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C21 Investments Inc
Symbol CXXI
Shares Issued 45,064,446
Close 2018-10-18 C$ 1.24
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C21 Investments firms up Phantom Farms acquisition

2018-10-18 09:51 ET - News Release

Mr. Keturah Nathe reports


C21 Investments Inc. has entered into definitive agreements for the June 18, 2018, announced acquisition of Phantom Venture Group LLC, Phantom Brands LLC and SDP Development Group LLC, the owner of the real property used in the Phantom Farms business.

Phantom Farms has outdoor cannabis cultivation facilities totalling 80,000 square feet plus an additional 40,000 square feet under development in southern Oregon. In addition, it operates a 5,600-square-foot facility, which includes a wholesale distribution warehouse and an extraction laboratory, plus a 7,700-square-foot state-of-the-art indoor grow facility in central Oregon. SDP currently leases such property to Phantom Farms.

"Phantom Farms is a high-quality operation with a talented team producing some of the finest products in Oregon," said Robert Cheney, president and chief executive officer of C21 Investments. "Phantom Farms is among several successful companies set to join C21 Investments in order to make us a world-class, vertically integrated cannabis company."

"We are excited to be part of a growing company with passionate employees who are committed to the quality of the products they produce and the communities they serve," said Sky Pinnick, chief executive officer of Phantom Farms. "Joining C21 Investments will enable us to expand our operations and establish our brand as a powerhouse in the global cannabis industry."

C21 Investments' strategy is to acquire existing and successful cannabis operations with experienced management teams in place. C21 Investments' focus is to expand into jurisdictions where it can wholly own indoor/outdoor cultivation operations, processing/extraction facilities, bakeries, branded products and retail dispensaries with a large distribution network.

Terms of Phantom Farms acquisition

The Phantom Farms acquisition is subject to prior approval of the Oregon Liquor Control Commission which is expected to be received in approximately three months, with closing to occur following receipt of approval. On closing, C21 Investments will acquire 100 per cent of Phantom Farms' membership units. The aggregate purchase price payable is (1) $8.01-million (U.S.) payable by the issue of 2.67 million common shares at a deemed price of $3 (U.S.) per share, (2) two million share purchase warrants of C21 Investments, with each warrant exercisable for one share at a price of $1.50 per share, and (3) up to an additional 4.5 million shares upon C21's Oregon business achieving certain performance targets over up to a seven-year period following the closing date.

Terms of SDP acquisition

Closing of the acquisition of the SDP membership interests has been deferred until October, 2020. Until then, Phantom Farms will continue to lease the real property from SDP at market rents. On closing, C21 Investments will acquire 100 per cent of SDP's membership units for an aggregate purchase price of $8.01-million (U.S.) payable in cash, or, at the election of the vendors, in whole or in part by the issue of 2.67 million shares at a deemed price of $3 (U.S.) per share.

About Phantom Farms

Phantom Farms is a premium legacy cannabis brand based in Oregon, known for its organic cultivation practices, with a focus on quality terpene development. Phantom Farms was awarded "Best CBD Flower" in both 2016 and 2017 and was recently awarded "Outstanding Terpenes" at the 2018 Cultivation Classic event in Oregon.

About C21 Investments Inc.

C21 Investments is a United States-focused vertically integrated cannabis corporation that cultivates, processes and distributes quality cannabis and hemp-derived consumer products in the United States. C21's current and announced operations currently comprise Silver State Relief in Nevada, as well as Phantom Farms, Swell Companies, Eco Firma Farms, and Gron Chocolate and Gron Confections in Oregon, and five dispensaries in two states. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, prerolls, cannabis oil, vaporizer cartridges and edibles.

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