6-K
Curaleaf Holdings, Inc. (CURLF)
UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 2021.
Commission File Number: 333-249081
CURALEAF HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
666 Burrard Street, Suite 1700, Vancouver, British Columbia V6C 2X8
Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ¨ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CURALEAF HOLDINGS, INC. | ||
|---|---|---|
| (Registrant) | ||
| Date: April 8, 2021 | By: | /s/ Peter Clateman |
| --- | --- | --- |
| Name: | Peter Clateman | |
| Title: | Chief Legal Officer |
EXHIBIT INDEX
| 99.1 | Press Release dated April 5, 2021 |
|---|---|
| 99.2 | Press Release dated April 7, 2021 |
| 99.3 | Form 9 Notice of Issuance or Proposed Issuance of Listed Securities<br> dated April 7, 2021 |
Exhibit 99.1
Curaleaf AnnouncesNew Branding for Illinois Retail Locations, Opening of New Westmont Store and Contribution to IL Social Equity Partners
Westmont Opening WillBring Curaleaf Retail Locations to 103 Nationwide
WAKEFIELD, Mass., April 5, 2021 -- Curaleaf Holdings, Inc. (CSE: CURA / OTCQX: CURLF) ("Curaleaf" or the "Company"), a leading U.S. provider of consumer products in cannabis, announces new Curaleaf branding for the Company's recently acquired retail locations and the imminent opening of its 10th store in Illinois. Additionally, Curaleaf has contributed $950,000 to impact social equity with six strategic partnerships focused on education and job training in the greater Chicagoland community as part of its Corporate Social Responsibility Rooted in Good initiative, and per the Illinois Social Equity provision in adult use regulations.
Curaleaf successfully closed its acquisition of Grassroots on July 23, 2020 and has obtained final regulatory approval from the state of Illinois for the transfer of nine Greenhouse and Windy City Cannabis retail licenses. In accordance with state guidelines, Curaleaf has begun rebranding of Windy City Cannabis retail locations in Worth, Justice, and on Weed Street in Chicago in addition to Greenhouse dispensaries located in Deerfield, Mokena, Skokie, Northbrook, Melrose and Morris.
At the nine rebranded Illinois retail locations, Curaleaf’s signature teal logo will be prominently displayed and as part of the new interior design, will feature hyper-local cityscape murals that capture each store’s unique location, further enhancing the experience and connection to the community. The staff at each retail location will remain committed to delivering unparalleled service and creating an inclusive experience that encourages cannabis exploration and education with a personalized approach.
Later this month, Curaleaf will be hosting a Grand Opening for its brand new 4,700 square foot Westmont store, located at 11 East Ogden Avenue in Westmont, Illinois, its 10th retail location in the state and its 103^rd^ nationwide. In addition to a ribbon cutting event to mark the occasion, all customers will receive 15% off on purchases made on their first visit to any of the new Curaleaf stores. All rebranded stores will also host a “Curaleaf Day” on April 8 with special offers, giveaways and offerings from local restaurants.
"We are pleased to bring the Curaleaf brand to the greater Chicago area,” said Joe Bayern, Curaleaf Chief Executive Officer. “The rebranding of these locations directly aligns with our strategy of building strong, national brands that deliver high-quality products backed by science to meet the needs of our patients and customers. We are also extremely proud to be active partners within these local communities and we look forward to building collaborative relationships and investing in long term opportunities with them."
As part of its “Rooted in Good” Corporate Social Responsibility platform, Curaleaf has contributed a total of $950,000 to six strategic partners in greater Chicagoland to create opportunities and sustainable impact within the cannabis industry.
Olive-Harvey College and an additional North Chicagoland community college have been selected to build programs that educate, mentor and provide internships and career opportunities within cannabis. Additionally, Curaleaf is partnering with three organizations, Cara Chicago, Growing Home and Greater West Town Community Development Project, which focus on job training to create economic opportunity and alleviate relational poverty. The Company also contributed to the Illinois Cannabis Business Development Fund, which provides technical assistance and training to support prospective entrepreneurs in applying for cannabis business establishment licenses.
Curaleaf is committed to improving lives by providing clarity around cannabis and confidence around consumption. During the COVID-19 pandemic, cannabis businesses have been deemed an essential service across the country, including Illinois. Curaleaf remains committed to serving patients and customers with the products they rely on while implementing heightened safety and hygienic measures for the safety of all team members and customers in all of its facilities. For additional information about Curaleaf's Illinois retail locations and CSR initiatives please visit www.Curaleaf.com.
About Curaleaf Holdings, Inc.
