James E. Wagner Cultivation Announces Entering Into of Non-Binding Term Sheet With Trichome Financial Corp. for Loan of $4 Mi...

James E. Wagner Cultivation Corporation (“

JWC

” or the “

Corporation

”) (TSXV: JWCA), is pleased to announce that on October 3, 2019, JWC entered into a non-binding, indicative term sheet with Trichome Financial Corp. (“

Trichome Financial

”), summarizing the principal terms and conditions of a proposed loan of $4,000,000 to be advanced by Trichome Financial to JWC in two tranches (the “

Term Sheet

”).

Pursuant to the Term Sheet, the first tranche, in the amount of $2,850,000 (the “First Tranche Advance”), shall be advanced by Trichome Financial to JWC upon the execution of a definitive agreement between the parties (the “Definitive Agreement”), scheduled to take place on or before October 18, 2019 (such date or such other date as agreed by the parties, the “Closing Date”). The second tranche, in the amount of $1,150,000, shall be advanced by Trichome Financial to JWC upon satisfaction of certain conditions precedent in favour of Trichome Financial (the “Second Tranche Advance”, and together with the First Tranche Advance, the “Loan”).

The term of the Loan shall be for two years calculated from the Closing Date, and shall be payable in full upon maturity. Interest on the Loan shall be paid monthly in cash at a rate of 9.25% per annum on the then outstanding amount of the Loan, with all outstanding interest payable upon maturity. JWC shall use the net proceeds of the Loan to finance construction and capital expenditures related to phases 2C and 3 of its facility located at 530 Manitou Drive in Kitchener, Ontario and for general working capital requirements (the “Use of Proceeds”). The Use of Proceeds shall be further defined in the Definitive Agreement. As security for the Loan, JWC shall provide Trichome Financial with a perfected, first lien on current and future tangible and intangible assets ‎and equity interests (including a share pledge from all active ‎subsidiaries) of JWC and each of the direct and indirect wholly owned subsidiaries organized ‎under JWC. In the event JWC, for whatever reason, cannot or elects not to close the First Tranche Advance portion of the Loan on or before the Closing Date, or any mutual extension thereof, JWC shall pay Trichome Financial a cash fee in the amount equal to 10% of the number of Bonus Warrants that would have been issued as Additional Consideration multiplied by the Exercise Price, subject to the option of being settled in warrants of JWC in accordance with TSX Venture Exchange (“TSXV”) Policy 4.3 – Shares for Debt, should the need arise.

‎For greater certainty, the Loan shall be in ‎addition to the $3,500,000 term loan previously advanced by Trichome Financial to JWC, pursuant to the previously disclosed loan agreement dated ‎February 19, 2019.‎

As additional consideration for providing the Loan (the “Additional Consideration”) and pursuant to TSXV Policy 5.1 – Loans, Loan Bonuses, Finder’s Fees and Commissions, JWC intends issue to Trichome Financial warrants to purchase common shares of JWC (the “Bonus Warrants”) in an amount equal to ‎50% of the Loan divided by the lower of a 5% premium to: (i) the ‎price per share of JWCA.V on October 3, 2019; and (ii) the price per share of JWCA.V on the last trading day immediately preceding the Closing Date, which lower amount shall be the exercise price at which each Bonus Warrant shall be exercisable into common shares of JWC (the “Exercise Price”). Based on the closing price of JWCA.V on October 3, 2019, the Exercise Price would be $0.5565, and the amount of Bonus Warrants given as the Additional Consideration with respect to the Loan would be 3,593,890 Bonus Warrants. Such amount is below the maximum number of warrants that may be granted pursuant to Section 2.2(b) of TSXV Policy 5.1 with respect to the First Tranche Advance which, as of market close on October 3, 2019, is 5,027,830 warrants. ‎The Bonus Warrants will be exercisable for a period of two years from the date of issuance, which shall be the Closing Date. ‎

About James E. Wagner Cultivation Corporation

JWC’s wholly owned subsidiary is a Licensed Producer under the Cannabis Regulations, formerly the Access to Cannabis for Medical Purposes Regulations (“ACMPR”). JWC is a premium cannabis brand, focusing on producing clean, consistent cannabis. JWC uses an advanced and proprietary Dual Droplet aeroponic platform named GrowthSTORM™. JWC was founded as a family company and is based on family values. JWC began as a collective of patients and growers under the Marihuana Medical Access Regulations (the precursor to ACMPR). Since its inception, JWC has remained focused on providing the best possible patient experience. JWC’s operations are based in Kitchener, Ontario. Learn more at www.jwc.ca.

For additional information about JWC, please refer to JWC’s profile on SEDAR (www.sedar.com) or the Corporation’s website: www.jwc.ca.

Notice regarding forward-looking statements:

This press release contains statements including forward-looking information for purposes of applicable securities laws (“forward-looking statements”) about JWC and its business and operations which include, among other things, statements regarding JWC and any information with respect to the entering into of a loan agreement, the availability of funds thereunder, and the issuance of warrants by the Corporation to the lender pursuant to the loan agreement. The forward-looking information contained in this news release are based on the Corporation’s current internal expectations, estimates, projections, assumptions, and beliefs and views of future events which management believes to be reasonable in the circumstances, including expectations and assumptions regarding: general economic conditions, the expected timing and cost of expanding the Corporation’s production capacity, the internal opportunities, the development of new products and product formats, the Corporation’s ability to retain key personnel, the Corporation’s ability to continue investing in its infrastructure to support growth, the impact of competition, trends in the Canadian cannabis industry and changes in laws, rules, and events, performance or results, and will not necessarily be accurate indications as to whether, or the times at which, such events, performance or results will occur or be achieved. The forward-looking statements can be identified by the use of such words as “anticipated”, “will”, “expected”, “approximately”, “may”, “could”, “would” or similar words and phrases. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those implied in the forward-looking statements. For example, risks include risks regarding the cannabis industry, economic factors, the equity markets generally, funding and grant related risks and risks associated with growth and competition as well as the risks identified in the Corporation’s Filing Statement and other filings with the Canadian securities regulators, which filings are available at www.sedar.com. Although JWC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release and are based on current assumptions which management believes to be reasonable. The Corporation disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For more information about this release, please contact:

Nathan Woodworth, the President and Chief Executive Officer Email: [e-mail] Phone: [phone] x421

Investor RelationsJonathan Leuchs, CMA   ‎Tel [phone] ‎[e-mail]