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Westleaf Inc. Announces Repricing of Bought Deal Financing


THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

 

CALGARY, April 30, 2019 / – Westleaf Inc. (the “Company” or “Westleaf“) (TSX-V:WL)(OTCQB:WSLFF) announces that it has agreed to amend the terms of its previously announced bought deal financing (the “Offering”) of convertible debenture units of the Company (the “Units”) to lower the conversion price at which the convertible debentures of the Company (“Convertible Debentures”) are convertible into common shares of the Company (the “Debenture Shares”) from $2.13 per Debenture Share to $1.30 per Debenture Share. The number of warrants per Unit has been revised from 235 common share purchase warrants of the Company (each, a “Warrant”) to 385 Warrants. In addition, the Company has agreed to lower the exercise price at which the Warrants will be exercisable to acquire common shares of the Company (a “Warrant Share”) from $2.75 per Warrant Share to $1.65 per Warrant Share.

The Company has granted Canaccord Genuity Corp. and GMP Securities L.P. (the “Underwriters”)  an over-allotment option to purchase up to additional Units, Convertible Debentures and/or Warrants (or any combination thereof, at the discretion of the Underwriters) equal to 15% of the Units sold under the Offering, at a price of C$1,000 per Unit, $932 per Convertible Debenture and/or $0.18 per Warrant, as applicable, exercisable in whole or in part at any time, for a period of 30 days after and including the closing date of the Offering (the “Closing Date“).

If the holder elects to convert the Convertible Debentures after a period that is eighteen months and one day following the Closing Date, then the holder will also receive the Effective Interest (as defined below), payable in: (i) common shares of the Company (“Common Shares”) at a price equal to the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the “Exchange” or “TSXV“) for the consecutive 20 trading days of the Commons Shares on the Exchange preceding the date of such election, or if such trading price is lower than the maximum permitted discount for such Common Shares, the maximum permitted discount for the issuance of the Common Shares under TSXV policies (the “Common Share Interest Price”); (ii) cash, or (iii) at the Company’s option, a combination of cash and Common Shares at the Common Share Interest Price. The effective interest (“Effective Interest“) is an amount equal to the interest that the holder would have received if the holder had held the Convertible Debentures until the maturity of the Convertible Debentures.

The net proceeds of the Offering will be used for working capital requirements and general corporate purposes.

The Units will be offered by way of an amended and restated final short form prospectus to be filed in all provinces of Canada except Quebec. The Offering is expected to close on or before May 15, 2019 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSXV and the applicable securities regulatory authorities. In the event that regulatory, including TSXV, approval in respect of the amendments to the Offering are not received on or before May 10, 2019, the parties have agreed that no effect shall be given to the amendments noted above and that the original terms of the Convertible Debentures and Warrants shall be deemed to be in effect.

The securities comprising the Units being offered, and the Debenture Shares issuable on the conversion of the convertible debentures and the Warrant Shares issuable on the exercise of the Warrants, have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Westleaf Inc.

Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British Columbia, Alberta, Saskatchewan and potentially Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. The Company also has two significant production facilities under construction and scheduled for completion in 2019. For more information, please visit www.westleaf.com or www.prairierecords.ca.

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

 

Cautionary Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. This news release, forward-looking statements relate, among other things, to the timing and expected closing of the Offering, the use of proceeds of the Offering, the definitive terms of the Units and the securities comprising the Units. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licenses to retail cannabis products; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder, court or regulatory approvals, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

 

For further information: Bruce Leslie, VP Corporate Communications, Bruce.leslie@954.lilrkt.xyz, 403-801-7612

Westleaf announces that its executive officers and directors have committed to not sell or trade their Westleaf shares


CALGARY, ALBERTA – April 30, 2019 – Westleaf Inc. (TSX-V: WL) (OTCQB: WSLFF) (“Westleaf“) announces that it has received voluntary commitments from each of its executive officers and directors (the “D&O’s“) pursuant to which the D&O’s have agreed that they will not offer, sell, assign, transfer, contract to sell or otherwise dispose of, or announce the intention to otherwise dispose of, any of their common shares of Westleaf (“Westleaf Shares“) or any securities convertible into Westleaf Shares such that all of the Westleaf Shares held either directly or indirectly by D&O’s will now be restricted from any trading, unless approved by Westleaf’s board of directors, until September 29, 2019.  This commitment is in addition to any escrow imposed by the TSX Venture Exchange.

“Westleaf’s directors and officers remain committed to Westleaf and its growth, and their voluntary commitment to not sell their Westleaf Shares or their securities convertible into Westleaf Shares, as an act of good faith, is expected to send a positive message to our shareholders,” stated Scott Hurd, Director, President and CEO.

About Westleaf Inc.

Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British Columbia, Alberta, Saskatchewan and potentially Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. Westleaf also has two significant production facilities under construction, with completion anticipated to occur in 2019. For more information, please visit http://954.lilrkt.xyz or www.prairierecords.ca.

 

Additional Information

More Information:
Bruce Leslie; Bruce.leslie@954.lilrkt.xyz; 403-801-7612

Cautionary Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements“) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, completion of the production facilities and timing thereof. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, receipt of all regulatory approval and completion of construction. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.

Neither 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

Westleaf Inc. Announces Closing of Convertible Debenture Unit Financing and Provides Corporate Update


THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

CALGARY, May 10, 2019 – Westleaf Inc. (the “Company” or “Westleaf“) (TSX-V:WL)(OTCQB:WSLFF) is pleased to announce that it has closed its previously announced bought deal financing (the “Offering”) of 12,000 convertible debenture units of the Company (the “Units”), by way of short form prospectus, at a price of $1,000 per Unit for aggregate gross proceeds of $12,000,000. Each Unit consisted of one 9.5% senior unsecured convertible debenture (each a “Convertible Debenture”) of the Company having a principal amount of $1,000 (the “Principal Amount”) and 385 common share purchase warrants of the Company (the “Warrants”).

