Delta 9 Reports Update on Retail Recreational Sales Following Cannabis Legalization

The vast majority of revenues are attributable to sales of dried cannabis products, with the remaining coming from the sale of ancillary products and accessories. Average selling price per gram of dried cannabis sold over the first seven days of sales was approximately $11.47, with the average cost of sales for a gram at approximately $8.64.

"The first day of legal recreational cannabis sales blew away all of our expectations" said John Arbuthnot, Chief Executive Officer.  "We launched online sales of cannabis just after the stroke of midnight on October 17, and in the first minute logged more than 100 sales to customers in Manitoba. By 4 a.m., we had sold out all the product set aside for online sales, but even that was nothing compared to the experience at our first retail store in Winnipeg"

Despite restricting online sales to 10 per cent of the Company's initial in-store inventory, Delta 9 logged 1,583 online orders, of which 961 were sent by Canada Post, and 622 were sent via Pineapple Express for same day delivery in Winnipeg.

Chief Technology Officer Matthew Sodomsky said Delta 9 was able to meet the massive online demand thanks to its partnerships with Pineapple Express and Shopify. More than 91,000 unique website visitors were logged on the delta9.ca website, which runs on the Shopify online platform.

"Selecting Shopify as our technology partner was definitely the right decision," said Sodomsky. "We were able to process thousands of orders on legalization day, while upholding our commitment to protecting our customer's data, storing it on a 100 per cent Canadian-hosted solution.  Shopify is the glue between Delta 9 Cannabis and Pineapple Express Delivery, allowing us to provide high-quality cannabis and accessories to our customers in their homes in as little 30 minutes"

"We are excited to be working with Delta 9 to provide a tailored customer experience to meet the unique demands of both consumers and regulators as we power this new industry," said Loren Padelford, VP and GM at Shopify.

The Delta 9 Cannabis Store in the St. Vital area of Winnipeg also recorded 8,017 sales in the first five days, with revenues of $572,454. The average online order this week was $104, while the average in-store order came in at $72.

The first customers for the Delta 9 Cannabis Store were seen camping outside the shop by 6:30 p.m. on October 16, and as the sun rose on October 17 hundreds of eager buyers were lined up around the building. It was just the first of several thousand sales at the Delta 9 outlet. Long lines continued throughout the day, extending completely around the building, with early customers patiently waiting up to two hours to buy their first legal, recreational cannabis products.

"We expected high volumes for both online and in-store sales, but what happened this week went beyond even our most optimistic projections," Arbuthnot said.  "We handled close to 2,000 sales by late afternoon, and even bigger crowds began arriving in the evening as people started arriving after work. We were starting to worry that everything in the vault would be cleared out by end of day."

While outlets across Canada have reported shortages of product, Arbuthnot says Delta 9 continues to enjoy a robust supply, particularly from its own production facility in Winnipeg.

"We've been working very hard to increase production over the past year, and that work is paying off now as we face huge demand from the recreational market," said Arbuthnot. "I'm happy to say Delta 9 has adequate supply, and we are even now preparing a large shipment to our store and to our wholesale customers."

Delta 9 is taking in three shipments of dried bud, cannabis oil, and gel caps from its suppliers, including Broken Coast and Canopy Growth, and will be shipping approximately 200 kilograms of Delta 9 product to Manitoba Liquor and Lotteries later this week.

About Delta 9 Cannabis Inc.

Delta 9 Cannabis was the fourth producer in Canada licensed to produce legal cannabis. Delta 9 now operates its wholly-owned subsidiary, Delta 9 Bio-Tech Inc., as 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 also owns 50 per cent of the 70,000 square foot Delta West facility in Alberta, and co-owns the Delta Nine cannabis retail operation. Delta 9's shares trade on the TSX Venture Exchange under the symbol "NINE".

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.

Disclaimer for Forward-Looking Information

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. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. 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. Forward Looking Statements in this release include the expectation that Delta 9 will receive three shipments from its suppliers over the coming week, and will be able to ship 200 kilograms of product from its own facility. 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.