TORONTO


,


Nov. 28, 2022


/CNW/ – Trees Corporation (NEO: Tree) (”

Trees

” or the ”

Company

“) is pleased to announce that it has completed the closing of a non-brokered private placement (the ”

Private Placement

“) of

745 units

(”

Units

“) of the Company at a price of

$1,000

per Unit for gross proceeds of approximately $

745,000

. The closing is expected to be the final tranche closing in the larger offering for aggregate gross proceeds of $

945,000

, as previously announced on

October 21, 2022

.

Proceeds from the Private Placement will be directed towards general working capital requirements and the opening of the Company’s next Trees Cannabis location at 3812a

Bloor Street West

,

Etobicoke, ON

, anticipated to open in

January 2023

.

Each Unit consists of (i) one 12.0% secured convertible promissory note bearing a principal amount of

$1,000

(each, a ”

Convertible Note

“), convertible into common shares of the Company (each, a ”

Common Share

“) at a conversion price of

$0.015

per Common Share (the ”

Conversion Price

“) and maturing thirty-six (36) months from the closing of the Private Placement; and (ii) 66,667 common share purchase warrants of the Company (each, a ”

Warrant

“). Each Warrant entitles the holder thereof to purchase one Common Share at a price of

$0.015

per share until

October 20, 2025

, subject to Acceleration (defined hereafter).

If, during the term of the Convertible Notes, the volume weighted-average share price of the Common Shares on the Neo Exchange Inc. (the ”

NEO

“) for twenty (20) consecutive trading days equals or exceeds

$0.06

, the Company may, upon 30 days’ prior notice, convert the Convertible Notes into Common Shares at the conversion price of

$0.015

(subject to customary adjustments), in whole or, from time to time, in part.

In the event that the volume-weighted average price of the Common Shares on the NEO for twenty (20) consecutive trading days equals or exceeds

$0.06

, the Company may, upon 30 days’ prior notice, accelerate the expiry of the Warrants to a date that is 30 days from the date of the notice (the ”

Acceleration

“).

Completion of the proposed Private Placement is subject to the satisfaction of certain conditions precedent, including, but not limited to, receipt of all necessary regulatory approvals, including final approval of the NEO.

Pursuant to applicable Canadian securities laws, all securities issued and issuable in connection with the closing of the Private Placement will be subject to a four (4) month hold period ending

March 26, 2023

.

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 currently has 13 Trees branded storefronts in

Canada

, including eight (8) stores owned and operated in

Ontario

and five (5) stores operated in BC, subject to the closing of the acquisition of the assets of 101 pursuant to the terms of 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, the latter of which has now been received in respect of one of the five locations. Now with the completion of due diligence approval from the British Columbia Liquor and Cannabis Regulation Branch, Trees anticipates the receipt of regulatory approvals for the remaining 4 stores imminently. Until such time as the closing of the acquisition of the assets under the terms of the APA, the BC stores will remain subject to a brand license agreement and will be included when reporting System-Wide Retail Sales.

¹

(1) System-wide retail sales represents the sum of the revenue reported to Trees by (i) brand licensed retail cannabis stores, which are subject to a brand license agreement providing Trees with a royalty interest, and (ii) Company-owned retail cannabis stores. Management believes this measure is useful to the investment community in evaluating brand scale and market penetration and is used by management of Trees to assess the financial and operational performance of the Company and the strength of the Company’s market position relative to its competitors.

Additional information on Trees can be found by reviewing its profile on SEDAR at

www.sedar.com

.

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation, including but not limited to the proposed use of proceeds of the Private Placement and the pending receipt of all necessary regulatory approvals, including approval of the NEO. 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.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results,


performance or achievements of Trees to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption “Risks Factors” in the Company’s Annual Information Form dated

March 31, 2022

, which is available for view on SEDAR at

www.sedar.com

. These risks include, but are not limited to, (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

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