Delta 9 Enters Definitive Agreement to Acquire Two Alberta Retail Stores
WINNIPEG, MB – November 21, 2019 – DELTA 9 CANNABIS INC. (TSX: DN) (OTCQX: VRNDF) (“Delta 9” or the “Company”), is pleased to announce that today it has entered into a definitive agreement with Modern Leaf Group Inc. ("Modern Leaf") and Mr. Preston Drummond (the "Modern Leaf Agreement") to acquire all or substantially all of Modern Leaf’s assets located in the Province of Alberta relating to two proposed retail cannabis stores (the "Proposed Transaction"). The acquisition will be completed through the Company’s wholly-owned subsidiary, Delta 9 Cannabis Store Inc. Kronos Capital Partners acted as Financial Advisor to the Modern Leaf Group on the transaction.
We are pleased to have reached definitive agreements with Modern Leaf on this previously announced transaction,
said John Arbuthnot, founder and CEO of Delta 9.
Following completion of this acquisition we will have a total of six operating retail stores in Western Canada and we are actively looking to increase this number as quickly as possible.
The purchase price for the Proposed Transaction is $1,300,000, subject to customary adjustments (the "Purchase Price"). $1,000,000 of the Purchase Price will be satisfied through the issuance of 1,250,000 common shares in the capital stock of the Company (each a "Common Share"), a price per Common Share of $0.80 based on the closing market price of the Common Shares on the Toronto Stock Exchange ("TSX") on September 19, 2019, such date being the date that the Company and Modern Leaf entered into a previously announced binding letter of intent with respect to the Proposed Transaction. $150,000 of the Purchase Price will be paid a deposit (the "Deposit") that is non-refundable except where the Proposed Transaction does not proceed due to the occurrence of certain events, or the discovery or disclosure of certain information, described in the Modern Leaf Agreement. If the Proposed Transaction proceeds, the Deposit will be applied against the Purchase Price, and the $150,000 balance of the Purchase Price will be satisfied in cash on closing of the Proposed Transaction.
The Modern Leaf Agreement and the Proposed Transaction are subject to, among other conditions:; (i) the obtaining of all required third party and governmental consents, authorizations and licenses required in connection with the Proposed Transaction and the operation of the proposed Alberta cannabis stores following the Proposed Transaction, including, without limitation, all consents, authorizations and licenses required to be issued by Alberta Gaming, Liquor & Cannabis (AGLC); and (ii) the approval of the TSX.
Subject to satisfaction of the conditions precedent set out in the Modern Leaf Agreement, management of the Company anticipates the closing of the Proposed Transaction to occur on or prior to March 30, 2020.
For more information contact:
Investor & Media Contact:
Ian Chadsey VP Corporate Affairs
Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. The company sells cannabis products through its wholesale and retail sales channels and sells its cannabis grow pods to other businesses. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the Toronto Stock Exchange under the symbol "DN" and on the OTCQX under the symbol "VRNDF". For more information, please visit www.delta9.ca.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) the Company's completion of a satisfactory due diligence investigation regarding the Proposed Transaction; (ii) all necessary regulatory approvals for the Proposed Transaction; and (iii) the closing of the Proposed Transaction being obtained. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including the risk that the Proposed Transaction does not close as well as all risk factors set forth in the annual information form of Delta 9 dated April 30, 2019 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.