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) ("Curaleaf") is the leading vertically integrated U.S. multi-state cannabis operator with a mission to improve lives by providing clarity around cannabis and confidence around consumption. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf and Select, provide industry-leading service, product selection and accessibility across the medical and adult-use markets. Curaleaf currently operates in 23 states with 102 dispensaries, 22 cultivation sites and over 30 processing sites, and employs over 4,600 team members across the United States. Curaleaf is listed on the Canadian Securities Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit www.curaleaf.com.
INVESTORCONTACT
Curaleaf Holdings, Inc.
Finance and Investor Relations
MEDIACONTACT
Curaleaf Holdings, Inc.
Tracy Brady, VP Corporate Communications
781-486-1037
FORWARDLOOKING STATEMENTS
This media advisory 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. Generally, forward looking statements and information may be identified by the use of forward-looking terminology such as "plans", "expects" or, "proposed", "is expected", "intends", "anticipates", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward–looking statements and information concerning the retail and cultivation expansion of Curaleaf in Illinois. Such forward-looking statements and information reflect management's current beliefs and are based on assumptions made by and information currently available to the company with respect to the matter described in this new release. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Additional information about these assumptions and risks and uncertainties is contained under "Risk Factors and Uncertainties" in the Company's latest annual information form filed September 25, 2020, which is available under the Company's SEDAR profile at http://www.sedar.com, and in other filings that the Company has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward looking statements contained in this press release. The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
Exhibit 99.2
Curaleaf CompletesAcquisition of EMMAC and Secures US$130Million Investment from a Single Strategic Institutional Investor ****
EMMAC brings vertically integrated operationsin Europe with a presence in key medical cannabis markets, including the UK, Germany, Italy, Spain, and Portugal
Strategic investor to fund cash portion of acquisition and Curaleaf’s growth initiatives in Europe
WAKEFIELD, Mass., April 7, 2021 -- CuraleafHoldings, Inc. (CSE: CURA / OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer products in cannabis has successfully completed the previously announced acquisition of EMMAC Life Sciences Limited ("EMMAC"), the largest vertically integrated independent cannabis company in Europe, for base consideration of approximately US$50 million in cash and 17.5 million shares of Curaleaf, with additional consideration to be paid based upon the successful achievement of performance milestones. Curaleaf has simultaneously established Curaleaf International Holdings Limited (“Curaleaf International”) in Guernsey to hold the EMMAC investment and further its European expansion.
To accelerate the expansion of Curaleaf International, Curaleaf has secured an investment of US$130 million from a single strategic institutional investor in exchange for 31.5% equity stake in Curaleaf International, implying a $413 million Post Money valuation, with US$80 million in cash available to spend. The subscription will fund the entire cash portion of the EMMAC acquisition consideration of US$50 million with the remaining US$80 million to be used to fund Curaleaf International’s current capital expenditures plan through 2022, as well as its pipeline of potential acquisitions. This infusion of outside capital into Curaleaf International significantly accelerates Curaleaf’s expansion plans in Europe by fully funding Curaleaf’s cash outlay for the EMMAC acquisition and providing the capital required to support Curaleaf International’s near-term European rollout. With its foreseeable expansion budget fully funded, Curaleaf’s new international business can focus on executing its further European expansion.
Curaleaf and the strategic investor have entered into a shareholders’ agreement regarding the governance of Curaleaf International pursuant to which Curaleaf will have control over operational issues as well as raising capital and the ability to exit the business. In addition, the strategic investor’s stake is subject to put/call rights which permits either party to cause the stake to be bought out by Curaleaf for Curaleaf equity starting in 2025.
Boris Jordan, Executive Chairman of Curaleaf, stated, “The successful completion of our acquisition of EMMAC, and the formation of our new Curaleaf International business, marks a transformational launching point for our entrance into the European cannabis market. Building on our market leading position in the U.S., this transaction establishes Curaleaf as the global, pure play, cannabis market leader by revenue and geographic reach. With our single strategic institutional investor, we have set a strong foundation for Curaleaf International’s future growth trajectory. On behalf of the Curaleaf Board of Directors and management team, we are thrilled to welcome Antonio Costanzo, co-founder and CEO of EMMAC, as the CEO of Curaleaf International, and the entire EMMAC team to Curaleaf.”
