VANCOUVER and DENVER – March 13, 2019 – Cannabis One Holdings Inc. (CSE:CBIS) (“Cannabis One” or the “Company“), an emerging, premier “House of Brands” in North America, is pleased to announce that effective March 5, 2019, it has executed a letter of intent (the “LOI“) to acquire majority ownership in California license holder, “420 Express Delivery Inc.” (the “Licensed Entity“), which operates, “Green Leaf Wellness”, a dispensary located in the Coachella Valley of California (the “Licensed Premises“), from Liht Cannabis Corp. (CSE:LIHT) (“Liht Cannabis“), a publicly-listed entity trading on the Canadian Securities Exchange (the “CSE“). Following the closing of the transaction (the “Closing“), it is the intention of the Company and Liht Cannabis to rebrand the operating entity, “Green Leaf Wellness”, under the banner of the Company’s retail concept The JointTM. The Company anticipates that this acquisition will provide Cannabis One, along with its unique branded products and retail presence, a foothold in the California market from which it may launch its proposed expansion, with a management-projected target of four (4) additional The JointTM locations in the state and a further twenty (20) The JointTM locations planned to arrive in state-legal jurisdictions across the U.S. in 2019, to complement this first transaction.
Following the execution of the LOI, Cannabis One CEO, Jeffery Mascio commented, “The Cannabis One team is pleased by this exciting opportunity to enter the California market and we believe this acquisition positions our company exceptionally well to promote the expansion of our portfolio of brands within one of the world’s most vibrant markets.” Mr. Mascio continued, “While we are naturally excited to introduce California to our The JointTM retail experience — named among LeaflyTM’s top Colorado picks for several years running — and to roll-out our INDVRTM line of vaporizer products across the state, we also view this acquisition as a significant milestone for Cannabis One that now allows us to advance our partnerships within the California cannabis manufacturing and distribution space for exciting new strategic relationships.”
Under the terms of the LOI, consideration for the transaction will consist of the rebranding of the Licensed Premises, valued at US$250,000, under Cannabis One’s The JointTM banner, which is mutually-agreed to commence in the weeks following Closing; and US$350,000 in Class A subordinated voting shares of Cannabis One (“CBIS Shares“), such that the valuation for such CBIS Shares be equal to the greater of: (1) the ten (10) day volume weighted average price (“VWAP“) for the period immediately trailing the execution of the definitive agreement (the “Definitive Agreement“), with a 10% discount applied to the VWAP; and (2) a 15% discount applied to the closing price of CBIS Shares immediately prior to this press release. CBIS Shares issued as consideration to Liht Cannabis shall be subject to a twelve (12) month contractual trading restriction following the date of issuance. Additionally, Cannabis One retains a right-of-first-refusal to purchase the remaining 49.0% of the Licensed Entity and related assets at fair market value in exchange for CBIS Share and/or cash consideration for a period of five (5) years immediately following Closing. The Closing remains subject to customary due diligence for a transaction of this nature and execution of the Definitive Agreement to acquire an interest in the Licensed Entity.
Rahim Mohamed, CEO of Liht Cannabis Corp., remarked, “Liht Cannabis welcomes one of Colorado’s most experienced cannabis industry teams to the California retail market and is thrilled to partner with Cannabis One for its first The JointTM corporate location in the state. We believe that Cannabis One’s track record of success and excellence, combined with its management team and board of directors’ extensive retail experience will be mutually-beneficial for LIHT and CBIS — Driving shareholder value for both enterprises.”
About Cannabis One
IF WE BRAND IT, THEY WILL COME – Cannabis One Holdings Inc. (CSE:CBIS) is focused on aggregating and optimizing popular cannabis brands throughout North America. With its unique, franchise-ready retail brand, The JointTM, and through targeted acquisition and partnership opportunities, Cannabis One intends to become the premier, globally-recognized, “House of Brands”, holding a client portfolio of award-winning products with an extensive market footprint. Through the Company’s The JointTM retail concept, Cannabis One intends to leverage the consumer and brand data harvested from its retail locations to bring data-driven analytics to an emerging, branded industry. For consumers, Cannabis One desires to become the definitive source for unparalleled product selection and renowned service in an otherwise fragmented market.
Disclaimer and Forward-Looking Information
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “anticipate”, “could”, “intend”, “expect”, “believe”, “will”, “projected”, “potential”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. These statements are only predictions. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Forward looking statements include, but are not limited to: the entering into of the Definitive Agreement; the planned expansion of the Company’s operations and product offerings; and receipt of conditional approval of the CSE. The Company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
The forward-looking information contained in this release is made as of the date hereof and the parties are not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Cannabis is legal in certain States in the United States (“U.S.“), however cannabis remains illegal under U.S. federal laws. The U.S. Department of Justice issued guidance in 2013 indicating that it will focus on certain enforcement priorities, outside of which it will generally not enforce federal prohibitions on cannabis in U.S. states that have authorized this conduct so long as the U.S. state has implemented a strong and effective regulatory program. This federal guidance is subject to change, rescission or alteration by other federal government policy pronouncements at any time. Cannabis One intends to conduct its U.S. cannabis operations in a manner consistent with the applicable State laws is in compliance with regulatory and licensing requirements applicable in the applicable State. However, the readers should be aware that change in federal guidance on enforcement actions could adversely affect Cannabis One’s ability to access private and public capital required in order to support continuing operations and its ability to operate in the U.S.
Unlike in Canada which has Federal legislation uniformly governing the cultivation, distribution, sale and possession of medical cannabis under the Cannabis Act (Federal), readers are cautioned that in the U.S., cannabis is largely regulated at the State level. To the knowledge of Cannabis One, there are to date a total of 33 states, plus the District of Columbia, that have legalized cannabis in some form. Notwithstanding the permissive regulatory environment of medical cannabis at the State level, cannabis continues to be categorized as a controlled substance under the Controlled Substances Act in the U.S. and as such, cannabis-related practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of cannabis are illegal under U.S. Federal law. Strict compliance with State laws with respect to cannabis will neither absolve Cannabis One of liability under the U.S. Federal law, nor will it provide a defense to any Federal proceeding, which may be brought against Cannabis One. Any such proceedings brought against Cannabis One may materially adversely affect its operations and financial performance in the U.S. market.
Further Information: For investment inquiries, please contact Scott Koyich, Investor Relations at Scott@briscocapital.com or (403) 619-2200.