TORONTO, May 19, 2020 /CNW/ - Cannabis Growth Opportunity Corporation ("CGOC", or the "Company") (CSE: CGOC), a cannabis focused investment corporation with both public and private cannabis holdings, is pleased to announce that the Company has completed its investment in Grown Rogue International Inc. (CSE: GRIN) ("Grown Rogue"), as initially announced on February 10, 2020. Grown Rogue is a vertically-integrated, multi-state operator, cannabis company with operations in Oregon, California and Michigan.
Pursuant to a subscription agreement, CGOC had committed to invest up to a total of Cdn. $1,500,000 in Grown Rogue though a non-brokered private placement offering (the "Offering") of units (the "Units"), at a price of Cdn. $0.10 per Unit. Each Unit is comprised of one common share (the "Grown Rogue Shares") and one common share purchase warrant (the "Grown Rogue Warrants") in the capital of Grown Rogue. On February 10, 2020, the Company completed an initial investment of Cdn. $500,000 in Grown Rogue and purchased a total of 5,000,000 Units. Furthermore, CGOC had agreed to complete the remaining Cdn. $1,000,000 investment upon the satisfaction of certain corporate milestone events by Grown Rogue.
On May 15, 2020, CGOC completed its remaining Cdn. $1,000,000 investment in Grown Rogue and purchased an additional 10,000,000 Units, at a price of Cdn. $0.10 per Unit. Each Warrant entitles CGOC to purchase one additional Grown Rogue Share for a period of 24 months from the date of issuance at an exercise price of Cdn. $0.13 per share. Furthermore, Grown Rogue may accelerate the expiration date of the Grown Rogue Warrants to a period of 30 days following written notice to the Company in the event that the Grown Rogue Shares close at or above Cdn. $0.25 per share for a period of 10 consecutive trading days on the Canadian Securities Exchange. Proceeds from the Offering are intended to be used by Grown Rogue for general corporate purposes. In connection with the Offering, Grown Rogue has agreed to provide CGOC with a pre-emptive right to participate in future offerings of Grown Rogue securities in order to maintain its respective percentage of ownership at the time of such offering. In addition, Grown Rogue has agreed to nominate one board member of Grown Rogue as recommended by CGOC at future shareholder meetings and the ability, if the Company does not have its nominee on Grown Rogue's board of directors, to appoint a board observer.
Sean Conacher, Chief Executive Officer of CGOC, commented, "We are thrilled to be increasing our investment in Grown Rogue and to be supporting them in their continued success. They are operationally among the best-in-class and we salute them on their progress and accomplishments thus far in Michigan where we believe there is an opportunity for Grown Rogue to establish significant market share."
All securities issued pursuant to the Offering are subject to a mandatory hold period of four months and a day under applicable Canadian securities laws.
Early Warning Disclosure Pursuant to National Instrument 62-103
Prior to the completion of the Offering, CGOC held 20,000,000 Grown Rogue Shares and 5,000,000 Grown Rogue Warrants. As of the date hereof, after giving effect to the Offering, the Company beneficially owns or controls 30,000,000 Grown Rogue Shares and 15,000,000 Grown Rogue Warrants, representing approximately 28.19% of the issued and outstanding Grown Rogue Shares on a non-diluted basis and approximately 37.06% of the issued and outstanding Grown Rogue Shares on a partially diluted basis, assuming the exercise of all of the Grown Rogue Warrants by the Company.
The Grown Rogue Shares and the Grown Rogue Warrants were acquired for investment purposes. While Company currently has no plans or intentions with respect to the Grown Rogue securities, the Company may from time to time acquire additional securities of Grown Rogue, may sell all or a portion of its securities of Grown Rogue or may continue to hold the Grown Rogue Shares and Grown Rogue Warrants, or other securities of Grown Rogue, depending on market conditions, the Company's view of Grown Rogue's prospects, other investment opportunities and other factors considered relevant the Company.
A copy of the early warning report to be filed by the Company will be available under Grown Rogue's issuer profile on SEDAR at www.sedar.com or by contacting Sean Conacher, CEO at (647) 660-0566. The Company's head office is located at 240 Richmond Street West, Suite 4163, Toronto, Ontario, M5V 1V6.
About Grown Rogue
Grown Rogue (CSE: GRIN) is a vertically-integrated, multi-state cannabis family of brands on a mission to inspire consumers to "enhance experiences" through cannabis. Grown Rogue has combined an expert management team, award winning cultivation team, state of the art indoor and outdoor manufacturing facilities, and consumer insight-based product categorization, to create innovative products thoughtfully curated from "seed to experience". The Grown Rogue family of products includes sun-grown and indoor premium flower, patented nitrogen sealed pre-rolls along with chocolate edibles featuring a partnership with a world‐renowned chocolatier.
CGOC is an investment corporation that offers unique global exposure to the emerging global cannabis sector. CGOC's main objective is to provide shareholders long-term total return through its actively managed portfolio of securities, both public and private, operating in, or that derive a portion of their revenue or earnings from products or services related to the cannabis industry.
This press release contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated in those forward-looking statements and information. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: risks associated with the Company's business plan and matters relating thereto, and risks associated with the Company's investments and financial objectives, as well as other risks and uncertainties, including but not limited to those detailed from time to time in the Company's public filings on SEDAR. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
SOURCE Cannabis Growth Opportunity Corporation
For further information: Please contact Cannabis Growth Opportunity Corporation: Sean Conacher, CEO, Tel: (647) 660-0566; Website - www.cgocorp.com; Investor Relations - Email: [email protected]