under cultivation, and expect full cultivation capacity to be reached by mid-February of this year.
- Atlas has been in contact with numerous licensed cannabis producers (“LPs”) in Canada, a number of which have expressed interest in purchasing genetics from Atlas, with the aim of significantly broadening the diversity of their own cultivar / product offerings which will eventually become available to retail consumers. The sale of the genetics lines is expected to become a promising new revenue stream for Atlas, and one contract with a prominent Alberta LP is planned to be fulfilled next week.
Status of Sales License Issued by Health Canada
- Our existing “Business-to-Business” license issued by Health Canada in November under the new Cannabis Act regulations currently allows Atlas to sell cannabis flower, oils, and “starting materials” products (such as seed genetics and live plants) to other licensed producers, as well as to the provincial cannabis distribution Boards. These entities, such as the AGLC (Alberta Gaming and Liquor Commission), serve as the wholesale distribution channel to the licensed end-use retail purchasers in Canada’s provinces and territories.
- Health Canada’s standard process of issuing to Atlas the eventual license to allow “full sales” for all cannabis products, including flowers and oils, will involve an on-site inspection of our production and packaging processes, as well as independent testing of our end-use cannabis products, which we expect to occur in conjunction with our first two crops harvesting in March.
Sales Contracts and Expansion Opportunities
- In December Atlas installed its industry leading extraction equipment, which will allow for the processing of cannabis flower into concentrated cannabis oils and other extracts (such as terpenes and flavonoids). This internal processing capacity, which is not available to many of Canada’s LPs, will be used to process Atlas’ own product, as well as flower and hemp, which can be purchased by Atlas from other LPs for processing and ultimate resale to the consumer market.
- Atlas has been in ongoing discussions with multiple parties in Canada and Europe regarding establishing long-term supply contracts, with the aim of establishing firm demand for the majority of our current and planned future expansion capacity.
- Based on the strong outlook for medical cannabis demand in Europe, Atlas has been evaluating several opportunities which will permit expansion of our existing capacity, to diversify our production outside of Canada. This includes options to serve the expanding European market from both Denmark and the United Kingdom (which both recently legalized cannabis for medical uses).
- Atlas’ operating procedures have been designed to meet or exceed Good Manufacturing Practice (“GMP”) and Good Production Practice (“GPP”) requirements, which we need to secure export sales to certain European countries. GMP certification is underway, with eventual full certification, which requires product shelf-life stability testing, expected in fall 2019.
- On initial design of our purpose-built production Facility, Atlas expected to have capacity for approximately 5,000 kg per year of cannabis flower and related oil extracts. Based upon current revisions to optimize our production processes, and discussion of yield expectations and site reviews by other industry parties, Atlas expects that this capacity will be significantly expanded, to over 10,000 kg per year, at virtually no additional cost.
Financing Activities
- Atlas built its initial Canadian production facility based on conservative financing goals, and in late 2018 commenced to utilize a portion of its existing $6.25 million bank term debt facility which was secured with ATB Financial in early 2018. Amounts drawn under this facility will bear interest at bank prime plus 1%.
- Atlas is currently evaluating a sizeable new common share equity raise, the proceeds of which will be applied to enhance working capital used in our initial cultivation and business development activities, and to secure strategic opportunities for expansion of cultivation and extraction operations / production, with the goal of bolstering demand for Atlas medical cannabis products in Europe.
Sheldon Croome, Atlas President & CEO summarized; “The last months of 2018 were very exciting, as we focused on bringing our production Facility online, maximizing operational efficiencies, securing long-term purchase contracts for our production volumes, and enhancing our potential revenue streams, including the sale of genetics and third party processing of extracted oil. We will be offering to sell a broad spectrum of unique genetics to producers at attractive prices, and without royalties or resale restrictions.”
About Atlas Biotechnologies Inc. (“Atlas”) and Atlas Growers Ltd.
Atlas is based in Edmonton, Alberta, Canada and its wholly owned subsidiary, Atlas Growers Ltd., is federally licensed for Cultivation and Production of cannabis products, with a focus on medical markets. Atlas currently has a purpose-built, 38,000 square foot Facility and laboratory where it expects to produce well over 10,000 kg of dried cannabis annually as well as capacity to refine cannabis into pure, isolated concentrates in large volumes. Further, Atlas owns a 160-acre site that could accommodate future expansion of cultivation capacity in Alberta, with a development permit in place to allow for up to 1,000,000 square feet of additional construction.
Atlas is well financed, and has raised $25 million in equity to date, including $7.6 million of equity issued related to acquisition of land and strategic investments, and also has available a $6.25 million bank term loan which is being used to partially finance Facility construction and equipping costs.
Forward-Looking Information
This news release may contain “forward looking information” and “forward-looking statements” within the meaning of applicable Canadian securities legislation. All information contained herein that is not historical in nature may constitute forward-looking information. When used in this document, words such as “intends”, “plans”, “anticipates”, “expects” and “scheduled”, are forward-looking statements. Forward-looking statements are subject to a wide range of business, market and economic risks and uncertainties, and although Atlas believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of factors can cause actual results to differ materially from those in the forward-looking statements. Except as required by law, Atlas disclaims any obligation to update or revise any forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements.
For further information, please contact:
Jeffrey R. Gossain, P. Eng.
Vice President of Operations
Atlas Growers Ltd.
Phone: 780-784-5920
Email: invest@atlasgrowers.com
Website: www.atlasgrowers.com
Investor Relations
Graeme Dick
Colwell Capital Corp.
403-561-8989
graeme@colwellcapital.com
Dean Stuart
403-617-7609
dean@boardmarker.net