TREES CORPORATION AND 1287406 B.C. LTD COMPLETE BUSINESS COMBINATION TRANSACTION

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Common Shares Expected to Commence Trading on the NEO Exchange in Early January 2022

TORONTO, Dec. 23, 2021 /CNW/ - Trees Corporation (the "Company" or "Trees") and 1287406 B.C. Ltd ("406"), a reporting issuer under the securities laws of the jurisdictions of Alberta and British Columbia, are pleased to announce the closing of their previously announced business combination with (the "Amalgamation"). Further details of the Amalgamation are available in the joint management information circular of the Company and 406 dated November 12, 2021 (the "Information Circular"), available under 406's SEDAR profile at www.sedar.com. References herein to the "Resulting Issuer" refer to the company resulting from the Amalgamation.

Jonathan Conquergood, CEO of Trees, said: "We are thrilled to have completed our Amalgamation and to have received conditional approval to list our shares on the NEO.  This is a significant milestone for Trees as we enter the public market and broaden our investor base.  Our enhanced visibility and access to capital will be key components in our strategy to build long-term shareholder value.  We look forward to reaching our next milestones and continuing to expand our retail footprint in Canada over the coming months."

Jeff Holmgren, CFO of Trees added: "With the added investor reach that we expect to come from being publicly listed once our NEO listing process is complete, we have set the stage for an exciting 2022.  In the months to come we will begin to reveal our strategic growth plans and our differentiated consumer approach that will be aimed at expanding our presence and influence in the Canadian cannabis retail landscape."

Prior to the Amalgamation taking effect: (i) the Company continued out of the jurisdiction of Alberta under the Business Corporations Act (Alberta) and into the federal jurisdiction of Canada under the Canada Business Corporations Act (the "CBCA") (the "Trees Continuance") and consolidated its Class A shares (the "Common Shares") at a ratio of fifteen (15) pre-consolidation Common Shares for every one (1) post-consolidation Common Share (the "Trees Consolidation"); and (ii) 406 continued out of the jurisdiction of British Columbia under the Business Corporations Act (British Columbia) and into the federal jurisdiction of Canada under the CBCA (the "406 Continuation") and completed a consolidation of its common shares (the "406 Shares") on the basis of 1 post-consolidation 406 Share for 0.77 pre-consolidation 406 Shares (the "406 Consolidation"). The Trees Continuance, Trees Consolidation, and Amalgamation, among other things, were approved at the annual and special meeting of the shareholders of the Company held on December 3, 2021. The 406 Continuance, 406 Consolidation and Amalgamation were approved by 406 shareholders by written resolution.

As previously announced, and in connection with the Amalgamation, the Company closed the previously announced non-brokered private placement (the "Private Placement") of subscription receipts of the Company (the "Subscription Receipts") on December 17, 2021. Pursuant to the Private Placement, the Company issued an aggregate of 101,500,000 Subscription Receipts at a price of $0.02 per Subscription Receipt (the "Subscription Price") for aggregate proceeds of $2,030,000. Pursuant to the terms of the subscription receipt agreement governing the Subscription Receipts, each Subscription Receipt was automatically exchanged following the Continuation but prior to the Consolidation, without payment of any additional consideration and any further action by the holder thereof, for one Common Share. Upon the closing of the Amalgamation, each issued and outstanding Common Share was exchanged for one common share in the capital of the Resulting Issuer (each, a "Resulting Issuer Share").

The Resulting Issuer Shares are expected to commence trading on the facilities of the Neo Exchange Inc. (the "NEO Exchange") under the symbol "TREE" at the opening of the markets in early January 2022, subject to the satisfaction of certain conditions to listing.

Following the Amalgamation, the leadership of team of the Resulting Issuer is as follows:

• Jonathan Conquergood — Chief Executive Officer and Director
• Jeffery Holmgren — Executive Vice President, Chief Financial Officer and Director
• James Ward — Director
• Scott Cunningham — Director
• Fraser Clarke — Director, Chairman
• Meysam Soltani — Director
• Melanie Cole — Corporate Secretary

Additional information related to the business of the Resulting Issuer and the Amalgamation (including the members of the management team and board of directors listed above) is available in the Information Circular.

About Trees

Trees is an independent retail cannabis operator that currently operates six (6) fully licensed retail cannabis stores that sell cannabis products and accessories in the Province of Ontario. Trees intends to enter the British Columbia retail cannabis market upon the closing of the acquisition of the shares or assets of 1015712 B.C. Ltd. ("101") pursuant to the terms of the second amended and restated asset purchase agreement (the "101 Purchase Agreement") entered into between Trees and 101. 101 currently operates five (5) existing retail cannabis stores in the Province of British Columbia and anticipates opening a sixth (6^th) location in Victoria in the first quarter of 2022.  101 has also secured a seventh (7^th) location in Victoria which is moving through the provincial regulatory licensing process.  The closing of the transactions contemplated by the 101 Purchase Agreement is subject to certain conditions precedent, including the receipt of certain licensing approvals and related regulatory consents.

In addition to the six (6) retail cannabis stores that Trees currently owns and operates in the Province of Ontario, Trees has completed the construction and build-out of two (2) additional stores, which stores have received conditional licenses to operate, and are anticipated to open in the first quarter of 2022. Trees has also secured an additional seven (7) cannabis retail store locations for which it has received conditional license approvals from the provincial regulator, with final licensing approvals subject to completion of store construction and final regulatory inspections. 

Combined with 101, Trees has a branded platform of 11 operating stores with a further three (3) stores anticipated to open in the first quarter of 2022, and another 8 locations in reserve together providing a platform of 22 stores from which to grow in 2022 and beyond.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.

Forward-looking statements in this document include, among others, statements relating to expectations regarding the trading of the Resulting Issuer Shares on the NEO Exchange and the timing thereof, the business plans and growth plans of the Resulting Issuer, the broadening of the Resulting Issuer's investor base and enhancement of visibility, building long-term shareholder value, the expansion of the Resulting Issuer's retail footprint in Canada in the future, the completion of the transactions contemplated in the 101 Acquisition Agreement and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) the Resulting Issuer may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Resulting Issuer's business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Resulting Issuer's securities, regardless of its operating peers; (e) adverse changes in the public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.

The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The Company's securities 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 within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Investors are cautioned that, except as disclosed in the Information Circular prepared in connection with the Amalgamation, any information released or received with respect to the Amalgamation may not be accurate or complete and should not be relied upon. 

The NEO Exchange has in no way passed upon the merits of the Amalgamation and has neither approved nor disapproved the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release. 

SOURCE Trees Corporation

Trees Corporation: Jeffrey Holmgren, Chief Financial Officer, Email: [email protected]