TORONTO, July 21, 2021 /CNW/ - 48North Cannabis Corp.
("48North" or the "Company") (TSXV: NRTH), is pleased
to announce that it has filed and mailed its management information
circular (the "Information Circular") and related
meeting and proxy materials (collectively, the "Meeting
Materials") for the special meeting of the shareholders of the
Company (the "Company Shareholders") to be held virtually on
Tuesday, August 17, 2021 at
10:00 a.m. (Toronto time ) (the "Meeting"). The
purpose of the Meeting is to consider and, if thought advisable, to
pass a special resolution, with or without variation (the
"Arrangement Resolution"), approving the previously
announced transaction pursuant to which HEXO Corp. ("HEXO")
will acquire all of the issued and outstanding common shares of the
Company (the "Common Shares") by way of a court-approved
plan of arrangement under the Canada Business Corporations
Act (the "Arrangement"). The Information Circular
contains a detailed description of the Arrangement and other
information relating to the Company and HEXO.
On July 14, 2021, the Company
obtained an interim order (the "Interim Order") of the
Ontario Superior Court of Justice (Commercial List) (the
"Court"), which, among other things, authorizes the calling
and holding of the Meeting, stipulates the dissent rights granted
to the Company Shareholders, and specifies certain other matters
relating to the conduct of the Meeting. The granting of the Interim
Order is a condition precedent to the completion of the Arrangement
in addition to a final order of the Court concluding as to the
fairness of the Arrangement (the "Final Order") at a hearing
to be held following the Meeting in the event the Company
Shareholders approve the Arrangement. In accordance with the
Interim Order, the Meeting Materials have been mailed to the
Company Shareholders and are also available on the Company's
website at https://48nrth.com/meetingmaterial2021/ and under the
Company's profile on SEDAR at www.sedar.com.
The board of directors of the Company (the "Company
Board") has determined that the
Arrangement is in the best interests of the Company and fair to the
Company Shareholders, and unanimously recommends that Company
Shareholders vote in favour of the Arrangement Resolution at the
Meeting.
Subject to receipt of all regulatory, court, shareholder and
stock exchange approvals, the satisfaction of customary conditions
precedent in transactions of this nature and the satisfaction of
certain other specified conditions precedent set out in the
arrangement agreement dated May 17,
2021 between the Company and HEXO (the "Arrangement
Agreement"), the Arrangement is expected to be completed at the
end of August 2021 shortly following
the Meeting and the granting of the Final Order.
Voting and Participation at the Meeting
Attendance
The Company remains mindful of the well-being of the Company
Shareholders and other stakeholders of the Company amid the ongoing
concerns regarding the Coronavirus (COVID-19) outbreak, and
accordingly, the Meeting will be held exclusively as a virtual (by
electronic means) shareholder meeting. Company Shareholders will
not be able to attend the Meeting in person. The Meeting will be
held via live audio webcast available online using the LUMI meeting
platform at https://web.lumiagm.com/418612599 on Tuesday, August 17, 2021 at 10:00 a.m. (Toronto time). A detailed summary of the
information Company Shareholders will need to attend the Meeting
online is provided in the Information Circular.
Voting
At the Meeting, Company Shareholders will be asked to consider
and, if thought advisable, approve, with or without variation, the
Arrangement Resolution. To become effective, the Arrangement
Resolution must be approved at the Meeting by the affirmative vote
of (i) at least 66 2/3% of the votes cast by Company Shareholders
virtually present or represented by proxy at the Meeting and
entitled to vote thereat, and (ii) a simple majority of the votes
cast by Company Shareholders virtually present or represented by
proxy at the Meeting and entitled to vote thereat, excluding the
votes of persons whose votes must be excluded in accordance with MI
61-101 - Protection of Minority Security Holders in Special
Transactions (as described in greater detail in the Information
Circular).
Your vote is important regardless of the number of Common
Shares you own. All Company Shareholders are encouraged to deposit
their proxies before 5:00 p.m.
(Toronto time) on Friday, August 13, 2021.
Benefits to Company Shareholders
In recommending that Company Shareholders vote in favour of the
Arrangement, the Company Board considered a number of factors,
including, among others:
- Ownership in a Larger, Stronger Company focused on Cannabis
Production. On June 1, 2021, HEXO
completed its previously announced plan of arrangement transaction
with Zenabis Global Inc., following which the combined organization
is one of the top-three Canadian Licensed Producers, as such term
is defined in the Cannabis Act (Canada) ("Licensed Producer") in terms
of combined Canadian recreational cannabis sales (based on the most
recently filed quarterly financial information of the top five
Licensed Producers in Canada).
Assuming completion of HEXO's proposed transaction (as announced by
HEXO on May 28, 2021) to acquire
RedeCan, presently Canada's
largest privately-owned Licensed Producer, the resulting issuer
would hold the number one market share in the Canadian recreational
cannabis market and the number one position in four of Canada's largest markets: Alberta, British
Columbia, Quebec, and
Ontario. Following completion of
the Arrangement, Company Shareholders will have an ownership
interest in the combined organization, which is expected to have an
enhanced capital markets profile, and a robust financial profile
with a strong balance sheet and financial position in terms of
debt, low depreciable capital base and working capital.
- Enhancing Shareholder Value. In the Company
Board's view, the Company and Company Shareholders should
ultimately benefit from what it believes to be a lower cost of
capital at HEXO than at the Company, and following completion of
the Arrangement, the addition of the Company's innovative product
offerings (including topicals, bath, and intimacy products) to
HEXO's existing product offerings would be expected to provide a
strong base for potential future consumer packaged goods
partnerships in the United States,
Canada and internationally,
further enhancing shareholder value.
