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Formerly Westleaf Inc.

Decibel Announces Year End 2019 Results, Amendment to Credit Facility and Extension of Interim Financial Filings


CALGARY, May 25, 2020 /CNW/ – Decibel Cannabis Company Inc. (the "Company" or "Decibel") (TSX-V:DB) (OTCQB:DBCCF) announces its year-end and fourth quarter financial results for 2019 and provides an update to the anticipated filing date of its Q1 2020 results. The Company is also pleased to announce that it has entered into an agreement with its lender ATB Financial ("ATB") to amend its credit agreement.

As a result of the previously announced Arrangement (as defined herein) completed on December 20, 2019 (the "Closing Date"), the historical financial results of Decibel for the period ending December 31, 2019 relate solely to We Grow BC Ltd. ("We Grow") up to and including the Closing Date. Following the Closing Date the financial information of Decibel relates to that of the consolidated company. As a result, the 2019 financial results reflect eleven days of net revenue and operational activity from operating assets acquired from Westleaf Inc. ("Westleaf") in the Arrangement.

2019 Financial Highlights and Subsequent Events

  • Net revenue for the fourth quarter and year-end of $1.5 and $6.2 million, respectively, primarily relating to sales from the Company’s Creston facility.
  • Adjusted EBITDA loss for the fourth quarter and year-end of $1.6 and $1.8 million, respectively.
  • Net loss for the fourth quarter and year-end of $6.0 and $6.5 million, respectively.
  • Sold 177 kilograms of cannabis in the fourth quarter and 731 kilograms of cannabis during the fiscal year achieving gross price per gram of $11.44 for the period. Sales volumes in the fourth quarter of 2019 were impacted by a Health Canada quality assurance hold on 190 kilograms that was subsequently lifted on January 14, 2020 and sold in Q1 2020.
  • On December 20, 2019, We Grow completed a plan of arrangement (the "Arrangement") which constituted a reverse takeover of Westleaf to combine We Grow’s cultivation facility and premium brand, Qwest, with Westleaf’s high quality cultivation, extraction, and retail assets to create one of Canada’s preeminent ultra-premium cannabis companies.
  • Executed several cost-reduction measures and realized synergies resulting from the Arrangement, resulting in an estimated cost savings exceeding $5 million through the 2020 fiscal year compared to 2019. These initiatives have included a ~35% reduction in corporate staff, a 68% reduction of its lease portfolio and broad elimination all non-essential spending.
  • Secures credit facility amendments to provide additional financial flexibility.

Fiscal year 2019 represents the Company’s first full year of sales from its Creston facility. During the period, revenue performance was positively affected by the launch of new cannabis strains and an expanded distribution footprint that includes British Columbia, Alberta, Ontario, Saskatchewan and Prince Edward Island. In the fiscal year 2019, the Company achieved construction milestones including the completion of construction and the receipt of a standard processing licence for its extraction and manufacturing facility. Management anticipates that its operational assets and facilities under development will allow the Company to increase sales volumes, expand into cannabis derivative products, and ultimately execute on its premium strategy. To date, Decibel’s premium strategy has resulted in achieving one of the highest gross prices per gram in the Canadian recreational market of $11.44 for the year ended December 31, 2019.

Decibel’s year-end Financial Statements and related Management Discussion & Analysis for the reporting period are available under the Company’s profile at www.sedar.com.

Credit Facility Amendment

Decibel is pleased to announce that on May 22, 2020, the Company entered into an agreement to amend its credit agreement with ATB. The Company believes the amended agreement is better aligned with the Company’s balance sheet and cash flow expectations and provides financial flexibility over the near term. Among other things, the amendments include an amendment to Decibel’s tested financial covenants and to certain licensing milestones. Additionally, the amendment provides for a $2.2 million reduction of the borrowing base availability under the facility. For more information please refer to Decibel’s management’s discussion and analysis for the year ended December 31, 2019, including to "Liquidity and Capital Resources".

Stuart Boucher, Decibel’s interim CFO, stated: "Decibel appreciates ATB’s commitment to and understanding of the Company’s business strategy and believes that the amendments will allow the Company to meet its near-term objectives."

Q1 2020 Interim Filing Extension

The Company also announces today that it is extending the filing deadline of its Q1 2020 interim financial statements and related management discussion and analysis for the fiscal quarter ended March 31, 2020 (collectively, the "Interim Filings"). Decibel anticipates that it will be able to complete the Interim Filings no later than July 10, 2020.

Recent proclamations and guidance from Canadian health authorities, the City of Calgary and the Province of Alberta and challenges resulting from the COVID-19 pandemic, have required the Company to coordinate the preparation of the Interim Filings remotely. As a result, the preparation of the Interim Filings has been delayed.

According to Blanket Order 51-517 issued by the Alberta Securities Commission on March 23, 2020 (the "Blanket Order"), during the period from March 23, 2020 to June 1, 2020, a person or company required to make certain filings has an additional 45 days from the otherwise applicable deadline to make such filings. The Company is relying on the Blanket Order for temporary relief from the requirements set out in Part 4 and Part 5 of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102"), to file the Interim Filings by the applicable deadlines set forth in NI 51-102.

All of the Company’s management, directors and other insiders will remain subject to its share trading and black-out policy which reflects the principles set out in section 9 of National Policy 11-207: Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.

There have been no material developments in the business of the Company, other than those disclosed in this press release and in the Company’s year-end report and related management discussion and analysis.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three production houses operating or under development along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, an 80,000 square foot indoor cultivation facility in Battleford, SK is scheduled to be completed and licensed in 2020. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither 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.

Non-GAAP Measures

This news release contains the financial performance metric of Adjusted EBITDA, a measure that is not recognized or defined under IFRS ("Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other cannabis companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the MD&A for the year ended December 31, 2019. The Company believes that Adjusted EBITDA is a useful indicator of operating performance and is specifically used by management to assess the financial and operational performance of the Company.

The Company calculates Adjusted EBITDA as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. Non-GAAP Measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things the Company’s expectations regarding its operational assets and facilities under development, the Company’s timing of the filing of the Interim Filings, the timing, construction and licensing of the Thunderchild Cultivation facility, the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, the Company’s expectations with respect to the amended credit agreement’s ability to provide financial flexibility and allow the Company to meet its near term objectives and the Company’s ability to execute on the foregoing. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the Company’s ability to file the Interim Filings, additional timing, delays, regulatory changes and impacts, capital requirements, construction impacts, displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic, the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Decibel Cannabis Company Inc.

Decibel Announces the Extension of Annual Financial Filings, Financial Update and Resignation of Chief Financial Officer


CALGARY, April 27, 2020 /CNW/ – Decibel Cannabis Company Inc. (the "Company" or "Decibel") (TSX-V:DB) (OTCQB:DBCCF) announces that it will delay the filing of its audited financial statements and related management’s discussion and analysis for the fiscal year ended December 31, 2019 (collectively, the "Annual Filings").

