Flower One Holdings Inc. (CSE: FONE) (OTCQB: FLOOF), a leading cannabis cultivator, producer and innovator in Nevada, is pleased to announce the full exercise of the over-allotment option for additional gross proceeds of $7,500,000 in conjunction with the Company’s previously announced $50,000,000 overnight marketed public offering of unsecured convertible debenture units of the Company that closed on March 28, 2019. An additional 7,500 Debenture Units were issued today by the Company representing additional gross aggregate proceeds of $7,500,000 and the total gross proceeds to the Company from Debenture Units sold in the Offering, including the 50,000 Debenture Units sold initially and the 7,500 Debenture Units sold pursuant to the over-allotment option, is $57,500,000.

The Offering was made through a syndicate of agents co-lead by Mackie Research Capital Corporation and Canaccord Genuity Corp., and including Cormark Securities Inc., Eight Capital, Industrial Alliance Securities Inc., and PI Financial Corp. (collectively, the “Agents“).

The net proceeds received by the Company from the sale of Additional Debenture Units are intended to be used for ongoing construction and development of its Nevada production facility, working capital and general corporate purposes.

Each Additional Debenture Unit consists of one 9.5% unsecured convertible debenture  maturing three years from the date of issuance and 192 common share purchase warrants of the Company. The Additional Debentures shall bear interest at a rate of 9.5% per annum from the date of issue, payable semi-annually in arrears on the last day of June and December in each year and will have a maturity on March 28, 2022. The principal amount of each Additional Debenture shall be convertible, for no additional consideration, into common shares of the Company  at the option of the holder at any time prior to the earlier of: (i) the close of business on the Maturity Date, and (ii) the business day immediately preceding the date specified by the Company for redemption of the Convertible Debentures upon a change of control at a conversion price equal to $2.60, subject to certain adjustment and acceleration provisions.  Each Additional Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $2.60 on or before March 28, 2022.

The Company paid the Agents a cash commission equal to 6.0% of the gross proceeds from the sale of Additional Debenture Units and issued to the Agents additional 151,200 non-transferable warrants of the Company, each such Broker Warrant exercisable into a common share in the capital of the Company at an exercise price of equal to the Conversion Price per Common Share exercisable at any time up to March 28, 2022.

The Additional Debentures and the Additional Warrants have been approved for listing with the Canadian Securities Exchange under the symbols FONE.DB and FONE.WT, respectively and will begin trading on April 1, 2019.

The Offering has been made pursuant to a short-form prospectus filed in each of the provinces of Canada (except Québec), and otherwise by private placement exemption in those jurisdictions where the Offering can lawfully be made, including the United States.  Neither the Additional Debentures Units (and the Additional Debentures and the Additional Warrants forming part of the Debenture Units) have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws, and such securities may therefore not be offered or sold in the United States or to or for the account or benefit of a person in the United States or a U.S. Person (as defined in Regulation S of the U.S. Securities Act) absent registration or an exemption from the registration requirements including to Institutional Accredited Investors pursuant to Rule 506(b) of Regulation D of the U.S. Securities Act. 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. A copy of the short form prospectus dated March 22, 2019 is available under the Company’s profile on SEDAR at www.sedar.com.

About Flower One Holdings Inc.

Flower One is sharply focused on quickly becoming the leading cannabis cultivator, producer and innovator in the highly lucrative Nevada market. Flower One owns and operates a 25,000 square-foot cultivation and production facility in North Las Vegas, with nine grow rooms, and owns the established NLV Organics consumer brand of cannabis products. The Company is also rapidly converting its 455,000 square-foot greenhouse and production facility, which is the largest in the State of Nevada, for cultivating and processing high-quality cannabis at scale. Combined, the flagship greenhouse facility and production facility (once fully operational) and the North Las Vegas facility provide Flower One with 480,000 square feet of capacity for cultivation and processing, production and high-volume packaging of dry flower, cannabis oils, concentrates and infused products. The Company is fully licensed for medical marijuana cultivation and production, as well as recreational marijuana cultivation and production in the state of Nevada and currently holds licensing agreements with their Brand Partners, Flyte Concentrates, Rapid-Dose Therapeutics’ Quick Strip, Old Pal, Palms, HUXTON, CannAmerica Brands and G Pen.