Delta 9 and Canopy Growth awarded retail license in Manitoba

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WINNIPEG, Feb. 16, 2018 /CNW/ - The Manitoba government today announced that an opportunity to legally retail recreational cannabis in the province has conditionally been awarded to a consortium consisting of Delta 9 Cannabis Inc. (TSXV: NINE) ("Delta 9" or the "Company") and Canopy Growth Corporation (WEED: TSX), ("Canopy Growth").

The issuance of the license is contingent on the signing of a formal agreement with the provincial government, which include meeting a series of conditions attached to the retail licensing process.

The license would authorize the Delta 9/Canopy Growth partners to build and operate a chain of retail stores throughout the Province of Manitoba. The first location for Delta 9 has already been constructed in the Osborne Village area of Winnipeg, and has been operating for several months as a resource centre and clinic. That location will become the first of many more stores, says Company CEO John Arbuthnot.

"It is hard to overstate how important this award is for our company, our shareholders, and for the future of the legal cannabis industry in Manitoba," Arbuthnot said. "As the only Manitoba producer licensed to sell cannabis, and partnered with the world's largest cannabis company, we feel we are uniquely situated to serve the Manitoba market with both quantity and quality of product."

Delta 9 management estimates the provincial cannabis market at $300 to $500 million annually. "Having one of only four retail licenses in this market, combined with what we feel is our unmatched ability to address that market, is a huge advantage for Delta 9, and should prove to be a great boon for our shareholders," Arbuthnot said.

Arbuthnot says the agreement with Canopy Growth was reached as part of the Company's commitment to adequately supply the Manitoba market. The Company has also accelerated its own expansion of its production facility in Winnipeg following the closing in December 2017 of a $23 million short form prospectus bought deal offering led by Canaccord Genuity Corp.

Delta 9 is pleased to announce the construction project is coming in significantly under budget, with the cost per grow pod dropping from approximately $40,000 to approximately $28,000. The Company now believes that it is fully funded to build 600 of its self-designed 'grow pods', estimated to increase cannabis production to approximately 17,500 kilograms annually.

"We've committed to producing a baseline amount of product for the Manitoba market, and we are confident we can achieve those numbers," said Arbuthnot. "However, we would like to exceed those projections in order to not only meet demand in Manitoba, but also meet or exceed our commitments to national sales under our previously announced CraftGrow agreement with Canopy Growth."

Additionally, Delta 9 products will be distributed through Canopy Growth outlets in other provinces, and through the Tweed Main Street online sales portal (tweedmainstreet.com). As responsible existing cannabis businesses, Delta 9 and Canopy Growth plan to work collaboratively within the proposed Manitoba framework to bring locally produced products as well as the best variety from across the country to future cannabis consumers throughout the province.

About Delta 9 Cannabis Inc.
Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9's shares trade on the TSX Venture Exchange under the symbol "NINE".

About Canopy Growth Corporation.
Canopy Growth is a world-leading diversified cannabis company, offering distinct brands and curated cannabis varieties in dried, oil and capsule forms. Through its wholly-owned subsidiaries, Canopy Growth operates numerous state-of-the-art production facilities with over 700k sq. ft. of licensed production, over 500k sq. ft. of which is GMP-certified.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) Delta 9's and Canopy Growth's expansion plans; (ii) Delta 9's production of cannabis; (iii) demand for Delta 9's products; (iv) the estimated size of the Manitoba cannabis market; and (v) Delta 9's cost to produce its grow pods. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that Delta 9's currently contemplated expansion and development plans may cease or otherwise change, Delta 9's production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9's products may be lower than anticipated, Delta 9's cost to produce its grow pods may be higher than expected and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

SOURCE Delta 9 Cannabis Inc.