Delta 9 Q1 Fiscal Results Show Increased Revenue and Profits

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WINNIPEG, May 31, 2018 /CNW/ - DELTA 9 CANNABIS INC. (TSXV: NINE) ("Delta 9" or the "Company") today announced the Company's Q1 fiscal results.

Highlights of the Company's operations include:

• As of March 31, 2018 the Company had 21,693,847 in working capital on hand;
• The Company reported revenue of $332,107 from the sale of dried cannabis, an increase of 225 per cent over the same period in the prior year;
• The Company also reported increased profits for the quarter at $202,695, an increase of 644 per cent over the same period in the year prior.

Delta 9 also undertook significant investments during the reporting quarter, including an investment of $1425,852 in the expansion of its cultivation facilities in Winnipeg by building and installing more of the Company's proprietary, self-designed grow pods, and an investment of $3 million to acquire a 50 per cent equity interest in the Delta West cannabis production facility in Calgary, Alberta. The Delta West facility is a jointly owned venture with Westleaf Cannabis, but will operate under the Delta 9 license.

Delta 9's management also reported on several successful ventures during the reporting period, as follows:

1. Delta 9 and Canopy Growth jointly acquired the conditional license to build and operate retail cannabis stores in the Province of Manitoba, one of only four proponents to be awarded that license;
2. The Company entered into an export agreement to Germany with Global Group Kalapa and CanPharma, both of which are early pioneering firms working in the area of medical cannabis in Europe;
3. The Company signed a Memorandum of Understanding for a Supply Agreement with Sundial Growers Inc. for 8,000 kilograms of cannabis, in order to secure supply for its growing retail operations in Alberta and Manitoba;
4. Delta 9 co-developed a hemp beer called Legal Lager with Fort Garry Brewing Company in Manitoba, and has a non-alcoholic cannabis beer (with THC) in development, subject to approvals by the federal government;
5. Delta 9 completed negotiations to buy out the land on which its production facilities are located, securing a significant acreage suitable for expansion, at a price of $6,250,000. Delta 9 is currently developing a Cannabis Campus that will be among the largest production facilities in the world. The option to buy the property is expected be executed in Q3 once the subdivision of the land has been approved by the City of Winnipeg.

In addition to the activities completed by management in Q1, Delta 9 reports that in early April the Company signed a Letter of Intent to become a Preferred Supplier with Pharmasave Drugs Ltd., a leading pharmacy chain with approximately 650 member-owned outlets across Canada.

CEO John Arbuthnot says the results of the Company's business activity in Q1 came from a deliberate plan to position Delta 9 for the upcoming legalization of cannabis.

"We believe that the key element for success in the coming legal market is access to distribution and the ability to retail our products," Arbuthnot says. "For this reason, we focused less on client acquisition under the Access to Cannabis for Medical Purposes Regulations (ACMPR), which we did not see as a long term driver of profits, and instead have focused very heavily on positioning Delta 9 for distribution and sales under the upcoming legal regime for recreational.

"Our success in acquiring the retail license in Manitoba, in working closely with Pharmasave, and acquiring an export agreement to Germany are all the result of our focus on market access. We feel that focus will pay off when legal sales begin, and that Delta 9 is among the best placed companies in Canada in terms of market access."

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 ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9's shares trade on the TSX Venture Exchange under the symbol "NINE".

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) Delta 9's expansion plans; (ii) Delta 9's production of cannabis; (iii) approvals for Delta 9's production facilities by Health Canada; (iv) demand for Delta 9's products; and (v) Delta 9's cost to produce its grow pods. 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 Delta 9's currently contemplated expansion and development plans may cease or otherwise change, Delta 9's production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9's products may be lower than anticipated, Delta 9's cost to produce its grow pods may be higher than expected and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017 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.

SOURCE Delta 9 Cannabis Inc.

Gary Symons, Director of Communications, [email protected], 250.300.9352