“Westleaf is pleased to close its previously announced $12 million financing, which bolsters the Company’s available capital to $57 million, allowing it to continue to advance its vertically integrated cannabis strategy with assets across the entire value chain (cultivation, extraction/product development and retail distribution),” said Scott Hurd, President and CEO of Westleaf Inc.

Update to Operations:

  • Strengthened Financial Position: With the close of the convertible debenture financing, Westleaf now has access to $57 million of capital (cash position as of April 30, 2019 adjusted for net proceeds of the convertible debenture financing) comprised of ~$27 million of cash and the ability to draw up to $30 million of undrawn, low cost, non-dilutive capital under its non-revolving credit facilities with ATB Financial, subject to ATB Financial’s discretion in certain cases and subject to the satisfaction of certain conditions precedent.
  • The Plant Extraction & Manufacturing Lab: Construction remains on schedule and on budget for The Plant with Phase I expected to be completed in June 2019. The licensing process is well underway with Health Canada, with the expectation that The Plant could receive a Standard Processing licence as early as Q3 2019. It is anticipated that Phase I will allow Westleaf to process up to ~30,000 kilograms of cannabis feedstock per annum (based on 252 work days per year), which will be refined and manufactured into products such as oils, tinctures and gel caps and ultimately, once fully legal, edibles, vapes, topicals and other high-margin cannabis products.
  • Thunderchild Cultivation Facility: Construction of Thunderchild Cultivation near Battleford, Saskatchewan is on track, on budget and is scheduled to be complete in Q4 2019 with Health Canada licencing expected to follow completion. The facility is expected to produce up to 14,600 kg of dried cannabis flower when fully operational (estimates based on a total flower bench of 42,000 square feet (Phase I & II), 60 grams of flower yield per square foot per harvest and 5.8 harvests per annum). The first wing and processing hub are targeted to be complete in October 2019. The Thunderchild Cultivation facility is anticipated to provide Westleaf’s retail locations and The Plant with a reliable supply of high-quality cannabis.
  • Prairie Records Cannabis Retail: Year to date the Company opened three Prairie Records cannabis retail stores in Saskatchewan, two in Saskatoon and one in Warman, as well as an online ecommerce platform serving all of Saskatchewan. Additional cannabis retail stores are planned for Saskatchewan, Alberta and British Columbia, with a total of 29 cannabis retail development permits secured, with timing of openings contingent on licencing from the respective provincial and municipal regulators.

Convertible Debenture Financing

The Convertible Debentures will mature and be repayable on a date that is 36 months (the “Maturity Date”) from the closing date of the Offering (the “Closing Date”) and will accrue interest at a rate of 9.5% per annum payable in arrears on the last business day of June and December in each year. The Principal Amount shall be convertible, for no additional consideration into common shares in the capital of the Company (the “Common Shares”) 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 repurchase of the Convertible Debentures upon a change of control of the Company, at a conversion price equal to $1.30, subject to adjustment in certain events (the “Conversion Price”). The Conversion Price represents a conversion rate of approximately 769 Common Shares for each $1,000 principal amount of Convertible Debentures, subject to certain anti-dilution provisions.

If the holder elects to convert the Convertible Debentures after a period that is eighteen months and one day following the Closing Date, then the holder will also receive the Effective Interest (as defined below), payable in: (i) Common Shares (the “Effective Interest Shares”) at a price equal to the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the “Exchange” or “TSXV“) for the consecutive 20 trading days of the Commons Shares on the Exchange preceding the date of such election, or if such trading price is lower than the maximum permitted discount for such Common Shares, the maximum permitted discount for the issuance of the Common Shares under TSXV policies (the “Common Share Interest Price”); (ii) cash, or (iii) at the Company’s option, a combination of cash and Common Shares at the Common Share Interest Price. The effective interest (“Effective Interest“) is an amount equal to the interest that the holder would have received if the holder had held the Convertible Debentures until the maturity of the Convertible Debentures.

Each Warrant will be exercisable to acquire one Common Share for a period of 36 months from the Closing Date at an exercise price of $1.65 per Common Share.

The Offering was completed pursuant to an underwriting agreement dated April 16, 2019, between the Company, Canaccord Genuity Corp. and GMP Securities L.P. (the “Underwriters”), as amended by an amending agreement dated April 29, 2019 (the “Underwriting Agreement”). Pursuant to the terms of the Underwriting Agreement, the Company paid the Underwriters a cash commission equal to 7% of the gross proceeds raised in the Offering and 646,154 non-transferable compensation warrants (the “Broker Warrants”). Each Broker Warrant is exercisable to acquire one Common Share at a price of $2.13 per Common Share, subject to anti-dilution adjustments that may apply until May 10, 2022.

The net proceeds of the Offering will be used for retail capital expenditures, working capital requirements and general corporate purposes.

The Convertible Debentures, the Warrants, the Effective Interest Shares and the Common Shares issuable on the conversion of the Convertible Debentures and on the exercise of the Warrants and the Broker Warrants, have been conditionally approved for listing on the TSXV and are expected to commence trading shortly following the closing of the Offering, subject to the satisfaction of all listing conditions.

The securities comprising the Units sold, and the Common Shares issuable on the conversion of the Convertible Debentures and on the exercise of the Warrants and the Broker Warrants, have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Westleaf Inc.

Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British Columbia, Alberta, Saskatchewan and potentially Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. The Company also has two significant production facilities under construction and scheduled for completion in 2019. For more information, please visit www.westleaf.com or www.prairierecords.ca.

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

Cautionary Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, the completion dates for Westleaf’s extraction and cultivation facilities, the processing and production capabilities of Westleaf’s extraction and cultivation facilities, receipt of Health Canada licensing for Westleaf’s extraction and cultivation facilities and the timing thereof, retail cannabis stores that Westleaf plans to open, the listing of the Convertible Debentures, the Warrants and the Common Shares issuable on the conversion of the Convertible Debentures and on the exercise of the Warrants and the Broker Warrants and the use of proceeds of the Offering. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of Westleaf’s extraction and cultivation facilities by Health Canada and receipt of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under Westleaf’s credit facilities; timing and completion of construction of Westleaf’s extraction and cultivation facilities and retail locations; and the delay or failure to receive board, ATB Financial or regulatory approvals, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

 

For further information:

Bruce Leslie, VP Corporate Communications

bruce.leslie@www.westleaf.com

403-801-7612

 

Lauren Steeves, North Strategic

lauren.steeves@northstrategic.com

306-717-3253

Westleaf Announces Exercise of Second Option to Purchase Cannabis Store in Saskatoon located on Preston Ave


CALGARYApril 18, 2019 /PRNewswire/ – Westleaf Inc. (TSX-V: WL)(OTCQB: WSLFF) (“Westleaf“), is pleased to announce it has exercised its previously announced option (the “Option“) to purchase all of the issued and outstanding shares of 102053592 Saskatchewan Ltd. (“592“), which operates a cannabis retail store located at 170-3020 Preston Avenue, Saskatoon.  Westleaf has now exercised options to purchase two retail cannabis stores in Saskatoon.

Highlights

  • Premium Location: The Preston Avenue store is in a high density, shopping-friendly neighborhood in the city’s Stonebridge subdivision, and will complement the previously opened Prairie Records stores on Broadway and in Warman;
  • Well Defined and Regulated Market: Saskatoon is the 17th largest city in Canada with around 300,000 people in the metropolitan area. The Saskatchewan Liquor and Gaming Authority (the “SLGA“) has approved seven licenses for the Saskatoon market, with Westleaf owning two of such locations upon the anticipated closing of the Option.
  • Truly Vertically Integrated Company – Westleaf is a vertically integrated company in the Canadian cannabis industry, with assets owned and under development across each vertical of the business, including cultivation, extraction, processing & manufacturing, distribution and wholly owned retail.

The store, which was built out as part of a license agreement with Westleaf, will operate under the Prairie Records retail banner and will be open for business on April 18, 2019. The store’s grand opening celebration is expected to occur on April 20, 2019, the day that is synonymous with the legalization of cannabis.

“While Prairie Records creates a unique and totally different cannabis retail experience, we do want to recognize the day that activists used to bring attention to the push for legalization of cannabis which has gone on for many years,” noted Adam Coates, Chief Commercial Officer at Westleaf. “We are excited to open our doors in two Saskatoon locations providing the community with a unique retail option that celebrates the relationship between cannabis and music.”

Saskatchewan is proving to be a strong cannabis retail market as the sector continues to evolve and mature,” said Scott Hurd, President and CEO of Westleaf. “Here, we have the opportunity to deal directly with licensed producers in purchasing inventory, we are able to sell online across the province through our e-commerce platform, and the ratio of stores to market size make Saskatoon an ideal location to operate cannabis retail.”

Prairie Records currently has a store operating on Broadway Avenue in Saskatoon, and in Warman, Saskatchewan, approximately 20 minutes from Saskatoon, as well as province-wide online sales at www.prairierecords.com.

Pursuant to the Option purchase agreement, upon delivery of all closing deliverables, which is expected to occur today, Westleaf will acquire the shares of 592 for an aggregate price of $690,000, upon which 592 will become a wholly owned subsidiary of Westleaf. The purchase price for the 592 shares will be paid by: (i) the issuance of an aggregate of 346,153 common shares in the capital of Westleaf (“Common Shares“) at a deemed value of $1.56 per Common Share; and (ii) a cash payment $150,000. Under the Option purchase agreement, Westleaf was eligible to purchase and transfer the store once 592 (as license holder) received approval from the SLGA.

About Prairie Records

Focusing exclusively on densely populated neighborhoods, high traffic areas, and tourist destinations, Prairie Recordsretail stores will be situated premium retail locations across the country. The foundation of the retail concept is ingrained with a desire to create a unique cannabis purchasing experience through tactile in-store features and product offerings that highlight the relationship between music and cannabis. Westleaf continues to be committed to becoming a leader in the Canadian cannabis retail market.

About Westleaf Inc.

Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British ColumbiaAlbertaSaskatchewan and potentially Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. Westleaf also has two significant production facilities under construction, with completion anticipated to occur in 2019. For more information, please visit https://www.westleaf.com or www.prairierecords.ca.

Cautionary Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the closing of the Option; timing and opening of the new retail store located at 170-3020 Preston Avenue, Saskatoon and the planned rollout of other retail locations; timing and completion of Westleaf’s production facilities; and the business and operations of Westleaf. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: satisfaction of all conditions to the exercise and closing of the Option; timing and completion of construction of retail locations; review of facilities by Health Canada and receipt of a licence from health Canada in respect of Westleaf’s production facilitiesfuture legislative and regulatory developments involving cannabis; the ability of Westleaf to implement its business strategy; ability to access sufficient capital from internal and external sources, and/or ability to access sufficient capital on favorable terms; the labour market generally and the ability to access, hire and retain employees; the cannabis industry in Canada generally; general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.

