Category: News Releases

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.

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.

/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 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.

SOURCE Westleaf Inc.

/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").

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.

/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.

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.

CALGARY, Nov. 28, 2019 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF), released today its third quarter financial results for the fiscal year 2019, for the three month interim period ending September 30, 2019 and provided an update on operations. Westleaf’s third quarter Financial Statements and related Management Discussion & Analysis for the reporting period are available under the Company’s profile at www.sedar.com

Q3 2019 Financial Highlights:

• Operating revenues of $1.7 million for the third quarter of 2019, up 82% from Q2 2019. Total revenue reflects operations from three cannabis retail stores in the Saskatoon region and one in Calgary, the latter which was only operational for the final two weeks of the interim period. In management’s view, the urban stores continue to perform well and are achieving blended gross margins of ~37%.
• Selling General & Administrative (SG&A) costs of $3.1 million for the quarter, down ~$0.7 million or 17% from Q2 2019. Westleaf continues to be focused on cost reductions and is implementing further overhead reduction initiatives.
• Westleaf’s cash reserves at the end of the reporting period were $10.0 million and the Company has access to low-cost, undrawn credit facilities with ATB Financial of ~$18.9 million which brings the total available borrowing room and cash reserves to ~$28.9 million;
• The Company opened a fourth Prairie Records retail location in Calgary, Alberta, on September 1, 2019, bringing the Company’s total cannabis retail profile to four stores operating, and the Company announced the anticipated development of three more proposed cannabis retail stores, one in downtown Calgary, one in the University District in Edmonton and one in Banff National Park, all of which are subject to applicable regulatory approvals, including approval from Albert Gaming Liquor and Cannabis.

Highlights Subsequent to Quarter End:

• On November 7, the Company announced the proposed merger of the Company with We Grow BC Ltd., the cultivator of premium cannabis brand Qwest, to create a combined vertically integrated company at the luxury end of the cannabis market. The proposed merger is expected to provide the combined entity with access to $8.9 million in additional non-dilutive capital 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 are expected to be consolidated at the Company level as part of the transaction). Following the close of the transaction, the combined company’s remaining infrastructure projects are anticipated to be fully funded.
• Westleaf’s Phase I of The Plant, the Company’s large-scale extraction, processing and manufacturing facility in Calgary, (built to EU GMP specifications) received approval from Health Canada for a standard processing licence on October 11, 2019.

"During the reporting period, we executed on our previously stated plans to build out a viable integrated premium cannabis company and prepare the Company for the coming of Cannabis 2.0, that is the legalization of a large variety of cannabis derivative products," said Scott Hurd, President and CEO of Westleaf. "We successfully completed construction on The Plant, and we received a standard processing licence from Health Canada within the estimated time frame. Subsequent to the quarter end The Plant has been operationalized and we are now prepared to begin manufacturing a number of cannabis derivative products for sale by the Company and through white label contracts for third parties."

"Most substantially, subsequent to quarter end, we announced that we intend to merge Westleaf with We Grow BC," added Hurd. "The resulting combined company is expected to have the scale and the cannabis brands to be a significant player in the ultra-premium end of the legal recreational cannabis market in Canada. In our view, We Grow’s Qwest brand has established itself as a leading cannabis brand, recognized for its ultra-premium quality products and rare flower varieties, evidenced by its leading realized selling price in the Canadian recreational market."

Operating Highlights

The Plant – Preparing for Cannabis 2.0:

• Phase I of The Plant, construction of the Company’s wholly owned large-scale cannabis extraction, processing and product formulation facility, was completed and it received approval from Health Canada for a standard cannabis processing licence which allows the Company to begin cannabis processing production;
• Phase I of the facility is designed to process approximately 65,000 kgs of dried cannabis per annum into high quality oils, concentrates, tinctures, vape products and gel caps, including a white label vape product for Winnipeg based Delta Nine Cannabis Inc., and Westleaf’s first in-house product, a line of vape pens under the brand General Admission¹;
• The Plant is a highly strategic asset for the Company. Westleaf anticipates strong industry wide demand for efficient extraction, processing and formulation capacity. In addition, the merger with We Grow BC is expected to enable the combined entity to begin processing and production of derivative products under the premium brand Qwest.

The Plant has an additional 45,000 square feet of scalable space with the potential to expand capacity as well as potentially add additional product lines based on consumer preferences now that additional products have been licensed.  The first products expected in Cannabis 2.0 legalization are a line of vape products the Company plans to roll-out in the early part of Q1 2020. The Plant is also anticipated to be a key component in the merged company, as some of the processing capacity will be used to create Qwest branded ultra-premium cannabis derivative products. 

Prairie Records – A Unique Retail Experience:

Prairie Records the Company’s retail brand continues to grow through the quarter with the addition of a store in Calgary’s Forest Lawn district, which opened on September 1, 2019. The Prairie Records two urban stores in Saskatoon continue to return gross margins close to 37%.

In September 2019, Prairie Records was awarded the Canadian "Retailer of the Year" Award by the Cannabiz GrowUP Awards and Conference and in November 2019, Prairie Records was recognized by the Canadian Marketing Association as a Silver Medalist in the Cannabis Category, for its on-the-ground launch campaign around the Company’s Saskatoon retail cannabis stores.    

