Blue Diamond Ventures Inc (BLDV)

[JPS02]

BLDV + Quality Green: What we know so far

Note: Quality Green Inc. is a client of BLDV.

1. Licensed Producer: Quality Green Inc. was added to the Health Canada web-site on Friday, October 27, 2017 making them the 39th licensed grower in Ontario.

Health Canada - List of Authorized Licensed Producers of Dried and Fresh Marijuana, and Cannabis Oil for Medical Purposes: Quality Green is on the list

Supporting link: https://www.canada.ca/en/health-canada/services/drugs-health-products/medical-use-marijuana/licensed-producers/authorized-licensed-producers-medical-purposes.html

10/30/17 BLDV PR - BLDV Client, Quality Green Inc., Secures Licensed Producer Status: https://backend.otcmarkets.com/otcapi/company/dns/news/document/30574/content


2. Quality Green Inc. website: Presented below are key extracts from Quality Green’s website:

i) We are a Licensed producer by Health Canada under the ACMPR to cultivate medical marijuana.

ii) Production Facilities - With our first facility completed we are excited to expand our operations to a second facility in 2018.

iii) Our short term vision is to have three facilities running year round . This will allow us to complete our aggressive growth strategy and become a household name for marijuana patients in legalized countries.

iv) Stay tuned, exciting updates are coming soon.

Source: http://qualitygreen.ca


3. Mention of Quality Green Inc. in BLDV PRs to date:

i) 9/6/17 BLDV PR - Blue Diamond Ventures Inc., Canadian Cannabis Update : Build to Lease Opportunity in Toronto- BLDV is in final negotiations with a Licensed Producer in Ontario to provide a turn-key design and build-to-lease building of 3,000 sq. ft. that will contain three levels of growing, for a total of 9,000 sq. ft. of grow space, with future expansion plans to build a 40,000-sq. ft. facility on the same site. Project should be confirmed within September. This project will be part of the newly expanded Innovative Growth Group Fund (Previously Michigan Growth Fund)

Source: https://www.otcmarkets.com/ajax/showNewsReleaseDocumentById.pdf?id=27159

ii) 9/20/17 BLDV PR - Blue Diamond Ventures Inc. Secures Canadian Real Estate Project: Blue Diamond Ventures Inc. (BLDV) has received a signed Letter-of-Intent and $25,000.00 deposit from Quality Green Inc. to provide a build-to-lease building for cannabis cultivation. This project is part of the newly expanded Innovative Growth Group Fund (Previously Michigan Growth Fund), that plans to build multiple buildings in the USA and Canada over the next 18 months. New Project will deploy a minimum of One Million (1 MM) USD from the Growth Fund

“Blue Diamond provided us with a package that will allow continued expansion to meet the surge in the Canadian market” said Andrew Spasiw, CEO of Quality Green Inc., “that, combined with access to the Blue Diamond’s network of technology and strategic partners, make it a powerful relationship”

Source: https://www.otcmarkets.com/stock/BLDV/news/Blue-Diamond-Ventures-Inc--Secures-Canadian-Real-Estate-Project?id=170323&b=y

iii) 10/19/17 PR - Blue Diamond Ventures Inc., Cannabis Clean Update: The Canadian GPP documents are incorporated as well to ensure that the new standards can be applied to Quality Green, AMS and other clients of BLDV. The new BLDV company formed in Israel this week will administer this project.

Source: https://www.otcmarkets.com/ajax/showNewsReleaseDocumentById.pdf?id=27825

iv) 10/23/17 PR - Blue Diamond Ventures Inc., Funding & Project Update : Joseph Groleau from AMS joined our advisory board back in July and has already made an impact with the introduction to Quality Green Inc, our most recent Build to Lease client in Ontario.

Source: https://www.otcmarkets.com/ajax/showNewsReleaseDocumentById.pdf?id=27854

v) 10/30/17 PR - BLDV Client, Quality Green Inc., Secures Licensed Producer Status: Blue Diamond Ventures, Inc. moves forward with $1mm USD Funding for New Facility. Blue Diamond Ventures, Inc. (OTC PINK: BLDV) will build a state of the art cultivation facility for the newest licensed producer in Ontario, Canada. Quality Green Inc. was added to the Health Canada web-site on Friday making them the 39th licensed grower in Ontario. Quality Green is now preparing for the future, even before their first test grow, they are already thinking expansion by planning an addition to the newly licensed facility in Canfield ON, making the BLDV turn-key project, the 3rd Cultivation Project for Quality Green Inc.

