WINNIPEG, Sept. 19, 2019 /CNW/ - DELTA 9 CANNABIS INC. (TSX: DN) (OTCQX: VRNDF) ("Delta 9" or the "Company"), is pleased to announce that today it has entered into a binding letter of intent (the "LOI") to enter into a definitive agreement to acquire from Modern Leaf Group Inc. ("Modern Leaf Group") all or substantially all of Modern Leaf Group's assets located in the Province of Alberta relating to two proposed retail cannabis stores (the "Proposed Transaction"). The acquisition will be completed through the Company's wholly-owned subsidiary, Delta 9 Cannabis Store Inc., or one or more of its nominee(s).
"The proposed acquisition of these additional cannabis stores continues our strategy of establishing a chain of Delta 9 branded retail stores across Canada," said John, Arbuthnot, founder and CEO of Delta 9. "Following completion of this acquisition we will have a total of six operating retail stores in Western Canada and we are actively looking to increase this number as quickly as possible."
Delta 9 has now organized a dedicated team to assess retail expansion opportunities across Western Canada. Kronos Capital Partners acted as Financial Advisor to the Modern Leaf Group on the proposed transaction.
The purchase price for the Proposed Transaction is $1,300,000, subject to customary adjustments and other adjustments that may be determined necessary in the course of the Company's due diligence investigation respecting the Proposed Transaction (the "Purchase Price"). $1,000,000 of the Purchase Price will be satisfied through the issuance of 1,250,000 common shares in the capital stock of the Company (each a "Common Share") at a price per Common Share of $0.80 based on the closing market price of the Common Shares on the Toronto Stock Exchange ("TSX") on the date hereof. $150,000 of the Purchase Price will be paid as a deposit (the "Deposit") that is non-refundable except where the Proposed Transaction does not proceed due to the occurrence of certain events, or the discovery or disclosure of certain information, described in the LOI. If the Proposed Transaction proceeds, the Deposit will be applied against the Purchase Price, and the $150,000 balance of the Purchase Price will be satisfied in cash on the closing date of the Proposed Transaction.
The LOI and the Proposed Transaction are subject to, among other conditions: (i) the completion by the Company of a satisfactory due diligence investigation; (ii) the obtaining of all required third party and governmental consents, authorizations and licenses required in connection with the Proposed Transaction and the operation of the proposed Alberta cannabis stores following the Proposed Transaction, including, without limitation, all consents, authorizations and licenses required to be issued by Alberta Gaming, Liquor & Cannabis (AGLC); and (ii) 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 on or around November 30, 2019.
About Delta 9 Cannabis Inc.
Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. 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. Delta 9's shares trade on the Toronto Stock Exchange under the symbol "DN" and on the OTCQX under the symbol VRNDF. For more information, please visit www.delta9.ca.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) the Company's completion of a satisfactory due diligence investigation regarding the Proposed Transaction; (ii) all necessary regulatory approvals for the Proposed Transaction; (iii) the Company entering into a formal purchase agreement and closing the Proposed Transaction; and (iv) the Company's additional expansion plans. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including failure to receive all necessary approvals for new cannabis product offerings or new cannabis product offerings not being developed by Delta 9, as well as all risk factors set forth in the annual information form of Delta 9 dated April 30, 2019 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE Delta 9 Cannabis Inc.
For further information: Investor & Media Contact: Ian Chadsey VP Corporate Affairs, Mobile: 204-898-7722, E-mail: [email protected]