The retail environment in Alberta and Saskatchewan, where the Company operates retail stores, continue to show positive month over month growth. Alberta remains among the highest sales per population in the country with a 3.16% increase in sales from August to September 2019. Saskatchewan also continues to grow by similar amounts. (Statistics Canada, Cannabis Retail Sales).

With its open retail market, Alberta has accounted for more sales than any other province in the country since legalization, edging out Ontario which has three and half times the population but only a fraction of the stores open. In the first 12 months of sales, there has been a total of $928.3 million sold in legal retail and online stores across Canada. (Statistics Canada, Cannabis Retail Sales).

Thunderchild Cultivation

Construction of Westleaf’s purpose-built, indoor cultivation facility near Battleford, Saskatchewan has progressed significantly in Q3 2019 and subsequent to the reporting period. Phase I of the indoor grow operation is expected to include a total of 80,000 square feet with 20 grow rooms and approximately 21,000 square feet of flower bench. Phase II is expected to add an additional 50,000 square feet and bring total production capacity up to approximately 14,600 kgs per annum, all subject to receipt of applicable regulatory approvals². Principle construction is expected to be primarily complete in December 2019.

The remainder of the facility construction is fully financed with low-cost, non-dilutive bank debt from ATB Financial and Westleaf believes it is uniquely positioned to provide the high demand ultra-premium indoor flower to the market once operational. Assuming the closing of the proposed merger, the Thunderchild facility is expected to be a key asset for the expansion of the Qwest brand, as We Grow BC will introduce its genetics and plants into the facility, which is amongst the most sought after premium cannabis on the market.

Outlook and Additional Information

With the announcement of the merger with We Grow BC, the combined Company is anticipated to be positively positioned as the market enters an important next phase of growth within Canada’s expanded legal recreational cannabis market. The combined entity will be focused on the ultra-premium end of the market both from a position of cultivation and product development of Qwest branded cannabis and cannabis derivatives as well as at its Prairie Records retail outlets. Based on data provided by the Alberta Gaming Liquor and Cannabis (AGLC) Commission, Qwest products held down the first and third highest average retail price amongst all available cannabis products in the province, averaging approximately $20 and $17 per gram for Qwest Reserve and Qwest respectively³. In management’s view, this support for these ultra-premium products bodes well for the development of additional derivative products under the Qwest brand.   

Share Structure

As of September 30, 2019, the Company had 142.7 million common shares outstanding, 23.5 million warrants outstanding, 7.9 million RSUs outstanding, and 3.0 million stock options outstanding. All RSUs were granted in accordance with the Company’s compensation plan.

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. The Company’s Health Canada licensed extraction and processing facility, The Plant, is expected 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. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.  

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, (i) retail cannabis stores that Westleaf plans to open; (ii) the construction of Westleaf’s production facilities and the timing for completion of same; (iii) commencement of production at Westleaf’s production facilities; (iv) the Plant providing a competitive advantage by being adaptive to consumer needs; (v) products and brands to be produced from Westleaf’s production facilities and the products and services that Westleaf plans to offer; (iv) timing of provincial and federal regulatory approvals; (vii) timing of legalization of certain derivative products; (viii) changes in cannabis consumption habits among Canadians; (ix) the processing and production capabilities of Westleaf’s extracting and cultivation facilities; and * the Company’s proposed merger with We Grow BC Ltd. and the anticipated benefits related thereto.  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 Westleaf’s production facilities by Health Canada and receipt of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; 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; the ability of Westleaf’s production facilities to operate and perform at peak production; 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, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, 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 assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

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

1. Based on average management suggested retail price of SKUs available from Alberta Gaming, Liquor and Cannabis in September 2019.
2. 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.). 
3. Extraction capacity estimates based on a phased approach anticipated to reach 65,000 kg capacity in Q1 2020 as additional equipment is installed in existing built out space. Based on 350 workdays per year.

SOURCE Westleaf Inc.

CALGARY, Nov. 21, 2019 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) announces that it has filed a Joint Information Circular with respect to its proposed December 18, 2019 Westleaf Shareholder Meeting in connection with its previously announced Arrangement with We Grow BC Ltd. ("We Grow") and certain securityholders thereof and has obtained approval of the Arrangement from holders of more than 66^2/3% of the principal amount of Westleaf Debentures. Westleaf also announces that Westleaf and We Grow have agreed to amend certain terms of the previously announced Arrangement Agreement between Westleaf and We Grow. It is anticipated that the Arrangement will close on or about December 20, 2019. A Transaction Presentation is now available on Westleaf’s website.

Amending Agreement

Westleaf announces that Westleaf and We Grow have executed an agreement (the "Amending Agreement") to amend the terms of the previously announced definitive agreement (the "Arrangement Agreement") between Westleaf and We Grow, whereunder the previously announced plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia) between Westleaf, We Grow and certain securityholders of WGBC (the "Arrangement") will be affected.

Under the terms of the Amending Agreement, conditions with respect to the private placement financing of subscription receipts of We Grow to be completed prior to or concurrently with closing of the Arrangement (the "We Grow Financing") have been amended to remove any required minimum raise under the We Grow Financing.