The forward-looking statements and information contained in this news release are made as of the date hereof and Westleaf undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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.

SOURCE Westleaf Inc.

Westleaf Announces Closing of Option to Purchase Cannabis Store located on Broadway in Saskatoon


CALGARYApril 17, 2019 /CNW/ – Westleaf Inc. (TSX-V: WL)(OTCQB: WSLFF) (“Westleaf“), is pleased to announce it has exercised its previously announced option (the “Option“) to purchase all of the issued and outstanding shares of 102053012 Saskatchewan Ltd. (“102“), which operates a cannabis retail store located at 720 Broadway Avenue, Saskatoon.

Highlights

  • Premium Location: The 720 Broadway Avenue store is in a high density, shopping-friendly neighborhood, situated in the middle of the city’s densest commercial and entertainment district and is also close to the University of Saskatchewan, the largest post-secondary institution in the province;
  • Well Defined and Regulated Market: Saskatoon is the 17th largest city in Canada with around 300,000 people in the metropolitan area. The Saskatchewan Liquor and Gaming Authority (the “SLGA“) has approved seven licenses for the Saskatoon market, with Westleaf owning one of such locations upon the anticipated closing of the Option, while having a previously announced option to purchase a second location.
  • Truly Vertically Integrated Company – Westleaf is a vertically integrated company in the Canadian cannabis industry, with assets owned and under development across each vertical of the business, including cultivation, extraction, processing & manufacturing, distribution and wholly owned retail.

Pursuant to the Option purchase agreement, upon delivery of all closing deliverables, which is expected to occur today, Westleaf will acquire the shares of 102 for an aggregate price of $690,000, upon which 102 will become a wholly owned subsidiary of Westleaf. The purchase price for the 102 shares will be paid by: (i) the issuance of an aggregate of 315,789 common shares in the capital of Westleaf (“Common Shares“) at a deemed value of $1.71 per Common Share; and (ii) a cash payment $150,000. Under the Option purchase agreement, Westleaf was eligible to purchase and transfer the store once 102 (as license holder) received approval from the SLGA.

The store, which was built out as part of a license agreement with Westleaf, will operate under the Prairie Records retail banner and will be open for business on April 17, 2019. The store’s grand opening celebration is expected to occur on April 20, 2019, the day that is synonymous with the legalization of cannabis.

“While Prairie Records creates a unique and totally different cannabis retail experience, we do want to recognize the day that activists used to bring attention to the push for legalization of cannabis which has gone on for many years,” noted Adam Coates, Chief Commercial Officer at Westleaf. “We are excited to open our doors in Saskatoon providing the community with a unique retail option that celebrates the relationship between cannabis and music.”

Saskatchewan is proving to be a strong cannabis retail market as the sector continues to evolve and mature,” said Scott Hurd, President and CEO of Westleaf. “Here, we have the opportunity to deal directly with licensed producers in purchasing inventory, we are able to sell online across the province through our e-commerce platform, and the ratio of stores to market size make Saskatoon an ideal location to operate cannabis retail.”

Prairie Records currently has a store operating in Warman, Saskatchewan, approximately 20 minutes from Saskatoon, as well as province-wide online sales at www.prairierecords.com. Westleaf holds an additional option to purchase a second store in Saskatoon.

About Prairie Records

Focusing exclusively on densely populated neighborhoods, high traffic areas, and tourist destinations, Prairie Recordsretail stores will be situated premium retail locations across the country. The foundation of the retail concept is ingrained with a desire to create a unique cannabis purchasing experience through tactile in-store features and product offerings that highlight the relationship between music and cannabis. Westleaf continues to be committed to becoming a leader in the Canadian cannabis retail market.

About Westleaf Inc.

Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British ColumbiaAlbertaSaskatchewan and potentially Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. Westleaf also has two significant production facilities under construction, with completion anticipated to occur in 2019. For more information, please visit https://www.westleaf.com or www.prairierecords.ca.

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

Cautionary Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the closing of the Option; timing and opening of the new retail store located at 720 Broadway Avenue, Saskatoon and the planned rollout of other retail locations; timing and completion of Westleaf’s production facilities; and the business and operations of Westleaf. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: satisfaction of all conditions to the exercise and closing of the Option; timing and completion of construction of retail locations; review of facilities by Health Canada and receipt of a licensee from health Canada in respect of Westleaf’s production facilitiesfuture legislative and regulatory developments involving cannabis; the ability of Westleaf to implement its business strategy; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favorable terms; the labour market generally and the ability to access, hire and retain employees; the cannabis industry in Canada generally; general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.

The forward-looking statements and information contained in this news release are made as of the date hereof and Westleaf undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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.

SOURCE Westleaf Inc.

For further information: Bruce Leslie, VP Corporate Communications, Bruce.leslie@westleaf.com, 403-801-7612; Lauren Steeves, North Strategic, Lauren.steeves@northstrategic.com, 306-717-3253

Westleaf Inc. Announces C$12 Million Bought Deal Financing


/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

CALGARYApril 10, 2019 /CNW/ – Westleaf Inc. (the “Company” or “Westleaf“) (TSX-V:WL)(OTCQB:WSLFF) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. (the “Underwriters“), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis pursuant to the filing of a short form prospectus, an aggregate of 12,000 convertible debenture units of the Company (the “Units“) at a price of $1,000 per Unit for aggregate gross proceeds to the Company of $12,000,000 (the “Offering“). Each Unit shall consist of one 9.5% senior unsecured convertible debenture (each a “Convertible Debenture“) of the Company having a principal amount of $1,000 (the “Principal Amount“) and 235 common share purchase warrants of the Company (each a “Warrant“).

