WINNIPEG, Manitoba, Oct. 19, 2020 (GLOBE NEWSWIRE) -- DELTA 9 CANNABIS INC. (TSX: DN) (OTCQX: VRNDF) (“Delta 9” or the “Company”) is pleased to announce that it has entered into an asset purchase agreement (the “ Purchase Agreement ”) to acquire from Auxly Cannabis Group Inc. and Kolab Project Inc. (collectively the “ Vendors ”) all or substantially all of the Vendors’ assets relating to the operation of a retail cannabis store in Lloydminster, Saskatchewan (the “ Proposed Transaction ”). The acquisition is anticipated to be completed through the Company’s wholly-owned subsidiary, Delta 9 Cannabis Store Inc.
“We are pleased to be again working with Auxly on another mutually beneficial arrangement, this time directly in the retail cannabis sector,” said John Arbuthnot, founder and CEO of Delta 9. “The proposed acquisition will represent Delta 9’s entry into the Saskatchewan retail market, allowing Delta 9 to further grow its brand for retail cannabis products across the country.”
Hugo Alves, CEO of Auxly, added: “The sale of our Lloydminster cannabis store enables us to further prioritize and reinforce our efforts in our core business of developing and manufacturing high-quality, branded cannabis products. As one of our long-standing partners, we couldn’t be more confident that Delta 9 is the perfect fit to support and continue to supply consumers in the Saskatchewan community.”
The purchase price for the Proposed Transaction is $875,000, subject to customary adjustments and other adjustments that may be determined necessary in the course of the Company’s due diligence investigation with respect to the Proposed Transaction (the “ Purchase Price ”). $750,000 of the Purchase Price will be satisfied through the issuance of common shares in the capital stock of the Company (each a “ Common Share ”) at a price per Common Share based on the 15-day volume weighted average price per Common Share on the Toronto Stock Exchange (“ TSX ”) as at the closing date for the Proposed Transaction. The $125,000 balance of the Purchase Price will be satisfied in cash on the closing date of the Proposed Transaction.
The Purchase Agreement and the Proposed Transaction are subject to, among other conditions: (i) the completion by the Company of a satisfactory due diligence investigation regarding the assets to be purchased; (ii) obtaining all required third party and governmental consents, authorizations and licenses required in connection with the Proposed Transaction and the operation of the proposed Saskatchewan cannabis store following the completion of the Proposed Transaction, including, without limitation, all consents, authorizations and licenses required to be issued by the Saskatchewan Liquor and Gaming Authority (SLGA); and (iii) 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 within 5 days of satisfaction of all conditions of closing to be set out in the definitive agreements pertaining to the Proposed Transaction, and is currently anticipated to occur in November 2020.
For more information contact:
Investor & Media Contact:
Ian Chadsey VP Corporate Affairs
Mobile: 204-898-7722
E-mail: ian.chadsey@delta9.ca
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. The company sells cannabis products through its wholesale and retail sales channels and sells its cannabis grow pods to other businesses. 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 t o: (i) the Company's completion of a satisfactory due diligence investigation regarding the Proposed Transaction ; (ii) all necessary regulatory approvals for the Transaction being obtained; and (iii) the Company closing the Proposed Transaction. 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 the risk that the necessary regulatory approvals are not obtained and the Proposed Transaction does not close as well as all risk factors set forth in the annual information form of Delta 9 dated March 19, 2020 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.