Debentureholder Consent

Westleaf has also received consent, in writing, from holders of more than 66^2/3% of the principal amount of previously issued and outstanding debentures of Westleaf (the "Westleaf Debentures") to the Arrangement, which consent was a condition under the Arrangement Agreement.

Transaction Presentation

In addition, the Company has made available a presentation containing information about Westleaf and We Grow dated November 7, 2019 (the "Transaction Presentation"), for use by shareholders, investors, industry analysts and others.

https://www.westleaf.com/financials-presentations/

Joint Information Circular and Closing of the Arrangement

Westleaf is also pleased to announce the filing on Westleaf’s SEDAR profile of the joint management information circular and proxy statement (the "Joint Information Circular") of Westleaf and We Grow in respect of the annual general and special meeting (the "Westleaf Shareholder Meeting") of the holders of common shares in the capital Westleaf to be held on December 18, 2019 and the corresponding Arrangement.

It is anticipated that the Arrangement will close on or about December 20, 2019. As previously announced, the closing of the Arrangement is subject to, among other things, requisite Westleaf and We Grow securityholder approvals.

For further particulars regarding the Arrangement and the Westleaf Shareholder Meeting, please refer to the Joint Information Circular, the Arrangement Agreement and Westleaf’s press release dated November 7, 2019, each of which is available under Westleaf’s SEDAR profile at www.sedar.com. A complete copy of the Amending Agreement will also be available under Westleaf’s SEDAR profile at www.sedar.com.

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. The Company’s Health Canada licensed extraction and processing facility, The Plant, is expected 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. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

About We Grow BC Ltd.

We Grow is an authorized licensed cultivator, processor and seller under the Cannabis Act (Canada). We Grow is located in Creston, British Columbia in the heart of the Kootenay’s, where British Columbia-grown marijuana originated, and holds a Cultivation License pursuant to the Access to Cannabis for Medical Purposes Regulations under Health Canada. 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 ultra-premium cannabis brand achieving one of the highest realized flower prices in Canada.

The TSX Venture Exchange has in no way passed upon the merits of the Arrangement or the Amendment and has neither approved nor disapproved of the contents of this press release.

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

The information contained in the Transaction Presentation is summary information only and is qualified in its entirety by the more fulsome information contained in the Arrangement Agreement and the Joint Information Circular. The Transaction Presentation is based on public information and is subject to updating, completion, revision, verification and amendment without notice, which may result in material changes. Westleaf and We Grow do not undertake any obligation to correct any inaccuracies that may become apparent or to update the information contained therein. Both Westleaf and We Grow encourage prospective readers of the Transaction Presentation to perform and rely on their own investigation and analysis of the Arrangement, including the merits and risks involved and are advised to seek their own professional advice on the legal, financial and taxation consequences of the Arrangement or an investment in Westleaf or We Grow.

No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon the Transaction Presentation and any representation to the contrary is an offence.

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. More particularly and without limitation, this press release contains forward-looking statements and information concerning: the timing and proceeds from the We Grow Financing, timing of the Westleaf Shareholder Meeting, the ability to satisfy all requirements in order to close the Arrangement, the ability of Westleaf and We Grow to obtain all necessary consents and approvals, the anticipated closing date of the Arrangement, 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 risks and uncertainties include the failure of the parties to satisfy the conditions to the Arrangement, in a timely manner, or at all. The failure of the parties to satisfy the conditions to the Arrangement may result in the Arrangement not being completed on the proposed terms, or at all. In addition, the failure of We Grow or Westleaf to comply with certain terms of the Arrangement Agreement may result in We Grow or Westleaf being required to pay a non-completion fee to the other party, the result of which could have a material adverse effect on Westleaf’s financial position and results of operations and its ability to fund growth prospects and current operations. Other risks and uncertainties which may cause the actual results and future events to differ materially from those expressed or implied by the forward-looking statements contained in this press release include, but are not limited to: risks relating to the ability to obtain or maintain licenses to retail cannabis products; review of Westleaf’s production facilities by Health Canada and receipt of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; 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, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, as applicable. There can be no assurance that forward-looking statements contained in this press release will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of Westleaf are included in reports on file with applicable securities regulatory authorities, including but not limited to Westleaf’s Annual Information Form for the year ended December 31, 2018 which may be accessed on Westleaf’s SEDAR profile at www.sedar.com

The forward-looking statements and information contained in this press release are made as of the date hereof and Westleaf undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press 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 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.

SOURCE Westleaf Inc.

• Transaction is expected to enable We Grow’s Qwest brand to rapidly expand and reach a broad consumer audience through Westleaf production facilities and retail assets

• Support from ATB Financial financing and insider-led equity financing

CALGARY, Nov. 7, 2019 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V: WL) (OTCQB: WSLFF) is pleased to announce that it has entered into a definitive arrangement agreement ("Arrangement Agreement") to combine with We Grow BC Ltd. ("We Grow"), a leading indoor cannabis producer located in Creston, British Columbia (the "Transaction"). We Grow brings an ultra-premium cannabis brand, Qwest ("Qwest"), which achieves some of the highest realized pricing in the Canadian adult-use markets⁽¹⁾. The combination of We Grow’s Qwest brand with Westleaf’s high quality production and retail assets, creates a combined company which is expected to be one of Canada’s preeminent craft-at-scale cultivators, manufacturers, and retailers of ultra-premium cannabis products.