Recent proclamations and guidance from Canadian health authorities, the city of Calgary and the province of Alberta and challenges resulting from the COVID-19 pandemic, have required the Company and its auditors to coordinate the preparation of the Annual Filings remotely. As a result, the completion of audit procedures as well as of the preparation of the Annual Filings as a whole have been delayed.

According to Blanket Order 51-517 issued by the Alberta Securities Commission on March 23, 2020 (the "Blanket Order"), during the period from March 23, 2020 to June 1, 2020, a person or company required to make certain filings has an additional 45 days from the otherwise applicable deadline to make such filings. The Company is relying on the Blanket Order for temporary relief from the requirements set out in Part 4 and Part 5 of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102"), to file the Annual Filings by the applicable deadlines set forth in NI 51-102. 

All of the Company’s management, directors and other insiders will remain subject to its share trading and black-out policy which reflects the principles set out in section 9 of National Policy 11-207: Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.

Decibel anticipates that it will be able to complete the Annual Filings no later than May 29, 2020.

Since the Company announced its latest interim financial report on November 28, 2019, the following material business developments have been previously disclosed by Decibel (collectively the "Disclosed Developments"):

(i)           

on December 6, 2019 a private placement with We Grow BC Ltd. (the "Private Placement");

(ii)          

on December 19, 2019 the results of its annual shareholder meeting held on December 18,2020, approving amongst other things, the change in management resulting from the Private Placement;

(iii)         

on December 23, 2019 the successful completion of the Private Placement;

(iv)        

on January 2, 2020 the third quarter results of We Grow BC Ltd.;

(v)         

on January 13, 2020 the resignation of its President and a corporate update;

(vi)        

on February 18, 2020 the rebrand from Westleaf Inc. to Decibel Cannabis Company Inc. (the "Rebrand"), corporate and operations update;

(vii)       

on March 2, 2020 the successful completion of the Rebrand; and

(viii)      

on April 14, 2020 a licensing update and business update relating to COVID-19.

 

The Disclosed Developments were disclosed in the Company’s public filings, which are available on the Company’s website at https://decibelcannabis.test/news/ and on its SEDAR profile at www.sedar.com.

In addition to the Disclosed Developments, based on its unaudited draft financial statements, the Company was in compliance, as at December 31, 2019, with all financial covenants contained in its credit facility (the "Credit Facility") with ATB Financial ("ATB"). Based on draft financial statements for the three months ended March 31, 2020, and out of an abundance of caution, the Company has entered into proactive discussions with ATB to ensure that applicable measures are in place in the event that the Company determines that it was not in compliance with any such covenant for the quarter end. The Company is optimistic that, if necessary, such discussions would be successful and covenant relief would be granted on a temporary basis. There is however, no certainty that any agreement will be reached nor that any covenant relief will be provided.

The Company is pleased to announce, one of its retail subsidiaries received its license from the Alberta Gaming, Liquor and Cannabis for its second Prairie Records branded retail store in Alberta. The Store is located at 8623-112 St NW, Edmonton, AB and is anticipated to be open to the public within the first two weeks of May.

Finally, the Company also announces today that Taylor Ethans, Chief Financial Officer and Co-Founder, has resigned from his position as Chief Financial Officer of Decibel effective May 4, 2020.

"Taylor co-founded Decibel and led from the position of Chief Financial Officer since inception. On behalf of the entire Company, we would like to thank Taylor for his leadership, hard work and commitment to Decibel" said Cody Church, Chairman of the Board of Decibel. "We wish Taylor nothing but continued success in his future endeavors."

The Company has appointed Stuart Boucher as interim Chief Financial Officer, effective May 4, 2020, and has initiated a search process to determine and appoint a permanent Chief Financial Officer. Prior to joining Decibel, Mr. Boucher worked in investment banking for BMO Capital Markets in their Global Energy group, focusing on public equity, debt offerings, and M&A advisory, exclusively in the Power & Energy Infrastructure industry. He holds a Bachelor of Commerce, with a major in Finance from the University of Alberta and was the second employee of Decibel, serving most recently as the Company’s Director of Corporate Development and Strategy. Mr. Boucher was instrumental in the merger with We Grow BC Ltd. and following the transaction has led the Company through numerous stringent cost-cutting activities and strategies.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three production houses operating or under development along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, an 80,000 square foot indoor cultivation facility in Battleford, SK is scheduled to be completed and licensed in 2020. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither 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.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things the Company’s timing of the filing of the Annual Filings, the Company’s compliance with the financial covenants contained in its credit agreement, the timing of and results of discussions and negotiations with ATB and the certainty of reaching any agreement with ATB, the opening of its recently licensed Prairie Record, the timing, construction and licensing of the Thunderchild Cultivation facility, the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats and the Company’s ability to execute on the foregoing. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the Company’s ability to file the Annual Filings, additional timing, delays, regulatory changes and impacts, capital requirements, construction impacts, displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic, the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Decibel Cannabis Company Inc.

Decibel Announces Licensing Developments and Provides Business Update


CALGARY, April 14, 2020 /CNW/ – Decibel Cannabis Company Inc. (the "Company" or "Decibel") (TSX-V:DB) (OTCQB:DBCCF) announces licensing developments at its Thunderchild Cultivation facility and The Plant extraction facility along with a general business update. The Company is actively working to mitigate the risk of disruption to its operations, due to COVID-19, with a focus on supporting the communities it operates in and providing a safe working environment for its employees and customers, all while continuing to progress its strategic plan.

"The Decibel team is working hard to continue to safely and efficiently produce our products, stay open for our customers, provide employment and support the communities in which we operate" said Benjamin Sze, CEO of Decibel. "Despite the challenges our country is facing during these unprecedented times, I am proud of the excellent progress we have made for our employees, customers and shareholders."

The Qwest Estate and Prairie Records

Decibel’s Qwest Estate cultivation facility in Creston, BC and Prairie Records retail stores in Saskatchewan and Alberta, remain fully operational with enhanced protective measures in place to prioritize employee and customer safety.  Additionally, Decibel continues to make excellent progress on the development and licensing of its University of Alberta and Palace Theatre cannabis retail stores, which are expected to be completed and licensed in May 2020.

Thunderchild Cultivation Facility

On April 13, 2020, dB Thunderchild Cultivation LP, a subsidiary of Decibel, submitted a complete site evidence package to Health Canada in connection with its application for a cultivation licence for its Thunderchild Cultivation facility, in Battleford, Saskatchewan.

The Plant Extraction & Manufacturing Facility

On March 30, 2020, Decibel’s subsidiary Westleaf Labs LP, submitted a sales licence amendment application for the sale of dried cannabis products and cannabis extract products produced at The Plant, its extraction and manufacturing facility located in Calgary, Alberta. The Plant remains active and is currently being used to perform co-packing services for a related party, while commissioning equipment and advancing product development initiatives.

