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C21 Investments restructures Nevada acquisition

2018-12-12 17:24 ET - News Release

Mr. Robert Cheney reports


C21 Investments Inc. has restructured the terms of the definitive purchase agreement under which C21 will acquire Nevada-based Silver State Relief and Silver State Cultivation. The acquisition will be effective Jan. 1, 2019, with formal completion of the transaction to occur upon receipt of approval of Nevada Department of Taxation, which is expected in January, 2019.

All figures are in U.S. currency.

The restructured terms include vendor financing for $30-million of the acquisition price. As a result, the total consideration for the acquisition has been increased by $5-million to $39-million payable in cash and by 10 million common shares to 12.5-million common shares. After payment of $3-million on or before Dec. 31, 2018, and application of $6-million of deposits previously paid, C21 will issue a $30-million secured promissory note, bearing interest at 10 per cent per annum, payable in quarterly instalments to be amortized over the period ending June, 2020. The 12.5 million common shares will be issued on closing subject to required hold periods under applicable securities laws, and will make the owner of Silver State, Sonny Newman, C21's largest shareholder. After completion of the acquisition, Mr. Newman will own 22 per cent of the issued and outstanding shares of C21. In addition, the parties agreed to cancel the previously negotiated $14-million three-year convertible note.

Silver State is an established, profitable, vertically integrated cannabis business with trailing 12-month revenue of $25-million. "The Silver State acquisition establishes C21's competitive position in the Nevada market," said Robert Cheney, president and chief executive officer, C21 Investments. "This is the first transaction in a larger plan by C21 Investments to expand significantly in the cultivation, processing, and wholesale and retail distribution of branded products throughout the state of Nevada."

C21 Investments retains the option to acquire the real-estate assets of Silver State, including the 155,000-square-foot building that houses its cultivation and processing facility, the 8,000-square-foot retail dispensary building, located in Sparks, Nev., servicing more than 36,000 customers per month, and its new 6,000-square-foot dispensary located in Fernley, Nev., which will go into operation this month.

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 owns Eco Firma Farms in Oregon, and has definitive agreements in place that are expected to close prior to the company's year-end of Jan. 31, 2019, to acquire Silver State Relief and Silver State Cultivation in Nevada and Phantom Farms and Swell in Oregon, and letters of intent to acquire and expected to also close prior to year-end with three dispensaries in Oregon.

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