John Arbuthnot reports
DELTA 9 ENTERS INTO AGREEMENT TO ACQUIRE SASKATCHEWAN RETAIL CANNABIS STORE
Delta 9 Cannabis Inc. has entered into an asset purchase agreement to acquire from Auxly Cannabis Group Inc. and Kolab Project Inc. all or substantially all of the vendors' assets relating to the operation of a retail cannabis store in Lloydminster, Sask. The acquisition is anticipated to be completed through the company's wholly owned subsidiary, Delta 9 Cannabis Store Inc.
"We are pleased to be again working with Auxly on another mutually beneficial arrangement, this time directly in the retail cannabis sector," said John Arbuthnot, founder and chief executive officer of Delta 9. "The proposed acquisition will represent Delta 9's entry into the Saskatchewan retail market, allowing Delta 9 to further grow its brand for retail cannabis products across the country."
Hugo Alves, chief executive officer of Auxly, added: "The sale of our Lloydminster cannabis store enables us to further prioritize and reinforce our efforts in our core business of developing and manufacturing high-quality, branded cannabis products. As one of our long-standing partners, we couldn't be more confident that Delta 9 is the perfect fit to support and continue to supply consumers in the Saskatchewan community."
The purchase price for the proposed transaction is $875,000, subject to customary adjustments and other adjustments that may be determined necessary in the course of the company's due diligence investigation with respect to the proposed transaction. Of the purchase price, $750,000 will be satisfied through the issuance of common shares in the capital stock of the company at a price per common share based on the 15-day volume-weighted average price per common share on the Toronto Stock Exchange as at the closing date for the proposed transaction. The $125,000 balance of the purchase price will be satisfied in cash on the closing date of the proposed transaction.
The purchase agreement and the proposed transaction are subject to, among other conditions: (i) the completion by the company of a satisfactory due diligence investigation regarding the assets to be purchased; (ii) obtaining all required third party and governmental consents, authorizations and licences required in connection with the proposed transaction and the operation of the proposed Saskatchewan cannabis store following the completion of the proposed transaction, including, without limitation, all consents, authorizations and licences required to be issued by the Saskatchewan Liquor and Gaming Authority (SLGA); and (iii) the approval of the TSX.
Subject to a satisfactory due diligence investigation, management of the company anticipates the closing of the proposed transaction to occur within five days of satisfaction of all conditions of closing to be set out in the definitive agreements pertaining to the proposed transaction, and is currently anticipated to occur in November, 2020.
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, Man., Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 cannabis store brand. Delta 9's shares trade on the Toronto Stock Exchange under the symbol DN and on the OTCQX under the symbol VRNDF.
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