CHICAGO–()–Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco Labs” or “the Company”), one of the most important vertically built-in, multistate hashish operators within the United States, and Bluma Wellness Inc. (CSE: BWEL.U) (OTCQX:BMWLF) (“Bluma”), a vertically built-in operator in Florida, introduced at the moment they’ve entered right into a definitive settlement (the “Agreement”) pursuant to which Cresco Labs will purchase all of the issued and excellent shares of Bluma (“Bluma Shares”) in an all-share transaction that values Bluma at an fairness worth of US$213 million (the “Transaction”).

Our strategy at Cresco Labs is to build the most strategic geographic footprint possible and achieve material market positions in each of our states. With Florida, we will have a meaningful presence in all 7 of the 10 most populated states in the country with cannabis programs – an incredibly strategic and valuable footprint by any definition. We recognize the importance of the Florida market and the importance of entering Florida in a thoughtful way – we identified Bluma as having the right tools and key advantages for growth. Bluma is known for having best-in-class cultivation in the state of Florida, a differentiated retail experience and omnichannel offering with effective delivery, a clear pathway to scale and an incredible management team. We have a proven track record of integrating assets in strategic states, improving fundamentals, and amplifying operations to take share in the most competitive cannabis markets,” mentioned Charles Bachtell, CEO of Cresco Labs. “In 2020, we demonstrated the growth and leverage that can be created by focusing only on the most strategic markets, executing high-quality cultivation at scale, and marrying it with a targeted, consumer-focused model of high-volume retail. In 2021, it’s rinse and repeat. We’re using the same playbook to go deeper in strategic states, including Florida – we look forward to bringing our Cresco Labs brands and our Sunnyside stores to the Sunshine State!”

Bluma’s high-quality cultivation operations, scaled delivery platform, and strategic retail investments combined with Cresco Labs’ track record of execution and capital allocation creates the best path forward to accelerate growth for our business in Florida,” mentioned Brady Cobb, CEO of Bluma. “Our vision for Bluma and One Plant Florida has always been to cultivate remarkable experiences through exceptional cannabis. Our management team took the responsibility to seriously assess potential partners and we’re thrilled to be joining an organization that aligns operationally and shares our passion for creating quality cannabis products.”

Bluma Highlights:

  • Bluma Wellness, below its working subsidiary “One Plant Florida”, has 7 strategically positioned dispensaries with eight extra places below authorized management and deliberate to open.
  • One Plant shops rank 2nd highest in per-store gross sales of smokable flower in Florida.
  • One Plant shops derive 15% of income from residence supply (among the many highest in Florida).
  • 54,000 sq. ft. of cultivation area (with deliberate enlargement of cultivation capability, processing lab, and edibles kitchen).
  • One Plant dispensaries act as supply hubs supporting the fleet of 15 supply automobiles providing 24-48 hour statewide service.

Florida Market Highlights:

  • 3rd most populous state within the U.S. with 21.7 million folks1.
  • 2nd largest progress of state residents within the U.S. in 20201.
  • Over 450,000 registered sufferers within the medical program2.
  • A regulatory surroundings that gives a margin profile via pressured vertical integration that’s instantly accretive to Cresco Labs’ general enterprise.
  • Significant future progress potential as soon as grownup use and/or wholesale gross sales are launched.

Financial and Legal Advisors

Cowen is performing as monetary advisor to Cresco Labs and supplied a equity opinion to the Company’s board of administrators. Bennett Jones LLP is performing as authorized advisor to Cresco Labs.

Clarus Securities Inc. and INFOR Financial Inc. are performing as monetary advisors to Bluma and every supplied a equity opinion to the board of administrators of Bluma. Gowling WLG (Canada) LLP is performing as authorized advisor to Bluma.

