The strategic acquisitions of the Cannabis Retailer Canndara and 50% of the Delta West extraction facility position Westleaf for future growth
CALGARY, Feb. 1, 2019 /CNW/ - Westleaf Inc. (TSX-V: WL) ("Westleaf"), is pleased to announce the closing of two recently announced acquisitions, which support its strategy of acquiring premium assets across the cannabis value chain. The transactions were previously announced on January 24, 2019 and January 28, 2019, respectively.
Closing of Option – Canndara Canada Inc. ("Canndara") Westleaf has closed the acquisition of all the issued and outstanding shares of Canndara, for an aggregate purchase price of $48.4 million. The purchase price was paid by the issuance of an aggregate of 21,641,407 common shares in the capital of Westleaf ("Common Shares") at a deemed value of $2.24 per Common Share. The transaction includes maintaining Canndara's founders as part of the senior management team, each having entered into a voluntary 24-month pooling agreement, whereby an aggregate of 7,727,236 Common Shares are held in escrow and are releasable in quarterly installments on July 31, 2019, January 31, 2020, July 31, 2020 and January 31, 2021. In addition, an aggregate of 21,570,120 Common Shares, issued to former Canndara Shareholders, and the 1,080,720 Common Shares, issued in payment of a finder's fee, are not transferrable until May 31, 2019.
Closing of Definitive Agreement – Delta 9 Cannabis Inc. ("Delta 9") Westleaf has also closed its previously announced acquisition of Delta 9's 50% interest in the Delta West extraction facility, bringing Westleaf's total ownership to 100% (the "Delta 9 Closing"). The purchase price was paid by way of the payment of $1.00 and the issuance of an aggregate of 5,600,000 Common Shares to Delta 9 that, based on the closing price of the Common Shares on the TSX Venture Exchange of $2.67 per Common Share on January 25, 2019, represents an aggregate purchase price of approximately $14.95 million. In connection with the Delta 9 Closing, Delta 9 entered into a voluntary escrow agreement, that in addition to the four month restricted period required by law, restricts the transfer of: (i) 1,000,000 Common Shares until May 31, 2019; and (ii) 4,600,000 Common Shares until September 30, 2019.
About Westleaf Inc.
Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national footprint for its retail concept Prairie Records, with upwards of 50 stores planned for British Columbia, Alberta, Saskatchewan and potentially Ontario through the end of 2020. Westleaf also has two large scale production facilities under construction and scheduled for completion in 2019. For more information, please visit www.westleaf.com or www.prairierecords.ca.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. This news release, forward-looking statements relate, among other things, to: (i) the development of retail cannabis stores and the business and operations of the Westleaf; (ii) the number of retail locations Westleaf expects to have by the end of 2020; (iii) the scheduled completion date of Westleaf's facilities. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder, court or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.