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TORONTO, Nov. 21, 2018 /CNW/ - Canaccord Genuity Growth Corp. ("CGGC") (NEO: CGGC.UN) and Columbia Care LLC ("Columbia Care"), a leading medical cannabis company in the United States, are pleased to announce that they have entered into a definitive transaction agreement (the "Transaction Agreement") providing for the previously announced business combination between the two companies (the "Business Combination").
"The execution of this agreement marks a critical milestone in Columbia Care's evolution as a global industry leader. Access to a permanent equity capital base beginning in the first quarter of 2019 will not only enable us to leverage our proven track record for operationalizing new markets and day-to-day execution, but will also significantly accelerate our global expansion and leadership plan. In addition, our ability to use a public currency as a strategic asset to enhance both transparency and independent validation to establish global partnerships and stakeholder support will be a significant advantage in comparison to being a privately-held company," said Nicholas Vita, co-founder and chief executive officer of Columbia Care.
Pursuant to the terms of the Transaction Agreement, the Business Combination will be structured as a merger between Columbia Care and a newly-formed Delaware subsidiary of CGGC. To implement the Business Combination, CGGC will, among other things, amend its articles to provide for a new class of proportionate voting shares (the "Proportionate Voting Shares"), which will be issued to holders of Columbia Care securities resident in the United States. Holders of Columbia Care securities resident outside the United States will receive common shares of CGGC (the "Common Shares").
In connection with the Business Combination, all outstanding Class A Restricted Voting Shares and Class B Shares of CGGC shall be automatically converted into Common Shares. In addition, the approximately US$85 million held in escrow pursuant to the terms of the subscription receipt agreement entered into in connection with the previously announced brokered institutional private placement of subscription receipts (the "Subscription Receipts") will be released. Holders of Subscription Receipts will be issued Common Shares upon completion of the Business Combination. It is expected that the Common Shares of CGGC will consolidate on a 3:1 basis prior to the completion of the Business Combination.
Following the closing of the Business Combination, it is expected that former holders of Columbia Care securities will hold approximately 91% of the outstanding equity interests in the resulting entity (assuming conversion of all Proportionate Voting Shares into Common Shares), which will remain a reporting issuer under Canadian securities laws. The remaining approximately 9% will be held by the securityholders of CGGC.
The Business Combination remains subject to the satisfaction or waiver of certain customary conditions, including, among other things, receipt of all required third party consents, regulatory approvals (including that of the NEO Exchange) and the approval of shareholders of CGGC and holders of ownership interests in Columbia Care. The Business Combination constitutes CGGC's qualifying transaction and must be approved by at least two-thirds (662/3%) of the votes cast by CGGC's shareholders.
The boards of directors of each of CGGC and Columbia Care have approved the Business Combination and determined that the transaction is in the best interests of their respective companies. The board of directors of CGGC recommends that its shareholders vote in favour of the Business Combination and the related transactions contemplated by the Transaction Agreement. The managers and board of directors of Columbia Care recommend that its unitholders vote in favour of the Business Combination and the related transactions contemplated by the Transaction Agreement.
In connection with the Business Combination, CGGC will prepare and file a long-form prospectus that provides prospectus level disclosure regarding the resulting issuer. CGGC will also prepare and deliver an information circular relating to the Business Combination containing further details regarding the terms and conditions of the transaction. Investors and security holders may obtain a copy of the Transaction Agreement and of the information circular and the prospectus, when filed, on the SEDAR website at www.sedar.com under CGGC's profile.
Completion of the Business Combination is currently expected to occur in the first quarter of 2019. Upon closing of the Business Combination, the name of CGGC is anticipated to be changed to Columbia Care Inc.
Following closing of the Business Combination, Columbia Care's current Executive Chairman, Michael Abbott, and its current Chief Executive Officer, Nicholas Vita, along with Columbia Care's current management team, will continue to lead the business.
Upon closing, the entity's board of directors is expected to include:
CGGC's capital markets advisor for this transaction was Canaccord Genuity Corp. Blake, Cassels & Graydon LLP and Goodwin Procter LLP are acting as legal counsel to CGGC. Stikeman Elliott LLP, Eversheds Sutherland (US) LLP and Ropes & Gray LLP are acting as legal counsel to Columbia Care.
This press release is not an offer of securities for sale in the United States, and the securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration. The securities have not been and will not be registered under the United States Securities Act of 1933.
Columbia Care is one of the U.S.'s largest and most experienced manufacturers and providers of medical cannabis products and services. It is licensed in highly selective and regulated jurisdictions and has completed more than 750,000 successful patient interactions since its inception. Working in collaboration with globally renowned and innovative teaching hospitals and medical centers, Columbia Care is a patient-centered healthcare company setting the standard for compassion, professionalism, quality, caring and innovation for a rapidly expanding new industry. For more information on Columbia Care, please visit www.col-care.com.
Canaccord Genuity Growth Corp. is a newly organized special purpose acquisition corporation incorporated under the laws of the Province of Ontario for the purpose of effecting a qualifying transaction on the NEO Exchange within a specified period of time.
This press release may contain forward‐looking information within the meaning of applicable securities legislation, which reflects CGGC's current expectations regarding future events including the proposed Business Combination. Forward‐looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond CGGC's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward‐looking information. Such risks and uncertainties include, but are not limited to, timing and requirements applicable to completion of the Business Combination, failure to complete the Business Combination, inability to obtain requisite regulatory and shareholder approvals, changes in general economic, business and political conditions, changes in applicable laws, compliance with extensive government regulation, as well as the factors discussed under "Risk Factors" in the final prospectus of CGGC dated September 13, 2018, a copy of which is available on SEDAR at www.sedar.com. CGGC undertakes no obligation to update such forward‐looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
The NEO Exchange does not accept responsibility for the adequacy or accuracy of this press release.
SOURCE Canaccord Genuity Growth Corp.
For further information: Canaccord Genuity Growth Corp., Michael Shuh, Chairman and Chief Executive Officer, (416) 869-7376; Columbia Care LLC, Josephine Belluardo, Ph.D., LifeSci Public Relations, (646)751-4361, jo@lifescipublicrelations.com
