Red White & Bloom Provides Update Relating to Aleafia Health

Court approves RWB’s Stalking Horse Bid for purposes of Aleafia Health’s CCAA Sale and Investment Solicitation Process

TORONTO, Aug. 22, 2023 (GLOBE NEWSWIRE) -- Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF) (“RWB” or the “Company”) is providing an update on matters relating to Aleafia Health Inc. (“Aleafia Health”).

RWB is pleased to announce that the Ontario Superior Court of Justice (Commercial List) (the “Court”) has approved a stalking horse asset purchase and share subscription agreement (the “Stalking Horse Agreement”) pursuant to which RWB would acquire certain assets from Aleafia Health and subscribe for shares of certain subsidiaries of Aleafia Health if RWB becomes the successful bidder pursuant to the sale and investment solicitation process (“SISP”) also approved by the Court in connection with the proceedings (the “Aleafia CCAA Proceedings”) of Aleafia and certain of its subsidiaries (collectively, the “Aleafia Group”) under the Companies’ Creditors Arrangement Act (the “CCAA”).

As part of the Aleafia CCAA Proceedings, Aleafia obtained an order from the Court earlier today approving, among other things, (i) an extension of the stay period until October 31, 2023 (the “Stay Period”); (ii) the SISP submitted by the Aleafia Group and KSV Restructuring Inc. in its capacity as monitor in the Aleafia CCAA Proceedings (the “Monitor”); (iii) the Stalking Horse Agreement (solely for the purposes of being the stalking horse bid under the SISP (the “Stalking Horse Bid”)); and (iv) the preservation and maintenance of the Aleafia Group’s Health Canada and cannabis excise licences (the “Licences”) until the expiration of the Stay Period, including the ability of the Aleafia Group to sell cannabis in the ordinary course under the Licences and, to the extent any Licence may expire during the Stay Period, an extension of such Licence by a period equal to the Stay Period.

The Stalking Horse Agreement provides for a reverse vesting transaction whereby a wholly-owned subsidiary of RWB would subscribe for shares of Emblem Cannabis Corporation, Canabo Medical Corporation, Aleafia Farms Inc. and Aleafia Retail Inc. (collectively, the “Aleafia Purchased Entities”, with such shares being referred to as the “Purchased Shares”) and acquire specific intellectual property owned, licensed or leased by Aleafia Health (the “Purchased IP”). Certain excluded assets and liabilities of the Aleafia Purchased Entities would be transferred to one or more corporations that would not be included among the Aleafia Purchased Entities at closing. RWB’s subsidiary would be the sole shareholder of the Aleafia Purchased Entities following closing.