Humble Announces US$8 Million Private Placement To Advance Expansion Into Cannabis Distribution in the U.S.

Published: November 16, 2021

Humble Announces US$8 Million Private Placement To Advance Expansion Into Cannabis Distribution in the U.S.

Humble & Fume Inc., a leading North American distributor of cannabis and cannabis accessories, announced today that it has completed a US$8 million private placement from Green Acre Capital Distribution Corp. for 18,795,471 common shares at a price of CDN$0.53 per share, representing 15.23% of the issued and outstanding common shares of Humble following completion of the private placement (the “Humble Equity”). Green Acre also intends to invest an additional US$2 million to form a Joint Venture (JV) with Humble focused on accelerating the Company’s expansion into cannabis distribution operations in California.

Humble and Green Acre also intend to establish the JV which will engage in the business of cannabis distribution in the United States, initially in California. The JV will be funded through aggregate capital contributions of US$10M – US$8M to be provided by Humble using the private placement funds and US$2M by Green Acre. As a result, the JV will be owned 80/20 by Humble and Green Acre, respectively. Green Acre also acquired the right to increase its ownership in the JV to 50% by investing up to an additional US$8M over the next two years. Similarly to the private placement, Green Acre’s interest in the JV would be funded by Johnson Brothers in accordance with a second option agreement (“Second Option”) pursuant to which Johnson Brothers would have the right to acquire, initially for US$2M, Green Acre’s interest in the JV on the same terms and circumstances, including U.S. federal legalization of cannabis, as the First Option. Green Acre will then have an opportunity to increase its ownership in the JV to 50% by investing up to an additional US$8M over the next two years. Green Acre would make this investment by selling additional options to Johnson Brothers giving Johnson Brothers the right to acquire Green Acre’s additional interests in the JV.

“This investment by Johnson Brothers, through their Green Acre option agreement, is a pivotal milestone for our expansion into the United States. Johnson Brothers is known for their operational expertise in the distribution of beverage alcohol in the United States,” said Joel Toguri, Chief Executive Officer of Humble. “We are actively executing on our growth strategy, which includes the previously announced agreement to acquire licensed California cannabis distributor, Cabo Connection. As our business evolves and expands, we continue to be hyper focused on sustainable profit generation and positive cash flow to deliver long-term shareholder value.”

“Johnson Brothers is excited about the future of Humble & Fume and its expansion strategy of cannabis distribution operations in the U.S. states where it’s allowed.” said Mark Hubler, President of Johnson Brothers.

Humble & Fume, Inc. is a leading North American distributor of cannabis and cannabis accessories, supported by a customer-centric sales team and strong fulfillment infrastructure. As the only fully-integrated cannabis distribution solution, Humble bridges the gap for retailers, licensed cannabis producers, multi-state operators, and cannabis consumers to maximize sales penetration, and increase financial performance. With over 20 years of North American operating experience, Humble has cultivated extensive vendor and customer relationships, distributing premium cannabis consumables and consumption devices. The Company is comprised of four subsidiaries that represents its vertical integration across North America; B.O.B. Headquarters Inc. / Humble+Fume, Windship Trading LLC, Humble+ Cannabis Solutions and Fume Labs Inc.

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