Red White & Bloom Brands Provides Corporate Update

Red White & Bloom Brands Inc. is pleased to advise on April 28, 2020, it completed its go public transaction by way of a reverse takeover of Tidal Royalty Corp. (“Tidal”), and on June 5, 2020 it commenced trading on the Canadian Securities Exchange (the “CSE”) under the symbol RWB and on the OTC under the symbol TDRYD (the “Transaction”).

In connection with the Transaction, certain shareholders, including management and founders of the Company, entered into voluntary escrow and/or escrow and leak out agreements totaling 36,844,823 Common shares and 3,200,000 Options to purchase Common shares. Additionally, 108,726,349 Series II Preferred shares and Options to acquire 7,401,429 Series II Preferred shares are restricted for 7 months. Lastly, RWB’s Michigan investee shareholders have agreed to participate in a voluntary share escrow agreement for the shares to be issued in connection with the closing of the acquisition. Collectively these agreements mean that over 70% of the fully diluted shares of the Company are in some form of escrow, lockup or subject to a trading restriction.  Additional details of the Transaction can be found in the press release issued on April 28, 2020 and in the Listing Statement posted on the Company’s disclosure hall with the CSE.

RWB’s U.S. footprint currently spans Illinois and Massachusetts through its investee, Michigan (see below). With a combined cultivation footprint of over 4,000,000 sf, 600 employees and 22 individual facilities, RWB’s mandate is to operate at scale in select states that provide the greatest return for our partners and shareholders.

Michigan:

RWB has advanced in excess of US$75 million to its investee in Michigan. The Company does not report the financial performance of the investee in its financials, as it has not yet exercised its irrevocable option to acquire 100% ownership of the investee. The Company intends to exercise this option, subject to the successful completion of RWB’s licensing to operate within the state of Michigan; which application is in process now.

The Michigan investee currently holds numerous licenses within Michigan covering the entire cannabis value chain; they are strategically located throughout the state to service the majority of its 10 million residents. The investee currently owns the assets of 18 dispensaries (referred to as provisioning centers in Michigan), 10 of these operating dispensaries have achieved approximately US$70 million in trailing revenues¹ over the last 12 months. The remaining 8 dispensaries are at various stages of development, are expected to open in calendar 2020 and be accretive to the current revenue run-rate. With the COVID-19 pandemic and state shelter in place orders taking effect, the investee was able to quickly pivot the business to include delivery and curb-side pick-up and within days saw an actual increase in revenue from the stores while providing a safe environment with appropriate social distancing and health and safety procedures in place for its employees and customers. 

RWB’s Michigan Investee is vertically integrated with two operational indoor cultivation facilities, an outdoor cultivation facility, and various additional cultivation and manufacturing locations coming on stream to increase their margins and meet their demands for 2020 and beyond.

In addition, RWB entered into a definitive agreement as announced on June 5, 2020, with High Times® to acquire the rights to exclusively brand both medical and recreational dispensaries and cannabis products within the States of Michigan, Illinois and Florida. RWB plans to sub-license its rights to its investee in Michigan, subject to regulatory approval and closing of the High Times® transaction.

Illinois:

RWB’s Illinois subsidiaries own and operate America’s largest indoor CBD cultivation facility which is 3,600,000 sf and sits on 236 prime agricultural acres in Putnam County, IL.

The facility is focused on producing high grade cannabinoids, complete with Certificate of Origin documentation, on a year-round, consistent basis. The facility was formerly a premier producer in the floricultural market for America’s big box national chains and has maintained the relationships and certifications to continue those business relationships for consideration of our national CBD product strategy. The facility has also secured various distributors, purchase orders and supply/off-take agreements for premium whole flower within the United States and CBD distillate internationally with an estimated value of over US$20 million.

Massachusetts:

RWB’s Massachusetts assets were developed initially by Tidal and now form part of the assets of the Company as a result of closing the Transaction. These assets consist of 3 cannabis licenses; 2 of which are for cultivation and 1 is for processing, and 2.8 acres of development land. RWB is looking at a number of strategic options for these assets for 2020.

About Red White & Bloom Brands Inc.

The Company is positioning itself to be one of the top three multi-state cannabis operators active in the U.S. legal cannabis and hemp sector. RWB is predominately focusing its investments on major markets in the United States, including Michigan, Illinois, Massachusetts, California, and Florida in respect to cannabis and the entire US for legal hemp CBD based products.

For more information about Red White & Bloom Brands Inc., please contact:

Tyler Troup, Managing Director
Circadian Group IR
IR@RedWhiteBloom.com

Visit us on the web: www.RedWhiteBloom.com

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