Blendcraft by Qwest Launch

Blendcraft by Qwest ("Blendcraft") is Decibel’s introduction of premium blended pre-rolls into the Canadian market and widens Decibel’s offerings of Qwest products to new consumers who may be experiencing high-end cannabis for the first time. The launch of Blendcraft allows for Decibel to unlock the full value of its harvests while preserving its top end wholesale pricing.  Decibel successfully launched Blendcraft in March 2020 and has achieved listings with BC, Alberta, Saskatchewan and Ontario.

Qwest Products Registered in Manitoba

Decibel is pleased to announce it has agreed to terms with Manitoba Liquor & Lotteries to supply Qwest branded flower and pre-rolls to Manitoba retailers.   The first shipment to Manitoba retailers is on track to be delivered in April. Qwest products are now registered for sale in six provinces.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three production houses operating or under development along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, an 80,000 square foot indoor cultivation facility in Battleford, SK is scheduled to be completed and licensed in 2020. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things the development of new products, the timing, construction and licensing of Decibel’s University of Alberta and Palace Theater cannabis retail stores, the timing of Decibel’s first shipment of Qwest products to Manitoba retailers, the timing, construction and licensing of the Thunderchild Cultivation facility, the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats and the Company’s ability to execute on the foregoing. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Decibel Cannabis Company Inc.

Westleaf Inc. Officially Rebrands as Decibel Cannabis Company Inc.


Decibel Cannabis Company: Defining the Ultimate Expression of Cannabis

CALGARY, March 2, 2020 /CNW/ – Westleaf Inc. (the "Company" or "Decibel Cannabis Company Inc.") (TSX-V:WL) (OTCQB:WSLFF) announces today that following the filing of Articles of Amendment with the Alberta Corporate Registry on March 1, 2020,  the Company is now named and will be operating as Decibel Cannabis Company Inc ("Decibel"). The comprehensive rebrand marks a new chapter in the evolution of the organization and brings together the Westleaf and We Grow businesses under one name, shared vision, and a visual brand identity that reflects our mission to define the ultimate expression of cannabis.

The common shares of the Company are anticipated to commence trading under its new name on the TSX Venture Exchange ("TSXV") under the ticker symbol DB within two business days following the issuance of a bulletin by the TSXV (with its ticker changing on the OTCQB once final regulatory approvals are received). The Decibel rebrand will be reflected on the Company's new website at www.decibelcc.com.

"Decibel is a culmination of two companies committed to creating quality products and experiences beyond the ordinary. This rebrand reflects our ongoing dedication to craftsmanship, precision and fiscal discipline to deliver profitability in the cannabis industry", said Benjamin Sze, President and CEO of Decibel. "Our team is focused on raising the bar in every facet of the organization, as proven today with the launch of our rebrand, which was conceptualized, developed and executed entirely by our talented employees internally."

The Decibel Business

  • Core focus on premium cannabis and introducing rare cultivars to the market.
  • Three production houses that deliver craftsmanship and master the fundamentals of cannabis production:
    • Qwest Estate in Creston, BC – Produces premium flower that yields among the highest realized prices per gram in the industry, under QwestQwest Reserve and the recently announced Blendcraft by Qwest brands (collectively "Qwest House Brands").
    • Thunderchild Cultivation in Battleford, SK – Expected to complete Phase 1 construction in April 2020 and once fully operational, is expected to produce up to 7300kg of premium flower under Qwest House Brands.
    • The Plant Manufacturing Facility in Calgary, AB – Currently holds a Health Canada processing license, and upon receipt of a sales license, will expand Qwest House Brands' offerings into Cannabis 2.0 derivative products.
  • Prairie Records Retail – A differentiated and immersive retail experience that allows Decibel to creatively execute and market its brands. Prairie Records gives Decibel direct access to consumers improving brand recognition and understanding of consumer trends and preferences.

About Decibel Cannabis Company

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three production houses operating or under development along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in five provinces across Canada. Thunderchild Cultivation, an 80,000 square foot indoor cultivation facility in Battleford, SK is scheduled to be completed and licensed in 2020. The Plant, Decibel's extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft by Qwest, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things when the Company will commence trading under the Company's new OTCQB trading symbol, the availability of the Company's new corporate website and related materials, the development of new products, the timing and quality of the Company's launch of "Blendcraft by Qwest", the Company's receipt of a sales license at the Plant Manufacturing Facility, the timing and the construction of the Thunderchild Cultivation facility and its expected levels of production, the ability of the Thunderchild Cultivation facility to produce certain products and product formats, and the Company's ability to execute on the foregoing. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company's production facilities by Health Canada and receipt or maintenance of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company's credit facilities; timing and completion of construction and expansion of the Company's production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Decibel Cannabis Company Inc.

Westleaf Inc. Announces Rebrand, Corporate and Operations Update


CALGARY, Feb. 18, 2020 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) is pleased to provide the following corporate and operations update with respect to its ongoing cost reduction initiatives, financial position, corporate rebranding, and operations.

Westleaf Cannabis Inc. (CNW Group/Westleaf Inc.)

"The Qwest brand was built on our commitment to quality cannabis.  Despite the headwinds the industry currently faces, consumer demand for quality cannabis products is strong and we are optimistic about the future of the industry" said Ben Sze, President and CEO of Westleaf.   "We will continue to be fiscally disciplined and uncompromising in our quest to forge a meaningful relationship with consumers.   The synergies of pairing We Grow BC with Westleaf are already being realized and I am excited about 2020 as we bring The Plant and Thunderchild facilities online."

Corporate Update

Corporate Rebrand

The combination of Westleaf and We Grow BC Ltd. resulted in an opportunity to create a market leading integrated producer of ultra-premium cannabis.  In recognition of this new chapter in our history, on March 1st, 2020, Westleaf is expected to close a series of internal transactions to effect a corporate rebrand and commencing March 2nd, 2020 will carry on business under the name Decibel Cannabis Company Inc., and expects to commence trading under the symbol "DB" on the TSX-V thereafter. The Company will announce its OTCQB trading symbol on or before March 2nd, 2020 or as soon as such symbol has been made available to the Company. The Company will also make available its new corporate website and related corporate materials on March 2nd, 2020.

New Strain Launches

Qwest and Qwest Reserve brands continue to deliver on the promise to introduce unique strains to the market with the introduction of eleven new strains through January 31, 2020, including stand-outs Wedding Cake, Gelato 33, and MAC 1 among others. The new cultivars are offered in flower and pre-roll form and registered across Alberta, British Columbia, Ontario and Saskatchewan. The new strains have maintained or increased wholesale pricing levels in comparison to previous Qwest and Qwest Reserve cultivars which is reflective of the demand for the cannabis product produced at the Qwest Estate and the sustained consumer demand for rare cultivars of high-quality flower. 

Launch of New Product Brand

In the coming weeks, The Company is expected to launch "Blendcraft by Qwest" as a complement to the existing Qwest and Qwest Reserve brands.  With an offering of high-quality blended pre-rolls, the Company expects the launch of "Blendcraft by Qwest" to reinforce its strong premium portfolio and more fully monetize the commercial value of its harvests.