The new Curaleaf International platform includes cultivation, EU GMP-certified processing, distribution, and R&D operations across several key European medical cannabis markets, including the United Kingdom, Germany, Italy, Spain and Portugal. Terra Verde, Curaleaf International's European market cultivation facility in Portugal, is one of the oldest licensed cannabis growing facilities in Europe with approximately 2 hectares of cultivation area and is an industry leader on the cannabis production cost efficiency front. The Portugal based cultivation facility provides Curaleaf International with the potential to serve customers across key European medical cannabis markets as well as supporting exports to countries such as Israel, among others. Curaleaf International plans to significantly increase its cultivation capacity in 2021, and to exceed 10 tons per year by 2022, in order to accommodate future growth related to the expansion of access to cannabis across the major European medical and adult-use, as well as export markets. Curaleaf International also has an operational presence and partnerships in European Union countries that are enacting new medical cannabis access programs. Curaleaf International will also serve as the platform for other possible acquisitions in Europe and adjacent areas, and for its participation in pilot adult use programs.
Joseph Bayern, CEO of Curaleaf, commented, “As the consumer and political liberalization trends around cannabis that are sweeping the U.S. are increasingly taking hold across Europe, our expansion into the international cannabis market presents tremendous new long-term growth opportunities for Curaleaf. With the European population of nearly 748 million^1^, the potential European addressable market is more than twice the size of the U.S. addressable market^2^. With the ability to operate our new European business across country borders, with one or two cultivation sites and one manufacturing center to serve the entire region in most cases, combined with our ability to leverage the strength of our consumer packaged goods strategies and innovations from our U.S. operations, we see enormously positive implications for our ability to quickly and efficiently scale the business across Europe.”
Following the successful completion of the transaction, Mr. Antonio Costanzo has been appointed as the new Chief Executive Officer of Curaleaf International, with the former EMMAC management team continuing to lead Curaleaf's new European presence as well as driving local European strategy and day-to-day operations.
Antonio Costanzo, CEO of Curaleaf International, commented, “This is an important day for the European cannabis market as EMMAC transitions to Curaleaf International. I look forward to working closely with the Curaleaf team to shape the future of cannabis for our patients and customers around the world. We will retain our science-led approach to continue to deliver best in class cannabis products for Europe’s growing medical cannabis market, and will work closely to leverage the consumer packaged goods experience and innovation from the U.S. to capitalize on the emerging adult-use market as legislation allows. We are now very well positioned to realize our aggressive growth ambitions.”
^1^ European market population based on United Nations 2020 estimate for European continent.
^2^Total European addressable market based on usage rates and spend estimates from U.S. Data from Cowen October 2020 research report.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) ("Curaleaf") is a leading international provider of consumer products in cannabis with a mission to improve lives by providing clarity around cannabis and confidence around consumption. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf and Select, provide industry-leading service, product selection and accessibility across the medical and adult-use markets. In the United States, Curaleaf currently operates in 23 states with 103 dispensaries, 22 cultivation sites and over 30 processing sites, and employs over 4,600 team members. Curaleaf International, is the largest vertically integrated independent cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Canadian Securities Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com.
Forward Looking Statements
This news release contains forward–looking statements and forward–looking information within the meaning of applicable securities laws which include, but are not limited to, the transaction described above, the investment by an outside financial investor group described above, the anticipated benefits of the transaction and the outside investment described above, the anticipated use of the funds obtained from the outside financial investor group, the expected market size for cannabis in Europe, the expected penetration of Curaleaf's products in Europe, the expected expansion of Curaleaf's international footprint, Curaleaf International’s acquisition pipeline, the emergence of adult-use markets in Europe. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as "plans", "expects" or, "proposed", "is expected", "intends", "anticipates", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward-looking statements and information concerning the acquisition of EMMAC Life Sciences Limited and the outside investment by a financial investor group, each as described above. Such forward-looking statements and information reflect management's current beliefs and are based on assumptions made by and information currently available to the Company with respect to the matters described in this new release. These assumptions include, but are not limited to, successfully integrating the business of EMMAC and to realize the anticipated benefits to Curaleaf of the transaction described above, the ability of Curaleaf to increase the cultivation activity of Terra Verde, Curaleaf's ability to serve customers in various European markets, the assumption that the cannabis consumption habits in European markets will replicate the cannabis consumption habits in the US, the assumption that demand for cannabis products in Europe will continue to grow, the assumption that Curaleaf, EMMAC and its subsidiaries will obtain, maintain and renew the licenses required for them to operate their business in the various European jurisdictions in which EMMAC and its subsidiaries operate, the assumption that an adult-use market will materialize and grow in Europe, and the Company’s ability to realize its European growth prospects. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and other factors may include, but are not limited to: general business, economic, political and social uncertainties; general capital market conditions and market prices for securities; the risk that Curaleaf may not be able to successfully integrate the business of EMMAC and their respective corporate cultures; the risk that the benefits of the transaction anticipated by Curaleaf may not materialize; competition and changes in legislation affecting Curaleaf or EMMAC; the inability of Curaleaf, EMMAC and its subsidiaries obtain, maintain and renew the licenses required for them to operate their business in the various European jurisdictions in which EMMAC and its subsidiaries operate; potential importation or exportation restrictions prohibiting EMMAC or its subsidiaries to export its products in other jurisdictions; the risk that the benefits of the outside investment described above anticipated by Curaleaf may not materialize; and that an adult-use European market may not develop on the scale anticipated by Curaleaf, or at all. Additional information about these assumptions and risks and uncertainties is contained under "Risk Factors and Uncertainties" in the Company's latest annual information form filed September 25, 2020, which is available under the Company's SEDAR profile at www.sedar.com, and in other filings that the Company has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward-looking statements contained in this news release. The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
Investor Contact:
Curaleaf Holdings, Inc.