Terms

Under the phrases of the Transaction, shareholders of Bluma will obtain 0.0859 of a subordinate voting share of Cresco Labs (“Cresco Shares”) for every Bluma Share held (the “Exchange Ratio”), topic to adjustment as described under. The Exchange Ratio implies a worth per Bluma Share of roughly US$1.12, representing a premium of roughly 29% based mostly on the closing worth of Bluma Shares on the CSE as of January 13, 2021. The Transaction shall be accomplished by method of plan of association below the Business Corporations Act (British Columbia). The Exchange Ratio is topic to adjustment within the following circumstances: (i) if the 5-day quantity weighted common worth of Cresco Shares instantly previous the 2nd enterprise day prior to the closing of the Transaction (the “Cresco Closing Price”) is under US$9.99 however higher than US$7.00, the Exchange Ratio per Bluma Share shall be calculated as US$0.86 divided by the Cresco Closing Price; and (ii) if the Cresco Closing Price is lower than or equal to US$7.00, the Exchange Ratio shall be fastened at 0.1229 Cresco Shares for every Bluma Share.

The Transaction is topic to, amongst different issues, the approval of Bluma shareholders at a particular assembly (the “Special Meeting”), and receipt of all required CSE, regulatory and court docket approvals, together with clearance below the Hart-Scott-Rodino Antitrust Improvements Act. Additional particulars of the Transaction shall be supplied to Bluma shareholders in an info round to be mailed in reference to the Special Meeting. It is at present anticipated that, topic to receipt of all required approvals, the Transaction shall be accomplished by the beginning of the second quarter of 2021.

Recommendation of Bluma Board

The board of administrators of Bluma fashioned a particular committee of unbiased members (the “Special Committee”) to evaluate and advocate the approval of the Transaction by the board of administrators. The Special Committee obtained equity opinions from every of INFOR Financial Inc. and Clarus Securities Inc. stating that, as of the date of the opinions and topic to the assumptions and limitations contained in such opinions, the consideration to be acquired by holders of Bluma Shares pursuant to the Transaction is honest, from a monetary level of view, to the holders of Bluma Shares. Based on the recommendation and suggestion of the Special Committee, the board of administrators of Bluma decided that the Transaction is honest to the shareholders of Bluma, that the Transaction is in one of the best pursuits of Bluma and unanimously recommends that Bluma shareholders vote in favor of the decision to approve the Transaction on the Special Meeting. Shareholders of Bluma holding roughly 40% in combination of Bluma Shares have executed voting and assist agreements in favor of the Transaction. Certain Bluma shareholders may even agree not to switch a portion of their ensuing Cresco Shares for up to an eight-month interval following closing of the Transaction.

About Cresco Labs

Cresco Labs is one of the most important vertically built-in, multistate hashish operators within the United States, with a mission to normalize and professionalize the hashish trade. Employing a consumer-packaged items (“CPG”) method, Cresco Labs is the most important wholesaler of branded hashish merchandise within the U.S. Its manufacturers are designed to meet the wants of all shopper segments and comprised of some of probably the most acknowledged and trusted manufacturers together with Cresco, Remedi, High Supply, Cresco Reserve, Good News, Wonder Wellness, FloraCal Farms and Mindy’s Chef Led Artisanal Edibles created by James Beard Award-winning chef Mindy Segal. Sunnyside, Cresco Labs’ nationwide dispensary model, is a wellness-focused retailer created to construct belief, training and comfort for each current and new hashish customers. Recognizing that the hashish trade is poised to turn out to be one of the main job creators within the nation, Cresco Labs operates the trade’s largest Social Equity and Educational Development initiative, SEED, which was established to be sure that all members of society have the talents, data and alternative to work and personal companies within the hashish trade. Learn extra about Cresco Labs at CrescoLabs.com.

About Bluma Wellness Inc.

Bluma Wellness Inc. owns and operates a vertically-integrated, licensed medical hashish firm within the State of Florida doing enterprise as “One Plant Florida.” One Plant Florida cultivates, processes, dispenses and retails medical hashish to certified sufferers within the State of Florida via a number of retail dispensaries and an modern next-day door-to-door e-commerce residence supply service, thereby providing handy entry for its clients and assembly the calls for of an evolving retail panorama. Bluma Wellness plans to proceed increasing its cultivation and distribution operations because the Florida market grows and should enter into different US states the place the manufacturing, distribution and use of hashish is permitted below state regulation.

Forward-Looking Statements

This press launch accommodates “forward-looking information” throughout the which means of relevant Canadian securities laws and may include statements which will represent “forward-looking statements” throughout the which means of the secure harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking info and forward-looking statements usually are not consultant of historic info or info or present situation, however as a substitute signify solely the Company’s and Bluma’s beliefs relating to future occasions, plans or aims, many of which, by their nature, are inherently unsure and outdoors of the management of the Company and Bluma. Generally, such forward-looking info or forward-looking statements will be recognized by the use of forward-looking terminology akin to, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the unfavourable of these varieties or different comparable phrases.

