Wildflower Brands and City Cannabis Sign Definitive Agreement Forming Multi-Country Multi-State-Operator
May 28th, 2019
News, Top News
VANCOUVER, British Columbia, May 28, 2019 (GLOBE NEWSWIRE) — Wildflower Brands Inc. (CSE: SUN, OTC: WLDFF) (the “Company” or “Wildflower”) announces that it has executed a share purchase agreement (the “Definitive Agreement”) with City Cannabis Corp. (“City Cannabis”) to acquire all of the issued and outstanding shares of City Cannabis (the “Acquisition”).
When the Acquisition was first announced, City Cannabis owned and operated two of only three licenced dispensaries in Vancouver. Its third location, on Vancouver’s Cambie Street, is currently under construction. A fourth location in Comox, which has received approval in principle from the Government of British Columbia, is expected to open this summer. City Cannabis holds nine leases that are at various stages in the regulatory licencing process. Management also continues to look at locations across the country for potential locations.
William MacLean, Chief Executive Officer of Wildflower, says, “City Cannabis is no doubt the fastest growing multiple location cannabis retailer in British Columbia. The team has demonstrated their ability to find the best locations, but more importantly, the knowledge and ability to work with regulators at all levels has meant success in licencing that is unmatched. We look forward to completing the acquisition and bringing together two phenomenal companies.”
Krystian Wetulani, Chief Executive Officer of City Cannabis, says, “This is an exciting moment for everyone and we are thrilled to be joining the Wildflower team. We believe Wildflower’s branding and marketing expertise will drive growth once City Cannabis is integrated, resulting in significant long-term value to Wildflower shareholders.”
The Acquisition strengthens Wildflower’s status as a leading brand-focused cannabis company and will be valuable in establishing a more dominant brand position in the retail market. The Company believes that City Cannabis’ assets are a natural fit for Wildflower to expand its presence into the Canadian cannabis market and brings together top-tier management teams with proven expertise in all critical cannabis verticals coupled with horizontal diversification.
Consideration for the Acquisition consists of 60 million common shares of the Company at a deemed price of $0.75 per common share (the “Consideration Shares”). The majority shareholders of City Cannabis representing 60% of the City Cannabis shares have agreed to have their shares subject to a three-year escrow release in accordance with National Policy 46-201 – Escrow for Initial Public Offerings. Upon closing of the Acquisition, Wildflower intends to appoint Krystian Wetulani as a Director and Chief Development Officer.
The board of directors of Wildflower has relied on a fairness opinion provided by GMP Securities L.P. (“GMP”) stating that, in GMP’s opinion and based upon and subject to the assumptions, limitations, and qualifications set forth therein, the consideration to be paid by Wildflower pursuant to the Acquisition is fair, from a financial point of view, to the Company.
The board of directors of Wildflower (acting through its sole independent director for purposes of the Acquisition) has approved the Acquisition and the board of directors of Wildflower unanimously recommends that all Wildflower shareholders vote in favour of the Acquisition at the annual general and special meeting of its shareholders to be held on June 26, 2019.
Pursuant to the terms of the Definitive Agreement, the closing of the Acquisition is subject to a number of conditions including, among other things, obtaining the requisite shareholder approvals and the listing of the Consideration Shares on the Canadian Securities Exchange. Wildflower is holding an annual general and special meeting of its shareholders on June 26, 2019 to consider the Acquisition. In order for the Acquisition to proceed, it must be approved by a simple majority of the votes cast by shareholders, excluding the votes of common shares held or controlled by “interested parties” as defined under the rules of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. Full details of the Acquisition will be included in the management information circular to be prepared by Wildflower and mailed to shareholders in connection with Wildflower’s annual general and special meeting. All other relevant and publicly disclosable materials will be filed by Wildflower on www.sedar.com.
ABOUT CITY CANNABIS
City Cannabis is a cannabis retailer holding two of the six City of Vancouver licences to sell cannabis and the first company to obtain multiple licences in the Province of British Columbia. City Cannabis has been profitably operating various dispensaries in Vancouver since Vancouver commenced licensing cannabis retailers. British Columbia is the heart of cannabis country in Canada, with a long history of cannabis production and consumption. As part of City Cannabis’s strategy, it is looking for premier locations to operate in. Its Robson and Granville location is the premier location in Western Canada, located at the junction of the Entertainment District and Shopping District of downtown Vancouver.
Wildflower Brands is a Vancouver-based company developing and designing brands that focus on plant-based health and wellness products. All of our brands work in synergy, toward becoming a global wellness leader.
The Acquisition is anticipated to close on June 28, 2019. A copy of the Definitive Agreement will be available under Wildflower’s profile on SEDAR at www.sedar.com.
The securities to be issued in connection with the Acquisition have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. 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 securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Completion of the Acquisition is subject to a number of conditions, including but not limited to, the listing of the Consideration Shares on the Canadian Securities Exchange, requisite shareholder approvals, and disinterested shareholder approval. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular of the Company to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Wildflower should be considered highly speculative.
Cautionary and Forward-Looking Statements
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as “appear”, “seek”, “anticipate”, “plan”, “continue”, “estimate”, “approximate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the cannabis industry in general such as operational risks in growing; competition; incorrect assessment of the value and potential benefits of the Acquisition; ability of City Cannabis to obtain additional licences; the successful integration of City Cannabis with Wildflower; ability of Wildflower to expand its presence in the Canadian cannabis market; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws and government regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.
The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Canadian Securities Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
The Canadian Securities Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.
For more information about Wildflower Brands, visit wildflowerbrands.co. To learn, engage and shop our wellness products visit buywildflower.com.
Investor Relations Contact:
Will Elston, Investor Relations
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