"This transaction brings together a known brand with revenue and EBITDA to complement some of Canada’s most premier indoor cultivation and extraction facilities. Together, we will be able to aggressively expand a trusted brand, increase market share, drive revenue and EBITDA growth and become an extremely competitive company in Canada and beyond" said Scott Hurd, President and Chief Executive Officer of Westleaf.

"Westleaf has built world class cultivation, extraction and retail assets that will allow us to scale quickly and address the existing demand for our Qwest branded products. Together, we create the preeminent ultra-premium cannabis brand in Canada" said Benjamin Sze, Chief Executive Officer of We Grow. 

Highlights of the Transaction

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⁽²⁾ 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 its leading realized selling prices in the Canadian recreational market and strong demand across various distribution channels⁽¹⁾. 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 at industry leading yields 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 are expected to be consolidated at the Company level as part of the Transaction). Following the close 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.

Transaction Summary

The Arrangement

Under the Arrangement Agreement, Westleaf will purchase all of the issued and outstanding shares of We Grow (the "We Grow Shares"), other than its Class "H" non-voting common participating shares ("Class H Shares"), in exchange for common shares in the capital of Westleaf ("Westleaf Shares"), by way of plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia)(the "Arrangement"). Each We Grow Share will be exchanged for 4.264 Westleaf Shares and each outstanding option to purchase one We Grow Share (the "We Grow Options") will be exchanged for one Westleaf option ("Westleaf Options") to purchase 4.264 Westleaf Shares pursuant to the Westleaf stock option plan currently in place.

All Westleaf Shares issued to the former holders of We Grow Shares (excluding any Westleaf Shares issued in exchange for We Grow Shares issued pursuant to the We Grow Financing or any We Grow Shares issued on the exercise of We Grow Warrants (as defined below)) or to the holders of We Grow Options on the valid exercise of their Westleaf Options, will be subject to a hold period from the closing of the Arrangement (the "Hold Period"), whereby 10% of such Westleaf Shares will be released on the date of closing of the Arrangement (the "Closing Date"), 30% of such Westleaf Shares will be released from the Hold Period on the date that is six months from the Closing Date, 30% of such Westleaf Shares will be released from the Hold Period on the date that is nine months from the Closing Date and the remaining 30% of such Westleaf Shares will be released from the Hold Period on the date that is 12 months from the Closing Date. All such foregoing Westleaf Shares will be legended with the applicable details of the Hold Period.

After giving effect to the Arrangement, the pre-Arrangement holders of We Grow Shares excluding the holders of We Grow Shares issued pursuant to the We Grow Financing (as defined herein), will hold approximately 55% of Westleaf’s issued and outstanding shares on a pro forma basis and the existing shareholders of Westleaf will hold approximately 45% of Westleaf’s issued and outstanding shares on a pro forma basis.

Upon closing of the Arrangement, it is anticipated that Westleaf’s board of directors (the "Westleaf Board") will be reconstituted and will include three appointees of We Grow being Benjamin Sze, Michael Kelly, Paul Wilson, and two appointees of Westleaf, being Cody Church and a Thunderchild nominee.  Westleaf’s officers will be reconstituted and will include Benjamin Sze, current Chief Executive Officer of We Grow, 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 foregoing changes will constitute a "Change of Management" as defined in the policies of the TSX Venture Exchange ("TSXV")(the "Change of Management").

The Arrangement is anticipated to close in mid-December 2019. Closing of the Arrangement is subject to the approval of not less than 66^2/3% of the votes cast by holders of We Grow Shares and We Grow Options, each voting as a separate class, on a resolution approving the Arrangement (the "We Grow Resolution") at the upcoming We Grow Meeting (as defined below) and, as a result of the Change of Management and in accordance with the polices of the TSXV, approval of not less than 50% of the votes cast by holders of Westleaf Shares on a resolution approving such Change of Management (the "Westleaf Resolution") at the upcoming Westleaf Meeting (as defined below). 

It is anticipated that a meeting (the "We Grow Meeting") of the holders of We Grow Shares and We Grow Options and a meeting (the "Westleaf Meeting") of the holders of Westleaf Shares will each be held on or around December 11, 2019 following the mailing to such securityholders of a joint management information circular regarding the Arrangement in November 2019 (the "Joint Information Circular").

Westleaf previously completed a financing of convertible debentures ("Debentures"), and the Arrangement constitutes a "Change of Control" as defined in the debenture indenture dated May 10, 2019 for the Debentures between the Company and Computershare Trust Company of Canada, as trustee for the Debentures (the "Debenture Indenture"). Holders of 50% of the principal amount of the outstanding Debentures have agreed in writing to consent to the Arrangement, provide a waiver and modification of the Debenture Indenture so that the Arrangement will not require the Company to repurchase the Debentures and to an amendment of the conversion price of the Debentures from $1.30 to $0.45 per Westleaf Share.