Carlos Madrazo, SVP
Media Contact:
Curaleaf Holdings, Inc.
Tracy Brady, VP Corporate Communications
Exhibit 99.3
FORM9
NOTICEOF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES
(or securitiesconvertible or exchangeable into listed securities^1^)
| Name of Listed Issuer: | Symbol(s): |
|---|---|
| Curaleaf Holdings,<br> Inc. (the "Issuer"). | CURA |
| Date: April<br> 7, 2021 | Is this an updating or amending<br> Notice: þ Yes ¨<br> No |
| --- | --- |
If yes provide date(s) of prior Notices:
Issued and Outstanding Securities of Issuer Prior to Issuance: 592,326,068
Pricing
Date of news release announcing proposed issuance: March 9, 2021 or
Date of confidential request for price protection:
Closing Market Price on Day Preceding the news release: $18.32 or
Day preceding request for price protection:
Closing
Number of securities to be issued: 16,420,495
Issued and outstanding securities following issuance: 608,746,563
Instructions:
| 1. | For private placements (including debt<br> settlement), complete tables 1A and 1B in Part 1 of this form. |
|---|---|
| 2. | Complete Table 1A – Summary for all<br> purchasers, excluding those identified in Item 8. |
| --- | --- |
| 3. | Complete Table 1B – Related Persons only for Related Persons |
| --- | --- |
| 4. | If shares are being issued in connection with an acquisition (either<br> as consideration or to raise funds for a cash acquisition) please proceed to Part 2 of this<br> form. |
| --- | --- |
| 5. | An issuance of non-convertible debt does<br> not have to be reported unless it is a significant transaction as defined in Policy 7, in<br> which case it is to be reported on Form 10 – Notice of Proposed Transaction |
| --- | --- |
| 6. | Post the completed Form 9 to the CSE website<br> in accordance with Policy 6 – Distributions. In addition, the completed form<br> must be delivered to [email protected] with an<br> appendix that includes the information in Table 1B for ALL placees. |
| --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 1 |
| --- |
Part 1. Private Placement
Table 1A – Summary
| Each<br> jurisdiction in which purchasers reside | Number of Purchasers | Price per Security | Total dollar value (CDN$) raised<br> in the jurisdiction |
|---|---|---|---|
| Total number of purchasers: | |||
| Total dollar value of distribution in all jurisdictions: |
Table1B – Related Persons
| **** | ****<br><br> <br>Number of | ****<br><br> <br>Purchase | Conversion | ****<br><br> <br>TotalSecurities | ****<br><br> <br>Payment | **** |
|---|---|---|---|---|---|---|
| Full Name | Securities | price per | Price (if | Previously | Date(1) | Describe |
| &Municipality of | Purchased | Security | Applicable) | Owned, | relationship to | |
| Residence | or to be | (CDN$) | (CDN) | Controlled or | Issuer (2) | |
| of Placee | Purchased | Directed |
All values are in US Dollars.
