Halo Collective Completes Acquisition of H2C Beverages and Securities Issuance to Independent Consultants and Related Parties

TORONTO, Jan. 25, 2022 /CNW/ - Halo Collective Inc. ("Halo" or the "Company") (NEO: HALO) (OTCQB: HCANF) (Germany: A9KN) has completed the previously announced acquisition of 1285826 B.C. Ltd. (dba H2C Beverages) ("H2C"), a company focused on cannabinoids and non-psychotropic mushroom functional beverages. The Company also announced the issuance of 1,981,349 common shares of the Company (the "Compensation Shares") to certain independent consultants and related parties of the Company, in lieu of cash consideration, at a price of C$1.20 per Compensation Share, being the closing price of the common shares of the Company on January 11, 2022.

Kiran Sidhu, Halo's Chief Executive Officer, commented, "Our strategic move into infused beverages expands our addressable market and gives us access to a rapidly growing sector of the consumer market. As the recreational cannabis market continues to mature, we believe companies with the most well-rounded and comprehensive product lines will thrive and those with limited SKUs focused on subsets of the industry will struggle amidst heavy and growing competition. Additionally, the Compensation Shares demonstrate the confidence of senior executives and all directors of the Company, in electing to take their compensation in the form of Common Shares in lieu of cash. We look forward to benefiting alongside shareholders from the long-term value we are creating."

In exchange for the acquisition of all of the issued and outstanding shares of H2C, the Company has issued 7,538,462 common shares in the capital of the Company ("Common Shares"). The Company also issued an aggregate of 603,077 Common Shares to an arm's length finder in connection with the acquisition.

The Company has also issued 1,981,349 Compensation Shares in satisfaction of approximately C$2,335,407 in fees and other compensation payable to independent consultants and related parties of the Company.

583,255 Compensation Shares were issued to related parties (within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101")) and such issuances are considered "related party transactions" for the purposes of MI 61-101. 118,778 Compensation Shares were issued to Kiran Sidhu, a director and the Chief Executive Officer of the Company, 66,677 Compensation Shares were issued to Katie Field, a director and the President of the Company, 118,743 Compensation Shares were issued to Philip Van Den Berg, a director and the Chief Financial Officer of the Company, 69,926 Compensation Shares were issued to Ryan Kunkel, a director of the Company, 47,629 Compensation Shares were issued to Andrew Turman, a director of the Company, 41,692 Compensation Shares were issued to Croftcap Inc. (a company controlled by Peter McRae, a director of the Company), 20,066 Compensation Shares were issued to Anmol Sidhu, a director of the Company and 99,744 Compensation Shares were issued to Shailesh Bhushan, an officer of the Company.

Such related party transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities being issued to the related parties nor the consideration being paid by the related parties exceeded 25% of the Company's market capitalization. The recipients of the Compensation Shares and the extent of such participation were not finalized until shortly prior to the completion of the issuance described herein. Accordingly, it was not possible to publicly disclose details of the nature and extent of related party participation in the transactions contemplated hereby pursuant to a material change report filed at least 21 days prior to the completion of such transactions.

All of the Compensation Shares were issued pursuant to an exemption from the prospectus requirement of applicable securities laws. 1,174,934 of the Compensation Shares issued are subject to a hold period expiring on the date that is four (4) months and one day from the date of issuance.

About Halo Collective Inc.

Halo is a leading, vertically integrated cannabis company that cultivates, extracts, manufactures, and distributes quality cannabis flower, oils, and concentrates and has sold approximately eleven million grams of oils and concentrates since inception. The Company continues to expand its business and scale efficiently, partnering with trustworthy leaders in the industry who value Halo's operational expertise in bringing top-tier products to market.

Halo currently operates in the United States in Oregon and California. The Company sells cannabis products principally to dispensaries in the U.S. under its brands Hush, Mojave, and Exhale, and under license agreements with Papa's Herb®, DNA Genetics, Terphogz, and FlowerShop*, a cannabis lifestyle and conceptual wellness brand that includes G-Eazy as a partner and key member.

