Delta 9 sells interest in Calgary facility to Westleaf for $14.95 Million of Westleaf Shares

DELTA 9 CANNABIS INC. (TSXV: NINE) is pleased to announce that it has entered into a definitive agreement  to sell its 50% interest in the Delta West extraction facility to Westleaf Inc. (TSX-V: WL). Under the Definitive Agreement, Westleaf has agreed to issue an aggregate of 5,600,000 common shares in the capital of Westleaf ("Westleaf Shares") in consideration for the acquisition of Delta 9's 50% interest in the project (the "Purchase Price"). Closing of the transaction is expected to occur on or about January 31, 2019 ("Closing").

"We feel that this transaction creates significant value for Delta 9 and its shareholders, representing a substantial return on our original investment in the Delta West facility" said John Arbuthnot, CEO of Delta 9. "This move will allow us to streamline our allocation of capital and allow Delta 9 to focus on continued expansion of our Winnipeg based cultivation facilities, continued expansion of our Delta 9 Cannabis Stores unit, and allow us to explore other strategic investments in the industry."

Transaction Summary

Under the Definitive Agreement, Westleaf will purchase Delta 9's 50% interest in the Delta West Limited Partnership (the "Partnership"), which owns the Delta West extraction facility. The Purchase Price is payable by way of the issuance of an aggregate of 5,600,000 Westleaf Shares which, based on the closing price of the Westleaf Shares on the TSX Venture Exchange ("TSXV") of $2.67 per Westleaf Share on January 25, 2019, represents approximately $14.95 million. It is a condition to Closing that Delta 9 enter into a voluntary escrow agreement that, in addition to the four month restricted period required by law, will restrict the transfer of the Westleaf Shares issuable under the Definitive Agreement as to: (i) 1,000,000 Westleaf Shares for a four (4) month period following Closing; and (ii) 4,600,000 Westleaf Shares for an eight (8) month hold period for Closing.

Completion of the transaction is subject to certain conditions and the receipt of all required regulatory and third party approvals, including the approval of the TSXV.

About Delta 9 Cannabis Inc.

Delta 9 Cannabis is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. 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 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the TSX Venture Exchange under the symbol "NINE" and on the OTC under the symbol VRNDF. For more information, please visit delta9.ca.

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