/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
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WINNIPEG, July 17, 2019 /CNW/ - Delta 9 Cannabis
Inc. ("Delta 9" or the "Company") (TSXV: NINE) (OTCQX:
VRNDF) is pleased to announce the closing (the "Closing") of
its previously announced public offering (the "Offering") of
convertible debenture units of the Company (the "Debenture
Units") for aggregate gross proceeds of $11,800,000. The Offering was led by Mackie
Research Capital Corporation and Canaccord Genuity Corp. (together,
the "Agents").
The net proceeds received by Delta 9 from the Offering will be
used for capital expenditures related to the expansion of Delta 9's
production facility, capital expenditures relating to new retail
cannabis stores and for general corporate and working capital
purposes.
"Closing of this debenture financing allows Delta 9 to continue
to expand on our vertically integrated business model" said
John Arbuthnot, CEO of Delta 9. "Our
diversified revenue model has demonstrated success over the first
eight months of legalization. We will feel confident that our
continued focus on execution will create value for our shareholders
over the long term."
Each Debenture Unit consists of one $1,000 principal amount of 8.5% unsecured
convertible debenture (the "Convertible Debentures")
maturing three years from the date of issuance and 826 common share
purchase warrants of the Company (the "Warrants"). The
Convertible Debentures shall bear interest at a rate of 8.5% per
annum from the date of issue, payable semi-annually in arrears on
the last day of June and December in each year and will mature 36
months from the date of issuance (the "Maturity Date"). The
principal amount of each Convertible Debenture is convertible, for
no additional consideration, into common shares of the Company
("Common Shares") at the option of the holder at any time
prior to the earlier of: (i) the close of business on the Maturity
Date; and (ii) the business day immediately preceding the date
specified by the Company for redemption of the Convertible
Debentures upon a change of control at a conversion price equal to
$1.21 (the "Conversion
Price"), subject to certain adjustment and acceleration
provisions.
Each Warrant entitles the holder thereof to purchase one Common
Share at an exercise price of $1.33
at any time up to 36 months following Closing. Provided that if, at
any time prior to the expiry date of the Warrants, the volume
weighted average trading price of the Common Shares on the TSX
Venture Exchange ("TSXV") is greater than $2.33 for 20 consecutive trading days, the
Company may, within 10 business days of the occurrence of such
event, deliver a notice to the holders of Warrants accelerating the
expiry date of the Warrants to the date that is 30 days following
the date of such notice (the "Accelerated Exercise Period").
Any unexercised Warrants shall automatically expire at the end of
the Accelerated Exercise Period.
Pursuant to the terms of the Agency Agreement, the Company paid
the Agents a cash commission equal to 7.0% of the gross proceeds of
the Offering, and issued to the Agents 682,276 non-transferable
warrants (the "Broker Warrants") of the Company, with each
Broker Warrant exercisable, for a period of 36 months from the date
of Closing, into a Common Share at an exercise price equal to the
Conversion Price.
The Offering is subject to the final approval of the TSXV. The
TSXV has conditionally approved the Offering and the listing of the
Convertible Debentures and Warrants. It is expected that the
Convertible Debentures and Warrants will commence trading on the
TSXV within two or three trading days under the trading symbols
"DN.DB" and "DN.WT.A", respectively. On the same date, the trading
symbol for the Common Shares will change from "NINE" to "DN" and
the trading symbol for Delta 9's existing listed warrants will
change from "NINE.WT" to "DN.WT".
The Offering was made pursuant to a short-form prospectus filed
in each of the provinces of Canada
(except Québec), and otherwise by private placement exemption in
those jurisdictions where the Offering can lawfully be made,
including the United States. Neither the Debentures Units
(and the Convertible Debentures and the Warrants forming part of
the Debenture Units) have been or will be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and such
securities may therefore not be offered or sold in the United States or to or for the account or
benefit of a person in the United
States or a U.S. Person (as defined in Regulation S of the
U.S. Securities Act) absent registration or an exemption from the
registration requirements of the U.S. Securities Act and in
accordance with applicable state securities laws. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the Debenture
Units in any jurisdiction in which such offer, solicitation or sale
would be unlawful. A copy of the short form prospectus dated
July 8, 2019 is available under the
Company's profile on SEDAR at www.sedar.com.
About Delta 9:
Delta 9 Cannabis is a vertically integrated cannabis company
focused on bringing the highest quality cannabis products to
market. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc.,
is a licensed producer of medical marijuana pursuant to the ACMPR
and operates an 80,000 square foot production facility in
Winnipeg, Manitoba, Canada. Delta
9 owns and operates a chain of retail stores under the Delta 9
Cannabis Store brand. Delta 9's shares currently trade on the TSX
Venture Exchange under the symbol "NINE" and on the OTC under the
symbol VRNDF.
For more information, please visit delta9.ca
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward Looking Statements
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the Company's future business plans and other matters. Such
forward-looking statements include, without limitation, the
Company's proposed use of the net proceeds of the Offering and the
listing of the Convertible Debentures and Warrants on the TSXV.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. No
assurance can be given that any of the events anticipated by the
forward-looking statements will occur or, if they do occur, what
benefits the Company will obtain from them. Readers are urged to
consider these factors carefully in evaluating the forward-looking
statements contained in this news release and are cautioned not to
place undue reliance on such forward-looking statements, which are
qualified in their entirety by these cautionary statements. These
forward-looking statements are made as of the date hereof and the
Company disclaims any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
SOURCE Delta 9 Cannabis Inc.