Flower One Announces Public Offering of Convertible Debenture Units

Flower One Holdings Inc. (“Flower One” or the “Company”) (CSE:FONE, OTCQX:FLOOF) is pleased to announce that it is commencing an overnight marketed offering (the “Offering”) of convertible debenture units (the “Debenture Units”) of the Company. In connection with the Offering, the Company intends to file a prospectus supplement (the “Prospectus Supplement”) to the Company’s short form base shelf prospectus dated October 22, 2019 (the “Shelf Prospectus”), with the securities regulatory authorities in each of the provinces of Canada, other than Québec.  Each Debenture Unit will consist of one 9.5% unsecured convertible debenture due November 2022 (the “Convertible Debentures”) of the Company, and a number of common share purchase warrants (the “Warrants”) of the Company.

The total size of the Offering as well as certain other  terms of the Convertible Debentures and the Warrants (including the number of Warrants per Debenture Units, the term and the exercise price) will be determined in the context of the market prior to the filing of the Prospectus Supplement.

The Offering is being led on a “best-efforts” basis by Mackie Research Capital Corporation and Canaccord Genuity Corp., as co-lead agents and joint bookrunners (collectively, the “Lead Agents”), and on behalf of a syndicate of agents (together with the Lead Agents, the “Agents”).

The Company intends to use the net proceeds from the Offering: (a) to advance and support the continued launch of its Brand Partners’ products into the Nevada market; (b) for working capital and general corporate purposes; and (c) to accelerate the Company’s market entry plans for California.

The Company will also grant the Agents an option (the “Over-Allotment Option”) to cover over-allotments and for market stabilization purposes, exercisable at any time up to 30 days subsequent to the closing of the Offering, to increase the size of the Offering by up to 15% in Debenture Units (or the components thereof) on the same terms and conditions of the Offering, exercisable in whole or in part.

Flower One will use commercially reasonable efforts to obtain the necessary approvals to list the Convertible Debentures, the Warrants, and the common shares of the Company issuable upon conversion of the Convertible Debentures and the exercise of the Warrants on the Canadian Securities Exchange (the “CSE”).

Copies of the base shelf prospectus and, any supplement thereto to be filed in connection with the Offering, can be found on SEDAR at www.sedar.com.

The closing of the Offering is currently expected to be on or about the week of November 11, 2019 and is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the CSE.

The Debentures Units (and the Convertible Debentures and the Warrants forming part of the Debenture Units) have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold in the United States, or to or for the account or benefit of, persons in the United States or U.S. Persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. 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.

About Flower One Holdings Inc.

Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. By combining more than 20 years of greenhouse operational excellence with best-in-class cannabis operators, Flower One offers consistent, reliable, and scalable fulfillment to a growing number of industry-leading cannabis brands. Flower One’s flagship 400,000 square-foot greenhouse and 55,000 square-foot production facility is used for large scale cannabis cultivation, processing, and manufacturing. Flower One also owns and operates a second production facility in Las Vegas, with 25,000 square-feet of indoor cultivation and a commercial kitchen that will produce several of the nation’s top-performing edible and beverage brands. Flower One produces a wide range of products ranging from wholesale flower, full-spectrum oils, and distillates to finished consumer packaged goods including flower, pre-rolls, concentrates, edibles, beverages, and topicals for the top-performing brands in cannabis.

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

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 actual 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.

Forward-looking statements may include, without limitation, statements relating to the Company’s ability to close the Offering, to gain access to further capital, to advance and support the continued launch of its Brand Partners’ products into the Nevada market, to accelerate the Company’s market entry plans for California, or to list the Convertible Debentures, the Warrants, and the common shares of the Company issuable upon conversion of the Convertible Debentures and the exercise of the Warrants on the CSE; the Company’s leadership as a cannabis cultivator, producer and full-service brand fulfillment partner; the Company’s ability to offer consistent, reliable and scalable fulfilment to its brand partners; and the production of a wide range of products including products of the top-performing edibles and beverage brands in the United States.

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 Company’s business are contained under the heading “Risk Factors” in the Company’s Shelf Prospectus dated September 27, 2019 filed on its issuer profile on SEDAR at www.sedar.com.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the “Cautionary Statement regarding Forward-Looking Information” section contained in the Shelf Prospectus. All forward-looking statements in this press release are made as of the date of this press release. 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 Shelf Prospectus.

Although Flower One 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: 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.

Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Flower One Holdings disclaims and does not undertake any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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

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