Christina Lake Cannabis Announces Acquisition Agreement and Financing

VANCOUVER, British Columbia, Feb. 05, 2024 (GLOBE NEWSWIRE) -- Christina Lake Cannabis Corp. (CSE: CLC) (OTCQB: CLCFF) (FRANKFURT:CLB), (the “Company” or “Christina Lake Cannabis” or “CLC”), a leading producer of high quality extracts and sun grown cannabis, today announced it has signed a definitive agreement ("Definitive Agreement") to acquire certain assets from a private British Columbia corporation (the "Vendor"). The proposed transaction includes acquiring ownership of outdoor cultivation facilities in Southern British Columbia, related harvesting and manufacturing equipment, and approximately 19,000 kg. of biomass (the "Transaction") for a total purchase price of $3,000,000 (the "Purchase Price"). The Transaction is expected to close on February 9, 2024, subject to completion of customary closing conditions.  

With this acquisition, the Company will expand its licensed outdoor cultivation footprint by approximately 100 acres. The first crop of propriety CLC strains will be planted in the spring of 2024. Enhancements to the Company’s processing infrastructure over the last 12 months ensures that the Company will be able to meet growing customer demand and handle the expanded cultivation capacity.

The Purchase Price for the proposed acquisition will be paid through the issuance of a secured convertible promissory note (“Note”). The Notes shall be secured by the land and buildings acquired in the Transaction. The Note bears interest at a rate of 10% per annum for year 1, 15% per annum for year 2, and 20% per annum for the remaining 3 years. Repayment of the Note shall be interest only payments paid annually on the anniversary dates for the first 24 months of the Term, then quarterly interest payments thereafter, and $1,000,000 principal repayments on or before each Anniversary Payment Date until the remaining principal amount of this Note is satisfied in full. Outstanding principal and unpaid interest from the Note will be convertible into common shares at a conversion price of $0.05 per common share during the Term. The Vendor shall have the right to convert the Note at any time, subject to a notice period. Additionally, the Company shall have the right to repay the Note at any time during the Term together with prepayment of any remaining interest payable under the Note.