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The group has agreed to a conversion price equivalent to C$7.00 per common share, indicating confidence in the value of GGB

COLUMBUS, OH, May 17, 2019 /CNW/ - Green Growth Brands, Inc. (CSE: GGB) (OTCQB: GGBXF) ("GGB" or the "Company") is pleased to announce that it has raised gross proceeds of US$45.5 million (C$61,233,100) pursuant to a private placement of convertible debt, (the "Debenture Financing") in the form of 15% secured convertible debentures (the "Debentures") at a price of US$1,000 per Debenture and with a conversion price equivalent to C$7.00 per common share. The net proceeds of the Debenture Financing will be used for general corporate and working capital purposes.

"The capital raised through this offering will help us further drive our rapid expansion," said Peter Horvath, CEO of Green Growth Brands. "We are a premier operator in two booming markets. In our CBD business, we are rolling out a line of exceptional consumer-focused products including topicals and balms, and working with America's largest developers to increase our network of mall kiosks situated in prime locations. In our MSO business, we manage a premier cannabis retail business. In both businesses, we are actively reviewing partnerships and M&A opportunities to accelerate the build out of our company."

"The participants in this offering included early stage strategic investors in the Company, and we are gratified by the confidence they continue to show in GGB, in particular, at what amounts to a C$7.00 per common share conversion price " Horvath added.

Under the Debenture Financing, GGB raised gross proceeds of US$45.5 million pursuant to issuance of Debentures on a non-brokered private placement basis. Each Debenture has a maturity date of May 17, 2020 (the "Maturity Date") and is convertible, in certain circumstances, into proportionate voting shares in the capital of the Company (the "PV Shares") at a conversion price per PV Share equal to C$3,500.00 (being equivalent to C$7.00 per common share) divided by the Canadian-US exchange rate on the business day prior to conversion (the "Conversion Price"). Upon conversion of the Debentures, the holders thereof shall be entitled to receive all accrued but unpaid interest thereon to, but excluding, the Maturity Date, with such amount to be paid in cash. No fractional PV Shares will be issued on any conversion and holders will receive a cash payment in satisfaction of any fractional interest.

Interest on the Debentures accrues daily and is payable to the holders thereof initially on November 17, 2019 and the balance on the Maturity Date. On the Maturity Date, the principal amount of the Debentures shall be payable by the Company in cash (together with all accrued but unpaid interest thereon) or, at the option of the holder thereof, in PV Shares at the Conversion Price, without adjustment for interest accrued on the Debentures or for dividends or distributions on the PV Shares issuable upon conversion, all subject to the terms and conditions and in the manner set forth in the Debenture Indenture (as defined below).

The Company shall have the option, exercisable in its sole discretion, of repaying all or any portion of the then outstanding principal amount of the Debentures in cash at any time. In the event that the Company exercises this option, interest on such principal amount being repaid shall be calculated up to but excluding the Maturity Date from, and including, the date of issue, and such interest, to the extent unpaid, shall be immediately due and payable at the time of repayment.

Upon the occurrence of a change of control of the Company, the Company is required to make an offer, at the option of each holder, to purchase all of the Debentures at a cash price equal to the principal amount of such Debentures plus accrued and unpaid interest (if any) up to, but excluding, the date the Debentures are so repurchased or allow such holder to convert the principal amount of such Debentures to PV Shares at the Conversion Price.

The obligations of the Company under the Debentures will be secured by a general security agreement over all of the Company's applicable present and after-acquired personal property.

The Debentures were be created and issued pursuant to a debenture indenture (the "Debenture Indenture") dated as May 17, 2019. The specific attributes of the Debentures will be set forth in the Debenture Indenture. Capital Transfer Agency will act as debenture trustee on behalf of the holders of Debentures.

A holder of PV Shares may at any time have the option to convert 1 (one) PV Share held into 500 (five hundred) common shares of the Company. The Company shall use commercially reasonable efforts to maintain its status as a "foreign private issuer" (as determined in accordance with Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Accordingly, the Company shall not give effect to any voluntary conversion of PV Shares, and the PV Share conversion rights will not apply, to the extent that after giving effect to all permitted issuance after such conversion of PV Shares, the aggregate number of common shares of the Company and PV Shares (calculated on the basis that each common share and PV Share is counted once, without regard to the number of votes carried by each share) held of record, directly or indirectly, by residents of the United States (as determined in accordance with Rules 3b-4 and 12g3-2(a) under the Exchange Act) would exceed forty percent (40%) (the "40% Threshold") of the aggregate number of common shares of the Company and PV Shares (calculated on the same basis) issued and outstanding as calculated herein. The directors may by resolution increase the 40% Threshold to a number not to exceed fifty percent (50%), and if any such resolution is adopted, all references to the 40% Threshold herein shall refer instead to the amended percentage threshold set by the directors in such resolution.

A complete description of the rights, privileges and restrictions attaching to the PV Shares can be found in the information which has been publicly filed at www.SEDAR.com by the Company.

About Green Growth Brands Inc.

Green Growth Brands creates remarkable experiences in cannabis and CBD, led by CEO Peter Horvath and a leadership team of consumer-focused retail experts. Their brands include CAMP, Seventh Sense Botanical Therapy, The+Source, Green Lily and Meri + Jayne, with a licensing agreement with the Greg Norman Brand. Already boasting the strongest sales per square feet in the cannabis industry, GGB is expanding its presence in Nevada, Massachusetts and Arizona with CBD presence at ShopSeventhSense.com, in malls across the country and at DSW shoe stores—and that's just the beginning. Learn more about our vision at GreenGrowthBrands.com.

Cautionary Statements:

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to, among other things, the conversion of Debentures, the payment of principal and interest on the Debentures and the issuance or conversion of PV Shares. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. Although such statements are based on management's reasonable assumptions, there can be no assurance that such events will occur or will be completed on the terms described above.

The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

This announcement does not constitute an offer, invitation or recommendation to subscribe for or purchase any securities and neither this announcement nor anything contained in it shall form the basis of any contract or commitment. In particular, this announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, or in any other jurisdiction in which such an offer would be illegal.

The securities referred to herein have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, within the United States, unless the securities have been registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available.

SOURCE Green Growth Brands

For further information: For investor relations inquiries, please contact: Julia Fulton, Investor & Public Relations, (614) 505-9880, [email protected]; or Eric Wright, 416-640-2963, [email protected]; or Peter Horvath, (614) 508-4222; For media enquiries or interviews, please contact: Wynn Theriault, Thirty Dash Communications, 416-710-3370, [email protected]

Related Links

https://www.greengrowthbrands.com/