Operational Update

Cultivation Operations Update

The Company is pleased to announce that modifications have been made to the construction of the Thunderchild facility to align with existing design and SOPs from We Grow’s Creston cultivation facility. These modifications will allow the Thunderchild facility to match the craft, ultra-premium product being produced from the We Grow facility in Creston, BC. Construction is expected to be completed April 2020.

Extraction Operations Update

The Plant continues its commissioning and qualification activities on its extraction, filtration and distillation processes to optimize its technical and regulatory efficiencies, as it awaits its sales license amendment.

Retail Operations Update

Following the launch of Cannabis 2.0 products, the Company’s four Prairie Records stores achieved record revenue in the month of January, with combined sales of approximately $930 thousand for the month, reflecting month over month sales growth of approximately 8%. Additionally, the operating Prairie Records stores have achieved positive EBITDA from its retail operations inclusive of retail-related corporate overhead. 

Construction began in late January on the Company’s University of Alberta and Palace Theatre cannabis retail locations and both locations are expected to open May 2020. Furthermore, The Company has completed demolition on its Banff location and is currently evaluating designs for the potential flagship retail location.

Synergies Capture

As a part of opportunity created by the integration of Westleaf and We Grow BC Ltd. ("We Grow"), the Company has executed several cost-reduction measures to improve profitability and cashflow. These initiatives include the elimination of 11 positions at Westleaf resulting in projected annualized savings of approximately $1.4 million exclusive of one-time severance costs. Additionally, the Company has rationalized its retail portfolio significantly, from twenty-two (22) non-active retail locations to eleven (11) to reduce related carrying costs and lease obligations.  With the execution of this phase of our integration programs, the Company is applying a disciplined and growth orientated approach to profitability.

Liquidity Position

As of January 31, 2020, the Company had access to $12.3 million of capital, comprised of $8.3 million of cash and the ability to draw up to $4.0 million of undrawn, low cost, non-dilutive capital under its non-revolving credit facilities with ATB Financial. The Company’s capital projects are fully funded with existing capital on hand.

About Westleaf Inc.

Westleaf Inc is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Westleaf has three production houses operating or under development along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is licensed and operating 26,000 square feet of cultivation space producing the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve. These products sell in five provinces across Canada. Thunderchild Cultivation, an 80,000 square foot indoor cultivation facility in Battleford, SK is scheduled to be completed and licensed in 2020. The Plant, Westleaf’s extraction facility, has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft by Qwest, into new and innovative product formats like vapes, concentrates, edibles and beyond.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things the timing and introduction of the Plant and Thunderchild facilities’ online platform, the timing and expected completion of a series of internal transactions effecting the Company’s corporate rebranding, including the Company continuing under the name "Decibel Cannabis Company Inc.", trading under the Company’s new OTCQB trading symbol, and the availability of the Company’s new corporate website and related materials, the development of new products, the timing and quality of the Company’s launch of "Blendcraft by Qwest", the Company’s receipt of a sales license amendment, the Company opening new retail locations by the University of Alberta and Palace Theatre, the timing and the construction of the Thunderchild Cultivation facility and corresponding license application, the ability of the Thunderchild Cultivation facility to produce certain products, and the Company’s ability to execute on the foregoing. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Non-GAAP Financial Measures

This press release contains the term " EBITDA". This indicator is not a recognized measure under International Financial Reporting Standards ("IFRS") and does not have a standardized meaning prescribed by IFRS. Accordingly, the Company’s use of this term may not be comparable to similarly defined measures presented by other companies. The Company believes that EBITDA is a useful indicator of operating performance and is specifically used by management to assess the financial and operational performance of the Company. The Company believes that this measure, in addition to conventional measures prepared in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. EBITDA is defined as net earnings before any deductions for net finance costs, stock-based compensation, taxes, depreciation, and amortization.

Accordingly, these Non-GAAP Financial Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

SOURCE Westleaf Inc.

Westleaf Inc. Announces Resignation of President and Corporate Update


CALGARY, Jan. 13, 2020 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) announced today that following the closing of the merger of Westleaf and We Grow B.C. Ltd. ("We Grow"), Scott Hurd, President and Co-Founder, has resigned effective January 24, 2019.

Westleaf Cannabis Inc. (CNW Group/Westleaf Inc.)

"On behalf of Westleaf, we thank Scott for his vision, leadership and efforts that have positioned Westleaf favourably with a high quality asset base that is ripe for growth in 2020" said Cody Church, Chairman of the Board of Westleaf. "Scott co-founded Westleaf and led the organization since August 2017. We are grateful for his strategic vision that has left the company in a strong financial position with sustainable competitive positioning. Scott was a driving force behind the recently closed merger with We Grow on December 20, 2019. We wish Scott continued success in his future endeavours."

"As a founder of Westleaf, it is with a heavy heart that I announce my resignation today," states Scott Hurd. "It has been an honour and a privilege to lead Westleaf through a period of immense growth in a new and dynamic industry. Our recently completed transformative merger with We Grow has positioned Westleaf to be one of the leading ultra-premium cannabis producers in Canada with best in class realized retail pricing, strong brand awareness and significant scalability and growth potential. With the merger now closed and a new leadership team in place, I have made the difficult decision to step back from the company. I have great confidence in the new management team and board to lead Westleaf through its next stage of growth. I wish Cody, Ben and the rest of the Westleaf team and board continued success in 2020 and beyond."

Scott will work to formally transition his responsibilities over the coming weeks and will be available to support the organization as needed as a strategic advisor. Ben Sze, the former CEO of We Grow and current CEO of Westleaf, will succeed Scott as the President of Westleaf.

Corporate Update

Realized Pricing

With We Grow’s commitment to quality, it has bucked the industry trend of price compression, with the Q3 2019 financial results of We Grow demonstrating a gross realized price per gram of $11.65 (net realized price per gram of $10.06). Notably, in Q4 2019, the Company released additional flower strains into the recreational market and received an incremental $0.50 price per gram for four premium product SKUs. The Company will continue to focus on maintaining We Grow’s position as a leader in the premium cannabis category with its Qwest and Qwest Reserve branded products.

Cost Reduction Initiatives

The Company continues to undertake cost reduction initiatives as it maintains focus on profitability and solidifying its position as one of the leading premium cannabis companies in Canada. As the integration of We Grow continues, Westleaf has focused on unlocking the combined synergies of the merger including the elimination of 9 positions (approximately 30% of corporate staff), resulting in projected annualized savings of approximately $1.3 million. The Company is finalizing its 2020 budget with a view to ensuring adequate adjustments are made to its cost structure to allow the Company to execute on its strategy and deploy capital towards optimizing its asset base. Effective immediately, executive leaders Shon Williams, Chief Development Officer, and Ben Kaanta, Chief Operating Officer, will be departing the Company and have transitioned their responsibilities to the current Westleaf executive team.  

About Westleaf Inc.

