Ms. Lee Ann Evans reports

THE CANNABIST COMPANY ANNOUNCES AGREEMENT FOR THE SALE OF VIRGINIA ASSETS TO CURALEAF

The Cannabist Company Holdings Inc. has entered into an agreement to sell all of the ownership interests of its subsidiary engaged in the business of cultivating, producing, manufacturing, distributing and selling cannabis in the commonwealth of Virginia to a subsidiary of Curaleaf Holdings Inc. for total consideration of $110-million, subject to adjustment. The assets consist primarily of five active retail locations, one additional retail location in development, and approximately 82,000 square feet of cultivation and production capacity in the Richmond region.

As previously announced, the board of directors of the company formed a special committee of independent directors to review strategic alternatives. The special committee, with support from external financial and legal advisers, is considering a range of options, including potential asset sales, mergers, or other strategic or financial transactions. The review is being conducted in consideration of the continuing operational and financial challenges for the company and the industry as well as of the continuing uncertainty as to if and when U.S. federal regulatory changes may occur that will impact the company and the industry, including, without limitation, changes to U.S. federal taxation of the company and the industry under Section 280(e) of the Internal Revenue Code. The transaction forms part of this strategic review.

Transaction highlights

The company, Green Leaf Medical of Virginia LLC, a subsidiary of the company (gLeaf Virginia), and Green Leaf Medical LLC, another subsidiary of the company and the sole member of gLeaf Virginia, entered into an equity purchase agreement (EPA) with Curaleaf Inc. (the buyer), a subsidiary of Curaleaf Holdings. Pursuant to the EPA, the buyer will purchase all of the issued and outstanding equity interests of gLeaf Virginia from the member for total consideration of $110-million, consisting of: $80-million in cash payable at the closing of the transaction, $20-million in cash as deferred consideration, as well as a $10-million promissory note issued by the buyer to the member or an affiliate thereof designated by the member prior to the closing, all subject to adjustment as described in the EPA. The promissory note will bear interest at a rate of 6 per cent per annum, beginning on the closing date of the EPA, through maturity on the one-year anniversary of the closing date. The delayed payment will be payable within 30 days following the earlier of: (i) the date on which the first adult-use sale has occurred at each of the five gLeaf Virginia retail locations in operation and the one retail location under development in the commonwealth of Virginia; and (ii) the date that is 12 months from the date on which the first adult-use sale has occurred at any of the retail locations.

The principal amount of the promissory note is subject to downward adjustments for cash, working capital, indebtedness and transaction expenses of gLeaf Virginia as well as for indemnification claims. Any unpaid indemnification obligations not settled against the promissory note may also be set off by the buyer against the delayed payment.

The EPA includes a 15-business-day go-shop period beginning on the date of the EPA and continuing until 11:59 p.m. Eastern Time on Dec. 22, 2025, unless otherwise extended with the prior written consent of the buyer, during which time the company, with the assistance of its financial adviser, Moelis & Co. LLC, will, subject to the requirements and limitations set forth in the EPA, be permitted to, among other things, solicit, negotiate and enter into alternative proposals. The EPA includes a $3.3-million break fee that will payable should the company enter into an alternative proposal or should the company fail to receive noteholder consent (as defined below).

The transaction is subject to, among other things, satisfaction or waiver of certain closing conditions, including regulatory approvals and the consent from holders of a majority of the aggregate principal amount of the 9.25 per cent senior secured notes due Dec. 31, 2028; and (ii) the 9.0 per cent senior secured convertible notes due Dec. 31, 2028, issued by the company. No shareholder approvals are required. The transaction is expected to close early in 2026 or before.

The company expects to use a portion of the net proceeds from the transaction to redeem notes.

Moelis & Co. acted as financial adviser to the company. Stikeman Elliott LLP acted as Canadian counsel. Weil Gotshal & Manges LLP and Foley Hoag LLP acted as U.S. counsel.

About The Cannabist Company Holdings Inc.

The Cannabist Company, formerly known as Columbia Care, is one of the most experienced cultivators, manufacturers and providers of cannabis products and related services, with licences in 12 U.S. jurisdictions. The company operates 77 facilities, including 61 dispensaries and 16 cultivation and manufacturing facilities, including those under development. Columbia Care, now The Cannabist Company, is one of the original multistate providers of cannabis in the United States and now delivers industry-leading products and services to both the medical and adult-use markets. In 2021, the company launched Cannabist, its retail brand, creating a national dispensary network that leverages proprietary technology platforms. The company offers products spanning flower, edibles, oils and tablets and manufactures popular brands including dreamt, Seed & Strain, Triple Seven, Hedy, gLeaf, Classix, Press, and Amber.

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