Delta 9 Cannabis Inc. has entered into a non-binding letter of intent (LOI) with Westleaf Cannabis Inc. to create a strategic partnership for the joint development of a large-scale cannabis production facility located in Southern Alberta.

Pursuant to the terms of the LOI, Delta 9 and Westleaf will each own a 50-per-cent equity interest in the project. The project includes the retrofit of an existing building intended to be equipped to produce approximately 4,000 kilograms of premium dried cannabis flower per annum, and an extraction lab for the production of cannabis oil and derivative products. Delta 9 anticipates designating the project as an expansion facility under its existing Access to Cannabis for Medical Purposes Regulations (ACMPR) licence. The project is expected to be operational as early as the third quarter of 2018 and is intended to supply cannabis products to the Alberta medical and recreational markets.

The completion of the project remains subject to a number of conditions including, among other things: the execution of a definitive, binding agreement between Delta 9 and Westleaf; the parties obtaining the debt and equity financing required to complete the project; and the completion of due diligence regarding the project by Delta 9 and Westleaf.

“We are excited about this transformational opportunity,” said Delta 9 chief executive officer John Arbuthnot. “Strategic partnerships with companies such as Westleaf provide Delta 9 with additional production capacity and expansion opportunities into new markets to meet increasing demand as we approach the legalization of recreational cannabis this summer.”

Westleaf president Scott Hurd says the Delta 9 partnership is an important step in his company’s development.

“We are extremely pleased to call Delta 9, one of Canada’s most experienced cannabis cultivators, our partner,” Mr. Hurd said. “Collectively, Westleaf and Delta 9 will have large-scale cannabis production facilities that can ably serve the Canadian Prairies (Alberta, Saskatchewan and Manitoba). Our partnership will allow us to accelerate our time to market and drive synergies through collaboration to bring high-quality, safe and consistent cannabis products to our medical and recreational customers.”

The completion of the project by Delta 9 is also subject to final approval by the TSX Venture Exchange.

About Delta 9 Cannabis Inc.

Delta 9’s wholly owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the Access to Cannabis for Medical Purposes Regulations and operates an approximately 80,000-square-foot production facility in Winnipeg, Man.

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