Westleaf is a fully integrated Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as premium cannabis cultivation. Westleaf’s operating cultivation facility is located in Creston, British Columbia in the heart of the Kootenays. It consists of 26,000 square feet retrofitted for phase 1 cultivation, including over 14,000 square feet of growing rooms. The Company is also building an 80,000 square foot purpose built indoor cultivation facility located in Battleford, Saskatchewan. Westleaf’s cannabis production includes its brand Qwest, which is considered a preeminent luxury cannabis brand. Westleaf’s extraction and processing facility, The Plant, is designed to produce high quality and consistent cannabis derivatives and consumables, both for Westleaf’s in-house brands as well as white label products. Westleaf’s retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things anticipated pricing, future capital requirements; Mr. Hurds ongoing involvement in the Company; the Company’s business strategy, plans, cost cutting strategy, 2020 budget and ability to execute on the foregoing; . Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Non-GAAP Financial Measures

This press release contains the terms "gross realized price per gram" and "net realized price per gram". These indicators are not recognized measures under International Financial Reporting Standards ("IFRS"), and do not have a standardized meaning prescribed by IFRS. Accordingly, the Company’s use of these terms may not be comparable to similarly defined measures presented by other companies. Gross realized price per gram and net realized price per gram are used by management to better understand the cannabis price per gram realized throughout a period. The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Gross realized price per gram is calculated as wholesale sales divided by the aggregate number of grams shipped during the period. Net realized price per gram is calculated as wholesales sales less excise taxes divided by the aggregate number of grams shipped during the period.

SOURCE Westleaf Inc.

Westleaf Inc. Announces Third Quarter 2019 Results of Newly Acquired We Grow B.C. Ltd.


CALGARY, Jan. 2, 2020 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) and its newly acquired wholly-owned subsidiary We Grow B.C. Ltd. ("We Grow"), released today the We Grow unaudited third quarter financial results for the fiscal year 2019, for the three and nine month interim period ending September 30, 2019. We Grow’s unaudited condensed interim consolidated financial statements ("Financial Statements") for the three and nine months ended September 30, 2019 and related Management Discussion and Analysis ("MD&A") for the reporting period are available under the Company’s profile at www.sedar.com.

Westleaf Cannabis Inc. (CNW Group/Westleaf Inc.)

Q3 2019 Financial Highlights:

  • Net revenues of $4.4 million for the nine months ended September 30, 2019, including net revenues of $2.7 million for the three months ended September 30, 2019, an increase from $nil net revenues for the three and nine months ended September 30, 2018. Net revenues reflect a record revenue quarter for We Grow with increasing demand for Qwest-branded cannabis products in British Columbia, Alberta, Saskatchewan, Ontario and Prince Edward Island.
  • Adjusted EBITDA of $0.8 million for the three months ended September 30, 2019, representing We Grow’s first quarter of positive Adjusted EBITDA, driven by strong wholesale pricing of Qwest-branded cannabis products on a per gram basis, and disciplined control of production costs and corporate expenses. See "Non-GAAP Measures" below.
  • Net comprehensive loss of $0.5 million for the nine months ended September 30, 2019, including a net comprehensive loss of $0.4 million for the three months ended September 30, 2019, a decrease from the net comprehensive loss of $2.6 million for the nine months ended September 30, 2018, and $0.8 million for the three months ended September 30, 2018.

Highlights Subsequent to Quarter End:

  • On December 23, Westleaf and We Grow announced the completion of a plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia) involving Westleaf and We Grow and certain security holders of We Grow (the "Arrangement").
  • Concurrently with the Arrangement, We Grow completed a non-brokered management and key stakeholder led private placement financing of subscription receipts of We Grow ("Subscription Receipts") for gross proceeds of $1,788,206.91 at a price of $0.21 per Subscription Receipt. Each Subscription Receipt entitled the holder thereof to acquire one We Grow Class "C" Voting Participating Share ("We Grow Class C Share") and one-half warrant to purchase a We Grow Class C Share (each whole warrant, a "We Grow Warrant"), and each We Grow Class C Share was exchanged for one common share in the capital of Westleaf ("Westleaf Share") and each whole We Grow Warrant was exchanged for one warrant to purchase a Westleaf Share ("Westleaf Warrant") under the Arrangement. Each Westleaf Warrant is exercisable at a price of $0.28 per Westleaf Share for a period of two years following the closing of the Arrangement.

"We are pleased to report We Grow’s first quarter of positive Adjusted EBITDA, resulting from the strength and growth of the Qwest and Qwest Reserve brand, reaffirming our strategy to serve the ultra-premium cannabis market in Canada" states Benjamin Sze, Chief Executive Officer of We Grow and Westleaf. "Going forward we anticipate integrating the Qwest brand within the Westleaf portfolio of assets to create value for our shareholders and stakeholders".

About Westleaf Inc.

Westleaf is a Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as cannabis cultivation. Westleaf’s extraction and processing facility, The Plant, will produce high quality and consistent cannabis derivatives and consumables, both for Westleaf’s in-house brands as well as white label products. Westleaf’s retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada. Westleaf’s Thunderchild cultivation facility is expected to be completed in Q1, 2020. http://www.westleaf.com

We Grow’s cultivation facility is located in Creston, British Columbia in the heart of the Kootenays, where BC grown marijuana originated, and holds cannabis cultivation, processing and sales licenses pursuant to the applicable regulations of the Cannabis Act. We Grow has scalable production facilities currently consisting of 26,000 square feet retrofitted for phase 1 cultivation including over 14,000 square feet of growing rooms and up to 100-acre cultivation abilities for future production. We Grow’s cannabis production includes its brand Qwest, which is considered a preeminent luxury cannabis brand achieving one of the highest realized flower prices in Canada.

Non-GAAP Measures

This news release contains the financial performance metric of Adjusted EBITDA, a measure that is not recognized or defined under IFRS ("Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other cannabis companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the section "Highlights for the three and nine months ended September 30, 2019" in the MD&A for the three and nine months ended September 30, 2019. The Company believes that Adjusted EBITDA is a useful indicator of operating performance and is specifically used by management to assess the financial and operational performance of the Company.

We Grow defines Adjusted EBITDA as net income or loss, excluding fair value changes on growth of biological assets, realized fair value changes on inventory sold or impaired, amortization, depreciation and accretion expense, share based payments, finance expense and income taxes. Non-GAAP Measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the We Grow’s operating results, underlying performance and prospects in a manner similar to We Grow’s management.

Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Notice of No Auditor Review

We Grow’s unaudited condensed interim consolidated Financial Statements for the three and nine months ended September 30, 2019 have been prepared by and are the responsibility of We Grow’s management.

We Grow’s independent auditor has not performed a review of these unaudited condensed interim consolidated financial statements in accordance with standards established by the CPA Canada for a review of interim financial statements by an entity’s auditor.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, the integration of the businesses of Westleaf and We Grow; the construction and expansion of the Company’s production facilities; the timing for completion of same and commencement of production at the Company’s production facilities; and future production capacity. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Westleaf Inc.

