Alcanna and YSS announces closing of subscription receipt private placement

On January 18, 2021, Alcanna Inc. ;("Alcanna") and YSS Corp. (“YSS”) announced the execution of a business combination agreement pursuant to which Alcanna will spin-out its retail cannabis business and combine with YSS to launch a new discount-focused cannabis retailer that is expected to be renamed Nova Cannabis Inc. (“New Nova”), in an all-stock transaction that will result in the reverse take-over of YSS by Alcanna.

In connection with the business combination, Alcanna and YSS announced a concurrent brokered private placement equity financing of at least 8,333,333 subscription receipts at a price of C$3.00 for aggregate gross proceeds of minimum C$25 million to be conducted by by Alcanna Cannabis Stores Finance Ltd. (“ACS FinCo”), a subsidiary of Alcanna

Under the agreement, each subscription receipt automatically converts into one common share of ACS FinCo following the successful closing of the financing and the related business combination, at which point ACS FinCo would amalgamate with 2316416 Alberta Ltd., a wholly-owned subsidiary of YSS. Pursuant to the amalgamation agreement, each holder of ACS FinCo shares issued upon conversion of the subscription receipts will receive one post-consolidation YSS share for each ACS FinCo share held. Following the amalgamation, the resulting company is expected to be renamed Nova Cannabis Inc. ("New Nova").

As a result of excess demand, the offering was upsized to C$40 million on January 19, 2021.

Alcanna and YSS announced the closing of the private placement of subscription receipts on February 10, 2021 for aggregate proceeds of C$40,002,000. Eight Capital and Cormark Securities Inc. acted as joint bookrunner on the financing.

Following closing of the private placement, and pending completion of the amalgamation, it is anticipated that Alcanna will hold approximately 63% of New Nova shares, with current YSS shareholders holding approximately 13%, and new subscribers under the private placement holding approximately 24%.

Further information can be found on Globe Newswire’s website.

Alcanna, a corporation existing under the Canada Business Corporations Act, is one of the largest private sector retailers of alcohol and cannabis in North America and the largest in Canada by number of stores – operating 238 locations in Alberta and British Columbia.

YSS, with retail operations under the YSS™ and Sweet Tree™ brands, has developed a retail cannabis business across Alberta and in Saskatchewan by operating 19 licensed retail stores in Alberta and Saskatchewan.