^1^An issuance of non-convertible debt does not have to be reported unless it is a significant transaction as defined in Policy 7, in which case it is to be reported on Form 10.
| 1. | Total amount of funds to be<br> raised: | . |
|---|---|---|
| 2. | Provide full details of the use of the proceeds.<br> The disclosure should be sufficiently complete to enable a reader to appreciate the significance<br> of the transaction without reference to any other material. | |
| --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 2 |
| --- | | 3. | Provide<br> particulars of any proceeds which are to be paid to Related Persons of the Issuer: | . | | --- | --- | --- | | 4. | If securities are issued in forgiveness of indebtedness, provide details<br> of the debt agreement(s) or and the agreement to exchange the debt for securities. | | --- | --- | | 5. | Description of securities to be issued: | | --- | --- | | (a) | Class | . | | --- | --- | --- | | (b) | Number | . | | --- | --- | --- | | (c) | Price per security | . | | --- | --- | --- | | (d) | Voting rights | | --- | --- | | 6. | Provide the following information if warrants,<br> (options) or other convertible securities are to be issued: | | --- | --- | | (a) | Number | . | | --- | --- | --- | | (b) | Number of securities eligible to be purchased on exercise of warrants<br>(or options) | . | | --- | --- | --- | | (c) | Exercise price | . | | --- | --- | --- | | (d) | Expiry date | . | | --- | --- | --- | | 7. | Provide the following information if debt securities are to be issued: | | --- | --- | | (a) | Aggregate principal amount | . | | --- | --- | --- | | (b) | Maturity date | . | | --- | --- | --- | | (c) | Interest rate | . | | --- | --- | --- | | (d) | Conversion terms | . | | --- | --- | --- | | (e) | Default provisions | . | | --- | --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 3 |
| --- | | 8. | Provide the following information for any<br> agent's fee, commission, bonus or finder's fee, or other compensation paid or to be paid<br> in connection with the placement (including warrants, options, etc.): | | --- | --- | | (a) | Details of any dealer, agent, broker or<br> other person receiving compensation in connection with the placement (name, and if a corporation,<br> identify persons owning or exercising voting control over 20% or more of the voting shares<br> if known to the Issuer): . | | --- | --- | | (b) | Cash | . | | --- | --- | --- | | (c) | Securities | . | | --- | --- | --- | | (d) | Other | . | | --- | --- | --- | | (e) | Expiry date of any options,<br> warrants etc. | . | | --- | --- | --- | | (f) | Exercise price of any options,<br> warrants etc. | . | | --- | --- | --- | | 9. | State whether the sales agent, broker, dealer<br> or other person receiving compensation in connection with the placement is Related Person<br> or has any other relationship with the Issuer and provide details of the relationship . | | --- | --- | | 10. | Describe any unusual particulars of the transaction (i.e. tax "flow<br> through" shares, etc.). | | --- | --- | | | . | | 11. | State whether the private placement will result in a change of control. | | --- | --- | | | . | | 12. | Where there is a change in the control of<br> the Issuer resulting from the issuance of the private placement shares, indicate the names<br> of the new controlling shareholders. ______________________________________________________________________________________________ | | --- | --- | | | . | | 13. | Each purchaser has been advised of the applicable<br> securities legislation restricted or seasoning period. All certificates for securities issued<br> which are subject to a hold period bear the appropriate legend restricting their transfer<br> until the expiry of the applicable hold period required by National Instrument 45-102 Resale<br> of Securities. | | --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 4 |
| --- |
Part 2. Acquisition
| 1. | Provide details of the assets to be acquired<br> by the Issuer (including the location of the assets, if applicable). The disclosure should<br> be sufficiently complete to enable a reader to appreciate the significance of the transaction<br> without reference to any other material: |
|---|
On March 9, 2021, the Issuer announced that it has signed a definitive agreement to acquire EMMAC Life Sciences Limited (“EMMAC”) for base consideration of approximately US$286 million to be paid 85% in subordinate voting shares of the Issuer (“Subordinate Voting Shares”) and 15% in cash. Contingent consideration of up to US$57 million will be paid in Subordinate Voting Shares and cash in the same ratio based upon the successful achievement of performance milestones.
The proposed transaction constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as a result of Measure 8 Ventures, LP an investment fund managed by Mr. Boris Jordan, the Executive Chairman of the board of directors of the Issuer and control person of the Issuer, having an interest in the proposed transaction by way of a profit interest and a convertible debt instrument which will convert into shares of EMMAC representing 8% of EMMAC equity at closing of the proposed transaction. Mr. Jordan owns a minority interest in Measure 8 Ventures, LP. The Issuer intends to rely upon the exemptions provided under Sections 5.5(b) of MI 61-101 – Issuer Not Listed on Specified Markets and 5.7(1)(a) of MI 61-101 – Fair Market Value Not More the 25% of Market Capitalization from the requirements that the Issuer obtain a formal valuation of the proposed transaction and that the proposed transaction receive the approval of the minority shareholders of the Issuer.