The Company has granted the Underwriters an over-allotment option to purchase up to additional Units, Convertible Debentures and/or Warrants (or any combination thereof, at the discretion of the Underwriters) equal to 15% of the Units sold under the Offering, at a price of C$1,000 per Unit, C$932 per Convertible Debenture and/or C$0.29 per Warrant, as applicable, exercisable in whole or in part at any time, for a period of 30 days after and including the closing date of the Offering (the “Closing Date“).

The Convertible Debentures will mature and be repayable on a Date that is 36 months from the Closing Date (the “Maturity Date“) and will accrue interest at the rate of 9.5% per annum payable in arrears on June 30 and December 31of each year, commencing on June 30, 2019. The Principal Amount shall be convertible, for no additional consideration, into common shares in the capital of the Company (the “Common Shares“) 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 repurchase of the Convertible Debentures upon a change of control of the Company, at a conversion price equal to $2.13, subject to adjustment in certain events (the “Conversion Price“). The Conversion Price represents a conversion rate of approximately 469 Common Shares for each $1,000 principal amount of Convertible Debentures, subject to certain anti-dilution provisions.

If the holder elects to convert the Convertible Debentures after a period that is six months and one day following the Closing Date, then the holder will also receive the Effective Interest (as defined below), payable in: (i) Common Shares at a price equal to the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the “Exchange” or “TSXV“) for the consecutive 20 trading days of the Commons Shares on the Exchange preceding the date of such election, or if such trading price is lower than the maximum permitted discount for such Common Shares, the maximum permitted discount for the issuance of the Common Shares under TSXV policies (the “Common Share Interest Price“); (ii) cash, or (iii) at the Company’s option, a combination of cash and Common Shares at the Common Share Interest Price. The effective interest (“Effective Interest“) is an amount equal to the interest that the holder would have received if the holder had held the Convertible Debentures until the Maturity Date.

Each Warrant will be exercisable to acquire one Common Share (a “Warrant Share“) for a period of 36 months from the Closing Date at an exercise price of $2.75 per Warrant Share.

The net proceeds of the Offering will be used for working capital requirements and general corporate purposes.

The Units will be offered by way of a short form prospectus to be filed in all provinces of Canada except Quebec. The Offering is expected to close on May 2, 2019 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSXV and the applicable securities regulatory authorities.

The securities comprising the Units being offered, and the Common Shares issuable on the conversion of the Convertible Debentures and the Warrant Shares issuable on the exercise of the Warrants, have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Westleaf Inc.

Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British ColumbiaAlbertaSaskatchewan and potentially Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. The Company also has two significant production facilities under construction and scheduled for completion in 2019. For more information, please visit www.westleaf.com or www.prairierecords.ca.

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

Cautionary Statements

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. This news release, forward-looking statements relate, among other things, to the timing and expected closing of the Offering, the use of proceeds of the Offering, the definitive terms of the Units and the securities comprising the Units. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licenses to retail cannabis products; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder, court or regulatory approvals, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Westleaf Inc.

For further information: Bruce Leslie, VP Corporate Communications, Bruce.leslie@www.westleaf.com, 403-801-7612

Westleaf Cannabis Announces Aggressive Canadian Retail Expansion with Experiential Music Partnership


PHOTO: WESTLEAF INC.

Calgary-based Westleaf Inc. is taking the unique relationship between cannabis and music to grow its Prairie Records retail brand across the country.

Adam Coates who has been spearheading the retail rollout as the company’s Chief Commercial Officer, said the online ecommerce has also been launched recently.

The two Saskatoon stores, both in premium locations, are planned to open in time to celebrate April 20, the day associated with the push to legalize cannabis in Canada.

PHOTO: WESTLEAF INC.

“After the two stores in Saskatoon, we have an opportunity to open another store in Swift Current, Saskatchewan, which will happen this summer likely and then we’re building out storefronts all over Alberta and B.C. With where the AGLC (Alberta Gaming, Liquor and Cannabis Commission) is at right now with not releasing any more licences, we’re busy building out the stores to meet regulation and security requirements and as soon as the AGLC will start issuing more licences we will be in a position to open more stores and enter Alberta,” said Coates.

“Same thing with B.C. We’re going through the different regulators – the B.C. government and the municipal level as well – to hopefully start building and opening stores in B.C. this year . . . We’re planning to open, in 2019, 25 stores and then plan to open as many as 50 stores by the end of 2020. Right now we’re focused on Saskatchewan, Alberta and B.C. and if there’s an opportunity in Ontario, once they start opening up more licence opportunities in Ontario, we plan to have a number of stores in Ontario as well under the Prairie Records brand.”

Westleaf says Prairie Records is focused exclusively on densely populated neighbourhoods, high traffic areas, and tourist destinations and retail stores will be situated in some of the most premium retail locations across the country.

photo: prairie records via facebook

The foundation of the retail concept is ingrained with a desire to create a unique cannabis purchasing experience through tactile in-store features and product offerings that celebrate the relationship between music and cannabis.

“Prairie Records is really the reinvention of the cannabis purchasing experience and what we’ve really done is married cannabis and music together. They’ve been best friends for a long time and we’ve used that as our theme throughout everything that we do from store design as well as the overall consumer purchasing experience,” said Coates.

“So what you’ll find when you walk into a Prairie Records is that it looks like a modern day record shop. However, the bit of the difference is that it’s a cannabis shop. So in a record shop you’d see records. We have records in shelves and racks of records that you would see in any record shop but instead of finding your next favourite band or artist what you’ll find is your next favourite brand or strain of cannabis.

PHOTO: WESTLEAF INC.

