Origin House Subsidiary Trichome Financial Corp. Provides Financing to Licensed Ontario Cannabis Retailer and Provides Corporate Update

This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States.  No securities of the company have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and no securities of the company may be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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• C.G.S. Foods Inc. (dba Ganjika House) was one of only 25 Ontario private cannabis retail lottery winners and is one of the first 5 to secure their Retail Operators License in Canada's largest cannabis market – opening its location in Brampton, Ontario on April 1, 2019 .[1] 
• Trichome has agreed to provide up to C$2 million comprised of a Revolving Credit Facility and Term Loan, both of which are fully secured.
• Trichome will receive warrants to acquire a minimum of 10.3% and a maximum of 13.3% of the common shares of Ganjika House, should the entire term loan be drawn.
• Ganjika House represents a unique platform to participate in retail industry growth and consolidation.
• Trichome's go-public process is progressing, and the Company expects to close a private placement of subscription receipts in early April.

OTTAWA, ON , March 18, 2019 /CNW/ - CannaRoyalty Corp. d/b/a Origin House (OH.CN) (ORHOF) ("Origin House"), a North American cannabis products and brands company, announced today that its subsidiary Trichome Financial Corp. ("Trichome" or the "Company") has entered into a C$2 million financing arrangement (the "Financing") with C.G.S. Foods Inc. (dba Ganjika House) ("C.G.S." or "Ganjika House"), a licensed Ontario cannabis retailer. Ganjika House was one of only 25 winners of the recent lottery conducted by the Alcohol and Gaming Commission of Ontario ("AGCO") and is one of the first 5 to receive its Cannabis Retail Operator License and Retail Store Authorization. Ganjika House plans to open its location at 186 Main Street South in Brampton, Ontario , on April 1, 2019 ¹

"The Trichome team has been impressed with the entrepreneurial spirit, commitment and vision of C.G.S. founder and sole shareholder Clint Seukeran ," said Michael Ruscetta , CEO of Trichome. " Ontario represents the largest retail opportunity in Canada . We believe C.G.S. possesses a significant first mover advantage in a constrained regulatory environment and is well-positioned to earn attractive returns on invested capital while being ideally positioned for industry growth and consolidation. Ganjika House represents a bold vision for cannabis retail and Trichome looks forward to partnering with Clint on this unique platform opportunity."

Under the terms of the Financing, Trichome has agreed to provide C.G.S. with up to C$2 million for a period of two years, comprised of a Revolving Credit Facility and Term Loan, both of which are fully secured. The Financing provides Trichome with attractive rates of contractual cash flow and warrants to acquire, for a period of 5 years, a minimum of 10.3% and up to 13.3% of the common shares of C.G.S. should the entire term loan be drawn. C.G.S. may draw up to C$1 million on the Revolving Credit Facility against eligible inventory and will draw half of the Term Loan immediately. 

Corporate Update

Marc Lustig , Chairman of Trichome and Chairman and CEO of founding shareholder Origin House commented, "Michael and the team at Trichome have already made significant progress since the closing of our first outside capital raise in September 2018 . The opportunity to provide specialty finance solutions to companies operating in the growing and increasingly complex global cannabis industry is certainly more robust than our original business plan contemplated. Trichome has a focused pipeline of potential transactions, sourced through its proprietary network, and has started to deploy capital at an accelerated rate, with three new deals signed in the past four weeks. Led by a team with a proven track record of generating strong returns in both private and public markets, I am confident that Trichome will continue to drive value for shareholders while enabling investee companies to execute and grow."

Go-public timing and financing:

On February 14, 2019 , Trichome announced the launch of a non-brokered private placement of subscription receipts (link) (the "Private Placement") in connection with its reverse take-over (the "RTO") of 22 Capital Corp (TSXV:LFC.P). The Private Placement has been well-received by investors and the Company expects to close in early April. The Company expects a shareholder vote in respect of the RTO to occur by the end of the second quarter of 2019 with closing shortly thereafter, subject to receipt of all applicable approvals including the approval of the TSX Venture Exchange.

US Opportunities: 

Given the size and rapid evolution of the cannabis landscape in the US, Trichome has received a substantial amount of inbound deal flow from US operators. With the core of the Company's infrastructure in place and the ability to leverage Origin House's significant US market knowledge, the Company believes that it is uniquely positioned to capitalize on credit market opportunities in the US market. While the Company's pending transaction with 22 Capital on the TSX Venture Exchange currently prohibits such investment activities, Trichome management have been working with counsel to create structures that may enable the Company to pursue these opportunities while complying with its listing obligations. Trichome expects to be able to share additional information in the coming months.