WINNIPEG, Jan. 28, 2019
/CNW/ - DELTA 9 CANNABIS INC. (TSXV: NINE) ("Delta 9" or the
"Company") is pleased to announce that it has entered into a
definitive agreement ("Definitive Agreement") to sell
its 50% interest in the Delta West extraction facility to Westleaf
Inc. (TSX-V: WL) ("Westleaf"). Under the Definitive Agreement,
Westleaf has agreed to issue an aggregate of 5,600,000 common
shares in the capital of Westleaf ("Westleaf Shares") in
consideration for the acquisition of Delta 9's 50% interest in the
project (the "Purchase Price"). Closing of the transaction
is expected to occur on or about January 31,
2019 ("Closing").
"We feel that this transaction creates significant value for
Delta 9 and its shareholders, representing a substantial return on
our original investment in the Delta West facility" said
John Arbuthnot, CEO of Delta 9.
"This move will allow us to streamline our allocation of capital
and allow Delta 9 to focus on continued expansion of our
Winnipeg based cultivation
facilities, continued expansion of our Delta 9 Cannabis Stores
unit, and allow us to explore other strategic investments in the
industry."
Transaction Summary
Under the Definitive Agreement, Westleaf will purchase Delta 9's
50% interest in the Delta West Limited Partnership (the
"Partnership"), which owns the Delta West extraction
facility. The Purchase Price is payable by way of the issuance of
an aggregate of 5,600,000 Westleaf Shares which, based on the
closing price of the Westleaf Shares on the TSX Venture Exchange
("TSXV") of $2.67 per Westleaf
Share on January 25, 2019, represents
approximately $14.95 million. It is a
condition to Closing that Delta 9 enter into a voluntary escrow
agreement that, in addition to the four month restricted period
required by law, will restrict the transfer of the Westleaf Shares
issuable under the Definitive Agreement as to: (i) 1,000,000
Westleaf Shares for a four (4) month period following Closing; and
(ii) 4,600,000 Westleaf Shares for an eight (8) month hold period
for Closing.
Completion of the transaction is subject to certain conditions
and the receipt of all required regulatory and third party
approvals, including the approval of the TSXV.
About Delta 9 Cannabis Inc.
Delta 9 Cannabis 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 marijuana pursuant to the ACMPR
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 TSX Venture Exchange under the symbol "NINE" and on the OTC
under the symbol VRNDF. For more information, please visit
delta9.ca.
Neither the 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.
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 closing of the sale of Delta 9's interest in the
Partnership and receipt of all required approvals; and (ii) Delta
9's 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 that all approvals for the transaction may
not be obtained, as well as all risk factors set forth in the
annual information form of Delta 9 dated May 31,
2018 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.
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SOURCE Delta 9 Cannabis Inc.