The terms of the proposed transaction were negotiated by management and advisors under guidance of, and unanimously recommended for approval by, a committee composed of members of the board of directors of the Issuer free from any conflict of interest with respect to the proposed transaction (the “Special Committee”), all of which are independent members of the board of directors within the meaning of National Instrument 52-110 – Audit Committees. The Special Committee has received a fairness opinion from Eight Capital (“Eight Capital”) to the effect that, in its opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be paid by the Issuer as part of the proposed transaction is fair from a financial point of view, to the Issuer. The fee paid to Eight Capital in connection with the delivery of its fairness opinion is not contingent on the successful implementation of the proposed transaction.
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 5 |
| --- |
The Issuer will acquire EMMAC for base consideration of £0.50 per share of EMMAC, comprised of approximately GBP£35 million in cash (equivalent to approximately US$50 million in cash), 16,420,495 Subordinate Voting Shares (based on the exchange ratio of Subordinate Voting Shares for each EMMAC share agreed by the parties). At the closing share price of Subordinate Voting Shares of US$14.12 on the CSE on March 8, 2021, the total base consideration in Subordinate Voting Shares and cash is valued at US$286 million. An additional US$57 million consideration will be paid subject to performance-based earn-outs.
Post-transaction, the former shareholders of EMMAC will have approximately 3% pro forma ownership of the Issuer on a fully-diluted basis, before factoring in the performance-based earn-outs. The portion of the consideration to be paid through the issuance of Subordinate Voting Shares will be subject to a statutory four-month hold period as well as a lock-up agreement with each recipient restricting trading of the share received, with release of 5% from such restrictions at the end of each calendar quarter following the closing. The proposed transaction is expected to close in the second quarter of 2021, subject to customary closing conditions and regulatory approval. The transaction has been unanimously approved by the boards of directors of both EMMAC and the Issuer, with Mr. Boris Jordan abstaining from the voting.
The proposed transaction is scheduled to close on April 7, 2021. At closing, the Issuer will issue to the former securityholders of EMMAC an aggregate of 16,420,495 Subordinate Voting Shares, of which 706,105 Subordinate Voting Shares will be issued in escrow pursuant to the terms of the transaction.
| 2. | Provide details of the acquisition including<br> the date, parties to and type of agreement (eg: sale, option, license etc.) and relationship<br> to the Issuer. The disclosure should be sufficiently complete to enable a reader to appreciate<br> the significance of the acquisition without reference to any other material: |
|---|
Please refer to section 1 immediately above.
The Issuer, as purchaser, has entered into a purchase agreement with EMMAC, and shareholders of EMMAC who own more than 50% of the issued and outstanding shares of EMMAC, whereby the Issuer will acquire 100% of the shares of EMMAC.
| 3. | Provide the following information in relation<br> to the total consideration for the acquisition (including details of all cash, securities<br> or other consideration) and any required work commitments: |
|---|---|
| (a) | Total<br> aggregate consideration in Canadian dollars: Approximately US$ 286,000,000<br> (equivalent to CAD$362,076,000 at an exchange rate of CAD$1.266 for US$1.00). |
| --- | --- |
| (b) | Cash:<br> Approximately US$ 50,000,000 (equivalent to CAD$<br> 63,300,000 at an exchange rate of CAD$1.266 for US$1.00). |
| --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 6 |
| --- | | (c) | Securities<br> (including options, warrants etc.) and dollar value:In connection with the closing<br> of the acquisition of EMMAC, the Issuer will issue 16,420,495.00 Subordinate Voting Shares<br> Voting representing an aggregate dollar value of approximately CAD$ 300,823,468 based on<br> the closing market price of the Subordinate Voting Shares on the CSE as of March 8, 2021. | | --- | --- | | (d) | Other: The sellers will be entitled to<br> receive up to US$57 million based upon the successful achievement of performance milestones,<br> which will be paid 85% in Subordinate Voting Shares (up to 3,359,592 Subordinate Voting Shares<br> worth approximately USD $47 million and 15% in cash (approximately USD $10 million). | | --- | --- | | (e) | Expiry date of options, warrants, etc. if any: N/A. | | --- | --- | | (f) | Exercise price of options, warrants, etc. if any: N/A. | | --- | --- | | (g) | Work commitments: N/A. | | --- | --- | | 4. | State how the purchase or sale price was determined<br> (e.g. arm's-length negotiation, independent committee of the Board, third party valuation<br> etc). | | --- | --- |
The purchase price results from arm’s length negotiations between the Issuer and the principals of EMMAC.
