Delta 9 Enters into Binding Letter of Intent to Acquire Two Alberta Retail Stores

Delta 9 announced that they have entered into a binding letter of intent to enter into a definitive agreement to acquire from Modern Leaf Group Inc. Modern Leaf Group 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).

Delta 9 Cannabis Inc. 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 and recreational cannabis 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 trade on the Toronto Stock Exchange under the symbol TSX: DN and on the OTCQX: VRNDF.

“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 (the “Purchase Price”). $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 (each a “Common Share”) 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 (the “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.