“With this record cover concept, it allows us to create a more tactile and engaging consumer experience because right now based on regulations all product needs to be actually under lock and key. And the actual packaging is very restrictive in terms of lots of warning labels and only space for a very small brand element. So what we’ve done with the record covers is taken a lot of the information that you would want to see on the packaging traditionally and put that right on the record cover. We allow consumers to pick up records and explore and really kind of instill this sense of discovery.”

He said another unique store feature is how it organizes products on its record shelves by music type.

“We’ve categorized our store in three categories. One’s called Dreams, a classic Fleetwood Mac song. Walking on Sunshine and Just Dance by Lady Gaga. If you know nothing about cannabis but come into our store I think you should at least get a sense of the type of experience you can expect or the type of products that are in that category,” said Coates.

“And taking it one step further. In a record shop you can listen to music. Well our record shop is no different. However, instead you will listen to music but you’ll listen to the strain of a feature product. So on our top hits wall we have sensory jars that actually has the product inside so you look at it, smell it and the record cover where you can learn a little bit more about the actual product itself and the headphones you can put on where you can listen to a curated playlist that will give you a sense of the mood or the type of experience that you could expect. Really bringing in a lot of sensory in a really immersive experience is really what we’re about as well as providing a really wide range of a great selection of cannabis products.”

The vertically-integrated company also is building a purpose-built indoor cultivation facility in Battleford, Saskatchewan which will be operational by the end of September this year. It also has an extraction processing and manufacturing facility in Calgary which will be completed later this spring.

“Saskatoon and all of Saskatchewan, is proving to be one of the strongest cannabis retail markets in Canada as the sector continues to evolve and mature,” said Scott Hurd, President and CEO of Westleaf. “We have the opportunity to deal directly with licensed producers in stocking our shelves, we are able to sell online across the province through our e-commerce platform, and the ratio of stores to market size make Saskatoon an ideal location to operate cannabis retail.”

PHOTO: WESTLEAF INC.

Recently, Westleaf announced it had entered into an exclusive partnership with cannabis leader Xabis to provide expertise to Westleaf’s Calgary cannabis extraction and production facility. The facility formerly known as Delta West, will be rebranded The Plant by Westleaf Labs. The extraction and production facility under construction in southeast Calgary is expected to produce cannabis derivative products and, after legalization of such products which is expected later this year, consumables, topicals and other cannabis infused products, subject to and in compliance with provincial and federal regulations.

Xabis is a Colorado-based cannabis processing company which provides turnkey operations for companies in the mid-stream of the cannabis industry.

“This partnership is another part of the execution on Westleaf’s strategy of becoming a significant vertically integrated player in the Canadian cannabis industry,” said Hurd.  “We believe a diversified offering of derivative cannabis products will account for a major shift in consumer demand once legal. We are positioning to formulate unique, high quality derivative products and bring in the best minds in the industry to help leverage our expertise in building and running these types of facilities.”

PHOTO: WESTLEAF INC.

Westleaf also recently announced that the Town of Banff has approved its development permit for a flagship retail location in the heart of Canada’s most visited national park. The location on Caribou Street just off famed Banff Avenue, will be developed as a flagship in the Prairie Records brand of cannabis stores.

“Premium retail locations are the cornerstone of our vertically integrated strategy and which we believe uniquely differentiates Westleaf by providing access to wholly owned distribution channels,” said Scott. “We have built our Prairie Records retail brand to be a superior retail experience and have focused on locations with high foot traffic in urban centres and resort destinations. There are very few locations in Canada that tick off as many boxes as the Banff location does. If you have ever been to the intersection of Banff Avenue and Caribou Street on a summer weekend, you will know exactly what we are talking about.”

The store will be in the basement of the historic King Edward Hotel which was built in 1904 and is the second oldest hotel in Banff.

Westleaf Inc (CVE:WL) Partners with Xabis Inc for Extraction Expertise


Westleaf Inc (CVE:WL) CEO Scott Hurd provides an update on the company’s retail strategy and continued rollout in Alberta and Saskatchewan. Westleaf has closed its acquisition of Canndara Canada Inc, a pure play retailer. The deal complements Westleaf’s existing retail portfolio while helping the company scale quickly. The company has consolidated 100 percent interested in its R&D, extraction, processing, manufacturing, and fulfillment centre in Calgary. Westleaf recently announced a deal with Colorado-based extractor Xabis Inc. Xabis will provide extraction expertise to Westleaf’s Calgary facility, which will be rebranded as The Plant by Westleaf Labs. Hurd reveals the company will continue its retail rollout across Alberta and Saskatchewan through its Prairie Record stores.

Transcript:

James West: Scott Hurd joins me now. He’s the CEO of Westleaf Cannabis, trading on the TSX Venture under the symbol WL. Scott, welcome back.

Scott Hurd:   Thanks, James.

James West: Scott, sounds like you’ve had a lot going on. Why don’t you give us a rundown of all that has transpired for Westleaf since we last chatted?

Scott Hurd: So, since going public in early January, we continue to execute and advance our vertically integrated strategy, with really a core focus on premium retail distribution. Notably during the quarter, we acquired a pure play cannabis retailer called Canndara, which provided us significant scale in high quality premium locations that are complementary to our existing portfolio. We secured options to purchase three additional cannabis retail locations in Saskatchewan; we announced one of our flagship locations in Banff, Alberta, which is a tourism mecca in Canada, sees over 4 million visitors a year. And we opened our first Prairie Records location in Saskatchewan, and we announced the opening of two more locations in Saskatoon prior to April 20th.

James West: Yeah, okay, so you’re really building out on the physical retail location model in a big way.