The terms of the proposed transaction were negotiated by management and advisors under guidance of, and unanimously recommended for approval by, a committee composed of members of the board of directors of the Issuer free from any conflict of interest with respect to the proposed transaction (the “Special Committee”), all of which are independent members of the board of directors within the meaning of National Instrument 52-110 – Audit Committees. The Special Committee has received a fairness opinion from Eight Capital (“Eight Capital”) to the effect that, in its opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be paid by the Issuer as part of the proposed transaction is fair from a financial point of view, to the Issuer. The fee paid to Eight Capital in connection with the delivery of its fairness opinion is not contingent on the successful implementation of the proposed transaction.
| 5. | Provide details of any appraisal or valuation<br> of the subject of the acquisition known to management of the Issuer: |
|---|
Please refer to section 4 immediately above.
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 7 |
| --- | | 6. | The names of parties<br> receiving securities of the Issuer pursuant to the acquisition and the number of securities<br> to be issued are described as follows: | | --- | --- | | Name of Party (If not an individual, name all insiders of the Party) | Number and Type of Securities to be Issued | Dollar value per Security (CDN$) | Conversion price (if applicable) | Prospectus Exemption | Total Securities, Previously Owned, Controlled or Directed by Party1 | Describe relationship to Issuer ^(1)^ | | --- | --- | --- | --- | --- | --- | --- | | The<br> security holders of EMMAC | 16,420,495<br> Subordinate Voting Shares for the base consideration and up to 3,359,592 Subordinate Voting<br> Shares for the earn-out component.<br><br> <br><br><br> <br>Please refer to sections 1 and 3 above for additional<br> details. | $20.77 | N/A | s.<br> 2.16 of NI 45-106 (Canadian security holders of EMMAC)<br><br> <br><br> s. 3 of BCI 72-503 (non-Canadian security holders of EMMAC) | Nil | Please<br> refer to the discussion above regarding the related party transaction considerations applicable to the proposed transaction. |
(1) Indicate if Related Person.
| 7. | Details of the steps<br> taken by the Issuer to ensure that the vendor has good title to the assets being acquired:<br> Sell-side due diligence, customary legal due diligence and legal opinions. |
|---|---|
| 8. | Provide the following<br> information for any agent's fee, commission, bonus or finder's fee, or other compensation<br> paid or to be paid in connection with the acquisition (including warrants, options, etc.): |
| --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 8 |
| --- | | (a) | Details of any dealer,<br> agent, broker or other person receiving compensation in connection with the acquisition (name,<br> and if a corporation, identify persons owning or exercising voting control over 20% or more<br> of the voting shares if known to the Issuer): N/A. | | --- | --- | | (b) | Cash N/A. | | --- | --- | | (c) | Securities N/A. | | --- | --- | | (d) | Other N/A. | | --- | --- | | (e) | Expiry date of any options, warrants etc. N/A. | | --- | --- | | (f) | Exercise price of any options, warrants etc. N/A. | | --- | --- | | 9. | State whether the sales agent, broker or<br> other person receiving compensation in connection with the acquisition is a Related Person<br> or has any other relationship with the Issuer and provide details of the relationship. N/A. | | --- | --- | | 10. | If applicable, indicate<br> whether the acquisition is the acquisition of an interest in property contiguous to or otherwise<br> related to any other asset acquired in the last 12 months. N/A. | | --- | --- |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 9 |
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FORWARD LOOKING STATEMENTS
This document contains forward–looking statements and forward–looking information within the meaning of applicable securities laws which include, but are not limited to, the expected date for the completion of the transaction described above, the anticipated benefits of the transaction described above, the expected market size for cannabis in Europe and the expected penetration of Issuer's products in Europe, the expected expansion of Issuer's international footprint,. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as "plans", "expects" or, "proposed", "is expected", "intends", "anticipates", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this document contains forward-looking statements and information concerning the proposed acquisition of EMMAC Life Sciences Limited. Such forward-looking statements and information reflect management's current beliefs and are based on assumptions made by and information currently available to the Company with respect to the matter described in this new release. These assumptions include, but are not limited to, the ability of Issuer to complete the transaction described above, to successfully integrate the business of EMMAC and to realize the anticipated benefits to Issuer of the transaction described above, the ability of Issuer to increase the cultivation activity of Terra Verde, Issuer's ability to serve customers in various European markets, the assumption that the cannabis consumption habits in European markets will replicate the cannabis consumption habits in the US and the assumption that demand for cannabis products in Europe will continue to grow, the asssumptions that Issuer, EMMAC and its subsidiaries will obtain, maintain and renew the licenses required for them to operate their business in the various European jurisdictions in which EMMAC and its subsidiaries operate. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and other factors may include, but are not limited to: general business, economic, political and social uncertainties; general capital market conditions and market prices for securities; the failure of Issuer to complete the transaction described above; the risk that Issuer may not be able to successfully integrate the business of EMMAC and their respective corporate cultures; the risk that the benefits of the transaction anticipated by Issuer may not materialize; delay or failure to receive applicable corporate or regulatory approvals; competition and changes in legislation affecting Issuer or EMMAC; the inability of Issuer, EMMAC and its subsidiaries to obtain, maintain and renew the licenses required for them to operate their business in the various European jurisdictions in which EMMAC and its subsidiaries operate; potential importation or exportation restrictions prohibiting EMMAC or its subsidiaries to export its products in other jurisdictions. Additional information about these assumptions and risks and uncertainties is contained under "Risk Factors and Uncertainties" in the Issuer's latest annual information form filed September 25, 2020, which is available under the Issuer's SEDAR profile at www.sedar.com, and in other filings that the Issuer has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward-looking statements contained in this document.
