Flower One Holdings Inc. (the “Company”) (CSE:FONE) (OTCQB:FLOOF), a leading cannabis cultivator, producer and innovator in Nevada,  is pleased to announce the closing of its previously announced overnight marketed public offering (the “Offering”) of unsecured convertible debenture units of the Company (the “Debenture Units”) for aggregate gross proceeds of $50,000,000.  In connection with the Offering, the Company issued a total of 50,000 Debenture Units at a price of $1,000 per Debenture Unit (the “Offering Price”).

As part of the Offering, the Agents (as defined below) have been granted an over-allotment option (the “Over-Allotment Option”) for up to 30 days after the Closing in respect of: (i) additional Debenture Units (each an “Over-Allotment Unit”); (ii) additional Convertible Debentures (each an “Additional Debenture”) at a price of $824.51 per such Additional Debenture; (iii) additional Warrants (each an “Additional Warrant”) at a price of $0.9140 per Additional Warrant; or (iv) any combination thereof; provided that the aggregate number of Additional Debentures and Additional Warrants which may be issued under the Over-Allotment Option (including those comprising Over-Allotment Units) does not exceed 7,500 Additional Debentures or 1,440,000 Additional Warrants, respectively.


“The success of this offering highlights the strong interest from investors and their increased confidence in the execution of our business model and strategy,” said Ken Villazor, President and CEO of the Company. “This funding better positions Flower One to capitalize on the continued growth and opportunities in Nevada and solidify our initial entry into the U.S. cannabis market as we continue to develop our best-in-class production facility.”

The Offering was completed pursuant to an agency agreement (the “Agency Agreement”) dated March 22, 2019 with Mackie Research Capital Corporation and Canaccord Genuity Corp. (collectively, the “Lead Agents”), on behalf of a syndicate of agents including Cormark Securities Inc., Eight Capital, Industrial Alliance Securities Inc., and PI Financial Corp. (together with the Lead Agents, the “Agents”).

The net proceeds received by the Company from the Offering are intended to be used for the payment of outstanding notes, ongoing construction and development of its Nevada production facility, working capital and general corporate purposes.

Each Debenture Unit consists of one 9.5% unsecured convertible debenture (the “Convertible Debentures”) maturing three years from the date of issuance and 192 common share purchase warrants of the Company (the “Warrants”). The Convertible Debentures shall bear interest at a rate of 9.5% per annum from the date of issue, payable semi-annually in arrears on the last day of June and December in each year and will have a maturity 36 months from the date of issuance (the “Maturity Date”). The principal amount of each Convertible Debenture shall be convertible, for no additional consideration, into common shares of the Company (“Common Shares”) at the option of the holder at any time prior to the earlier of: (i) the close of business on the Maturity Date, and (ii) the business day immediately preceding the date specified by the Company for redemption of the Convertible Debentures upon a change of control at a conversion price equal to $2.60 (the “Conversion Price”), subject to certain adjustment and acceleration provisions.  Each Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $2.60 at any time up to 36 months following Closing of the Offering.

Pursuant to the terms of the Agency Agreement, the Company paid the Agents a cash commission equal to 6.0% of the gross proceeds of the Offering, and issued to the Agents 999,936 non-transferable warrants (the “Broker Warrants”) of the Company, each such Broker Warrant exercisable into a Common Share at an exercise price of equal to the Conversion Price per Common Share exercisable at any time up to 36 months from the Closing Date.

The Convertible Debentures and the Warrants have been approved for listing with the Canadian Securities Exchange under the symbols FONE.DB and FONE.WT, respectively and will begin trading on the Closing Date.

