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.