Delta 9 sells interest in Calgary facility to Westleaf for $14.95 Million of Westleaf Shares

WINNIPEG, Jan. 28, 2019 /CNW/ - DELTA 9 CANNABIS INC. (TSXV: NINE) ("Delta 9" or the "Company") is pleased to announce that it has entered into a definitive agreement ("Definitive Agreement") to sell its 50% interest in the Delta West extraction facility to Westleaf Inc. (TSX-V:WL) ("Westleaf"). Under the Definitive Agreement, Westleaf has agreed to issue an aggregate of 5,600,000 common shares in the capital of Westleaf ("Westleaf Shares") in consideration for the acquisition of Delta 9's 50% interest in the project (the "Purchase Price"). Closing of the transaction is expected to occur on or about January 31, 2019 ("Closing").

"We feel that this transaction creates significant value for Delta 9 and its shareholders, representing a substantial return on our original investment in the Delta West facility" said John Arbuthnot, CEO of Delta 9. "This move will allow us to streamline our allocation of capital and allow Delta 9 to focus on continued expansion of our Winnipeg based cultivation facilities, continued expansion of our Delta 9 Cannabis Stores unit, and allow us to explore other strategic investments in the industry."

Transaction Summary
Under the Definitive Agreement, Westleaf will purchase Delta 9's 50% interest in the Delta West Limited Partnership (the "Partnership"), which owns the Delta West extraction facility. The Purchase Price is payable by way of the issuance of an aggregate of 5,600,000 Westleaf Shares which, based on the closing price of the Westleaf Shares on the TSX Venture Exchange ("TSXV") of $2.67 per Westleaf Share on January 25, 2019, represents approximately $14.95 million. It is a condition to Closing that Delta 9 enter into a voluntary escrow agreement that, in addition to the four month restricted period required by law, will restrict the transfer of the Westleaf Shares issuable under the Definitive Agreement as to: (i) 1,000,000 Westleaf Shares for a four (4) month period following Closing; and (ii) 4,600,000 Westleaf Shares for an eight (8) month hold period for
Closing.

Completion of the transaction is subject to certain conditions and the receipt of all required regulatory and third party approvals, including the approval of the TSXV.

About Delta 9 Cannabis Inc.
Delta 9 Cannabis is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. Delta 9's wholly-owned
subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the TSX Venture Exchange under the symbol "NINE" and on the OTC under the symbol VRNDF. For more information, please visit delta9.ca.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) the closing of the sale of Delta 9's interest in the Partnership and receipt of all required approvals; and (ii) Delta 9's expansion plans. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that all approvals for the transaction may not be obtained, as well as all risk factors set forth in the annual information form of Delta 9 dated May 31, 2018 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward looking
statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

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For further information: Investor & Media Contact: Ian Chadsey VP Corporate Affairs, Mobile: 204-898-7722, E-mail: ian.chadsey@delta9.ca