The Offering is being made pursuant to a short-form prospectus filed in each of the provinces of Canada (except Québec), and otherwise by private placement exemption in those jurisdictions where the Offering can lawfully be made, including the United States.  Neither the Debentures Units (and the Convertible Debentures and the Warrants forming part of the Debenture Units) have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and such securities may therefore not be offered or sold in the United States or to or for the account or benefit of a person in the United States or a U.S. Person (as defined in Regulation S of the U.S. Securities Act) absent registration or an exemption from the registration requirements including to Institutional Accredited Investors pursuant to Rule 506(b) of Regulation D of the U.S. Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Debenture Units in any jurisdiction in which such offer, solicitation or sale would be unlawful. Three subscribers in the United Kingdom entered into a placing letter and settled 400 Debenture Units directly with the Company.  In connection with this, the Agents received a cash compensation equal to 6.0% of the gross proceeds and no Broker Warrants.  A copy of the short form prospectus dated March 22, 2019 is available under the Company’s profile on SEDAR at www.sedar.com.

About Flower One Holdings Inc.

Flower One is sharply focused on quickly becoming the leading cannabis cultivator, producer and innovator in the highly lucrative Nevada market. Flower One owns and operates a 25,000 square-foot cultivation and production facility in North Las Vegas, with nine grow rooms, and owns the established NLV Organics consumer brand of cannabis products. The Company is also rapidly converting its 455,000 square-foot greenhouse and production facility, which is the largest in the State of Nevada, for cultivating and processing high-quality cannabis at scale. Combined, the flagship greenhouse facility and production facility (once fully operational) and the North Las Vegas facility provide Flower One with 480,000 square feet of capacity for cultivation and processing, production and high-volume packaging of dry flower, cannabis oils, concentrates and infused products. The Company is fully licensed for medical marijuana cultivation and production, as well as recreational marijuana cultivation and production in the state of Nevada and currently holds licensing agreements with their Brand Partners, Flyte Concentrates, Rapid-Dose Therapeutics’ Quick Strip, Old Pal, Palms, HUXTON, CannAmerica Brands and G Pen.

The Common Shares are traded on the Canadian Securities Exchange under the Company’s symbol “FONE” and in the United States on the OTCQB under the symbol “FLOOF.” For more information, visit: https://flowerone.com

For inquiries please contact:

Flower One Holdings Inc.
Ken Villazor, President and CEO
416.200.7641
kvillazor@flowerone.com

Flower One investor relations inquiries
NATIONAL Capital Markets
416.848.9835
ir@flowerone.com

Flower One media inquiries
Natalie Martin
604.738.2220
flowerone@talkshopmedia.com

The CSE does not accept responsibility for the adequacy or accuracy of this press release.

Forward Looking Statements

Statements in this press release that are not statements of historical or current fact constitute “forward looking information” within the meaning of Canadian securities laws and “forward looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “intends,” “anticipates,” “potential,” “should,” “may,” “will,” “plans,” “continue” or other similar expressions to be uncertain and forward looking. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Forward-looking statements in this press release include, but are not limited to, the use of the net proceeds of the Offering; information or statements about the Company’s strategy; future operations, prospects and the plans of management; the Company’s ability to achieve its objectives and plans, including the timing and results of those objectives; the timing and extent of the conversion of its 455,000 square foot greenhouse and production facility in Nevada; the Company’s potential to become the leading cannabis cultivator, producer and innovator in the Nevada market; the scale and capacity of the Company’s cultivation, processing and high-volume packaging facilities in Nevada; and the Company’s ability to fund its continued operations.

The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplaces in the United States through its subsidiary Cana Nevada Corp. Local state laws where Cana Nevada Corp. operates permit such activities; however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Corporation’s business are contained under the heading “Risk Factors” in the Company’s annual information form dated November 7, 2018 filed on its issuer profile on SEDAR at www.sedar.com.

Although the Company has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: the Company’s dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under United States federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry; and regulatory or political change.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the “Forward-Looking Statements” section contained in the Company’s most recent management’s discussion and analysis (“MD&A”), which are available on SEDAR at www.sedar.com. All forward-looking statements in this press release are made as of the date of this press release. The Company does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company’s public securities filings with the Canadian securities commissions, including the Company’s most recent MD&A.

Click here to connect with Flower One Holdings Inc. (CSE:FONE; OTC:FLOOF) for an Investor Presentation.

Source: www.globenewswire.com

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