Trees Corporation, a next-now cannabis company at the intersection of community, content, and commerce, is pleased to announce that it its wholly-owned indirect subsidiary, OCH Ontario Consulting Corp. (OCH) has entered into an agreement to purchase all of the issued and outstanding shares of Barnard Cann Ltd. (o/a “Camp Cannabis”) from the shareholders of Camp (the “Transaction”) pursuant to the terms of a share purchase agreement (the “SPA”) dated the date hereof among the shareholders of Camp (the “Vendors”) and OCH. Camp owns and operates licenced retail cannabis businesses at three Ontario locations in Burlington, Milton and Kanata, with a fourth location in Gloucester expected to open soon.
Michael Klein, CEO of Trees, stated: “Camp locations across Ontario allow the TREES brand to expand our retail footprint as we build upon our strategy of being best at engaging the ‘cannabis curious’ consumer.”
Jeff Holmgren, President and CFO of Trees, stated: “The definitive agreement with Camp is a crucial step and the beginning of our planned growth strategy through accretive consolidation.”
Transaction Details
The purchase price is approximately $780,000 (the “Purchase Price”), of which approximately $707,000 is to be satisfied on the closing date by the issuance of a demand note (the “Demand Note”) in favour of a representative of the Vendors (the “Vendor Representative”). Immediately following the closing of the Transaction, the Vendor Representative shall demand payment on the Demand Note and direct OCH to pay such amount over to Trees, and cause Trees to:
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- Issue to the Vendors in accordance with their proportionate interests, an aggregate of up to 2,380,000 common shares in the capital of Trees (“Consideration Shares”), of which 75% of such Consideration Shares shall be subject to an escrow agreement pursuant to which 1/3 of such shares will be released on the six month anniversary of the closing date and the remaining 2/3 released on the twelve month anniversary of the closing date; and
- Issue to the Vendor Representative an unsecured convertible debenture in the amount of $350,000 payable to the Vendors in accordance with their proportionate interests (the “Convertible Debenture”), which Convertible Debenture shall bear interest at 7.5% compounding annually, payable monthly in cash, shall mature on the second anniversary of the closing date, and which shall allow for the principal owing thereunder to be convertible into common shares in the capital of Trees (“Debenture Shares”) at the option of the Vendor Representative, no sooner than the first anniversary of the closing date, at a conversion price being the greater of (X) $0.15, and (Y) the closing price of Trees’ common shares at the close of trading on the date prior to the conversion date, less a 10% discount.
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Completion of the proposed Transaction is subject to the satisfaction of certain conditions precedent, including, but not limited to, receipt of all necessary regulatory approvals, including approval of the Alcohol and Gaming Commission of Ontario and the NEO Exchange Inc.
About Trees
Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded, Trees offers a differentiated retail experience, combined with digital platforms that aim to educate and amplify, unlocking emerging consumer segments and need states that allows Trees to uniquely engage the 360 cannabis consumer. The company has 11 Trees branded storefronts in Canada, including seven (7) stores owned and operated in Ontario and four (4) stores operated in BC, subject to the closing of the acquisition of the assets of 101 pursuant to the terms of the third amended and restated asset purchase agreement between Trees and 1015712 B.C. Ltd. (the “APA”). The closing of the transactions contemplated by the Retail Store APA is subject to certain conditions precedent, including the receipt of certain licensing approvals and related regulatory consents.
