Flower One Announces Public Offering of Convertible Debenture Units

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

TORONTO, March 4, 2019 /CNW/ - Flower One Holdings Inc. (the "Company") (CSE: FONE) (OTCQB: FLOOF) is pleased to announce that it has filed and been receipted for a preliminary short form prospectus (the "Preliminary Prospectus") with securities regulatory authorities in all provinces of Canada (except Québec) in connection with a proposed overnight-marketed public offering (the "Offering") of convertible debenture units (each, a "Debenture Unit"). Each Debenture Unit will consist of one 8.0% unsecured convertible debenture (each, a "Convertible Debenture") and an amount of common share purchase warrants (each, a "Warrant"), to be determined in the course of marketing the Offering.

The Offering is being made through a syndicate of agents (the "Agents") co-led by Mackie Research Capital Corporation and Canaccord Genuity Corp. (collectively, the "Lead Agents").

The price and number of Debenture Units to be distributed, the conversion price of each Convertible Debenture and the exercise price of each Warrant will be determined in the course of marketing the Offering and by negotiation between the Company and the Lead Agents.

The net proceeds received by the Company from the Offering are intended to be used for the payment of outstanding notes, ongoing construction and development of its Nevada production facility, working capital and general corporate purposes.

The Company will also grant the Agents an option (the "Over-Allotment Option") to cover over-allotments and for market stabilization purposes, exercisable at any time up to 30 days subsequent to the closing of the Offering, to increase the size of the Offering by up to 15% in Debenture Units on the same terms and conditions of the Offering, exercisable in whole or in part.

The Convertible Debentures are intended to have a maturity 36 months from the date of issuance (the "Maturity Date"). The principal amount of each Convertible Debenture (the "Principal Amount") shall be convertible, for no additional consideration, into common shares in the capital of the Company (each, a "Common Share") at the option of the holder at any time prior to the earlier of: (i) the close of business on the Maturity Date; and (ii) the business day immediately preceding the date specified by the Company for redemption of the Convertible Debentures upon a change of control at a conversion price to be determined in the context of marketing of the Offering (the "Conversion Price").

The Warrants issued pursuant to the Offering are intended to entitle the holder thereof to purchase one Common Share of the Company at any time up to 36 months following the closing of the Offering, at an exercise price to be determined in the context of the marketing of the Offering.

The Company will be entitled to force the conversion (the "Mandatory Conversion") of the Principal Amount of the then outstanding Convertible Debentures at the Conversion Price on not more than 60 days' and not less than 30 days' notice should the daily volume weighted average trading price of the Common Shares on the CSE be greater than a price to be determined during the course of marketing for the consecutive 20 trading days of the Common Shares on the CSE preceding such notice, subject to the Mandatory Conversion being permitted under the policies of the CSE for any trading of the Common Shares at that time.

The Offering is being made pursuant to a short-form prospectus filed in each of the provinces of Canada (except Québec), and otherwise by private placement exemption in those jurisdictions where the Offering can lawfully be made, including the United States and Europe.  The Debentures Units (and the Convertible Debentures and the Warrants forming part of the Debenture Units) have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered or sold in the United States, to or for the account or benefit of, persons in the United States or U.S. Persons (as defined in Regulation S under the U.S. Securities Act)  (i) by directly by the Company to institutional "accredited investors" meeting one or more of the criteria in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the U.S. Securities Act and (ii) if the Offering proceeds on an underwritten basis, by the Agents directly to qualified institutional buyers as defined in Rule 144A under the U.S. Securities Act, and in each case in accordance with applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Debenture Units in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The closing of the Offering is currently expected to be during the week of March 18, 2019 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the Canadian Securities Exchange (the "CSE"). Until such time as an underwriting agreement is entered into, the Agents are under no obligation to underwrite, sell or purchase any securities of the Company or to enter into any such transaction. The Company will use commercial reasonable efforts to obtain the necessary approvals to list the Convertible Debentures, Warrants, Common Shares issuable upon conversion of the Convertible Debentures on the CSE.

About Flower One Holdings Inc.

Flower One is sharply focused on quickly becoming the leading cannabis cultivator, producer and innovator in the highly lucrative Nevada market. Flower One owns and operates a 25,000 square-foot cultivation and production facility in North Las Vegas, with nine grow rooms, and owns the established NLV Organics consumer brand of cannabis products. The Company is also rapidly converting its 455,000 square-foot greenhouse and production facility, which is the largest in the State of Nevada, for cultivating and processing high-quality cannabis at scale. Combined, the flagship greenhouse facility and production facility (once fully operational) and the North Las Vegas facility provide Flower One with 480,000 square feet of capacity for cultivation and processing, production and high-volume packaging of dry flower, cannabis oils, concentrates and infused products. The Company is fully licensed for medical marijuana cultivation and production, as well as recreational marijuana cultivation and production in the state of Nevada and currently holds licensing agreements with their Brand Partners, Flyte Concentrates, Rapid-Dose Therapeutics' Quick Strip, Old Pal, Palms, HUXTON, and CannAmerica Brands.

The Common Shares are traded on the Canadian Securities Exchange under the Company's symbol "FONE" and in the United States on the OTCQB under the symbol "FLOOF." For more information, visit: https://flowerone.com 

The CSE does not accept responsibility for the adequacy or accuracy of this press release.

Forward Looking Statements                                                    

Statements in this press release that are not statements of historical or current fact constitute "forward looking information" within the meaning of Canadian and United States securities laws (collectively, "forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates," "potential," "should," "may," "will," "plans," "continue" or other similar expressions to be uncertain and forward looking. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Forward-looking statements in this press release include, but are not limited to, the ability of the Company to close the Offering, the amount of gross proceeds to be raised from the Offering, information or statements about the Company's strategy, future operations, prospects and the plans of management; the Company's ability to achieve its objectives and plans, including the timing and results of those objectives; the timing and the outcome of the conversion of its 455,000 square foot greenhouse and production facility in Nevada; the Company's potential to become the leading cannabis cultivator, producer and innovator in the highly lucrative Nevada market; the scale and capacity of the Company's cultivation, processing and high-volume packaging facilities in Nevada, the size and continued growth, profitability, maturity, retail sales and size of the cannabis market in Nevada; and the Company's ability to fund its continued operations.                                                                                                      

Although the Company has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: the Company's dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under United States federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry; and regulatory or political change.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the "Forward-Looking Statements" section contained in the Company's most recent management's discussion and analysis ("MD&A"), which are available on SEDAR at www.sedar.com. All forward-looking statements in this press release are made as of the date of this press release. The Company does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company's public securities filings with the Canadian securities commissions, including the Company's most recent MD&A.

SOURCE Flower One Holdings Inc.

Flower One Holdings Inc., Ken Villazor, President and CEO, 416.200.7641, [email protected]; Flower One investor relations inquiries, NATIONAL Capital Markets, 416.848.9835, [email protected]; Flower One media inquiries, Natalie Martin, 604.738.2220, [email protected]