Pre-Fabricated Grow Rooms that jumpstart production, Vertical Growing Systems to optimize space,
Heavy Duty Hydroponics to cut down on maintenance, and LED Lighting to enhance cannabinoids, are just a few of the products that will be specified for the new facilities during the next 60 days.

This first project is currently estimated at a cost of $1.2 Million USD, $700K for purchase of an existing building and an additional $500K for buildout and construction/project fees. BLDV is expected to deliver a fully functional cultivation facility within 12 months or the period approved by Health Canada.

Source: https://www.otcmarkets.com/stock/BLDV/news/BLDV-Client--Quality-Green-Inc---Secures-Licensed-Producer-Status?id=173711&b=y

vi) 11/21/17 PR - Blue Diamond Ventures Inc., Vegas Show Report : 1) Based on the performance of the Canadian Market, the size of the project has been increased and the building under consideration for purchase by BLDV for lease to Quality Green is now 30,000 sq. ft. up from 7,500 sq. ft.

2) BLDV was able to meet with the Quality Green team to further discuss the Site-B addition to their current Cannabis Cultivation License. The schedule for operations in the new building has been agreed to be January 2019, which matches the build-out plan and anticipated schedule of approvals from Health Canada.

3) Josh Alper CEO of BLDV will be in Canada on the week of December 5th to continue the process and inspect the buildings under consideration for purchase and build-out.

4) Andrew Spasiw, CEO of Quality Green Inc. was able to meet the team from Cann10 Israel to discuss how the efforts of Cann10 North America can contribute to a competitive sustainable advantage for their efforts in Canada.

Source: http://www.otcmarkets.com/ajax/showNewsReleaseDocumentById.pdf?id=28361

vii) 12/5/17 PR - Oricann® Cannabis Lighting: Multiple clients of BLDV have signed on to be included in the side by side test grows that will document the advantages of the Oricann® fixtures including Quality Green Inc.

Source: https://backend.otcmarkets.com/otcapi/company/dns/news/document/28580/content

viii) 2017 10-K (unaudited): Quality Green Inc. issued December 31st, 2017 Twenty-Five (25) million restricted common shares as security deposit for contract to build cultivation facility.

Source: https://backend.otcmarkets.com/otcapi/company/financial-report/190003/content

ix) 4/16/18 PR - Blue Diamond Consulting Expands Scope with Cann10 North America: Quality Green Inc. a licensed producer in Ontario has invested $25K to become a Promoting Sponsor and Founding Member of the Cann10 Alliance. The Group will create a bridge for North American Companies to Israeli Cannabis Technology and Research.

Source: https://backend.otcmarkets.com/otcapi/company/dns/news/document/30574/content


4. BLDV CEO Interviews:

i) 10/2/17 BLDV CEO interview: BLDV CEO discusses a few core details about the Quality Green agreement and the 506C structure of funding that makes this agreement happen in the YT clip below.

Quality Green Inc. is mentioned at the following YouTube clip intervals:

4:45 – Deal signed with Quality Green

5:15 – Explanation of how controlled distribution system provides opportunity to Quality Green where BLDV provides growing facility without having to apply for funding because they have a provincial government customer. Quality Green signed the LOI.

6:06 – Notice how the interviewer asks if BLDV will own 100% of Quality Green; however, BLDV CEO clarifies that BLDV will build and only own the growing facility for Quality Green.

ii) 12/4/17 BLDV CEO interview: BLDV discusses the following important developments about Quality Green in the YT clip below:

5:04 – BLDV took a bet with them that Quality Green would get their license

5:08 – Already have approval for construction of a new 15,000 sq. ft. facility .

5:16 – BLDV will provide a 30,000 sq. ft. (originally scheduled to be 7,500 sq. ft.) facility on the build lease program

5:27 – I think the key idea here that Josh mentions is how approvals from Health Canada encourage cannabis growers to expand and thereby provide supply. Furthermore, I think the supply capacity factor will affect future industry dynamics in Canada and the value prospect/attractiveness of new Licensed Produces such as Quality Green, a client of BLDV.

5:48 – Quality green took a chance by going through a very expensive multi-year process to get a 2,000 sq. ft facility approved

6:00 – BLDV took a chance with Quality Green that their timing is right and CEO indicates they both hit it very well and then he goes on to explain positive investment environment and expansion implications of timing.


- Closing thoughts: Based on the information presented above, I think there is a strong relationship developing between BLDV and their client Quality Green Inc. who is already licensed and has plans to build up to a total of 47,000 sq. ft (2,000 sq. ft. + 15,000 sq. ft. + 30,000 sq. ft.) of growing space.

Please share any comments or other thoughts you may have.

Go BLDV!