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WINNIPEG, Feb. 16, 2018 /CNW/ - The Manitoba government today announced that an opportunity to legally retail recreational cannabis in the
province has conditionally been awarded to a consortium consisting of Delta 9 Cannabis Inc. (TSXV: NINE) ("Delta 9" or the
"Company") and Canopy Growth Corporation (WEED: TSX), ("Canopy Growth").
The issuance of the license is contingent on the signing of a formal agreement with the provincial government, which include
meeting a series of conditions attached to the retail licensing process.
The license would authorize the Delta 9/Canopy Growth partners to build and operate a chain of retail stores throughout the
Province of Manitoba. The first location for Delta 9 has already been constructed in the Osborne
Village area of Winnipeg, and has been operating for several months as a resource centre and
clinic. That location will become the first of many more stores, says Company CEO John
Arbuthnot.
"It is hard to overstate how important this award is for our company, our shareholders, and for the future of the legal
cannabis industry in Manitoba," Arbuthnot said. "As the only Manitoba producer licensed to sell cannabis, and partnered with the world's largest cannabis company, we
feel we are uniquely situated to serve the Manitoba market with both quantity and quality of
product."
Delta 9 management estimates the provincial cannabis market at $300 to $500 million annually. "Having one of only four retail licenses in this market, combined with what we feel is
our unmatched ability to address that market, is a huge advantage for Delta 9, and should prove to be a great boon for our
shareholders," Arbuthnot said.
Arbuthnot says the agreement with Canopy Growth was reached as part of the Company's commitment to adequately supply the
Manitoba market. The Company has also accelerated its own expansion of its production facility
in Winnipeg following the closing in December 2017 of a
$23 million short form prospectus bought deal offering led by Canaccord Genuity Corp.
Delta 9 is pleased to announce the construction project is coming in significantly under budget, with the cost per grow pod
dropping from approximately $40,000 to approximately $28,000. The
Company now believes that it is fully funded to build 600 of its self-designed 'grow pods', estimated to increase cannabis
production to approximately 17,500 kilograms annually.
"We've committed to producing a baseline amount of product for the Manitoba market, and we
are confident we can achieve those numbers," said Arbuthnot. "However, we would like to exceed those projections in order to not
only meet demand in Manitoba, but also meet or exceed our commitments to national sales under
our previously announced CraftGrow agreement with Canopy Growth."
Additionally, Delta 9 products will be distributed through Canopy Growth outlets in other provinces, and through the Tweed
Main Street online sales portal (tweedmainstreet.com).
As responsible existing cannabis businesses, Delta 9 and Canopy Growth plan to work collaboratively within the proposed
Manitoba framework to bring locally produced products as well as the best variety from across
the country to future cannabis consumers throughout the province.
About Delta 9 Cannabis Inc.
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's shares trade on the TSX Venture Exchange under the symbol "NINE".
About Canopy Growth Corporation.
Canopy Growth is a world-leading diversified cannabis company, offering distinct brands and curated cannabis varieties
in dried, oil and capsule forms. Through its wholly-owned subsidiaries, Canopy Growth operates numerous state-of-the-art
production facilities with over 700k sq. ft. of licensed production, over 500k sq. ft. of which is GMP-certified.
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) Delta 9's and Canopy Growth's expansion plans; (ii) Delta 9's
production of cannabis; (iii) demand for Delta 9's products; (iv) the estimated size of the Manitoba cannabis market; and (v) Delta 9's cost to produce its grow pods. 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 Delta 9's currently contemplated expansion and development plans may cease or otherwise change,
Delta 9's production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada,
demand for Delta 9's products may be lower than anticipated, Delta 9's cost to produce its grow pods may be higher than expected
and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017
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.
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