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 10 |
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Certificate Of Compliance
The undersigned hereby certifies that:
| 1. | The undersigned is a<br> director and/or senior officer of the Issuer and has been duly authorized by a resolution<br> of the board of directors of the Issuer to sign this Certificate of Compliance on behalf<br> of the Issuer. |
|---|---|
| 2. | As of the date hereof<br> there is not material information concerning the Issuer which has not been publicly disclosed. |
| --- | --- |
| 3. | the Issuer has obtained the express written<br> consent of each applicable individual to: |
| --- | --- |
| (a) | the disclosure of their information to<br> the Exchange pursuant to this Form or otherwise pursuant to this filing; and |
| --- | --- |
| (b) | the collection, use<br> and disclosure of their information by the Exchange in the manner and for the purposes described<br> in Appendix A or as otherwise identified by the Exchange, from time to time |
| --- | --- |
| 4. | The undersigned hereby<br> certifies to the Exchange that the Issuer is in compliance with the requirements of applicable<br> securities legislation (as such term is defined in National Instrument 14-101) and all Exchange<br> Requirements (as defined in CSE Policy 1). |
| --- | --- |
| 5. | All of the information in this Form 9 Notice of Issuance of Securities<br> is true. |
| --- | --- |
[signature page follows]
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 11 |
| --- |
Dated: April 7, 2021.
| Joseph Bayern |
|---|
| Name of Director or Senior Officer |
| (Joseph Bayern) |
| Signature |
| Chief Executive Officer |
| Official Capacity |
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 12 |
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Appendix A
PERSONAL INFORMATION COLLECTIONPOLICY REGARDING FORM 9
The Canadian Securities Exchange and its subsidiaries, affiliates, regulators and agents (collectively, "CSE" or the "Exchange") collect and use the information (which may include personal or other information) which has been provided in Form 9 for the following purposes:
| • | To determine whether an individual<br> is suitable to be associated with a Listed Issuer; |
|---|---|
| • | To determine whether an issuer is suitable for listing; |
| --- | --- |
| • | To determine<br> whether allowing an issuer to be listed or allowing an individual to be associated with a<br> Listed Issuer could give rise to investor protection concerns or could bring the Exchange<br> into disrepute; |
| --- | --- |
| • | To conduct enforcement proceedings; |
| --- | --- |
| • | To ensure compliance with Exchange<br> Requirements and applicable securities legislation; and |
| --- | --- |
| • | To fulfil the Exchange's obligation to regulate its marketplace. |
| --- | --- |
The CSE also collects information, including personal information, from other sources, including but not limited to securities regulatory authorities, law enforcement and self-regulatory authorities, regulation service providers and their subsidiaries, affiliates, regulators and agents. The Exchange may disclose personal information to these entities or otherwise as provided by law and they may use it for their own investigations.
The Exchange may use third parties to process information or provide other administrative services. Any third party will be obliged to adhere to the security and confidentiality provisions set out in this policy.
All personal information provided to or collected by or on behalf of The Exchange and that is retained by The Exchange is kept in a secure environment. Only those employees who need to know the information for the purposes listed above are permitted access to the information or any summary thereof. Employees are instructed to keep the information confidential at all times.
Information about you that is retained by the Exchange and that you have identified as inaccurate or obsolete will be corrected or removed.
If you wish to consult your file or have any questions about this policy or our practices, please write the Chief Privacy Officer, Canadian Securities Exchange, 220 Bay Street – 9th Floor, Toronto, ON, M5J 2W4.
| **FORM 9 – NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED SECURITIES**<br><br>October 2019<br><br>Page 13 |
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