Maricann Closes Upsized $40.25 Million Capital Raise

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Maricann Group Inc. Announces Closing of $40 Million Private Placement

TORONTO, ONTARIO–(Marketwired – Jan. 9, 2018) –

Maricann Group Inc. (CSE:MARI)(CSE:MARI.CN)(CNSX:MARI)(OTCQB:MRRCF)(FRANKFURT:75M) (“Maricann” or the “Company”) is pleased to announce the closing of its previously announced private placement offering (the “Offering”) of special warrants (the “Special Warrants”) for aggregate gross proceeds of $40,250,000. Eight Capital, as sole bookrunner and co-lead agent with Canaccord Genuity Corp., and together with Industrial Alliance Securities Inc. (the “Agents”), acted as the agents in connection with the Offering. The aggregate gross proceeds of the Offering includes the full exercise of the over-allotment option granted to the Agents in connection with the Offering.

Pursuant to the Offering, the Company issued 20,125,000 Special Warrants, at a price of $2.00 per Special Warrant. Each Special Warrant is automatically exercisable, for no additional consideration, into units of the Company (the “Units”) on the earlier of: (i) the date that is three business days following the date on which the Company obtains receipt from the applicable securities regulatory authorities (the “Securities Commissions”) for a (final) prospectus (the “Qualifying Prospectus”) qualifying distribution of the Units issuable upon exercise of the Special Warrants; and (ii) May 10, 2018.

Upon automatic exercise of the Special Warrants, each Unit shall consist of one common share of the Company (each, a “Common Share”) and one-half of one common share purchase warrant of the Company (each full common share purchase warrant, a “Warrant”). Each Warrant will be exercisable to acquire one Common Share at a price of $2.35 per Common Share until January 9, 2021, subject to adjustment in certain events.

Pursuant to the terms of the Offering, the Company has agreed to use its commercially reasonable efforts to obtain a receipt from the Securities Commissions for the Qualification Prospectus before February 27, 2018; provided, however, that there is no assurance that a Qualification Prospectus will be filed or that a receipt therefor will be issued by the Securities Commissions prior to the expiry of the statutory four month hold period on May 10, 2018. In the event the Company has not received a receipt from the Securities Commissions for the Qualifying Prospectus before February 27, 2018, each unexercised Special Warrant will thereafter entitle the holder to receive, upon the exercise thereof, for no additional consideration, 1.05 Units (instead of one (1) Unit) (the additional 0.05 Units are collectively referred to herein as the “Penalty Units”); provided, however, that any fractional entitlement to Penalty Units will be rounded down to the nearest whole Penalty Unit.

Insiders of the Company or their associates participated in the Offering for an aggregate amount of $929,500.

In connection with the Offering, the Agents received a cash commission and 935,950 compensation warrants (the “Compensation Warrants”). Each Compensation Warrant entitles the holder thereof to acquire one Unit at a price of $2.00 per Unit until January 9, 2020, subject to adjustment in certain events.

Prior to the filing of the Qualifying Prospectus and the automatic exercise of the Special Warrants, the securities issued under the Offering will be subject to a four month hold period from the date of closing of the Offering, expiring on May 10, 2018.

The net proceeds from the Offering will be used for facility expansion, working capital and general corporate purposes. The Company intends to continue to expand operations at its Langton, Ontario property by adding 630,000 sq. ft. of greenhouse space. This expansion is in addition to its current 44,000 existing operations and its fully funded 217,000 sq. ft production facility, including a natural gas co-generation facility to produce 2.9 MW of electricity, 3,406,000 litre water cistern, boilers for ambient and water heating, and CO2 scrubbing equipment to provide additional CO2 for plants. Upon completion of the full expansion, the Company anticipates that annual production capacity will be in excess of 95,000 kg/year from 891,000 sq. ft. of combined operations. The Company’s new cultivation facility will employ 26 people, making use of industrial automation in partnership with Rockwell Automation in an effort to ensure optimal operational efficiency, leading to low cost production.

Correction to December 12, 2017 Press Release

The Company has been made aware that a statement in the Company’s December 12, 2017 press release relating to the Company’s agreement with Lovell Drugs was incorrect. The statement at issue was as follows: “Lovell Drugs has already commenced distribution of Maricann cannabis products to its patients, with the first prescription registered and fulfilled on December 1st, 2017.” In fact, it was not a prescription that was registered and fulfilled on December 1st, 2017 but rather a patient registration that was completed on such date. The remaining text of the December 12, 2017 press release was correct.

About Maricann Group Inc.

Maricann is a vertically integrated producer and distributor of marijuana for medical purposes. The company was founded in 2013 and is based in Toronto, Canada and Munich, Germany, with production facilities in Langton, Ontario, Canada where it operates a medicinal cannabis cultivation, extraction, formulation and distribution business under federal licence from the Government of Canada. and Dresden, Saxony, Germany. Maricann is currently undertaking an expansion of its cultivation and support facilities in Canada in a 847,000 sq. ft. (78,688 sq. m) build out, capable of producing 95,000 kg of dry cannabis flower per year to support existing and future patient growth.

For more information about Maricann, please visit our website at www.maricann.ca.

Original press release

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