Additional Transaction Terms

The Arrangement is subject to We Grow completing a non-brokered management and key stakeholder led private placement financing of subscription receipts of We Grow ("Subscription Receipts") for gross proceeds of not less than $3,000,000, at a price of $0.30 per Subscription Receipt, to be completed prior to or concurrently with closing of the Arrangement (the "We Grow Financing"). Each Subscription Receipt shall entitle the holder thereof to acquire a unit of We Grow, which unit will ultimately be exchanged under the Arrangement for one (1) Westleaf Share and one-half of a warrant of Westleaf (each a full warrant, "Westleaf Warrant").  Each Westleaf Warrant shall be exercisable at a price of $0.38 per share for a period of 2 years following the closing of the Arrangement.

The Arrangement is also subject to, among other conditions, the approval of the Supreme Court of British Columbia, the receipt of all necessary regulatory approvals, including approval of Health Canada, applicable provincial retail cannabis regulators and the TSXV, and satisfaction of certain other closing conditions that are customary for a transaction of this nature.

The Agreement contains representations, warranties and covenants, including a termination fee in the amount of 3% of the transaction value payable by Westleaf or We Grow to the other party, as applicable, in the event that the Arrangement Agreement is terminated in certain circumstances. The Arrangement Agreement also includes certain non-solicitation covenants subject to the rights of each of Westleaf and We Grow to accept a superior proposal in certain circumstances, with the other party having a five business day right to match any such superior proposal received. Additional details of the Arrangement will be provided in the Joint Information Circular.

Westleaf Board Approval and Recommendation

Westleaf appointed a special independent committee (the "Special Committee") of the Westleaf Board consisting of Cody Church, Kareen Stangherlin, Delbert Wapass and John Radostits, with the mandate to review and evaluate strategic transaction alternatives for the Company including the Arrangement. Based on the recommendation of the Special Committee, the Westleaf Board has unanimously approved the Arrangement Agreement, determined that the Arrangement is in the best interests of Westleaf and the Westleaf Board has unanimously resolved to recommend that the holders of Westleaf Shares vote in favour of the Westleaf Resolution at the Westleaf Meeting. The Special Committee also received a verbal fairness opinion provided by Eight Capital Inc. (the "Eight Capital Fairness Opinion") which was considered in connection with its recommendation to the Board, 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.

All of the directors and officers of Westleaf, who beneficially own, or exercise control or direction over, approximately 19% of the outstanding Westleaf Shares, have entered into support agreements pursuant to which each has agreed to vote their Westleaf Shares in favour of the Westleaf Resolution and all other matters in favour of the Arrangement as applicable.

We Grow Board Approval and Recommendation

We Grow’s board of directors (the "We Grow Board") has unanimously approved the Arrangement Agreement, determined that the Arrangement is fair and in the best interests of We Grow and, based on the verbal fairness opinion provided by AltaCorp Capital Inc. (the "AltaCorp Fairness Opinion"), determined that and 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, and the We Grow Board has unanimously resolved to recommend that the holders of We Grow Shares and the holders of We Grow Options vote in favour of the We Grow Resolution at the We Grow Meeting. 

All of the directors and officers of We Grow who beneficially own, or exercise control or direction over, approximately 36% of the outstanding We Grow Shares, have entered into support agreements pursuant to which each has agreed to vote their We Grow Shares and We Grow Options in favour of the We Grow Resolution and all other matters in favour of the Arrangement as applicable.

Complete details of the terms of the Arrangement are set out in the Arrangement Agreement, which will be filed by Westleaf and will be available for viewing under Westleaf’s profile at www.sedar.com.

Combined Westleaf-We Grow Pro-Forma Facility and Assets

• Creston Valley Cultivation (We Grow) – We Grow has a purpose-built indoor cultivation facility 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 is currently constructing a genetics and tissue culture lab in the existing facility.
• Thunderchild Cultivation (Westleaf): Construction of Westleaf’s purpose-built, GMP compliant, indoor cultivation facility near Battleford, Saskatchewan has progressed significantly in the third quarter and is nearing completion. Phase I of the indoor grow operation will be a total of 80,000 square feet with 20 grow rooms and approximately 21,000 square feet of flower bench. Phase II will add an additional 50,000 square feet of production space. The name of the facility reflects the company’s first and largest investor, the Thunderchild First Nation, an independent Cree nation based in Turtleford, Saskatchewan.
• The Plant by Westleaf Labs (Westleaf): A scalable extraction, processing, and product manufacturing facility located in Calgary, Alberta is a strategic asset for the Company. With the legalization of derivative products, Westleaf anticipates strong industry wide demand for efficient extraction, processing and formulation capacity and recently announced receipt of its first white label order. The Plant is currently a 16,000 square foot licensed production facility with scalable capacity of up to 65,000 kgs⁽³⁾ of dried flower per annum. The Plant has an additional 45,000 square feet of expansion space.
• Prairie Records (Westleaf): The Company’s experiential retail concept Prairie Records, which combines music and cannabis into a unique retail environment, launched with three stores in the Saskatoon region and one in Calgary. Westleaf maintains a portfolio of over 20 premium retail locations with development permits.

Advisors and Counsel

Eight Capital is acting as the exclusive financial advisor to Westleaf and the Special Committee. Borden Ladner Gervais LLP is acting as legal counsel to Westleaf.

