Green Growth Brands Provides CCAA and Other Updates

COLUMBUS, Ohio, Aug. 14, 2020 (GLOBE NEWSWIRE) -- Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) (“GGB” or the “Company”) and certain of its direct and indirect wholly owned subsidiaries (collectively, the “Applicants”) today provided an update on their insolvency proceedings under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”).

As previously announced, the Applicants sought and were granted protection under the CCAA by the Ontario Superior Court of Justice (the “Court”) on May 20, 2020. On June 2, 2020, the Court granted certain additional relief, including an order that, among other things: (a) approved the implementation of a sale and investment solicitation process (the “SISP”); and (b) approved a stalking-horse agreement made as of May 19, 2020 (the “Stalking Horse Agreement”) between the Company, All Js Greenspace LLC (“All Js”) and Capital Transfer Agency, ULC in its capacity as the debentureholder trustee of the Company’s (i) US$45,500,000 aggregate principal amount of 15.00% secured convertible debentures that matured May 17, 2020 and (ii) US$23,717,000 aggregate principal amount of 5.00% secured convertible debentures maturing in 2024 (All Js and Capital Transfer Agency, ULC in such capacities are collectively referred to as the “Purchaser”) pursuant to which the Purchaser would act as the stalking-horse bidder under the SISP.

The SISP did not result in a Superior Offer (as that term is defined in the SISP). As such, and in accordance with the terms of the SISP, Ernst & Young Inc., in its capacity as the Court-appointed monitor of the Applicants (“Monitor”), recommended that the SISP be terminated. The Company issued a press release to this effect on July 22, 2020.

On August 13, 2020, the Court granted two orders that, among other things, (a) approved the sale transaction (the “Transaction”) contemplated by the Stalking Horse Agreement, as amended and restated by the Amended and Restated Acquisition Agreement dated August 10, 2020 (the “Amended and Restated Stalking Horse Agreement”) between the Company and the Purchaser; (b) approved the vesting in an entity to be incorporated all of the Company’s right, title and interest in and to all of the Purchased Assets (as that term is defined in the Amended and Restated Stalking Horse Agreement), which include all of the shares of GGB Canada Inc., all of the shares of Xanthic Biopharma Limited, certain intercompany indebtedness and certain books and records; (c) approved an amendment dated August 10, 2020 (the “DIP Amendment”) to the debtor-in-possession term sheet between the Company and All Js dated May 19, 2020; and (d) extended the stay of proceedings ("Stay") under the CCAA until and including December 18, 2020.

The Transaction is structured as a credit bid. The Monitor estimates that the approximate aggregate purchase price pursuant to the Amended and Restated Stalking Horse Agreement is US$106,388,429.

The Transaction remains subject to the satisfaction of certain conditions to closing, some of which remain outstanding and include the transfer of certain cannabis licenses.

A copy of the orders issued and entered by the Court, the Amended and Restated Stalking Horse Agreement, the DIP Amendment, and other Court materials and information related to the Applicants’ CCAA proceedings, all as may be updated or amended from time to time, are available on the website maintained by the Monitor at www.ey.com/ca/ggbi. The Applicants intend to provide further updates on the CCAA proceedings when there are significant developments.

Settlement of Nevada License Dispute

The Company also announced that on July 29, 2020, its subsidiary, Nevada Organic Remedies LLC (“NOR”), reached a partial settlement (the “Settlement”) regarding the previously disclosed Nevada cannabis license litigation (the “License Litigation”). The License Litigation challenged, among other things, the manner and method by which the state of Nevada’s Department of Taxation reviewed and awarded applications for conditional retail cannabis dispensary licenses (the “Conditional Licenses”). NOR received seven Conditional Licenses pursuant to the application process in December 2018 but was prevented from receiving final approval pursuant to an August 2019 preliminary injunction (the “Preliminary Injunction”). Under the terms of the Settlement, NOR and the other successful applicants have agreed to assign certain licenses to the unsuccessful parties in exchange for, among other things, dismissal with prejudice of the relevant actions brought by the settling plaintiffs, removal of NOR and the other settling defendant-intervenors from the scope of the Preliminary Injunction and expedited inspection and approval for dispensary locations. On August 7, 2020, the Cannabis Compliance Board of the state of Nevada approved the Settlement. The Settlement will allow NOR to expedite the opening of its Reno location, and will allow for the future opening of dispensary locations in the City of Las Vegas, the City of North Las Vegas, the city of Henderson and Nye County.

Cease Trade Order

The Company further announced that a cease trade order was issued by the Ontario Securities Commission on July 29, 2020 as a result of the Company's failure to file its interim financial statements for the three months ended March 31, 2020, including the related management discussion and analysis and interim filing certifications. In connection with the cease trade order, the Canadian Securities Exchange suspended trading of the Company's shares effective July 30, 2020.

About Green Growth Brands Inc.

Green Growth Brands maintains licenses for cannabis operations in Nevada, Massachusetts, and Florida. Its brands include CAMP, The+Source and 8Fold . Learn more about the vision at GreenGrowthBrands.com.

Cautionary Statements

Forward Looking Information

Certain information in this news release constitutes forward-looking statements under applicable securities law. 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”, “intend”, “forecast” and similar expressions. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical and recreational marijuana; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favorable terms; the marijuana industry in the United States, income tax and regulatory matters; the ability of the Company to implement its business strategies; competition; currency and interest rate fluctuations and other risks, including those factors described under the heading “Risks Factors” in (i) the Company’s Annual Information Form dated November 26, 2018 which is available on the Company’s issuer profile on SEDAR and (ii) the Company’s Short Form Prospectus dated August 15, 2019.

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. The forward-looking statements contained in this release, including the successful completion of the Transaction and the realization of the expected benefits of the Settlement, are made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

US Securities Law Disclaimer

This announcement does not constitute an offer, invitation or recommendation to subscribe for or purchase any securities and neither this announcement nor anything contained in it shall form the basis of any contract or commitment. In particular, this announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, or in any other jurisdiction in which such an offer would be illegal.

The securities referred to herein have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act“) or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, within the United States, unless the securities have been registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available.

For investor relations inquiries, please contact:

Randy Whitaker
Chief Executive Officer
Green Growth Brands Inc.
rwhitaker@greengrowthbrands.com