NEW YORK--(BUSINESS WIRE)--Jan. 22, 2024--The Cannabist Company Holdings Inc.(NEO: CBST) (OTCQX: CBSTF) (FSE: 3LP) (“The Cannabist Company” or the “Company”), one of the largest and most experienced cultivators, manufacturers and retailers of cannabis products in theU.S., announced today that, further to its previously announced intention to repurchase up toUS$25 millionof principal amount of 6.0% senior secured convertible notes dueJune 2025of the Company (the “2025 Convertible Notes”), it has entered into a binding agreement (the “Agreement”) with certain offshore institutional investors (the “Investors”) to conditionally effect such repurchase (the “Repurchase”) for common shares of the Company (“Common Shares”).
“We are pleased to have reached agreement on the previously announced transaction to reduce leverage and decrease interest expense, maintaining momentum for our balance sheet improvement plan. We are grateful for the constructive relationship with our investors that enabled this transaction to come to fruition and look forward to delivering on additional initiatives in the months ahead,” saidDavid Hart, CEO ofThe Cannabist Company.
Pursuant to the terms of the Agreement, the Investors shall:
- byJanuary 31, 2024, exchange, assign, transfer and sell (“Transfer”)US$5 millionprincipal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater ofCAD$0.41per Common Share and the 12.5% discount to the 5-day volume weighted average price of the Common Shares (the “Initial Exchange Price”) onCboe Canada Inc.(the “Exchange”) prior to receipt of a Transfer notice;
- upon fulfillment of certain conditions related to the trading price of the Common Shares on the Exchange, on or prior toFebruary 29, 2024, TransferUS$5 millionprincipal amount of 2025 Convertible Notes in consideration of Common Shares issued at the Initial Exchange Price, and
- upon fulfillment of certain conditions related to the trading price of the Common Shares on the Exchange, on or prior toJune 30, 2024, Transfer in three separate equal tranches, an aggregate ofUS$15 millionprincipal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater ofCAD$0.57per Common Share and the 12.5% discount to the 5-day volume weighted average price of the Common Shares on the Exchange prior to receipt of a Transfer notice, in each case, subject to adjustment in certain instances.
In the event the conditions are fulfilled and the Investors fail to Transfer their 2025 Convertible Notes in accordance with the terms of the Agreement, the Company has the right, but not the obligation, to require the Investors to Transfer some or all of the portion of the$25 millionof 2025 Convertible Notes still held by the Investors. Assuming all of the conditions are fulfilled, and the entireUS$25 millionprincipal amount of 2025 Convertible Notes are Transferred for Common Shares issued at the minimum prices set out in the Agreement, a maximum of 68,564,698 Common Shares would be issued in connection with the Repurchase.
In connection with the Repurchase, the Company obtained waivers from holders of, in the aggregate,US$34.5 millionprincipal amount of 2025 Convertible Notes confirming that they did not object to the Company completing the Repurchase and confirming that they had no intention of participating in a Repurchase of their 2025 Convertible Notes on similar terms. Should the holders of the balance of the 2025 Convertible Notes (representing an aggregate amount ofUS$5 million) participate in a similar Repurchase of their 2025 Convertible Notes, the Company expects that approximatelyUS$3.57 millionprincipal amount of 2025 Convertible Notes could be repurchased, with the remaining balance being potentially Transferred for New Notes.
In connection with the Repurchase,ATB Capital Marketsacted as exclusive financial advisor to the Company and to the Company’s special committee.
AboutThe Cannabist Company(f/k/aColumbia Care)
The Cannabist Company, formerly known asColumbia Care, is one of the largest and most experienced cultivators, manufacturers and providers of cannabis products and related services, with licenses in 16 U.S. jurisdictions. The Company operates 125 facilities including 94 dispensaries and 31 cultivation and manufacturing facilities, including those under development.The Cannabist Companyis one of the original multi-state providers of cannabis in theU.S.and now delivers industry-leading products and services to both the medical and adult-use markets. In 2021, the Company launched Cannabist, its retail brand, creating a national dispensary network that leverages proprietary technology platforms. The company offers products spanning flower, edibles, oils and tablets, and manufactures popular brands including Seed & Strain, Triple Seven, Hedy, gLeaf, Classix, Press, and Amber. For more information, please visit www.cannabistcompany.com.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell, buy or subscribe for any securities or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this communication is not an offer of securities for sale intothe United States. No offer of securities shall be made inthe United Statesor to or for the account or benefit of aU.S.person (as that term is used in Regulation S of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)) absent registration under theU.S.Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements. In addition, hedging transactions may not be conducted unless in compliance with theU.S.Securities Act.
Caution Concerning Forward Looking Statements
This press release contains certain statements that constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable securities laws and reflect the Company’s current expectations regarding future events. Forward-looking statements or information contained in this release include, but are not limited to, statements or information with respect to the Repurchase, the fulfilment of the conditions to one or more of the Transfers contemplated by the Repurchase, the prices at which the Common Shares will be issued if the conditions to one or more of the Transfers are fulfilled, the ability to complete a future offering of convertible notes on favourable terms if at all, the potential for additional holders to Transfer their 2025 Convertible Notes, and the Company’s ability to execute on retail, wholesale, brand and product initiatives. There can be no assurances that the conditions to any future Transfer will be fulfilled or that the Common Shares will be issued. These forward-looking statements or information, which although considered reasonable by the Company, may prove to be incorrect and are subject to known and unknown risks and uncertainties that may cause actual results, performance or achievements of the Company to be materially different from those expressed or implied by any forward-looking information. In addition, securityholders should review the risk factors discussed under “Risk Factors” in the Company’s Form 10-K for the year endedDecember 31, 2022, as filed with Canadian andU.S.securities regulatory authorities and described from time to time in subsequent documents filed with applicable securities regulatory authorities.
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Lee Ann Evans
SVP, Capital Markets
Source:The Cannabist Company Holdings Inc.