The Supreme Cannabis Company, Inc. Announces $90 Million Bought Deal Financing of Convertible Debentures

The Supreme Cannabis Company Inc (TSXV:FIRE) (“Supreme Cannabis” or the “Company”) announced today that it has entered into an agreement with a syndicate of underwriters co-led by GMP Securities L.P. (“GMP”) and BMO Capital Markets (“BMO” and together with GMP, the “Co-Lead Underwriters” and, collectively with the syndicate, the “Underwriters”) as joint bookrunners, pursuant to which the Underwriters have agreed to purchase, on a bought deal basis pursuant to the filing of a short form prospectus, $90,000,000 aggregate principal amount of convertible debentures (the “Convertible Debentures”) of the Company at a price of $1,000 per Convertible Debenture (the “Offering”). The Convertible Debentures shall bear interest at a rate of 6.0% per annum from the date of issue, payable semi-annually in arrears on June 30 and December 31 of each year, commencing December 31, 2018. Interest shall be computed on the basis of a 360-day year composed of 12 30-day months.  The Convertible Debentures will mature on the date that is 36 months from the closing date (the “Maturity Date”).

The Company has agreed to grant the Underwriters an over-allotment option (the “Over-Allotment Option”) to purchase up to an additional $10,000,000 aggregate principal amount of convertible debentures on the same terms as the Convertible Debentures pursuant to the Offering (together with the Convertible Debentures, the “Debentures”), exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the Offering. If the Over-Allotment Option is exercised in full, the aggregate gross proceeds of the Offering will be $100,000,000.

The Debentures will be convertible at the option of the holder into common shares of the Company (“Common Shares”) at any time prior to the close of business on the Maturity Date at a conversion price of $2.45 per Common Share (the “Conversion Price”).

The Company may force the conversion of the principal amount of the then outstanding Debentures at the Conversion Price on not less than 30 days’ notice should the daily volume weighted average trading price of the Common Shares be greater than $3.43 for any 10 consecutive trading days.

The Debentures will be offered by way of a short form prospectus to be filed in all provinces of Canada (except Quebec). The Company intends to use the net proceeds from the Offering for capital expenditures for capacity expansion, working capital and general corporate requirements.   In addition, the Company views the completion of the Offering as an important milestone in qualifying for graduation to the Toronto Stock Exchange alongside other leading mature licensed producers in the Canadian cannabis industry.

The Offering is expected to close on or about October 19, 2018. The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements.  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 securities in any State in which such offer, solicitation or sale would be unlawful.

About Supreme Cannabis

The Supreme Cannabis Company (TSXV: FIRE) (OTCQX: SPRWF) (FRA: 53S1) is a Canadian publicly traded company committed to providing premium brands and products that proudly reflect its consumers, people and uniquely innovative culture. The Company’s portfolio includes its wholly-owned subsidiary and flagship brand 7ACRES.

7ACRES is a federally licensed cannabis producer operating a 342,000-square-foot facility in Kincardine, Ontario. 7ACRES is dedicated to providing consumers with a premium-quality product that recognizes its customers are informed, discerning and value a brand and culture that aligns with their principles. 7ACRES brand success has been reflected in provincial supply agreements with the provinces of Ontario, British Columbia, Alberta, Manitoba, Nova Scotia and Prince Edward Island.

The Company’s growing portfolio also includes an equity investment and long-term global distribution partnership with Lesotho-based Medigrow for the exporting of medical-grade cannabis oil.

The Supreme Cannabis Company has consistently set the standard for innovation in the sector, including the design of growing facilities and development of operational excellence metrics. We are confident that together with our flagship brand, proprietary technology and products, truly unique culture, and industry-leading team, we will deliver our shareholders consistent long-term value creation.

Please visit www.supreme.ca and www.7ACRES.com for more information.

Forward Looking Statements

Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to anticipated events or results and include, but are not limited to, statements relating to the closing date of the Offering, the completion of the Offering and the exercise by the Underwriters of the Over-Allotment Option, the qualification for graduation to the Toronto Stock Exchange and other statements that are not historical facts. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology. Forward-looking statements are current as of the date they are made and are based on applicable estimates and assumptions made by us at the relevant time in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances. However, we do not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. There can be no assurance that such estimates and assumptions will prove to be correct.  Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the “Risk Factors” section of the Company’s Annual Information Form dated January 22, 2018 (“AIF”). A copy of the AIF and the Company’s other publicly filed documents can be accessed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Investor Relations, Scott Davidson, Bayfield Strategy, Inc., Phone: 416-466-6265, Email: sdavidson@bayfieldstrategy.com, Website: supreme.ca

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Source: globenewswire.com