An anonymous director reports

DELTA 9 OBTAINS AMENDED AND RESTATED INITIAL ORDER FOR CCAA PROTECTION

Further to the initial order for creditor protection obtained and announced by Delta 9 Cannabis Inc. on July 15, 2024, Delta 9 has obtained an amended and restated initial order for creditor protection, an order approving the sale and investment solicitation process, a claim procedure order, and a sealing order from the Court of King's Bench of Alberta under the companies' Creditors Arrangement Act (Canada).

Acquisition transaction

As previously announced by the company on July 15, 2024, the company entered into a term sheet with 2759054 Ontario Inc. operating as The Fika Company as plan sponsor to the CCAA proceedings whereby Fika proposes to acquire the cannabis retail store business and the logistics and distribution business of the company, while facilitating a sale and investment solicitation process for the assets of the licensed cannabis production business of the company, in exchange for equity of Fika and the satisfaction of certain secured debt of the company.

AR initial order

The AR initial order provides for: (i) an extension of a stay until Sept. 15, 2024, of creditor claims and proceedings in respect of the company and its subsidiaries Delta 9 Logistics Inc., Delta 9 Bio-Tech Inc., Delta 9 Lifestyle Cannabis Clinic Inc. and Delta 9 Cannabis Store Inc.; (ii) the approval of an interim financing credit facility provided by Fika of up to $16-million pursuant to the interim financing term sheet between the company and Fika dated July 18, 2024, and the financing charge related thereto; (iii) authorization of a payment of up to $13-million to SDNL Inc. with respect to the mezzanine debt provided by SNDL to the company pursuant to the interim financing term sheet; (iv) an increase in the directors' charge from $300,000 to $900,000; (v) an increase in the administration charge from $350,000 to $750,000; (vi) a key employee retention plan in the amount of $650,000 and a charge to secure the amounts payable thereunder; (vii) the appointment of Mark Townsend as chief restructuring officer and approval of the engagement letter between the company and 1198184 B.C. Ltd., a corporation controlled by the CRO, dated July 18, 2024; and (viii) the approval of a break fee of $1.5-million that is payable to Fika upon the occurrence of certain events that would result in the acquisition transaction not proceeding and a charge to secure the amount of the break fee.

SISP order

The SISP order authorizes and directs Alvarez & Marsal Canada Inc., as the court-appointed monitor to, among other things, proceed with implementing an SISP in respect of the LP business, which is owned and operated by Delta 9 Bio-Tech. The SISP is intended to solicit interest in, and opportunities for, a sale of, or investment in, all or part of the LP business. This may include one or more of a restructuring, recapitalization or other form of reorganization of the business and affairs of all or part of the Delta 9 Bio-Tech, or a sale of all, substantially all or a portion of its assets and business operations as a going concern or otherwise. To participate in the SISP and obtain access to a virtual data room and other information, interested parties must comply with the terms and conditions set forth in the SISP order and other related documents, which are available on the monitor's website.

Parties interested in participating in the SISP should contact David Williams of Alvarez & Marsal Canada at david.williams@alvarezandmarsal.com.

Interested parties which wish to submit a bid must deliver a binding offer to the monitor in accordance with the SISP by no later than 5 p.m. Calgary time on Oct. 28, 2024. The monitor, Fika, the company and sales adviser, if any, will assess the binding bids received on or before the bid deadline and may select certain bidders to proceed to the next phase of the process. Any transaction that may ultimately be consummated by the company and/or its subsidiaries will be subject to the approval of the court in the CCAA proceedings.

CP order

The CP order provides for and establishes a claim process to identify and determine claims against the company and its subsidiaries, including the directors and officers.

Scheduled delisting form the Toronto Stock Exchange

The Toronto Stock Exchange has scheduled the delisting of the company's common shares on the TSX for Aug. 22, 2024, for failure to meet the continued listing requirements of the TSX. Trading in the common shares is currently halted on the TSX.

MLT Aikins LLP is acting as legal counsel to the company and its subsidiaries in connection with the CCAA proceedings and the acquisition transaction.

Any stakeholders that are interested in information with respect to the CCAA proceedings should visit the monitor's website.

About Delta 9 Cannabis Inc.

Delta 9 is a vertically integrated cannabis company focused on bringing the highest-quality cannabis products to market. The company sells cannabis products through its wholesale and retail sales channels, and sells its cannabis grow pods to other businesses. Delta 9's wholly owned subsidiary, Delta 9 Bio-Tech, is a licensed producer of medical and recreational cannabis, and operates a 95,000-square-foot production facility in Winnipeg, Man., 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 Toronto Stock Exchange under the symbol DN and on the OTC under the symbol DLTNF.

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