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Goodness Growth Holdings Inc
Symbol GDNS
Shares Issued 86,721,030
Close 2023-05-24 C$ 0.235
Market Cap C$ 20,379,442
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Goodness Growth to cultivate products with Grown Rogue

2023-05-25 15:56 ET - News Release

Also News Release (C-GRIN) Grown Rogue International Inc

Mr. Josh Rosen of Goodness reports

GOODNESS GROWTH HOLDINGS AND GROWN ROGUE INTERNATIONAL ANNOUNCE STRATEGIC ADVISORY AGREEMENT

Goodness Growth Holdings Inc. and Grown Rogue International Inc. have entered into a strategic agreement whereby Grown Rogue will support Goodness Growth in the optimization of its cannabis flower products, with a particular focus on improving the quality and yield of top-grade A cannabis flower across its various operating markets, starting with Maryland and Minnesota.

Grown Rogue, based in Oregon, is a renowned craft cannabis operator with proven expertise growing, harvesting, processing, packaging and selling cannabis flower in the most competitive adult-use markets. The company has a relentless focus on driving quality and value through efficient standard operating procedures and superior genetics, which has resulted in Grown Rogue becoming the number one flower brand in Oregon and a top five indoor flower brand in Michigan. Goodness Growth is a Minneapolis-based operator whose medical expertise helped its team build a portfolio of merit-based medical license awards, which are all currently experiencing transitions to adult-use regulatory frameworks.

Interim Chief Executive Officer of Goodness Growth, Josh Rosen, said, "As we have recently discussed, cultivation improvements are an important focus for us this year. We've been impressed by the initial site visits and preliminary work that Grown Rogue's team has already completed. We're striving to put more passion into quality and efficiency so we can deliver affordable products that meet the demands of medical and adult-use markets and compete effectively with the illicit market. This strategic agreement aligns with that focus, and we're optimistic that it will accelerate operational improvements that, most importantly, should both lower our cost of production and provide higher quality, a true win-win for our patients and customers."

Obie Strickler, Chief Executive Officer of Grown Rogue, commented, "While this is a great strategic collaboration for Grown Rogue and Goodness Growth, we are especially excited for the many patients and customers in the markets that Goodness Growth serves. We have been actively looking to expand the reach of our craft-quality cannabis flower. This agreement enables us to help Goodness Growth delight customers and patients as we have been in Oregon and Michigan in exchange for a modest increase in our operating expenses and no increase in capital expenses. The incentive structure of the agreement, whereby Grown Rogue only benefits if Goodness Growth benefits as well, reflects my confidence in our operational ability to drive improved cultivation performance, and I am excited about this opportunity because we have one of the best operations teams in the country."

Under the terms of the agreement, which expires on September 30, 2025, Goodness Growth will provide compensation to Grown Rogue for sustained consulting support, including input on systems and processes, and recommendations to improve Goodness Growth's cultivation operations. Grown Rogue will be entitled to receive additional incentive compensation if its services result in improved cash flow performance as compared to Goodness Growth's baseline expectations over the term of the agreement. Grown Rogue's cooperation in the agreement will be on an exclusive basis to Goodness Growth within the markets in which Goodness Growth operates.

In addition, Goodness Growth will issue 10,000,000 warrants to purchase subordinate voting shares of Goodness Growth to Grown Rogue, with a strike price equal to a 25.0 percent premium to the 10-day volume weighted average price ("VWAP") of Goodness Growth's subordinate voting shares prior to the effective date of the agreement. Similarly, Grown Rogue will issue 8,500,000 warrants to purchase subordinate voting shares of Grown Rogue to Goodness Growth, with a strike price equal to a 25.0 percent premium to the 10-day VWAP of Grown Rogue's subordinate voting shares prior to the effective date of the agreement. The warrants exchanged in the agreement will be issued with five year terms to exercise, shall not be registered with the United States Securities & Exchange Commission or qualified by any Canadian provincial securities commission, and shall not be assignable except as set forth in the warrant certificates. The parties intend to issue the warrants within 60 days. The aforementioned warrants and shares underlying such warrants will be subject to a four-month and one-day hold period under applicable Canadian securities laws.

About Goodness Growth Holdings, Inc.

Goodness Growth Holdings, Inc. (CSE: GDNS; OTCQX: GDNSF), is a cannabis company based in Minneapolis. The Company's mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. The Company is evolving with the industry and is in the midst of a transformation to being significantly more customer-centric across its operations, which include cultivation, manufacturing, wholesale and retail business lines. For more information about Goodness Growth Holdings, please visit www.goodnessgrowth.com.

About Grown Rogue International, Inc.

Grown Rogue International, Inc. (CSE: GRIN; OTC: GRUSF), is a craft cannabis company focused on delighting customers with premium flower and flower-derived products at fair prices. The Company's roots are in Southern Oregon where it has demonstrated its capabilities in the highly competitive and discerning Oregon market and, more recently, successfully expanded its platform to Michigan. The Company combines its passion for product and value with a disciplined approach to growth, prioritizing profitability and return on capital. Its strategy is to pursue capital efficient methods to expand into new markets, bringing craft quality and value to more consumers. The Company also continues to make modest investments to improve its outdoor craft cultivation capabilities in preparation for eventual interstate commerce. For more information about Grown Rogue, please visit www.grownrogue.com.

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