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Ventura Cannabis to Acquire Cannabis Dispensaries in Cathedral City, California, and Portland, Oregon

Secures Former Morgan Stanley, Merrill Lynch Executive as Senior Advisor

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ALL FIGURES IN CANADIAN DOLLARS UNLESS OTHERWISE SPECIFIED.

LOS ANGELES, Feb. 12, 2019 (GLOBE NEWSWIRE) — Ventura Cannabis and Wellness Corp. (“VCAN” or the “Company“) (CSE: VCAN) announced today that it has entered into a binding agreement to acquire two cannabis dispensaries. The first, located in Cathedral City, California just outside Los Angeles, is a strategic acquisition that pairs well with the Company’s detox centers located nearby. The second is a cannabis dispensary in Portland, Oregon which will become part of its existing Oregon business. Additionally, Ventura Cannabis announced it secured Craig Lipsay, a senior investment banker and former Managing Director at Morgan Stanley and Merrill Lynch in New York City to advise its Board and management.

The combined businesses are expected to generate $2,500,000 in annual revenue with positive cash flow. The total combined cost, including all fees and expenses, of the transactions, is expected to be an average of less than 1.9 times revenues, inclusive of up to US$658,000 in stock, with a portion of the consideration paid over time based upon performance.

Cathedral City, California Dispensary Acquisition

Ventura Cannabis has executed a binding stock purchase agreement to acquire Remedy Inc., a cannabis business in California near Los Angeles and Corona, which are the locations of the current detox centers. The business also has the ability to apply for a delivery license through a grandfather clause, which after closing Ventura Cannabis plans to do. Additionally, the business has a medical cannabis endorsement whereby it can sell high dosage products for medical use only. Based on unaudited financials and due diligence, the business is expected to generate positive cash flow and annual revenues of $1.6 million.

“I am pleased we were able to secure this strategic acquisition,” said Jacob Gamble, CEO of Ventura Cannabis. “This asset comes with two very exciting attributes. First, its location near the music festivals has great potential and has not been fully explored. Secondly, its delivery endorsement, which also has yet to be leveraged, fits very well with our plans for revenue generation in California.”

The purchase price for the acquisition is (a) US$1,000,000 is payable to the vendor on closing, (b) four quarterly payments of US$225,000 per quarter over the first four quarters following closing, subject to a quarterly clawback of US$2.00 against each dollar of revenue below US$1,100,000 (annualized) and the business being cash flow positive, (c) a payment of US$250,000 fifteen months following closing, and (d) a payment of US$250,000 eighteen months following closing. In connection with the transaction, the vendor has agreed to enter into an employment contract for the 12 month period following closing. The vendor is entitled to payment of 20% of earnings if gross revenue is above US$1,500,000 and if the business has +25% profit margin during the 12-month term of the employment agreement.

Closing of the acquisition is subject to a number of customary conditions, including receipt of all required regulatory approvals.

Portland, Oregon Dispensary Acquisition

Ventura Cannabis has executed a binding asset purchase agreement for Amberlight LLC, a Portland, Oregon cannabis dispensary. Based on unaudited financials and due diligence, the business is expected to generate positive cash flow and annual revenues of $900,000. The business is an important addition to the Oregon operations that already include a business in Salem, Oregon.

“We continue to build out our expertise around the Oregon dispensary market,” said Jacob Gamble, CEO of Ventura Cannabis. “This asset has a focus on branding and lifestyle for the medical cannabis consumer. While small, it gives us a very good entry point into a team focused on branding in a city center setting serving patients with several conditions.”

The purchase price for the acquisition is (a) US$550,000, with the majority in stock, is payable to the vendor on closing, and (b) two quarterly payments of US$25,000 per quarter over the first two quarters following closing, subject to a quarterly clawback of $1.50 against each dollar of revenue below US$600,000 (annualized) and the business being cash flow positive. In connection with the transaction, the vendor has agreed to enter into an employment contract for the 12 month period following closing. The vendor is entitled to payment of 20% of earnings if revenue is above US$1,050,000 and if the business has +25% profit margin during the 12-month term of the employment agreement.

Closing of the acquisition is subject to a number of customary conditions, including receipt of all required regulatory approvals.

Craig Lipsay Engaged as Senior Advisor

Craig Lipsay has been appointed as the Company’s Senior Financial Advisor to the Board of Directors. Mr. Lipsay has almost 30-year track record on Wall Street, including 11 years at Morgan Stanley where, as an investment banker based in Morgan Stanley’s New York City headquarters, he rose to Managing Director, Co-head of North American Structured Products and then Managing Director, Co-head of the North American Strategic Solutions Group at Merrill Lynch. He has since served as an advisor and large shareholder in several investment funds. Mr. Lipsay has an undergraduate degree from SUNY, Albany and an MBA from The Wharton School at the University of Pennsylvania. Mr. Lipsay will support the company in areas of capital markets communication and strategic planning.

“I am pleased that Craig has agreed to join as a key member of our team,” continued Mr. Gamble. “He will be joining me when I meet with shareholders and market participants in Canada in the coming weeks.”

“I believe this company offers a rare opportunity for investing,” said Mr. Lipsay. “The cannabis industry is slated to grow into a major U.S. industry, and we are at the very beginning. Ventura offers a unique value proposition at the moment. It has eight figure revenues and a long-standing detox business that can be leveraged into cannabis revenues. It has a strong team of operators and a deep pipeline of deals and opportunities. We enter the market with a strong balance sheet, cash flow and a great platform for growth. I look forward to working with Jacob and the team to turn this into a world-class medical cannabis company.”

On behalf of Ventura Cannabis and Wellness Corporation

Jacob Gamble
Chief Executive Officer and Executive Director

For more information contact:

BLVD Centers Corporation
Jacob Gamble
CEO and Executive Director
(360) 314-4294
investorinfo@BLVDcenters.com
www.BLVDir.com


Forward-Looking Statements

Certain statements contained in this press release constitute “forward-looking information” as such term is defined in applicable Canadian securities legislation. The words “may”, “would”, “could”, “should”, “potential”, “will”, “seek”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions as they relate to the Company. Such statements reflect the Company’s current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. VCAN holds or is acquiring marijuana licenses in Oregon and California. Marijuana is legal in each state; however, marijuana remains illegal under US federal law and the approach to enforcement of US federal law against marijuana is subject to change. Shareholders and investors need to be aware that adverse enforcement actions could affect their investments and that VCAN’s ability to access private and public capital could be affected and or could not be available to support continuing operations. All figures are in Canadian dollars unless otherwise indicated.

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