Scott Hurd: We’re pursuing a vertically integrated model, so we’re one of the very few companies that is owning and developing assets across the entire cannabis value chain, from cultivation, extraction, processing, and then right down to wholly owned retail. Notably during the quarter, we also consolidated 100 percent interest in our R&D, extraction, processing, extraction and fulfillment centre in Calgary, and we recently announced an exclusive Canadian partnership with a global leader in cannabis derivative product formulation and manufacturing, called Xabis, out of the US.

James West: Right.

Scott Hurd: This group has operated four supercritical CO2 extraction facilities. They’ve designed about a dozen. And they’ve formulated over 200 distinct cannabis-derivative based product skus. So we’re really leveraging that expertise to be ready with a diversified offering of high quality derivative products when that market opens up later this year in Canada.

James West: Yeah, great. And so, from where you sit, that seems to be happening according to schedule, and it will in fact roll out on October 17th? And if so, what does that all look like?

Scott Hurd: I mean, we’re preparing to be ready for October 17th. We don’t have a formal date yet from the federal government on when the full suite of derivative products will be available, but we’re excited to be offering different modalities of consumption to consumers beyond just the consumption of flower today, and we think that’ll be a large growth segment of the market, and we’re well positioned to serve it.

James West: Fascinating. Tell me about the Prairie Records thing – that sounds like almost social cannabis. Is it the kind of place where you can go listen to be a record you might be interested in as well, while you sample some cannabis products?

Scott Hurd: So our concept for cannabis retail is very unique and different, and I introduced that to you back in January. Our concept’s called Prairie Records, and what Prairie Records really is, is a reinvention of the cannabis purchasing experience that leverages the instinctual tie between recreational cannabis and music in a sophisticated yet approachable environment that we think will appeal to a wide variety of consumers.

Everyone has a relationship with music, and it’s through that relationship and Prairie Records that we think we can align and engage with consumers in ways our competitors can’t. So when you come into our stores, you’ll see a lot of the typical things you’d find in a cannabis retail shopping journey, meaning, the digital assets, the sales associates with iPads. But in our stores, you’ll actually find records, and these are not albums; they’re actually strains of cannabis and products, and they’re effectively a giant brand card. But if offers the consumer a tactile, educational and engaging shopping experience, but also serves as a really interesting medium to showcase brands and give them dimension.

So what we do is, we take all the brand elements that a producer would have wanted to put on their packaging but they can’t; we put it on a record in-store. It’s a really interesting way to give dimension to a brand in an otherwise very regulated and sterile shopping environment.

James West: That sounds very intriguing. I’m going to go on a road trip just to check that out this summer.

Scott Hurd: I don’t know what your plans are for 4/20, James, but we’d love to have you out and host you for a grand opening in Saskatoon.

James West: That sounds like that would be a riot. 4/20 – that’s April 20th, right?

Scott Hurd:  Yeah.

James West: Yeah, I don’t know, maybe! That would be intriguing. I do have reason to be out on the west coast a couple times. All right, Scott, why don’t you tell me a little bit about this Xabis relationship that you have, because that sounds intriguing, as well.

Scott Hurd: So we’ve partnered with Xabis, which is really a global leader in cannabis product formulation and manufacturing. They operate four supercritical CO2 extraction facilities across the US, they’ve designed about a dozen facilities, and notably, they’ve manufactured over 200 distinct product skus. And we’re really leveraging that expertise to bring a high quality, diversified offering of derivative products to the market later this year.

James West: Very cool. All right, so then, what are the big – what are your big milestones coming up yet this year?

Scott Hurd: 2019 is really the year of execution and operationalizing our business. Our current plan has us opening upwards of 20 retail locations by the end of Q3 this year, as well as operationalizing our lab and our cultivation facility.

James West: Very cool. And do you guys have an ambition towards international playing, or are you just focused on Canada right now?

Scott Hurd: We’re really focused on executing domestically within Western Canada right now. We do have an in-house M&A team and we’re constantly evaluating new opportunities, but right now it’s really focused on execution.

James West: Very cool. All right, Scott, when are you in Toronto next? We’ll have to have you in the studio.

Scott Hurd: I should be out there next week; I’ll drop you a note and confirm my travel dates.

James West: Yeah, sounds good.

Scott Hurd: Would love to connect in person again.

James West: You bet. Scott, it was great to talk to you again. We’re going to leave it there for now; thanks for joining me today.

Scott Hurd: Thanks for your time.

Westleaf (WL.V) cannabis concept is music to the ears


In his influential 1949 book: The Organization of Behavior, Canadian psychologist Donald Hebb theorized that “one thought is more likely to trigger another thought” if those two thoughts are linked together multiple times in the past.

This concept has been employed to good effect in the world of branding.

When a Bronx, NY ice-cream manufacturer realised Americans associate Europe with delicious ice cream – it launched Häagen-Dazs – with those impudent umlauts (double dots) hovering over the first “a”.

Häagen-Dazs was more American than Harley-Davidson (HOG.NYSE) – but once that European association was made – it stuck.

The retail concept behind Westleaf’s (WL.V) Prairie Records acknowledges the nostalgic link between music and cannabis.

Hurd accepts that the current Canadian cannabis marketing regulations make it almost impossible to create powerful retail brands.  He’s bypassing that by creating a strong brand association between the customer and the store (rather than the product).

In a recent excellent interview with The Midas Letter, the interviewer James West blurted out: “Nine times out of ten when I went to a record store as a young person, I was high!”

“I first heard about the Prairie Records cannabis retail business model mid last year,” wrote Equity Guru’s Chris Parry, “And my first thought upon seeing it was, this will never be allowed. But here we are, and the first Prairie Records store actually exists now.”

