Delta 9 Signs Agreements to Acquire 180,000 Square Feet of Warehouse Space and 47 Acres of Land in Winnipeg for Expansion of its Production Facilities

Delta 9 Signs Agreements to Acquire 180,000 Square Feet of Warehouse Space and 47 Acres of Land in Winnipeg for Expansion of its Production Facilities

WINNIPEG, March 21, 2018 /CNW/ – DELTA 9 CANNABIS INC. (TSXV:NINE.V – News) (“Delta 9” or the “Company”) is pleased to announce that it has signed a binding letter of intent (the “LOI”) and a lease agreement (the “New Lease”) setting out the terms and conditions by which the Company will purchase the land and buildings where its current cannabis production facility is located as well as certain additional land and buildings for the expansion of its production facility.

Delta 9 Cannabis, one of Canada's first legal producers of medical marijuana. (CNW Group/Delta 9 Cannabis Inc.)

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Delta 9 Cannabis, one of Canada’s first legal producers of medical marijuana. (CNW Group/Delta 9 Cannabis Inc.)

The New Lease is a new five-year lease with 6599362 Canada Ltd. (the “Vendor”) for the land and building containing the Company’s current cannabis production facility (referred to as “Building E”). The New Lease also contains an option for the Company to purchase Building E for a price of $6.25 million at any time during the term of the New Lease. The Company anticipates executing this option to purchase Building E within the next few days.

The LOI provides that Delta 9 will purchase three existing warehouse buildings from the Vendor (referred to as “Buildings B, C and D”) located on approximately 40 acres adjacent to Building E for a purchase price of $6.50 million. Buildings B, C and D contain an aggregate of approximately 100,000 square feet of existing warehouse space. Delta 9 anticipates using Buildings B, C and D to expand its cannabis production facility.

The properties are located in a heavy industrial area in East Winnipeg, Manitoba. The properties are currently serviced with 10 megawatts of power, which is sufficient power for Delta 9’s proposed increase of its production capacity to 600 of Delta 9’s self-designed cannabis grow pods.

“This agreement is a critical part of our strategic plan to become a leader in the Canadian cannabis industry,” said Delta 9 CEO John Arbuthnot. “The land in question already houses our current 80,000 square foot Health Canada licensed facility. Acquiring the additional land and buildings will allow us to build one of the largest cannabis production facilities in the Prairie region.” Arbuthnot also stated the Company has been designing what it refers to as a “cannabis campus” which management believes would rival any current or planned cannabis production facility in the Prairie region in terms of square footage and production capacity.

It is anticipated that Delta 9 will complete the acquisition of Building E prior to the acquisition of Buildings B, C and D. The closing of the acquisition of Building E is subject to a number of conditions, including the completion of satisfactory due diligence by Delta 9 and the approval of the TSX Venture Exchange. The closing of the acquisition of Buildings B, C and D is subject to all of the foregoing conditions but is also subject to the negotiation of a definitive purchase agreement and the completion of a subdivision of the property by the City of Winnipeg, which is anticipated to take at least six months.

About Delta 9 Cannabis Inc.
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 was the fourth company in Canada licensed to produce legal cannabis. 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. Forward looking statements in this news release include statements relating to: (i) Delta 9’s expansion plans;; and (ii) Delta 9’s completion of its proposed property acquisitions. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that Delta 9’s currently contemplated expansion and development plans may cease or otherwise change, Delta 9’s production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9’s products may be lower than anticipated, Delta 9’s cost to produce its grow pods may be higher than expected and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017 which has been filed on SEDAR. 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.

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