Cannabis One Holdings Inc. (CSE:CBIS)  an emerging, premier “House of Brands” in North America, is pleased to announce that it has entered into a letter agreement with Colorado-based cannabis industry consulting firm Itachi Advisory Group LLC to pursue acquisitions related to a suite of portfolio assets related to cannabis retail, cultivation, and manufacturing operations from certain entities advised by Itachi.

On execution of the Agreement, Jeffery Mascio, CEO of Cannabis One, stated, “We believe this new partnership with Itachi will provide CBIS with a profound opportunity to explore the acquisition of a series of accretive transactions designed to rapidly expand our cannabis-related infrastructure.” Mr. Mascio continued, “We believe that Neil Demers and his team at Itachi have identified a host of attractive assets for Cannabis One to consider and we look forward to evaluating each opportunity independently, on its merits, but with the express intention of moving towards a definitive agreement with each party as quickly as may be practicable.”

If a definitive agreement is executed and closed between the Company and each of the Sellers, the Company anticipates the potential benefits from completing the proposed Transactions may include:

• the addition of certain assets associated with seven cannabis retail locations, which Itachi anticipates, based on information provided by management of each Seller to Itachi, will collectively generate an estimated US$43,512,000 million in annualized system-wide brand revenue through fiscal 2019, and through which CBIS management projects it can achieve an estimated EBITDA margin of 20% – 30%, assuming the continued operating performance of each Seller’s retail operations; the maintenance of certain management and personnel integral to the operating business of each Seller; the successful integration of each of the Assets (as defined below) into Cannabis One’s business and operating portfolio; and the successful implementation of the anticipated cost synergies Cannabis One believes it may attain;
• providing a substantial growth catalyst for the expansion of Cannabis One’s consumer-centric retail concept brand, The Joint^TM, which the Company projects will include up to twenty-five retail locations across five states: Colorado, Washington, California, Nevada, and Oregon, through fiscal 2019;
• the addition of certain assets associated with seven cannabis cultivation operations, which Itachi anticipates, based on information provided by management of each Seller to Itachi, will collectively generate an estimated US$10,200,000 million in annualized system-wide brand revenue through fiscal 2019, with an anticipated annual production of approximately 10,200 lb, and through which CBIS management projects it can achieve an estimated EBITDA margin of 15% – 20%, assuming the continued operating performance of each Seller’s cultivation operations; the maintenance of certain Key Employees of each Seller; the successful integration of each of the Assets into Cannabis One’s business and operating portfolio; and the successful implementation of the anticipated cost synergies Cannabis One believes it may attain; and
• The addition of certain assets associated with a medical and recreational cannabis manufacturing facility, contributing a combined 18,000 ft² in consolidated footprint, which the Company anticipates will provide the opportunity for expanded and accelerated throughput of Cannabis One’s suite of portfolio brands, which will include: INDVR, INDVR Fire, INDVR Strains, Fat Face Farms, Honu, Evergreen Organix, EG.O, and Fleur, in addition to products developed through the Company’s licensing and manufacturing relationship with Cheech’s Private Stash^TM.

Under the terms of the Agreement, the Company and Itachi will work jointly to negotiate the purchase and sale of certain assets from each of the Sellers, inclusive of all leasehold rights, intellectual property, and tangible and intangible assets, subject to regulations and any exclusions to be further defined in detail in each proposed Definitive Agreement. Cannabis One will not assume any liabilities or obligations of any Seller of any kind, contingent or otherwise. This exclusion includes but is not limited to: cash-on-hand, insurance policies, commercial business lending, and any other liabilities or obligations of any Seller. The precise structure, terms, and conditions of the understandings and obligations of Cannabis One and its counterparties in relation to each Transaction will be contained in each Definitive Agreement to be prepared between counsel to Cannabis One and counsel to each of the Sellers. In accordance with Colorado regulation and legislation, Cannabis One, nor its wholly-owned subsidiary, will acquire any interest in regulated inventory or licenses related to the cultivation, manufacture, distribution, or sale of cannabis or cannabis-related products in connection with a Transaction. The suggested terms set forth in the Agreement may differ from each Definitive Agreement.

The Company anticipates that any share-based consideration issued in connection with the proposed Transactions will be comprised of Class B Super Voting Shares in the capital of Cannabis One at a per Class B Share price equal to ten times (given that each Class B Share is convertible into ten Class A Subordinate Voting Shares in the capital of Cannabis One) the greater of: (i) a maximum discount of ten percent, subject to the policies of the Canadian Securities Exchange, to the closing price of the Class A Shares on the last trading day immediately prior to the date of execution of each Definitive Agreement, with the announcement of the same by Cannabis One; and (ii) the volume-weighted average price of the Class A Shares for the ten (10) day period immediately preceding the Closing, converted into United States Dollars using a simple average of the USD:CAD Noon exchange rate for the ten day period immediately preceding the Closing, as published on www.federalreserve.gov.

Any Class B Shares that would be issued in connection with the proposed Transactions will be subject to a trading restriction pursuant to applicable Canadian securities legislation of four (4) months and one (1) day, and trading restrictions pursuant to applicable United States securities legislation. Additionally, it is contemplated that each Seller shall agree to grant Cannabis One, and its wholly-owned Colorado subsidiary, a sixty day right-of-first-refusal to purchase, or identify a third-party purchaser for, any such Class B Shares (or Class A Shares as may be converted therefrom) intended to be sold by the Seller.

About Cannabis One

IF WE BRAND IT, THEY WILL COME – Cannabis One Holdings Inc. is focused on aggregating and optimizing popular cannabis brands throughout North America. With its unique, franchise-ready retail brand, The Joint^TM, and through targeted acquisition and partnership opportunities, Cannabis One intends to become the premier, globally-recognized, “House of Brands”, holding a client portfolio of award-winning products with an extensive market footprint. Through the Company’s The Joint^TM retail concept, Cannabis One intends to leverage the consumer and brand data harvested from its retail locations to bring data-driven analytics to an emerging, branded industry. For consumers, Cannabis One desires to become the definitive source for unparalleled product selection and renowned service in an otherwise fragmented market.