US$6.25 Millionof total will be issued in exchange for existing 6% Senior Secured Convertible Notes Due 2025
NEW YORK--(BUSINESS WIRE)--Mar. 19, 2024--The Cannabist Company Holdings Inc.(Cboe CA: CBST) (OTCQX: CBSTF) (FSE: 3LP) (“The Cannabist Company” or the “Company”) announced today that it has completed a private placement ofUS$19.5 millionaggregate principal amount of 9.00% senior secured convertible debentures due 2027 (the "Notes") in a concurrent private brokered offering (the “Brokered Offering”) and private non-brokered offering (the “Non-Brokered Offering” and together with the Brokered Offering, the “Offering”).
In addition, in accordance with the terms of a previously executed agreement, as amended, the Company has issuedUS$6.25 millionof Notes in exchange for the cancellation of previously issued 6% senior secured convertible notes due 2025 held by certain offshore institutional investors.
The Notes are senior secured obligations of the Company and mature inMarch 2027, unless earlier converted or repurchased. The conversion rate is 3,278.6 common shares in the capital of the Company ("Common Shares") perUS$1,000principal amount of Notes (equivalent to a price of approximatelyUS$0.305per Common Share), subject to customary adjustments. In no event will fractional common shares be issuable. The conversion price of the Notes represents a premium of approximately 25% over the closing price of the Common Shares on the Cboe Canada (the “Exchange”) onMarch 14, 2024. The Notes are subject to an original issue discount and priced atUS$800per issuance ofUS$1,000in principal amount of new Notes. As a result, the Company has receivedUS$15.6 millionof new capital and has extinguishedUS$5.0 millionof 6% Senior Secured Convertible Notes Due 2025. Subsequent to this transaction, there areUS$59.5 millionremaining 6% Senior Secured Convertible Notes Due 2025. In connection with the Offering, the Company and the investors have entered into customary registration rights agreements.
The Notes were offered for sale on a private placement basis in certain provinces and territories ofCanadapursuant to applicable exemptions from the prospectus requirements of Canadian securities laws. The Notes were also sold inthe United Statesto or for the account or benefit of "U.S.persons" (as defined inthe United StatesSecurities Act of 1933, as amended) (the "U.S.Securities Act"), on a private placement basis pursuant to an exemption from the registration requirements of theU.S.Securities Act, and in such jurisdictions outside ofCanadaandthe United Statesas agreed upon by the Company, in each case in accordance with applicable laws. The Notes issued in certain provinces and territories ofCanadaare subject to a customary four-month hold period under Canadian securities laws.
The net proceeds from the Offering will be used for repayment of debt, including the remainingUS$13.2 millionof the Company’s 13% senior secured notes dueMay 2024, working capital and general corporate purposes.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The Notes and the Common Shares issuable upon conversion of the Notes have not been and the Notes will not be registered under theU.S.Securities Act or any state securities laws, and accordingly, may not be offered or sold unless registered under theU.S.Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of theU.S.Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Advisors
ATB Securities Inc.acted as the sole bookrunner and agent for the Brokered Offering.
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 15 U.S. jurisdictions. The Company operates 124 facilities including 93 dispensaries and 31 cultivation and manufacturing facilities, including those under development.Columbia Care, nowThe Cannabist Company, is 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 defined 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 and applicable state securities laws, 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 Offering and the use of proceeds of the Offering. 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, 2023, 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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Investor Contact
Lee Ann Evans
SVP, Capital Markets
investor@cannabistcompany.com
Media Contact
Lindsay Wilson
SVP, Communications
media@cannabistcompany.com
Source:The Cannabist Company Holdings Inc.