TORONTO, ON and GLIL YAM, ISRAEL / ACCESSWIRE / March 18, 2021 / IM Cannabis Corp. (the “Company” or “IMC”) (CSE:IMCC), (NASDAQ:IMCC), a multi-country operator (“MCO”) in the medical cannabis sector with operations in Israel, Germany and Canada, is pleased to announce the closing of its acquisition of Trichome Financial Corp. (“Trichome”), previously announced on December 30, 2020 (the “Transaction”). The Transaction was completed pursuant a plan of arrangement under the Business Corporations Act (Ontario). The Transaction will result in IMC entering the Canadian recreational cannabis market and creating a global leader in the adult-use recreational and medical cannabis sectors.

Transaction Highlights

• IMC is now the only MCO with established operations in Israel, the EU and Canada.
• The Transaction marks the launch of IMC’s North American expansion strategy.
• IMC’s senior management team now includes extensive experience in acquisitions and restructuring to capitalize on consolidating a targeted list of attractively valued and highly synergistic assets.
• IMC’s global platform now includes the adult-use recreational cannabis market, in addition to its established distribution channels for medical cannabis in Israel through Focus Medical Herbs Ltd. (“Focus Medical”) and in Germany through Adjupharm GmbH (“Adjupharm”).
• IMC will leverage Trichome’s premium indoor cultivation capability to meet growing demand for premium cannabis under IMC’s established international distribution platform.
• IMC is now forecasted to be adjusted EBITDA positive in 2021.

The Transaction was implemented pursuant to the terms and conditions of an arrangement agreement dated December 30, 2020 between IMC and Trichome (as amended), which resulted in the acquisition by IMC of all of the issued and outstanding shares of Trichome (the “Trichome Shares”) in exchange for consideration of 0.24525 of a common share of IMC (each full share, an “IMC Share”) for each Trichome Share.

In connection with the closing, a total of 10,104,901 IMC Shares have been issued to the former holders of Trichome Shares, resulting in former Trichome shareholders holding approximately 20.06% of the total number of issued and outstanding IMC Shares (based on 50,370,027 IMC Shares issued and outstanding immediately after closing).

To obtain their IMC Shares, former registered shareholders of Trichome must complete the letter of transmittal mailed to them and submit it to AST Trust Company and otherwise follow the instructions contained in such letter of transmittal. Further details can be found in the management information circular of Trichome dated February 12, 2021 delivered in connection with the special meeting of holders of Trichome Shares held on March 15, 2021 to approve the Transaction. A copy of the circular is available on Trichome’s SEDAR profile at www.sedar.com.

It is expected that the Trichome Shares will be delisted from the Canadian Securities Exchange (the “CSE”) on or about March 18, 2021. Trichome will also apply to cease to be a reporting issuer in the jurisdictions in which it is currently a reporting issuer.

Trichome’s directors and officers, Cresco Labs Inc. (CSE:CL), and Opaskawayak Cree Nation, which held approximately 34% of the outstanding Trichome Shares have each entered into lock-up agreements restricting the resale of the IMC Shares acquired by such individuals upon closing of the Transaction to a staggered 1/6 release per month of such shares for a period of 6 months.

Following the completion of the Transaction, IMC will have beneficial ownership and control over 100% of the issued and outstanding Trichome Shares. Prior to the Transaction, IMC did not hold Trichome Shares. A copy of the applicable early warning report concerning the acquisition of Trichome Shares by IMC will be filed under Trichome’s profile at www.sedar.com.

Oren Shuster, Chief Executive Officer of IMC, said, “The acquisition of Trichome marks a major milestone in our strategy to become a global leader in adult-use recreational and medical cannabis markets.

With the capabilities of our network of cannabis producers and distributors in Israel and Germany, IMC branded products are driving increasing revenue, and Trichome’s wholly-owned subsidiary, Trichome JWC Acquisition Corp. d/b/a JWC (“JWC”), is securing our foothold in Canada’s adult-use recreational market.

Oren Shuster, Chief Executive Officer of IMC

We are now a truly global company, with the scale, capabilities and footprint to solidify and expand our leading position internationally.

Mr. Shuster continued, “We have seen a marked increase in demand for premium, indoor-grown cannabis products in both Israel and Europe, with Israel becoming a top importer of cannabis in 2020. Trichome’s cultivation facility will secure our supply of premium indoor-grown cannabis and we are already planning to roll-out JWC products in Israel this year.

“The Trichome team also has extensive experience in acquisitions, restructurings and operations, and we plan to leverage this skillset to accelerate our growth strategy in North America via strategic acquisition activity, of attractively valued assets. Our focus will be on low capital, high return projects, with free cash flow generation, in keeping with our philosophy of prudent capital allocation and maintaining a disciplined and lean cost structure,” concluded Mr. Shuster.

About IM Cannabis Corp.

IMC is an MCO in the medical cannabis sector headquartered in Israel and with operations In Israel, Germany and Canada. Over the past decade, the Company believes that the IMC brand has become synonymous with quality and consistency in the Israeli medical cannabis market. The Company has also expanded its business to offer intellectual property-related services to the medical cannabis industry.

In Europe, IMC operates through Adjupharm, a German-based subsidiary and EU-GMP certified medical cannabis distributor. IMC’s European presence is augmented by strategic alliances with various pan-European EU-GMP cultivators and distributors to capitalize on the increased demand for medical cannabis products in Europe and bring the IMC brand and its product portfolio to European patients.

In Canada, IMC operates through Trichome JWC Acquisition Corp. d/b/a JWC. JWC is a licensed producer located in Kitchener, Ontario. JWC sells cannabis flower, pre-rolls, hash and kief under the JWC and Wagners brands. JWC operates with the highest standards for providing clean, consistent, aeroponically-grown premium cannabis products to medical patients and the adult-use market throughout Canada and the world.

Advisors

Cormark Securities Inc. is acting as financial advisor and Gowling WLG (Canada) LLP is acting as legal counsel to IMC. McMillan LLP is acting as legal counsel to Cormark Securities. Desjardins Capital Markets is acting as financial advisor and Torys LLP is acting as legal counsel to Trichome. Dentons Canada LLP is acting as legal counsel to Desjardins Capital Markets.

IMC also issued an aggregate of 100,916 IMC Shares in partial settlement of an advisory fee payable in connection with the completion of the acquisition, consisting of 50,391 shares issued to Desjardins Capital Markets and 50,525 shares issued to Cormark Securities Inc.

Original Press Release

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