The forward-looking info and forward-looking statements on this press launch contains statements about: the timing and completion of the Transaction and the acquisition of all of the issued and excellent Bluma Shares, the timing and anticipated receipt of required regulatory, court docket and shareholder approvals for the Transaction and different customary closing situations; the anticipated advantages of the Transaction, together with the company, operational and monetary advantages, the events’ strategic plans and enlargement and expectations relating to the expansion of the Florida hashish market.

Developing forward-looking info and forward-looking statements entails reliance on a quantity of assumptions and consideration of sure dangers and uncertainties, some of that are particular to the Company and Bluma and others that apply to the trade usually. Such assumptions embody however usually are not restricted to the flexibility of the mixed entity to execute its marketing strategy, the continued progress of the hashish market in these U.S. states the place the cultivation, distribution and use of medical or leisure hashish is authorized and specifically, within the State of Florida, that any modifications in US federal or state legal guidelines is not going to adversely have an effect on the companies or operations of the events and the flexibility of the Company to efficiently combine Bluma into its operations.

The forward-looking info and forward-looking statements are topic to identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by such forward-looking info and statements. Such elements embody, however usually are not restricted to:

  • the flexibility of the Company and Bluma to obtain, in a well timed method, the mandatory regulatory, court docket, shareholder, inventory alternate and different third-party approvals to consummate the Transaction;
  • the flexibility of the Company and Bluma to fulfill, in a well timed method, the opposite situations to the closing of the Transaction;
  • the flexibility to full the Transaction on the phrases contemplated by the definitive association settlement and different agreements, together with the assist agreements, or in any respect;
  • the flexibility of the Company to understand the anticipated advantages of the Transaction and the timing thereof;
  • the implications of not finishing the Transaction, together with the volatility of the share costs of the Company and Bluma;
  • unfavourable reactions from the funding group and the required fee of sure prices associated to the Transaction;
  • actions taken by authorities entities or others looking for to stop or alter the phrases of the Transaction;
  • potential undisclosed liabilities unidentified through the due diligence course of;
  • the interpretation of the Transaction by tax authorities;
  • the main focus of administration’s time and a spotlight of each the Company and Bluma on the Transaction and different disruptions arising from the Transaction;
  • a resurgence in instances of COVID-19, which has occurred in sure places and the chance of which in different places stays excessive and creates ongoing uncertainty that would end in restrictions to include the virus being re-imposed or imposed on a extra strict foundation, together with restrictions on motion and companies;
  • the success of new COVID-19 office insurance policies and the flexibility of folks to return to workplaces;
  • dangers relating to hashish being unlawful below US federal regulation and dangers of US federal enforcement actions associated to hashish actions;
  • unfavourable modifications within the political surroundings or within the regulation of medical hashish within the State of Florida;
  • unfavourable shifts in public opinion and notion of the hashish trade and hashish consumption;
  • dangers of product legal responsibility and different safety-related legal responsibility because of this of utilization of the Company’s or Bluma’s hashish merchandise;
  • the inherent uncertainty of manufacturing and price estimates and the potential for sudden prices and bills;
  • crop failures;
  • litigation;
  • forex fluctuations;
  • growing competitors; and
  • loss of key administration and/or staff.

Readers are cautioned that the foregoing record of elements just isn’t exhaustive. The forward-looking info and forward-looking statements contained on this press launch are made as of the date hereof. Except as required by relevant securities regulation, the Company and Bluma undertake no obligation to replace publicly or in any other case revise any forward-looking info or forward-looking statements or the foregoing lists of elements affecting these statements, whether or not because of this of new info, future occasions or modified circumstances.

This information launch constitutes a “designated news release” for the needs of the Company’s prospectus complement dated December 3, 2019 to its quick type base shelf prospectus dated July 25, 2019.

1 https://www.census.gov/programs-surveys/popest/technical-documentation/research/evaluation-estimates.html

2 https://s27415.pcdn.co/wp-content/uploads/ommu_updates/2021/010821-OMMU-Weekly-Update.pdf

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