Westleaf and We Grow BC Announce Completion of Business Combination


/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

CALGARY, Dec. 23, 2019 /CNW/ – Westleaf Inc. ("Westleaf" or the "Company") (TSX-V:WL) (OTCQB:WSLFF) and We Grow B.C. Ltd. ("We Grow") are pleased to announce the completion, following the receipt of the final order of the Court on December 20, 2019, of the previously announced plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia) involving Westleaf, We Grow and certain securityholders of We Grow (the "Arrangement" or the "Transaction").

Westleaf Cannabis Inc. (CNW Group/Westleaf Inc.)

"Westleaf has built world class cultivation, extraction and retail assets that will allow our combined company to scale up quickly to address the existing and unmet demand for our Qwest branded products. We aim to create the preeminent ultra-premium cannabis brand in Canada that will have a renewed focus on execution, cost control, effective corporate governance and profitability," said Benjamin Sze, Chief Executive Officer of Westleaf. 

Transaction Highlights

The Arrangement is expected to accelerate We Grow’s strategy to expand cultivation capabilities for its popular Qwest and Qwest Reserve ultra-premium cannabis flower brands. The Arrangement is expected to elevate the combined entity’s forecasted 2020 cannabis production capacity to 9,100 kgs(1) of dried cannabis flower while enabling the Company to fully leverage the Qwest ultra-premium brand through Westleaf’s extraction facility and Westleaf’s chain of award-winning Prairie Records retail stores. Specific additional highlights include the following:

  • Established Industry Leading Cannabis Brands: Qwest has established itself as a leading cannabis brand, recognized for ultra-premium quality products and rare flower varieties, evidenced by one of the highest realized selling prices in the Canadian recreational market and strong demand across various distribution channels(2). The Transaction positions the combined company to accelerate Qwest’s brand growth through Westleaf’s assets by expanding into cannabis derivative products, adding craft-style cultivation capacity, and owning the relationship with the consumer through the award winning wholly owned retail stores, Prairie Records.
  • Creates One of Canada’s Largest Craft Producers: The Transaction combines We Grow’s current production and Westleaf’s nearly completed Thunderchild cultivation facility, creating one of the largest craft producers in Canada with a core focus on producing the highest quality cannabis and cannabis derivative products for the recreational market. We Grow’s access to an extensive genetic library is anticipated to be commercialized on an accelerated basis to bring novel, differentiated cannabis products to market.
  • Positioned for Cannabis 2.0 Products: Westleaf brings scalable extraction and product manufacturing assets which is expected to enable Qwest to expand its ultra-premium product lines into high margin derivative cannabis products in time to meet the expected demand for cannabis 2.0 products.
  • Proven Execution Capabilities: We Grow intends to take its best-in-class production practices and cannabis cultivation expertise and apply it to Westleaf’s high quality assets to maintain its high standard of quality for products under the Qwest banner, including Westleaf’s Thunderchild Cultivation facility and The Plant extraction facility.
  • Highly Experienced Management Teams: We Grow’s management and cultivation teams have a proven ability to scale ultra-premium indoor cannabis production and obtain best in class wholesale pricing. Westleaf brings a complementary and experienced processing and extraction team, industry leading retail operators and capital markets expertise.
  • Additional Non-Dilutive Financing from ATB Financial: As part of the transaction ATB Financial has committed, subject to customary conditions precedent to be satisfied prior to or concurrent with closing of the Transaction, to provide $8.9 million of additional credit and liquidity through the issuance of a new term loan ($4.7 million) and removal of the restricted cash requirement (~$4.2 million) under the Company’s current subsidiary level credit facilities which have been consolidated at the Company level as part of the Transaction. The combined company’s remaining infrastructure projects are anticipated to be fully funded.
  • Strong Economics and Demonstrated Cash Flow: We Grow has demonstrated a disciplined approach to sustainable profitability, achieving positive Adjusted EBITDA and net income in Q3 2019 enabling the Transaction to be immediately accretive to Westleaf. The combined entity is anticipated to be reflective of We Grow’s commitment to lean and efficient operations and the pro forma management team is expected to be focused on delivering strong financial performance going forward.

Completion of Business Combination

Pursuant to the previously announced arrangement agreement between Westleaf and We Grow dated November 7, 2019, Westleaf has acquired all of the issued and outstanding shares of We Grow (the "We Grow Shares"), other than its Class "H" non-voting common participating shares (which shares are held by a wholly-owned subsidiary of We Grow) in exchange for common shares in the capital of Westleaf ("Westleaf Shares") by way of the Arrangement. Each We Grow Share, other than the We Grow Class "C" Voting Common Participating Shares ("We Grow Class C Shares"), was exchanged for 4.264 Westleaf Shares. Each outstanding option to purchase one We Grow Share ("We Grow Options") were exchanged for one Westleaf option ("Westleaf Options") and each outstanding warrant to purchase one We Grow Class C Share ("We Grow Warrants") were exchanged for one Westleaf warrant ("Westleaf Warrants"). Each We Grow Class C Share was exchanged for one Westleaf Share. The Transaction is an arms’ length transaction.

Prior to the completion of the Arrangement, $1,000,000 principal amount of promissory notes outstanding in the capital of We Grow, plus accrued and unpaid interest, was exchanged for We Grow units ("We Grow Units"), with each We Grow Unit consisting of one We Grow Class C Share and one-half We Grow Warrant, at a price of $0.16 per We Grow Unit.  Each We Grow Class C Share and We Grow Warrant was exchanged under the Arrangement for one Westleaf Share and one Westleaf Warrant. Each Westleaf Warrant is exercisable at a price of $0.28 per Westleaf Share for a period of two years following the closing of the Arrangement.

Following the Arrangement and Concurrent Financing, there were 342,504,258 Westleaf Shares outstanding and former holders of We Grow Shares held 58% of the issued and outstanding Westleaf Shares at closing of the Arrangement.

All Westleaf Shares received by shareholders of We Grow pursuant to the Arrangement, except Westleaf Shares issued in exchange for We Grow Class C Shares, are subject to a contractual hold period (the "Hold Period"), during which time the holder of such Westleaf Shares subject to the Hold Period may not trade, offer, sell, pledge or otherwise transfer such shares until the Hold Period expires, and the Westleaf Shares subject to the Hold Period and the certificates representing such shares will bear a legend indicating that the resale of such securities is so restricted. The Hold Period will expire as follows: (a) 10% of the Westleaf Shares subject to the Hold Period will be released from the Hold Period at the Effective Time; (b) 30% of the Westleaf Shares subject to the Hold Period will be released from the Hold Period on the date that is six months from the Effective Time; (c) 30% of the Westleaf Shares subject to the Hold Period will be released from the Hold Period on the date that is nine months from the Effective Time; and (d) 30% of the Westleaf Shares subject to the Hold Period will be released from the Hold Period on the date that is 12 months from the Effective Time, provided that the Westleaf Shares subject to the Hold Period may be released from the Hold Period at such earlier times as may be consented to by Westleaf in writing.