- Premium to Company Shareholders. The exchange
ratio (being, 0.02366 of a common share of HEXO (each whole share,
a "HEXO Share") in exchange for each Common Share) implies a
premium per Company Share of approximately 20%, based on the 10-day
volume-weighted average price of the Common Shares on the TSX
Venture Exchange and the HEXO Shares on the Toronto Stock Exchange
as of the close of markets on May 14,
2021, and then takes into account an adjustment for 50% of
the $5,000,000 million bridge loan
advanced by HEXO to the Company in June
2021 (as described in greater detail in the Information
Circular).
- Shareholders Will Participate in the Business of the
Resulting Issuer. Following the completion of the Arrangement,
48North Shareholders will hold shares of the combined organization
and will participate in any future increases in value of the
shares.
The foregoing summary is not intended to be exhaustive and is
qualified in its entirety by the detailed discussion and
description thereof in the Information Circular
Shareholder Questions and Assistance
If you have questions regarding the Arrangement or require
assistance with voting or delivery of your form of proxy, please
contact the Company's proxy solicitation agent, Gryphon Advisors
Inc., by telephone at 1.833.461.3643 (toll-free in North America) or 416–902–5565 (collect call
outside North America), or by
email at inquiries@gryphonadvisors.ca.
Company Shareholders are encouraged to carefully read the
Meeting Materials, which are available on the Company's website at
https://48nrth.com/meetingmaterial2021/ and under the Company's
profile on SEDAR at www.sedar.com. The Meeting Materials have also
been mailed to the Company Shareholders.
About 48North
48North Cannabis Corp. (TSXV:NRTH) is a brand-led,
consumer-centric licensed cannabis producer with an expansive
portfolio of high quality, accessibly priced products available
across the country. The company serves the Canadian medical and
adult-use markets with its brand portfolio that includes: 48North,
an innovative and high-quality cannabis brand focused on
thoughtfully crafted everyday staples for passionate cannabis
users; Trail Mix, an accessibly priced brand formulated with taste
and aroma-first flavour profiles; and Latitude, a next generation
lifestyle platform and premium, natural cannabis collection focused
on wellness, beauty, and beyond. 48North operates two
indoor-licensed cannabis production sites in Ontario and cultivates unique genetics through
its wholly-owned subsidiary, DelShen Therapeutics Corp., and
processes cannabis and manufactures next generation cannabis
products through Good & Green Corp., both licensed producers
under the Cannabis Act (Canada).
Cautionary Statements
Certain information in this news release constitutes
forward-looking statements under applicable securities laws. Any
statements that are contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by
terms such as "may", "should", "anticipate", "expect", "potential",
"believe", "intend" or the negative of these terms and similar
expressions. Forward-looking statements in this news release
include, but are not limited to, statements with respect to (i) the
anticipated benefits of the Arrangement to the Company Shareholders
(including, without limitation, each of the benefits described
under the heading "Benefits to Company Shareholders"), (ii) HEXO
holding the number one market-share in the Canadian recreational
cannabis market and the number one positions in four of
Canada's largest markets (being,
Alberta, British Columbia, Quebec and Ontario), (iii) the effect of the Arrangement
on HEXO and its strategy going forward, and (iv) the anticipated
timing of the Meeting and the completion of the Arrangement, as
well as the conditions for closing (including, the requisite
regulatory, court, shareholder and stock exchange approvals and the
satisfaction of conditions precedent). There can be no assurance
that the Arrangement will be completed as proposed, or at all.
Forward-looking statements are based on certain current
expectations, estimates, projections, and assumptions of the
Company, including, without limitation, (i) with respect to the
completion of the Arrangement, (ii) with respect to anticipated
benefits from the Arrangement, (iii) with respect to the expected
growth, results of operations, and performance of HEXO and the
Company, as well as industry trends and growth opportunities, (ii)
with respect to the ability of HEXO and the Company to receive, in
a timely manner, the requisite regulatory, court, shareholder and
stock exchange approvals) and satisfy, in a timely manner, all
conditions precedent to the closing of the Arrangement. While the
Company considers these assumptions to be reasonable, based on
information currently available, they may prove to be incorrect.
Readers are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements also
necessarily involve known and unknown risks, including, without
limitation, (i) risks associated with the delay or failure to
receive regulatory approvals with respect to the Arrangement, (ii)
the Arrangement not proceeding or anticipated synergies not
materializing as anticipated, or at all, (iii) the ability of HEXO
to implement its business strategies, (iv) the cannabis industry
generally, including changing industry trends, (v) future
legistive, tax and regulatory developments, (vi) competition,
(vii) general business, economic, competitive, political,
regulatory and social uncertainties and conditions, (viii) adverse
industry events, including loss of markets, (ix) the COVID-19
pandemic nationally and globally, which could have a material
adverse impact on the business, operations and financial results of
the Company and/or HEXO and on public markets generally, and * such
other risks. Readers are cautioned that the foregoing list is not
exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those
anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement and reflect the
Company's expectations as of the date hereof, and thus are subject
to change hereafter. The Company disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law. Factors that could cause anticipated
opportunities and actual results to differ materially include, but
are not limited to, matters referred to above and elsewhere in the
Company's public filings.
Neither the 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.
SOURCE 48North Cannabis Corp.