Mr. John Arbuthnot reports
DELTA 9 COMPLETES TRANSACTION TO ACQUIRE TWO ALBERTA RETAIL STORES
On May 29, 2020, Delta 9 Cannabis Inc. closed a transaction with Modern Leaf Group Inc. to acquire all or substantially all of Modern Leaf's assets in Alberta relating to two retail cannabis stores located in Calgary, Alta., and Grande Prairie, Alta. The acquisition is being completed through the Company's wholly-owned subsidiary, Delta 9 Cannabis Store Inc., and pursuant to the previously announced purchase agreement among Delta 9 Cannabis Store Inc., Modern Leaf and Mr. Preston Drummond dated November 21, 2019 (the "Agreement"). Kronos Capital Partners advised Modern Leaf in regards to the transaction.
"We are pleased to have finalized our transaction with Modern Leaf and look forward to the first Delta 9 Cannabis Stores opening their doors in the province of Alberta in short order," said John Arbuthnot, chief executive officer of Delta 9. "This is another milestone for us in our goal of creating one of Canada's preeminent vertically integrated cannabis companies."
The purchase price paid by Delta 9 Cannabis Store Inc. relating to the Transaction was $1,300,000, subject to customary adjustments (the "Purchase Price"). $1,000,000 of the Purchase Price was 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 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. The balance of the Purchase Price was paid by way of the release of the $150,000 deposit in respect of the transaction, and the payment of $150,000, satisfied in cash.
Upon the closing of the Transaction under the Agreement, Delta 9 Cannabis Store Inc. and Modern Leaf entered into additional agreements effective at the date of closing providing for, among other things, the granting of a right of first refusal by Modern Leaf in favour of Delta 9 Cannabis Store Inc. pertaining to the purchase of a retail cannabis store located in Olds, Alberta and the granting of certain restrictive covenants by Modern Leaf in favour of Delta 9 Cannabis Store Inc.
The final closing of the transaction remains subject to the approval of the Toronto Stock Exchange.
About Delta 9 Cannabis Inc.
Delta 9 Cannabis 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.
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