MedReleaf closes $105M bought deal

MedReleaf Corp.



News Release

MEDRELEAF CORP. ANNOUNCES CLOSING OF $100.5 MILLION BOUGHT DEAL FINANCING

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

MARKHAM, ON – December 4, 2017 – MedReleaf Corp. (TSX:LEAF) (“MedReleaf” or the “Company”) is pleased to announce that it has completed its previously announced offering (the “Offering”), on a “bought deal” basis, pursuant to a short form prospectus, of an aggregate of 6,072,600 common shares of the Company (the “Offered Shares”) at a price of $16.55 per Offered Share (the “Offering Price”). The Company offered and sold a total of 3,625,470 Offered Shares (the “Treasury Offering”), and an aggregate of 2,447,130 Offered Shares were offered and sold by certain selling shareholders of the Company (the “Secondary Offering”), namely: Zola Finance Inc., Rayray Investments Inc., Baronford Capital Corporation, AJA Holdings 2013 Inc. and MENA Investment Network Inc. (collectively, the “Selling Shareholders”), resulting in aggregate gross proceeds of approximately $100.5 million, with MedReleaf and the Selling Shareholders receiving gross proceeds of approximately $60.0 million and $40.5 million, respectively.

The Offering was underwritten by a syndicate of underwriters led by GMP Securities L.P., as lead underwriter and sole bookrunner, Canaccord Genuity Corp., Clarus Securities Inc., Cormark Securities Inc. and PI Financial Corp. (collectively, the “Underwriters”). Cowen and Company, LLC is serving as financial advisor to the Company.

In connection with the Offering, the Company granted the Underwriters an over-allotment option to purchase up to an additional 543,821 Offered Shares from the Company at the Offering Price, exercisable in whole or in part, at any time and from time to time on or prior to January 3, 2018 (the “Over-Allotment Option”). If the Over-Allotment Option is exercised in full, the Company will receive approximately an additional $9 million in gross proceeds.

The Company intends to use the net proceeds from the Treasury Offering to finance the acquisition and/or construction of additional cannabis production and manufacturing facilities in Canada as well as in other jurisdictions with federal legal cannabis markets, where warranted by the opportunities available to MedReleaf, and the expansion of the Company’s marketing and sales initiatives. If the Over-Allotment Option is exercised, the Company intends to use the additional net proceeds for working capital and general corporate purposes. The Company did not receive any of the net proceeds from the Secondary Offering and all of such proceeds went to the Selling Shareholders.

In connection with the Offering, the directors and officers of the Company and the Selling Shareholders have agreed to extend the release of the initial one-half of the common shares of the Company held by such directors, officers and Selling Shareholders that are subject to existing lock-up agreements until February 5, 2018.

The securities described herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About MedReleaf Corp.

MedReleaf sets The Medical Grade Standard™ for cannabis in Canada and around the world. The first and only ICH-GMP and ISO 9001 certified cannabis producer in North America, MedReleaf is a R&D-driven company dedicated to patient care, scientific innovation, research and advancing the understanding of the therapeutic benefits of cannabis. Sourced from around the world and carefully cultivated in one of two state of the art facilities in Ontario, MedReleaf delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis.

For more information on MedReleaf, its products, research and how the company is helping patients #livefree, please visit MedReleaf.com or follow @medreleaf.

Contact Information:
Dennis Fong, Investor Relations, investorrelations@medreleaf.com, 416-283-9930.