Delta 9 Signs One-Year White Label Cannabis Derivative Manufacturing Agreement with Westleaf

WINNIPEG, July 24, 2019 /CNW/ - DELTA 9 CANNABIS INC. (TSXV: DN) (OTCQX: VRNDF) ("Delta 9" or the "Company") is pleased to announce that its subsidiary, Delta 9 Bio-Tech Inc., has entered into a one-year white labeling agreement with Westleaf Inc.("Westleaf") (TSX-V:WL) (OTCQB:WSLFF) to supply approximately $4 million of cannabis derivative products from Westleaf's large-scale extraction and manufacturing facility located in Calgary, known as The Plant. Under the terms of the agreement, the deliveries of cannabis derivative products will begin on October 1, 2019 subject to receipt of final license approval from Health Canada for The Plant, and will continue an initial term of one year. During this initial year, Delta 9 will be required to purchase a minimum of approximately $4 million of various white labeled cannabis derivative products (subject to regulation, such products are expected to include a mix of vape pens, gel caps, tincture oil, and edibles) with an option to increase such amount up to $16 million per year.

"We are looking forward to expanding our product distribution to include cannabis derivative products with the anticipated roll out of additional regulations this fall. When looking at our suite of options for white labeled derivative cannabis products, Westleaf stood out as a clear choice." said John Arbuthnot, President and CEO of Delta 9. "Given Westleaf's menu of existing product formulations and distribution capabilities through their cannabis retail chain, Prairie Records, we view this agreement as positive step in expanding our Delta 9 branded product offerings and distribution footprint."

"This is an important milestone for The Plant and for Westleaf in securing contractual revenue," noted Scott Hurd, President and CEO, Westleaf Inc. "This is the first of what we believe will be many derivative product sales and manufacturing agreements for our facility, Phase I of which is designed to process up to 65,000 kilograms of dried cannabis flower per year." Hurd added that The Plant has an additional 45,000 square feet of space available for expansion which will greatly increase its capacity to formulate and produce the next wave of cannabis derivative products such as vapes, edibles and topicals, once they are legalized later this year.

About Delta 9 Cannabis Inc.

Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the TSX Venture Exchange under the symbol "DN" and on the OTCQX under the symbol VRNDF. For more information, please visit www.delta9.ca.

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.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future.

Forward-looking statements in this news release include statements relating to: (i) commencement of purchase of cannabis derivative products form Westleaf; (ii) changes to laws and regulations regarding cannabis products; and (iii) Delta 9's expansion plans. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including the Company's actual financial results being different from its estimates as well as all risk factors set forth in the annual information form of Delta 9 dated April 30, 2019 which has been filed on SEDAR.

No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

SOURCE Delta 9 Cannabis Inc.

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