In connection with the Transaction, Eight Capital Inc. ("Eight Capital") provided a fairness opinion ("Eight Capital Fairness Opinion") to the special independent committee of the Westleaf board of directors that provided, subject to the assumptions, qualifications and limitations contained in the Eight Capital Fairness Opinion, that the consideration to be paid by Westleaf for the acquisition of We Grow pursuant to the Arrangement is fair, from a financial point of view, to Westleaf.

In connection with the Transaction, AltaCorp Capital Inc. ("AltaCorp") provided a fairness opinion ("AltaCorp Fairness Opinion") that provided that subject to the assumptions, qualifications and limitations contained in the AltaCorp Fairness Opinion, that the consideration to be paid by Westleaf to the holders of We Grow Shares with respect to the Arrangement is fair, from a financial point of view.

Concurrent Financing

Concurrently with the Arrangement, We Grow completed a non-brokered management and key stakeholder led private placement financing of subscription receipts of We Grow ("Subscription Receipts") for gross proceeds of $1,788,206.91 at a price of $0.21 per Subscription Receipt (the "Concurrent Financing"). Each Subscription Receipt entitled the holder thereof to acquire one We Grow Class C Share and one-half We Grow Warrant, and each We Grow Class C Share was exchanged for one Westleaf Share and each whole We Grow Warrant was exchanged for one Westleaf Warrant under the Arrangement. Each Westleaf Warrant is exercisable at a price of $0.28 per Westleaf Share for a period of two years following the closing of the Arrangement.

It is anticipated that the proceeds of the Concurrent Financing (after deduction of costs of fees incurred) will be used to integrate the businesses of Westleaf and We Grow and for general corporate purposes and future working capital. Although the Company intends to use the proceeds of the Concurrent Financing as described above, the actual allocation of proceeds may vary from the uses set forth above, depending on future operations or unforeseen events or opportunities.

In connection with the closing of the Concurrent Financing, 4,253,334 Subscription Receipts were issued to certain directors and officers of the Company.  The participation of directors and officers in the Concurrent Financing constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").  The Company is relying upon exemptions from the formal valuation and minority approval requirements of MI 61-101 based on a determination that the fair market value of the Concurrent Financing, insofar as it involves the related parties, does not exceed 25% of the market capitalization of the Corporation.  The Corporation was not in a position to file a material change report more than 21 days in advance of the closing of the Concurrent Financing, as the participation of the related parties was not confirmed at that time. The Concurrent Financing was approved by the Company’s board of directors by means of a unanimous resolution.

Westleaf Credit Facility

Concurrently with the closing of the Arrangement, the Company entered into a credit facility for a new term loan for $4,700,000 with ATB Financial and the restricted cash requirement of approximately $4,200,000 under its existing credit facility, was removed.

New Board of Directors

Westleaf’s board of directors has been reconstituted to include three appointees of We Grow, being Benjamin Sze, Michael Kelly and Paul Wilson, and two appointees of Westleaf, being Cody Church and Delbert Wapass. Westleaf’s officers have been reconstituted to include Benjamin Sze as Chief Executive Officer, Scott Hurd as President, Taylor Ethans as Chief Financial Officer, Gary Leong as Chief Compliance Officer, and Adam Coates as Executive Vice-President, Commercial.

The above noted changes constitute a "Change in Management" as defined in the policies of the TSX Venture Exchange ("TSXV"). Pursuant to the policies of the TSXV, the Change in Management was approved by the shareholders of Westleaf at its annual general and special meeting of shareholders on December 18, 2019.

Amendment to Debenture Indenture

In connection with Westleaf’s previous announcement regarding its intended amendment to the debenture indenture between Computershare Trust Company of Canada ("Computershare") and Westleaf dated May 10, 2019, Westleaf is pleased to announce that it has entered into a supplemental debenture indenture with Computershare dated December 20, 2019 in respect of the amendment to the conversion price of the outstanding convertible debentures of Westleaf from $1.30 to $0.45.

Advisors and Counsel

Eight Capital Inc. acted as the exclusive financial advisor to Westleaf. Borden Ladner Gervais LLP acted as legal counsel to Westleaf.

AltaCorp Capital Inc. acted as the financial advisor to We Grow. McCarthy Tetrault LLP acted as legal counsel to We Grow.

About Westleaf Inc.

Westleaf is a Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as cannabis cultivation. Westleaf’s extraction and processing facility, The Plant, will produce high quality and consistent cannabis derivatives and consumables, both for Westleaf’s in-house brands as well as white label products. Westleaf’s retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada. Westleaf’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

We Grow’s cultivation facility is located in Creston, British Columbia in the heart of the Kootenays, where BC grown marijuana originated, and holds cannabis cultivation, processing and sales licenses pursuant to the applicable regulations of the Cannabis Act. We Grow has scalable production facilities currently consisting of 26,000 square feet retrofitted for phase 1 cultivation including over 14,000 square feet of growing rooms and up to 100-acre cultivation abilities for future production. We Grow’s cannabis production includes its brand Qwest, which is considered a preeminent luxury cannabis brand achieving one of the highest realized flower prices in Canada.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, the use of proceeds from the Concurrent Financing; details with respect to the Hold Period; anticipated pricing, future capital requirements; the integration of the businesses of Westleaf and We Grow; the construction and expansion of the Company’s production facilities; the timing for completion of same and commencement of production at the Company’s production facilities; and future production capacity. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

1.

Based on management estimates. Thunderchild production capacity estimates are based on Phase I and Phase II total flower bench of 42,000 square feet total (21,000 square feet per phase), 60 grams of flower per yield per square foot per harvest, and 5.8 harvests per annum. Phase I consists of facility floor plate of approximately 80,000 total square feet (total square footage of Phase I & II of ~130,000 sq. ft.). Creston production capacity estimates are based on Phase1 and Phase 1B total flower bench of 22,900 square feet total (7,700 square feet phase 1), 43 grams of flower per yield per square foot per harvest, and 5.5 harvests per annum.

2.

Based on average retail price of SKUs available online from Alberta Gaming, Liquor and Cannabis in December 2019.

 

SOURCE Westleaf Inc.

Westleaf and We Grow Announce Results of Shareholder Meetings


/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

CALGARY, Dec. 19, 2019 /CNW/ – Westleaf Inc. ("Westleaf") (TSX-V:WL) (OTCQB:WSLFF) and We Grow BC Ltd. ("We Grow") are pleased to announce the results of their respective securityholder meetings in connection with the previously announced plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia) involving Westleaf, We Grow and certain securityholders of We Grow (the "Arrangement").

Westleaf Cannabis Inc. (CNW Group/Westleaf Inc.)

The Westleaf Meeting

At Westleaf’s annual general and special meeting of the holders of Westleaf common shares (the "Westleaf Shareholders") held on December 18, 2019 (the "Westleaf Meeting"), Westleaf Shareholders have approved all of the resolutions to be voted on by Westleaf Shareholders that were set forth in the joint information circular of Westleaf and We Grow dated November 20, 2019 (the "Information Circular"), available on Westleaf’s SEDAR profile at www.sedar.com.