AltaCorp Capital is acting as the financial advisor to We Grow. McCarthy Tetrault LLP is acting 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. The Company’s Health Canada licensed extraction and processing facility, The Plant, is expected 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. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

About We Grow BC Ltd.

We Grow is an authorized licensed cultivator, processor and seller under the Cannabis Act (Canada). We Grow is located in Creston, British Columbia in the heart of the Kootenay’s, where British Columbia-grown marijuana originated, and holds a Cultivation License pursuant to the Access to Cannabis for Medical Purposes Regulations under Health Canada. 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 ultra-premium cannabis brand achieving one of the highest realized flower prices in Canada.

Non-GAAP Measures

To supplement the financial measures prepared in accordance with Canadian generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures, including Adjusted EBITDA (non-GAAP). The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide useful information about the Company’s operating results and liquidity and enhance the overall ability to assess the Company’s financial performance.  The Company uses these measures, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. 

However, these measures are not prepared in accordance with GAAP nor do they have any standardized meaning under GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to such similarly titled non-GAAP measures. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. They should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

As indicated above, for guidance purposes, the Company does not provide reconciliations of projected Adjusted EBITDA (non-GAAP) to projected GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "anticipate", "may", "will", "should", "believe", "intends" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this press release contains forward-looking statements and information concerning: mailing of the information circular, timing of the WGBC Meeting, the timing of the Westleaf Meeting, the timing and proceeds from the We Grow Financing, details with respect to the Hold Period, anticipated synergies, anticipated pricing, future capital requirements, construction of the Creston Valley Qwest Cannabis Estate, Thunderchild and The Plant facilities and the timing and production related thereto, the ability to satisfy all requirements in order to close the Transaction and the anticipated closing of the Arrangement. Risks and uncertainties inherent in the nature of the Arrangement include the failure of the parties to satisfy the conditions to the Arrangement, in a timely manner, or at all. The failure of the parties to satisfy the conditions to the Arrangement may result in the Arrangement not being completed on the proposed terms, or at all. In addition, the failure of WGBC or Westleaf to comply with certain terms of the Arrangement Agreement may result in WGBC or Westleaf being required to pay a non-completion fee to the other party, the result of which could have a material adverse effect on Westleaf’s financial position and results of operations and its ability to fund growth prospects and current operations.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of Westleaf are included in reports on file with applicable securities regulatory authorities, including but not limited to Westleaf’s Annual Information Form for the year ended December 31, 2018 which may be accessed on Westleaf’s SEDAR profile at www.sedar.com

The forward-looking statements and information contained in this press release are made as of the date hereof and Westleaf undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press 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 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.

The TSX Venture Exchange has in no way passed upon the merits of the Arrangement and has neither approved nor disapproved of the contents of this press release.

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

1. Based on average management suggested retail price of SKUs available from Alberta Gaming, Liquor and Cannabis in September 2019.
2. 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.
3. Extraction capacity estimates based on a phased approach anticipated to reach 65,000 kg capacity in Q1 2020 as additional equipment is installed in existing built out space. Based on 350 workdays per year.

SOURCE Westleaf Inc.

Orders commence under cannabis derivative product sale agreement with Delta 9 with initial order for vape pens and cartridges

CALGARY, Nov. 4, 2019 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) is pleased to announce that the conditions precedent to the white-label cannabis derivative product sale agreement (the "White-Label Agreement") between the Company’s wholly owned subsidiary Westleaf Labs LP ("Westleaf Labs") and Delta 9 Cannabis Inc. (TSXV: NINE) (OTCQX: VRNDF) ("Delta 9") have been completed, and Westleaf Labs has received the first order from Delta 9 for an initial three-month supply of vape pens and cartridges. This first order represents anticipated revenue of ~$740,000 starting as early as January 2020.

"This is another important milestone in the development of Westleaf, as we add the critical processing and manufacturing component to our vertically integrated strategy," said Scott Hurd, President and CEO of Westleaf. "This operationalizes a key component in the cannabis supply chain and one that we expect will see increase in demand as we enter Cannabis 2.0, and the legalization of a myriad of new products."

The White-Label Agreement provides for Westleaf Labs to produce a minimum of ~$4 million of white labelled cannabis derivative products, with the option to increase to $16 million per annum. The one-year agreement was announced on July 24^th and Westleaf Labs received its Health Canada Standard Processing Licence on October 11^th and is set to begin processing.

Highlights:

• Delta 9 Order –The initial order represents anticipated revenue of ~$740,000 over three months. The one-year deal commits Delta 9 to acquire a minimum of ~$4 million with an option to increase up to ~$16 million per year.
• Enhanced Product Selection for Retail – The White-Label Agreement is expected to create value added products to be sold through both Delta 9’s retail stores in Manitoba, through Westleaf’s wholly-owned Prairie Records stores in Saskatchewan as well as through provincial wholesalers.
• Safe and Regulated Products – The production of vape pens and cartridges at The Plant by Westleaf Labs, as well as the entire Westleaf supply chain, will be highly regulated and adhere to the strictest safety standards of Health Canada.

With the onset of Cannabis 2.0 and the legalization of a wide variety of new derivative cannabis products, Westleaf is expecting strong industry wide demand for efficient and high-quality extraction, processing and product manufacturing to meet the needs of the new product manufacturers.

