Mr. Sonny Newman reports

C21 ANNOUNCES AGREEMENT FOR THE ACQUISITION OF CANNABIS DISPENSARY IN RENO, NEVADA AND PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURE UNITS

C21 Investments Inc.'s wholly owned Nevada subsidiary, Silver State Relief LLC, has entered into an asset purchase agreement with Deep Roots Harvest Inc. to acquire all or substantially all of Deep Roots' assets related to the operation of its 6,500-square-foot, purpose-built, operational retail cannabis dispensary located in southern Reno, Nev. The company also announces a non-brokered private placement of principal amount $1,000 secured convertible debenture units of the company for aggregate gross proceeds of up to $4-million.

Sonny Newman, chief executive officer and president of the company, commented: "We are thrilled to announce the agreement with Deep Roots to acquire this dispensary, which, upon completion of the acquisition, will allow us to expand our retail footprint in Nevada, a pivotal step in the company's growth strategy. We plan to integrate and rebrand this dispensary, purpose built in 2021, under the Silver State Relief banner. With the dispensary's desirable location in a high-traffic, flourishing area of southern Reno, we anticipate strong revenue growth from this acquisition, along with the added benefit of allowing us to expand the portion of our cultivation capacity sold through our retail channel."

Dispensary acquisition

Pursuant to the terms of the agreement, the closing of the dispensary acquisition shall involve the transfer of, among other things, certain machinery, tools, supplies, lease interests, contracts and other assets to the company as well as the transfer to the company of certain retail store licences (the regulatory assets) held by Deep Roots, which shall take place at such time as certain conditions precedent to closing set forth in the agreement are met, including: (i) the receipt by the parties of the grant and approval by the Nevada Cannabis Compliance Board (CCB) of a transfer of interest (TOI) permitting the transfer of the regulatory assets to the company; (ii) the approval by the City of Reno, Nev., of the TOI; and (iii) the consent of the landlord to the assignment of the lease related to the Deep Roots dispensary to the company.

The purchase price to be paid by the company for the dispensary acquisition is $3.5-million (U.S.), which comprises: (i) a cash payment of $100,000 (U.S.), which amount was paid to Deep Roots as a non-refundable deposit upon the execution of the agreement; and (ii) a cash payment of $3.4-million (U.S.) to be paid to Deep Roots on closing.

The closing of the dispensary acquisition is also subject to the approval of the Canadian Securities Exchange.

Private placement

Each convertible debenture unit offered under the private placement will comprise: (i) one convertible debenture of the company secured against the Nevada operations of the company in the principal amount of $1,000; and (ii) 1,000 detachable common share purchase warrants, with each warrant exercisable for one common share at a price of 55 cents per share for a period of 30 months from the issue date of the convertible debenture units.

The principal amount of the convertible debentures, together with any accrued and unpaid interest, will mature and become due and payable on the date that is 30 months from the issue date, subject to earlier conversion or repayment. The principal amount owing under the convertible debentures will accrue interest from the issue date at rate of 12 per cent per annum, payable quarterly in cash.

The principal amount may be converted into common shares at the option of the holder at any time prior to the maturity date at a price of 45 cents per common share.

The net proceeds raised from the private placement will be used by the company to finance the purchase price of the dispensary acquisition.

The private placement is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the CSE. All securities to be issued pursuant to the private placement will have a hold period of four months and one day from the date of closing of the private placement.

About C21 Investments Inc.

C21 Investments is a vertically integrated cannabis company that cultivates, processes and distributes quality cannabis and hemp-derived consumer products in the United States. The company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing and distribution assets in strategic markets, leveraging industry-leading retail revenues with high-growth-potential, multimarket branded consumer packaged goods. The company owns Silver State Relief and Silver State Cultivation in Nevada, including legacy Oregon brands Phantom Farms, Hood Oil and Eco Firma Farms. These brands produce and distribute a broad range of THC (tetrahydrocannabinol) and CBD (cannabidiol) products from cannabis flowers, prerolls, cannabis oil, vaporizer cartridges and edibles.

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