Specifically, Westleaf Shareholders have approved the ordinary resolution relating to the change in management ("Change in Management") of Westleaf in connection with the Arrangement. The Change in Management resolution was approved by approximately 98% of the votes cast by Shareholders at the Westleaf Meeting.

At the Westleaf Meeting, Westleaf Shareholders also approved ordinary resolutions approving: (i) fixing the number of directors of Westleaf to be elected at seven; (ii) election of directors of Westleaf; (iii) appointment of the auditor; (iv) an amendment to the stock option plan for Westleaf to be effective upon completion of the Arrangement; and (v) an amendment to the restricted share unit plan for Westleaf to be effective upon completion of the Arrangement.

The We Grow Meeting

At We Grow’s special meeting of the holders ("We Grow Securityholders") of certain of the common shares in the capital of We Grow ("We Grow Shares") and the holders of options to purchase We Grow Shares ("We Grow Options") held on December 18, 2019 (the "We Grow Meeting"), We Grow Securityholders have approved the special resolution to approve the Arrangement as set forth in the Information Circular. All of the votes cast by holders of We Grow Shares and We Grow Options were voted in favour of the special resolution approving the Arrangement.

The closing of the Arrangement remains subject to the satisfaction or waiver of the other conditions specified in the arrangement agreement between Westleaf and We Grow dated November 7, 2019, as amended on November 20, 2019 (the "Arrangement Agreement"), including approval of the final order in respect of the Arrangement by the Supreme Court of British Columbia. If all other conditions specified in the Arrangement Agreement are satisfied or waived, Westleaf and We Grow expect that the closing of the Arrangement will occur on December 20, 2019.

About Westleaf Inc.

Westleaf is a Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as cannabis cultivation. Westleaf’s extraction and processing facility, The Plant, will produce high quality and consistent cannabis derivatives and consumables, both for Westleaf’s in-house brands as well as white label products. Westleaf’s retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada. Westleaf’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

About We Grow B.C. Ltd.

We Grow is located in Creston British Columbia in the heart of the Kootenay’s, where BC grown marijuana originated, and holds cannabis cultivation, processing and sales licenses pursuant to the applicable regulations of the Cannabis Act. We Grow has scalable production facilities currently consisting of 26,000 square feet which has been retrofitted for phase 1 cultivation including over 14,000 square feet of growing rooms and up to 100-acre cultivation abilities for future production. We Grow’s cannabis production includes its brand Qwest, which is considered a preeminent luxury cannabis brand achieving one of the highest realized flower prices in Canada.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, statements concerning the completion of the Arrangement and the timing thereof, the integration of the businesses of Westleaf and We Grow; the construction and expansion of Westleaf’s production facilities; the timing for completion of same and commencement of production at Westleaf’s production facilities; and future production capacity. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licenses to retail cannabis products; review of the Company’s production facilities by Health Canada and receipt or maintenance of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under Westleaf’s credit facilities; timing and completion of construction and expansion of Westleaf’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf and We Grow assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law., projections, or other factors, should they change, except as required by law.

SOURCE Westleaf Inc.

Westleaf and We Grow Announce Pricing and Closing Date for Private Placement


/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

CALGARY, Dec. 6, 2019 /CNW/ – Westleaf Inc. ("Westleaf") (TSX-V:WL) (OTCQB:WSLFF) and We Grow B.C. Ltd. ("We Grow") announce pricing for the previously disclosed non-brokered private placement financing of subscription receipts for We Grow ("Subscription Receipts"), at a price (the "Offering Price") of $0.21 per Subscription Receipt (the "Offering"). The financing will be up to $3 million and will be led by insiders of Westleaf and We Grow. The Offering is expected to be completed prior to or concurrently with the previously announced plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia) involving Westleaf, We Grow and certain securityholders of We Grow (the "Arrangement"), estimated to close on or about December 20, 2019.

Westleaf Inc. (CNW Group/Westleaf Inc.)

Each Subscription Receipt will entitle the holder thereof to acquire one unit of We Grow ("We Grow Unit"), with each We Grow Unit consisting of one class "C" voting common participating share in the capital of We Grow ("We Grow Class C Share") and one-half of one common share purchase warrant of We Grow (each full warrant a "We Grow Warrant"). Each We Grow Class C Share and each We Grow Warrant will ultimately be exchanged under the Arrangement for one common share in the capital of Westleaf ("Westleaf Share") and one common share purchase warrant of Westleaf ("Westleaf Warrant"), respectively. The Westleaf Warrants will be exercisable at a price of $0.28 per Westleaf Share (the "Exercise Price") for a period of two years following the closing of the Arrangement.

It is anticipated that the proceeds of the Offering (after deduction of costs of fees incurred) will be used to integrate the businesses of Westleaf and We Grow and for general corporate purposes and future working capital. Although Westleaf and We Grow intend to use the proceeds of the Offering as described above, the actual allocation of proceeds may vary from the uses set forth above, depending on future operations or unforeseen events or opportunities.

Completion of the Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange (the "TSXV"). The Offering Price and the Exercise Price set forth in this news release supersedes the pricing set forth in Westleaf’s prior news release dated November 7, 2019.The TSXV has not yet approved the Offering Price or the Exercise Price for the Offering and they remain subject to the change.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities issued pursuant to the Offering and the Arrangement described herein have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from such registration.

About Westleaf Inc.

Westleaf is a Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as cannabis cultivation. Westleaf’s extraction and processing facility, The Plant, will produce high quality and consistent cannabis derivatives and consumables, both for Westleaf’s in-house brands as well as white label products. Westleaf’s retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada. Westleaf’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

About We Grow B.C. Ltd.

WGBC is an authorized licensed cultivator, processor, and seller under the Cannabis Act. WGBC is located in Creston British Columbia in the heart of the Kootenay’s, where BC grown marijuana originated, and holds cannabis cultivation, processing and sales licenses pursuant to the applicable regulations of the Cannabis Act. WGBC has scalable production facilities currently consisting of 100,000 square feet of indoor space of which 24,000 has been retrofitted for Phase 1 Cultivation and up to 100-acre cultivation abilities for future production. WGBC’s cannabis production includes its brand Qwest, which is considered a preeminent luxury cannabis brand achieving one of the highest realized flower prices in Canada.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release

Cautionary Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, statements concerning completion of the Arrangement and the Offering and the timing thereof; the pricing of the Offering and the Exercise Price; the use of proceeds from the Offering; the payment of fees to certain eligible persons in connection with the Offering; the integration of the businesses of Westleaf and We Grow; the construction of Westleaf’s production facilities and the timing for completion of same and commencement of production at Westleaf’s production facilities. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under Westleaf’s credit facilities; timing and completion of construction of Westleaf’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf and We Grow assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Westleaf Inc.