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. The Company’s Health Canada licensed extraction and processing facility, The Plant, is expected 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. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

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, (i) retail cannabis stores that Westleaf plans to open; (ii) the construction of Westleaf’s production facilities and the timing for completion of same; (iii) commencement of production at Westleaf’s production facilities; (iv) commencement of operations at the Plant, its capacity to manufacture and extract cannabis derivative products and corresponding scalability, its ability to provide a competitive advantage by being adaptive to consumer needs and material revenue that may be derived from its operations; (v) products and brands to be produced from Westleaf’s production facilities and the products and services that Westleaf plans to offer; (vi) the anticipated benefits and impact of the production and sale of cannabis derivative products on Westleaf; (vii) anticipated revenue from the White-Label Agreement; and (ix) the processing and production capabilities of Westleaf’s extracting and cultivation 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 licenses to retail cannabis products; review of Westleaf’s production facilities by Health Canada and receipt of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; 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; the ability of Westleaf’s production facilities to operate and perform at peak production; 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, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, 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 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.

Prairie Records stores coming to downtown Calgary, Edmonton’s University District and Banff National Park  

CALGARY, Oct. 28, 2019 /CNW/ – Westleaf Inc. (the “Company” or “Westleaf“) (TSX-V:WL) (OTCQB:WSLFF) is pleased to announce development of its proposed next three key Alberta retail locations for its award-winning retail concept Prairie Records which include a location in the historic Palace Theatre on Calgary’s Stephen Avenue, one directly beside the University of Alberta main campus in Edmonton and the Company’s flagship store in the heart of Banff, Alberta, one of Canada’s most visited tourist destinations (collectively, the “Retail Locations“). Opening of the Retail Locations is subject to final retail cannabis licence approval by Alberta Gaming, Liquor and Cannabis (“AGLC“).

“We have always maintained our Prairie Records retail brand would be a premium cannabis retail experience, and these three locations are premium retail locations,” said Scott Hurd, President and CEO of Westleaf. “These three stores check off all the boxes of our retail concept, high foot traffic locations in urban settings and resort destinations, as well as being in Alberta, which continues to lead the country in legal cannabis retail.”

The Company’s Prairie Records branded cannabis stores combine the inherent connection between music and cannabis in a highly immersive retail experience. The Prairie Records stores were recently awarded top Canadian cannabis retailer at the Grow UP Conference and Expo. The retail stores are an integral part of Westleaf’s vertically integrated strategy providing the Company a valuable portal to the consumer as well as an outlet for its own branded products which are expected to come to market in the coming months.

Further details on the Retail Locations now in development follow:

• Palace Theatre: Situated at the centre of Stephen Avenue (219 8^th Avenue SW) in downtown Calgary, this store will be part of the historic Palace Theatre which opened its doors in 1921. Now a busy music venue at the heart of a pedestrian mall which hosts up to 30,000 pedestrians on a busy day. The Palace Theatre Prairie Records store is expected to be only one of two cannabis stores on the busy four block pedestrian stretch of Stephen Avenue;
• University of Alberta: The first Prairie Records in the provincial capital will be directly beside the University of Alberta main campus (8623 112 St. NW) in the trendy Garneau district. The U of A has a student population of close to 40,000 in addition to the many permanent residents in the area;
• Banff National Park: The Banff Prairie Records location is expected in the historic King Edward Hotel (137 Banff Avenue), adjacent to the busiest street corner in the town. Banff is one of Canada’s most visited tourist locations and attracts around 4 million visitors from around the world each year.

“These three stores, combined with the four Prairie Records stores currently open, three in the Saskatoon region and one in Calgary, will enhance our retail footprint,” noted Adam Coates, Westleaf’s Chief Commercial Officer. “But given these prominent and premium locations, we anticipated that they will have an exceptional impact on our brand and our Company.”

Certain of Westleaf’s current Prairie Records stores continue to record margins that put them amongst the industry leaders since opening. The Saskatoon Broadway and Saskatoon Stonebridge Prairie Records locations have recorded gross sales over the last 30 days of $249,945 and $283,351 respectively, and profits over that same period of $93,400 for Broadway and $106,633 for Stonebridge respectively, or a 37.5% combined gross margin.

The cannabis retail landscape in Canada continues to improve month over month with StatsCan reporting that in the month of August retail sales totaled $127.3 million across Canada and 18.6% month over month increase. The retail environment in Alberta continues to lead the country, with now more than 300 retail stores licenced and August sales for the province totaling $24.8 million, a 16.3% month over month increase. With its open retail market, Alberta has accounted for more sales than any other province in the country since legalization, edging out Ontario which has three and half times the population but only a fraction of the stores open. In the first 11 months of sales, there has been a total of $807 million sold in legal retail and online stores across Canada.

