WINNIPEG, Sept. 19, 2019 /CNW/ - PRESS RELEASE - Delta 9 Cannabis Inc. has announced that it has entered into a binding letter of intent (LOI) to enter into a definitive agreement to acquire from Modern Leaf Group Inc. all or substantially all of Modern Leaf Group's assets located in the Province of Alberta relating to two proposed retail cannabis stores. The acquisition will be completed through the company's wholly-owned subsidiary, Delta 9 Cannabis Store Inc., or one or more of its nominee(s).
"The proposed acquisition of these additional cannabis stores continues our strategy of establishing a chain of Delta 9 branded retail stores across Canada," said John, Arbuthnot, founder and CEO of Delta 9. "Following completion of this acquisition we will have a total of six operating retail stores in Western Canada and we are actively looking to increase this number as quickly as possible."
Delta 9 has now organized a dedicated team to assess retail expansion opportunities across Western Canada. Kronos Capital Partners acted as financial advisor to the Modern Leaf Group on the proposed transaction.
The purchase price for the proposed transaction is $1,300,000, subject to customary adjustments and other adjustments that may be determined necessary in the course of the company's due diligence investigation respecting the proposed transaction. $1,000,000 of the purchase price will be satisfied through the issuance of 1,250,000 common shares in the capital stock of the company at a price per common share of $0.80 based on the closing market price of the common shares on the Toronto Stock Exchange (TSX) on the date hereof. $150,000 of the purchase price will be paid as a deposit that is non-refundable except where the proposed transaction does not proceed due to the occurrence of certain events, or the discovery or disclosure of certain information, described in the LOI. If the proposed transaction proceeds, the deposit will be applied against the purchase price, and the $150,000 balance of the purchase price will be satisfied in cash on the closing date of the proposed transaction.
The LOI and the proposed transaction are subject to, among other conditions: (i) the completion by the company of a satisfactory due diligence investigation; (ii) the obtaining of all required third party and governmental consents, authorizations and licenses required in connection with the proposed transaction and the operation of the proposed Alberta cannabis stores following the proposed transaction, including, without limitation, all consents, authorizations and licenses required to be issued by Alberta Gaming, Liquor & Cannabis (AGLC); and (ii) 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 on or around Nov. 30, 2019.