May 9, 2022

TREES ANNOUNCES CLOSING OF PRIVATE PLACEMENT FINANCING

TORONTO, May 9, 2022 /CNW/ – Trees Corporation (NEO: TREE) (the “Company” or “Trees“), a next-now cannabis company at the intersection of community, content, and commerce, is pleased to announce that it has completed the closing of a non-brokered private placement (the “Private Placement“) of 34,166,665 units (“Units“) of the Company at a price of $0.03 per Unit for gross proceeds of approximately $1,025,000. Each Unit is comprised of one common share (each, a “Common Share“) and one-half of one common share purchase warrant (each whole warrant, a “Warrant“) of the Company. Each Warrant entitles the holder thereof to purchase one Common Share at a price of $0.05 per Common Share for a period of two years from the date of issuance, subject to an accelerated expiry date at the option of the Company in the event that the closing price of the Common Shares on the facilities of the Neo Exchange Inc. (“NEO“) is greater than $0.20 for ten non-consecutive trading days (the “Acceleration Provision“).

From the proceeds of this Private Placement, the Company intends to use approximately $80,000 for the cash portion of the purchase price of its previously announced proposed acquisition of Barnard Cann Ltd. (o/a “Camp Cannabis”) (“Camp“), with the remainder of the net proceeds of the Private Placement to be used for operating expenses of Trees’ retail cannabis stores and general working capital purposes. Camp owns and operates licenced retail cannabis businesses at three Ontario locations in Burlington, Milton and Kanata, with a fourth location in Gloucester expected to open soon.  Completion of the proposed Camp acquisition is subject to the satisfaction of certain conditions precedent, including, but not limited to, receipt of all necessary regulatory approvals, including approval of the NEO. Please see the Company’s news release of March 28, 2022 for additional details relating to the proposed acquisition of Camp.

In connection with the closing of the Private Placement, the Company paid a finder $14,000 in cash commission and issued certain finders an aggregate of 1,866,666 Units in lieu of a cash commission and issued an aggregate of 1,866,666 broker warrants (“Broker Warrants“) of the Company. Each Broker Warrant entitles the holder thereof to acquire one Unit at a price of $0.03 for a period of two years from the date of issuance, subject to acceleration in accordance with the Acceleration Provision. Each Unit underlying the Broker Warrants is identical to the Units issued under the Private Placement.  The Company also issued an aggregate of 600,000 Units to a former director of the Company in settlement of an aggregate of $18,000 in indebtedness.

The Private Placement is subject to the receipt of all necessary regulatory and stock exchange approvals. The securities issued pursuant to the Private Placement are subject to a hold period expiring September 7, 2022 in accordance with applicable Canadian securities law.Related Party Transaction

Certain directors of the Company purchased an aggregate of 6,100,000 Units under the Private Placement. The issuances of Units to such insiders are considered related party transactions under the NEO Listing Manual and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61- 101“). The Company relied on exemptions from the formal valuation and minority approval requirements in sections 5.5(c) and 5.7(1)(b) of MI 61-101, respectively, in respect of such insider participation. Further details will be provided in the Company’s material change report relating to the Private Placement to be filed on SEDAR.  The Company did not file a material change report in respect of the related party transaction less than 21 days prior to the closing of the Private Placement, which the Company deems reasonable in the circumstances so as to be able to avail itself of the proceeds of the Private Placement in an expeditious manner.About Trees

Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded, Trees offers a differentiated retail experience, combined with digital platforms that aim to educate and amplify, unlocking emerging consumer segments and need states that allows Trees to uniquely engage the 360 cannabis consumer. The company has 11 Trees branded storefronts in Canada, including seven (7) stores owned and operated in Ontario and four (4) stores operated in BC, subject to the closing of the acquisition of the assets of 101 pursuant to the terms of the third amended and restated asset purchase agreement between Trees and 1015712 B.C. Ltd. (the “APA“). The closing of the transactions contemplated by the APA is subject to certain conditions precedent, including the receipt of certain licensing approvals and related regulatory consents. Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that constitute “forward-looking information” (“forward-looking information“) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses 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 information.

Forward-looking statements in this document include, among others, statements relating to the Trees’ expectations regarding the closing of the Camp Transaction, the expected receipt of regulatory approvals, the closing of the acquisition of Camp and the transactions contemplated by the APA, the use of proceeds of the Private Placement, expectations regarding the Company’s ability to unlock and capture emerging consumer segments across its platforms, expectations regarding the Company’s ability to engage its customers and new consumer segments and need states, the expectation that the Company will be successful in its growth strategy, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company’s business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company’s securities, regardless of its operating peers; (e) adverse changes in the public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.

The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.

The NEO Exchange has neither approved nor disapproved the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release. 

SOURCE Trees Corporation

For further information: Trees Corporation: Jeffrey Holmgren, President and Chief Financial Officer, Email: jeffh@treescorp.ca