Origin House Updates Investors on Cresco Labs Merger

Origin House (CSE: OH) (OTCQX: ORHOF) provided investors with a corporate update this morning on its planned merger with fellow U.S. multi-state operator (MSO) Cresco Labs (CSE: CL) (OTCQX: CRLBF). The company also provided an update on the replacement of its debt facility and the current U.S. Antitrust Review in connection with their pending Cresco Labs Merger.

U.S. Antitrust Review Details:

Origin House and Cresco Labs both received requests from the United States Department of Justice Antitrust Division for additional information.
- Pursuant to the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
- Initially disclosed by Origin House here.
- In connection with their previously announced merger plans.
The issuance of Second Requests is a statutory tool used by the DOJ to investigate pending transactions.
Purpose of the Second Requests:
- To extend the waiting period imposed by the HSR Act.
  - Until 30 days after both Origin House and Cresco Labs have substantially complied with their respective Second Requests.
  - Except if Origin House or Cresco Labs voluntarily extends that period or if the DOJ terminates it before.
Both companies are fully cooperating with the DOJ’s investigation.
Both companies are actively discussing the Second Requests with the DOJ.
Both companies have put forth the resources to completely respond to the Second Requests in a quick and efficient manner.
The 2 companies businesses are very complementary with minimal area of overlap.
- This is not material to either the strategic or financial rationale of the pending merger.
Both companies are confident that regulatory approvals will be obtained and the merger will proceed as planned.
Origin House and Cresco Labs both look forward to completing their merger.

“Origin House and Cresco Labs remain committed to completing the transaction and are confident that we will be able to submit all requested documentation to the Department of Justice as soon as possible. This combination of Origin House’s and Cresco Labs’ businesses represents an exciting opportunity for shareholders of both companies and we look forward to closing,” said Marc Lustig, Chairman, and CEO of Origin House in a previous press release dated June 11, 2019.

Source: Shutterstock

New $12 Million Debt Facility:

Origin House also announced the execution of a binding term sheet with Opaskwayak Cree Nation (OCN) for $12 million in debt financing.
The capital from this deal is expected to be used by Origin House for:
- The construction and expansion of its 2 premium craft cannabis production facilities in Sonoma County California (Cub City and FloraCal).
- For general corporate purposes.
- For costs associated with closing the Cresco merger.
This financing replaces the previously announced $12 million debt facility with Sprott.
- The Sprott deal has been terminated.
$3.5 million of the OCN debt facility has already been funded.
- The remaining balance is expected to be advanced to Origin House in the coming days.
Origin House’s consolidated cash balance was CDN $39.3 million at the end of Q1 2019.

OCN Debt Facility Terms:

5% commitment fee.
Interest rate of 10% per annum on the amount advanced.
Matures on December 31, 2019.
The advance is evidenced by a promissory note.
- Promissory note will be replaced by definitive loan and security documents once finalized.

Origin House also announced the shareholder approval obtained at their special meeting held on June 11, 2019, that allowed Origin House to amended its articles to create an unlimited number of subordinate voting shares. Each of the subordinate voting shares is convertible into 0.000001 Origin House common shares. In accordance with the company’s information circular dated May 13, 2019, Origin House intends to issue the subordinate voting shares to company officers that are not United States residents.

Additionally, on June 28, 2019, Origin House issued 50,000,000 subordinate voting shares to company Chairman and CEO Marc Lustig. The 50 million shares were issued to Lustig as an award for his past services to the company. The shares were issued at a deemed issue price of CDN $0.00000821 per subordinate voting share for an aggregate deemed issue price of CDN $410.50. The subordinate voting shares issued to Lustig are convertible into, in the aggregate, 50 Origin House common shares. The new shares are subject to a customary four-month hold period.

Investors looking for additional information on Origin House and the Cresco Labs Merger are encouraged to visit the company’s website here.

Additional investor due diligence links: Origin House IR Website & Origin House Investor Deck

Stay up to date with all things Origin House Merger by following them on social media: Facebook, Twitter, Instagram, and LinkedIn

About Origin House:

Origin House (CSE: OH) (OTCQX: ORHOF) is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. Origin House’s foundation is in California, the world’s largest regulated cannabis market, where it delivers over 130 branded cannabis products from 50+ brands to the majority of licensed dispensaries. Origin House’s brand development platform is operated out of five licensed facilities located across California and provides distribution, manufacturing, cultivation and marketing services for its brand partners. Origin House is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke. Origin House is the registered business name of CannaRoyalty Corp.

Read the full Origin House Merger press release