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. The Company’s Health Canada licensed extraction and processing facility, The Plant, is expected 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. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

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, (i) retail cannabis stores that Westleaf plans to open, including the Retail Locations; (ii) the construction of Westleaf’s production facilities and the timing for completion of same; (iii) commencement of production at Westleaf’s production facilities; (iv) commencement of operations at the Plant, its capacity to manufacture and extract cannabis derivative products and corresponding scalability, its ability to provide a competitive advantage by being adaptive to consumer needs and material revenue that may be derived from its operations; (v) products and brands to be produced from Westleaf’s production facilities and the products and services that Westleaf plans to offer; (iv) timing of provincial and federal regulatory approvals, including AGLC approval for the Retail Locations; (vii) timing of legalization of certain derivative products and the anticipated benefits and impact on Westleaf; (viii) changes in cannabis consumption habits among Canadians; and (ix) the processing and production capabilities of Westleaf’s extracting and cultivation 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 licenses to retail cannabis products, including final approval for the Retail Locations; review of Westleaf’s production facilities by Health Canada and receipt of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; 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; the ability of Westleaf’s production facilities to operate and perform at peak production; 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, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, 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 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.

The Company’s large-scale cannabis extraction facility, The Plant, can now begin processing and product formulation in time to meet expected demand of Cannabis 2.0

CALGARY, Oct. 15, 2019 /CNW/ – Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) is pleased to announce its large scale cannabis extraction, processing and product formulation facility, The Plant by Westleaf Labs, received a standard processing licence from Health Canada (the "Standard Processing Licence") and is ready to start operations immediately. The Standard Processing Licence will allow Westleaf to process bulk cannabis to create and sell derivative products through a variety of commercial arrangements.

"This is a major catalyst for Westleaf to generate material revenue through the sale of derivative cannabis products and by offering contract manufacturing services," said Scott Hurd, President and CEO of Westleaf. "The issuance of the Standard Processing Licence is timely as Westleaf prepares to launch its cannabis 2.0 products upon legalization which is expected on October 17, 2019".

Cannabis 2.0 is the legalization of the next wave of recreational and medicinal cannabis products currently set to begin in Canada on October 17^th, 2019. It will allow cannabis manufacturers and retailers to provide consumers with a wide range of new cannabis products including high quality and safe vape cartridges, edibles, concentrates and other oil products.

The 15,000 square foot Phase I of the facility has been built to European Union good manufacturing practice (GMP) specifications and is designed to process up to approximately 65,000 kgs of dried cannabis per annum into anticipated high quality edibles, concentrates, vape and oil products, including Westleaf’s first in-house product, a line of vape pens under the brand General Admission, as well as products under the Company’s other house brands, Backstage, and wellness brand, Loon. The Plant has an additional 45,000 square feet of space to expand extraction capacity as well as add additional product lines based on consumer preferences once the additional products are licensed post October 17, 2019.

With the pending legalization of cannabis derivative products, Westleaf anticipates strong industry wide demand for efficient extraction, processing and formulation capacity. The scalability of The Plant ensures Westleaf is well positioned to capitalize on the expected demand growth for contract manufacturing, tolling arrangements, white labeling, and in-house product formulation. In July 2019, Westleaf signed its first extraction contract with Delta 9 for white label derivative cannabis products worth at minimum approximately $4 million per annum with an option to increase up to $16 million per annum.

"The Delta 9 contract is the first of what we hope to be a number of similar arrangements between licensed producers, product developers and others who are preparing for the coming legalization of derivative cannabis products such as vapes, edibles, topicals and beverages, or what is called Cannabis 2.0," noted Hurd. "We are preparing Westleaf to be in a strong position to capitalize on the expected spike in consumer demand for these products later this year and into 2020 and beyond."

In addition, Westleaf has now satisfied ATB’s condition precedent (receipt of Health Canada standard processing licence) to draw the previously announced $3.7 million of additional capital in the form of a $2.7 million term loan and a $1.0 million line of credit for working capital purposes.

Westleaf Operational Updates:

• Prairie Records – Named the top retailer in Canada by the Grow UP Conference and Expo, Prairie Records is generating revenue through three stores in the Saskatoon region and one in Calgary, with up to 20 more locations under development including downtown Calgary and Edmonton and a flagship store in the tourist centre of Banff, Alberta;

• Thunderchild Cultivation – Phase I (80,000 square feet) of the large-scale cultivation facility in Battleford, Saskatchewan is fully funded and on track for completion and submission of its Health Canada evidence package for a cannabis standard cultivation licence by the end of 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. The Company’s Health Canada licensed extraction and processing facility, The Plant, is expected 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. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.

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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, (i) retail cannabis stores that Westleaf plans to open; (ii) the construction of Westleaf’s production facilities and the timing for completion of same; (iii) commencement of production at Westleaf’s production facilities; (iv) commencement of operations at the Plant, its capacity to manufacture and extract cannabis derivative products and corresponding scalability, its ability to provide a competitive advantage by being adaptive to consumer needs and material revenue that may be derived from its operations; (v) products and brands to be produced from Westleaf’s production facilities and the products and services that Westleaf plans to offer; (iv) timing of provincial and federal regulatory approvals; (vii) timing of legalization of certain derivative products and the anticipated benefits and impact on Westleaf; (viii) changes in cannabis consumption habits among Canadians; (ix) anticipated revenue from contractual arrangements with Delta 9; * draw down on credit facilities with ATB; and (xi) the processing and production capabilities of Westleaf’s extracting and cultivation 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 licenses to retail cannabis products; review of Westleaf’s production facilities by Health Canada and receipt of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; 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; the ability of Westleaf’s production facilities to operate and perform at peak production; 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, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, 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 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.