Delta 9 Enters Into Agreement to Acquire Saskatchewan Retail Cannabis Store

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.