As part of continued expansion and vertical integration in the U.S., Halo boasts several grow operations throughout Oregon and two planned in California. In Oregon, the Company has a combined 11 acres of owned and contracted outdoor and green house cultivation, including East Evans Creek, a six-acre grow site in Jackson County with four licenses owned and operated by Halo and two third-party licenses under contract to sell all of their product to Halo; Winberry Farms, a one-acre grow site located 30 miles outside of Eugene in Lane County with a license owned and operated by Halo; and William's Wonder Farms, a three-acre grow site in Applegate Valley, under contract to sell all of its product to Halo pending the closing of Halo's acquisition of its licenses and business assets. Halo has recently acquired Food Concepts LLC, a master tenant of a 55,000 square foot indoor cannabis cultivation, processing, and wholesaling facility in Portland, Oregon operated by the Pistil Point entities.

In California, the Company is building out Ukiah Ventures, a planned 30,000 square foot indoor cannabis grow and processing facility, which aims to include up to an additional five acres of industrial land to expand the site. Recently, Halo partnered with Green Matter in California to purchase the Farm in Lake County, developing up to 63 acres of cultivation, comprising one of the largest licensed single site grows in California. Halo also plans to expand its operations in California by opening three dispensaries under the Budega™ brand in North Hollywood, Hollywood, and Westwood.

In Canada, Halo acquired three KushBar retail cannabis stores located in Alberta as a first in its planned entry into the Canadian market, leveraging its Oregon and California brands. With the KushBar retail stores as a foundation, the Company plans to expand its foothold in Canada.

Halo has also acquired a range of software development assets, including CannPOS, Cannalift, and, more recently, CannaFeels. In addition, Halo owns the discrete sublingual dosing technology, Accudab. The Company intends to spin-off these assets and its intellectual property and patent applications into its subsidiary Halo Tek Inc. and expects to complete a distribution to shareholders on a record date to be determined by Halo.

Halo recently completed the sale of certain of its non-U.S. operations to Akanda Corp. ("Akanda"), whose mission is to provide high-quality and ethically sourced medical cannabis products to patients worldwide. As an independent company, Akanda is seeking to deliver on this promise while driving positive change in wellness, empowering individuals in Lesotho, and uplifting the quality of the lives of employees and the local communities where it operates, all while limiting its carbon footprint. Akanda combines the scaled production capabilities of Bophelo Bioscience & Wellness Pty. Ltd., a Lesotho-based cultivation and processing campus located in the world's first Special Economic Zone (SEZ) containing a cannabis cultivation operation, with distribution and route-to-market efficiency of CanMart Ltd., UK-based fully approved pharmaceutical importer, and distributor that supplies pharmacies and clinics within the UK. With a potential maximum licensed canopy area of 200 hectares (495 acres), Bophelo has scalability that is arguably unmatched in the world today. Following the sale, Halo is Akanda's largest shareholder.

For further information regarding Halo, see Halo's disclosure documents on SEDAR at www.sedar.com

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Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". Forward-looking information may relate to anticipated events or results including, but not limited to management's plans regarding its portfolio of cannabis businesses, the Company's expansion plans regarding Canada, the expected size and capabilities of the final facility planned at Ukiah Ventures, the size of Halo's planned cultivation facility in Northern California, and the ability of Bophelo and Canmart to serve the UK market and the proposed spin-off by Halo Tek Inc.

By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: inability of management to successfully integrate the operations of acquired businesses, changes in the consumer market for cannabis products, changes in the expected outcomes of the proposed changes to Halo's operations, delays in obtaining required licenses or approvals necessary for the build-out of Oregon operations, dispensaries or Canadian operations, the proposed spin-out with Halo Tek Inc., delays or unforeseen costs incurred in connection with construction, the ability of competitors to scale operations in Northern California, delays or unforeseen difficulties in connection with the cultivation and harvest of Halo's raw material, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company's annual information form dated March 31, 2021 and other disclosure documents  available on the Company's profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.

Non-Solicitation

This press release shall not constitute an offer to sell nor the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

SOURCE Halo Collective Inc.

Halo Collective Inc., Investor Relations, [email protected], www.haloco.com/investors