By Amy Chen

A CEO of a Vancouver-based publicly listed medical marijuana grower has filed a defamation suit against a government official who accused him of fraud, court records show.

Dennis Petke, President and CEO of Alliance Growers Corp (CSE: ACG) is suing St. Albert, AB-based federal employee Brigitte Petke for allegedly publishing an article on the Internet accusing ACG of engaging in criminal behaviour cheating and defrauding investors.

According to the Statement of Claim, on February 12, 2017 the Plaintiff alleges that the Defendant published the following on the Stockwatch Website:

When a company goes public, they are required to file a Form 2A Listing Statement. This Listing Statement (along with Newsletters) is provided to investors to assist them in making informed decisions about where to invest their hard-earned money. By law, the facts’ presented in this Form 2A Listing Statement are required to be TRUE. I will demonstrate that the basic business premise of Alliance Growers Corp. is based on Major Misrepresentations. Alliance has enticed the public into the hot pot-stock” market by claiming that BC 0961268 Ltd. and B.C. Maramed Ltd. are authentic companies involved in the production of marijuana.

On their form 2A Listing Statement Alliance claims that BC O961268 Ltd. has six (6) full time employees and ten (10) parttime employees (pg. 15). It also claims that BC 0961268, a Kelowna, B.C. Company, is currently selling and growing medicinal marijuana under the Marihuana Medical Access Regulations (MMAR) for eight (8) patients (pg. 12). The claim is that this approved Health Canada numbered company has leased it’s 11,000-square foot facility to BC Maramed Ltd, also a Kelowna based Company. Then, once BC Maramed has received its own medical marijuana license approval from Health Canada, they would combine their employees. Both organizations are required to have payroll and GST nos. with Revenue Canada, be registered under the Kelowna by-law division and hold business licenses; they do not! BC 0961268 is and never was registered with Health Canada; it does not exist.

FACTS :
BC 0961268 has never registered its Business No. 830939138 BC0001. With Revenue Canada

B.C. Maramed has never registered its Business No. 811 O258.325 BCOOO1. With ReVenue Canada
Alliance also never registered its Business No. 803282441 BC0001, even though they claim to have two (2) employees (
BC 0961268 does not have a Kelowna business license and is not registered with Kelowna by-laws division (required for marijuana grow-up). Health Canada has no record of them
BC Maramed does not have a Kelowna business license and is not registered with Kelowna by-laws division (required for marijuana grow up). There never was an 11,000 square foot facility.

When this was brought to Alliance’s attention, they buried BC Maramed under several layers or divisions of pot venture with B.I.M. (Botanical Research in Motion International Inc.) which if you do a corporate search does not exist. Their focus now is Germany which would be next to impossible to verify. Do your due diligence when investing with Alliance.

The Statement of Claim alleges that Brigitte Petke’s accusation are based on incorrect assumptions, stating:

The allegations published by, or on the instructions of, the Defendant on February 12, 2017 are based upon the assumption that BC Maramed operates in Kelowna, BC. This assumption is incorrect. BC Maramed carries on business in West Kelowna, BC and has, at all times, complied with all obligations under civic, provincial and federal laws.

Dennis Petke alleges that Brigitte Petke’s statements caused ACG’s stock price to drop from 29 cents per share to just 10 cents.

Last week, the Investment Industry Regulatory Organization of Canada (IIROC) halted the trading of ACG stocks^[1]http://www.newswire.ca/news-releases/iiroc-trading-halt—acg-649232523.html following ACG’s dissemination of a report claiming that ACG stocks would rise by 200% to 0.30^[2]http://thecse.com/sites/default/files/investorx/ACG/1710030605070366.pdf.

“Needless to say we were more than pleased to see the FRC research report indicate a valuation of CAD$0.30 per share which we believe is more indicative of the true value of Alliance Growers with the projects and financing initiatives that are currently in place,” Dennis Petke said following the release of the report authored by Siddharth Rajeev.

It was later revealed that the report ACG paid Fundamental Research Corp. (FRC) $25,000 for the report^[3]http://thecse.com/sites/default/files/investorx/ACG/1710030833509596.pdf.

At the IIROC’s request, ACG later retracted announcement, and trading was subsequently resumed.

ACG stock trading has been halted or ceased at least three times during the last 30 days, records show.^[4]http://www.stockwatch.com/Quote/Detail.aspx?symbol=ACG&region=C

Regulatory filings show that more than 13% of all ACG shares were at one time owned by Jason Shull^[5]http://thecse.com/sites/default/files/investorx/ACG/1506221431417321.pdf, the son of penny stock trader Robert Shull who pleaded guilty and served time for criminal charges over stock manipulation and fraud in 2010^[6]http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1791081&symbol=*SEC&news_region=C.

The company’s latest available Audited annual financial statements filed in January 2017 do not paint a rosy picture^[7]http://www.sedar.com/GetFile.do?lang=EN&docClass=5&issuerNo=00036417&issuerType=03&projectNo=02573225&docId=4040344.

The Company has incurred operating losses since inception and has no current source of operating cash flow. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the financing necessary to acquire projects and develop them as well as fund ongoing administration expenses. There are no assurances that sufficient funding will be available to further develop its projects.

Management intends to obtain additional funding by issuing common stock in private placements. There can be no assurance that management’s future financing actions will be successful. Management is not able to assess the likelihood or timing of improvements in the equity markets for raising capital for future acquisitions or expenditures.

According to the statement of claim, the two parties are currently involved in another lawsuit in the British Columbia Supreme Court.

5. In November, 2016 the Plaintiff and Defendant were involved in litigation in the British Columbia Supreme Court wherein the Defendant has alleged that the Plaintiff, in his capacity as a director and/or officer several companies, fraudulently induced the Defendant to invest in Companies in which the Plaintiff was associated. The Plaintiff has denied any wrongdoing either as alleged by the Defendant or at all. In November, 2016 the Defendant had taken no steps in the British Columbia Supreme Court action for over a year.

Brigitte Petke did not wish to comment on the matter other than to say that a lawsuit has been filed.

We have reached out to Dennis Petke, but have yet to receive a response.

[Photo Credit: Bob Doran]