On March 18, 2019, Westleaf (WL.V) announced the execution of a term sheet with a Colorado-based cannabis processing company, Xabis, whereby Xabis will lend expertise to WL’s Calgary cannabis extraction and production facility.

Xabis provides turnkey operations for companies in “the mid-stream of the cannabis industry”. Its team of PHDs and scientists manage all aspects of the extraction and manufacturing of cannabis infused products.

After Westleaf consolidates its interest in The Plant to 100%, the facility formerly known as Delta West, will be rebranded The Plant by Westleaf Labs.

Westleaf is anticipating the 2019 legalisation of cannabis derivative products (consumables, topicals and other cannabis infused items).

After receiving a green light from Health Canada, The Plant by Westleaf Labs is expected to produce cannabis derivative products.

Term Sheet Highlights:

Industry Leading Expertise – Xabis is a leader in design, construction and management of cannabis extraction and manufacturing facilities, as well as product development:

Xabis has developed more than two hundred product SKUs, including oil based oral solutions, gummy edibles, hard pressed tablets, water soluble powders, oil-based capsules, body melt capsules and suppositories.

High Margin Products – a diversified offering of derivative cannabis products will account for the majority of consumer demand. Westleaf is focused on product formulations to produce vape cartridges, edibles, beverages, and topicals to meet this expected demand.

Global Ambitions – The Plant is being built to EU Good Manufacturing Process (GMP) specifications to ensure export capabilities.

Scalability – The Plant’s 15,000 sq. ft. complex can be expanded to 60,000 sq feet. The design includes R&D, processing, extraction, manufacturing and order fulfillment. Construction is expected to be complete in summer 2019.

Multiple Revenue Streams – As well as diversified cannabis derivative products, Westleaf plans to offer white labeling services for 3rd parties, and contract manufacturing services for raw extract and distillation.

Vertically Integration – With cultivation, extraction, processing, manufacturing, distribution and 1005 owned retail assets, Westleaf is positioned to protect margins across the life cycle of the industry.

Xabis has designed, built, and operated facilities in 5 US states where medical or recreational cannabis has been legalized.

The move by Xabis into the Canadian market under an exclusive relationship with Westleaf.

Xabis services:

  • Complete on-site extraction and manufacturing operations
  • Compliance, inventory management, supply chain and HR
  • Facility & systems design and implementation
  • License application support
  • Product development

“We believe a diversified offering of derivative cannabis products will account for a major shift in consumer demand once legal,” stated Scott Hurd, President and CEO of Westleaf, “We are positioning to formulate unique, high quality derivative products.”

Brand round up:

  • ‘General Admission’ – targets the recreational adult market
  • ‘Loon’ – embraces health and wellness
  • ‘Backstage’ – premium label for the recreational user
  • ‘Westleaf Cannabis’ — medicinal cannabis for pain alleviation and healing.

Tilray (TLRY.Q) invested $2.9 million in Westleaf, Vivo (VIVO.V) invested $5 million, and ATB Financial committed $30 million.

“We are entirely focused on the plant-to-product portion of the value chain,” explains Dale Zink, CEO of Xabis. “From the end of the grow to the final processed product shipping out to the retail store or dispensary.”

“We are reinventing the cannabis experience by leveraging a tactile, musically themed, shopping journey through a record store-style concept,” confirmed Hurd in a Trend Hunter interview, “allowing consumers to engage and educate themselves on products.”

Full Disclosure: Westleaf is an Equity Guru marketing client, and we own the stock.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

A Look at Westleaf (WSLFF)(WL:CA) and Vertical Integration in the Cannabis Industry


Vertical integration in the cannabis industry has strong benefits especially in states that are newly passing medical-based legalization. A few of the positive benefits of vertical integration is that on a regulatory side, inspectors do not have to spread themselves thin.Furthermore, as cultivators and retailers work together, the price of cannabis would continue to fall, which would benefit consumers in the long run. In addition, growers essentially have special access to consumers and their preferences, which allows them to track data more directly, and, in turn, make decision at the seed level about what strain to plant for the next harvest.

Westleaf’s Vertical Plan

One Canadian company that is moving fast in this direction is Westleaf WSLFF  (WL:CA[CDX] – $2.20 0.07 (3.08%)   ). First, on the retail side, the company has what we see as a very unique, high-end retail concept. Prarie Records is the name of Westleaf’s flagship retail concept and their first store will soon be opening in Warman, Saskatchewan.

The retail shop links cannabis and music by allowing customers to peruse cannabis strains and profiles like they would at a record shop. In a bin, cannabis descriptions will be printed on albums covers and will include playlists to accompany selections. The company will also have a matching e-commerce site that mimics the engaging in-store experience. Plus, the company is going to open another Prarie Records in Banff, the Albertan resort town, sometime this summer.

The company plans to follow a similar strategy focusing on high foot-traffic and tourist-packed areas. According to their investor presentation, Westleaf is targeting 30-50 retails shops across provinces that allow for vertical integration.

In that regard, the company is developing a series of cannabis brands that are flower or derivatives. At the moment, thanks to the development of their Thunderchild Facility (the cultivation site is located on lands owned by the Thunderchild First Nation and is anticipated to provide a source of long-term employment for as many as 150 people from the region) in Battleford, Saskatchewan, the company has 7,300 kg of flower in process, while 14,600 kg will be available after Phase 2 is complete, and, lastly, Phase 3 will top out at 29,200 kg.

Recently, the company also closed a term sheet with Xabis Inc. that will see the latter offer extraction expertise at their Calgary plant. This was another step in Hurd and Westleaf’s march toward vertical integration and we have a feeling more M&A announcement are up ahead.