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Citizen Stash Reaffirms its Support of the Plan of Arrangement with The Valens Company Inc.

Monday, October 18, 2021 8:45 AM
Citizen Stash Cannabis Corp.

Citizen Stash Shareholders are encouraged to submit their proxies for the Special Meeting of Shareholders and Option holders on Monday, November 1, 2021


VANCOUVER, BC / ACCESSWIRE / October 18, 2021 / Citizen Stash Cannabis Corp. "Citizen Stash") (formerly Experion Holdings Ltd.) (TSXV:CSC)(OTCQB:EXPFF)(FRANKFURT:MB31) today confirmed its continued support of the proposed plan of arrangement (the "Valens Transaction") with The Valens Company Inc. ("Valens"). Following the completion of the Valens Transaction, the combined entity will accelerate Valens' strategic initiative to create a leading global manufacturing platform, capture market share through innovative product launches, and expand on its existing domestic and international distribution network to better capitalize on the global opportunity.

"Citizen Stash continues to believe that the Valens Transaction is the best available option for Citizen Stash shareholders, despite a recent market downturn in the cannabis sector," said Jarrett Malnarich, the Chief Executive Officer of Citizen Stash. "Our belief in the long term value opportunity created through this business combination is supported by the enhanced market share of the combined entity generated from the addition of Citizen Stash's innovative, premium flower brand to the already robust Valens product portfolio. With this transaction, our shareholders have the opportunity to benefit from the future upside of a dynamic top tier cannabis company that in our opinion would be unattainable as a stand-alone company."

Recently there has been a decline in the overall cannabis market and Valens has not been immune to the sector impacts as seen in a decreased share price that reduces the currently implied value of Citizen Stash shares under the Valens Transaction. In particular, the Solactive Cannabis Index indicates that the cannabis sector has experienced an approximate 50% decline since its February 2021 highs and is currently at an 11 month low. Valens has not been immune to the sector impacts as seen in an approximately 35% decrease in Valens' share price since entering into the arrangement agreement with Citizen Stash dated August 30, 2021 (the "Arrangement Agreement"). However, Citizen Stash continues to manage its business for the long term and encourages Citizen Stash shareholders to consider the long-term benefits that the Valens Transaction will offer. Markets are cyclical but Citizen Stash believes that a combined Citizen Stash and Valens entity will be well positioned for strong growth.

The Citizen Stash Board Reaffirms its Unanimous Support for the Valens Transaction

The Citizen Stash board of directors ("Board") reaffirms its unanimous support and determination that the Valens Transaction is and continues to be in the best interests of Citizen Stash. Citizen Stash's Board unanimously recommends that shareholders vote FOR the Valens Transaction by proxy or at the meeting of Citizen Stash shareholders at the upcoming meeting of Citizen Stash's securityholders to be held at the following date, time and location (the "Meeting"):


Monday, November 1, 2021
10:00 a.m. (Pacific time)


As outlined in Citizen Stash's management information circular dated September 28, 2021 (the "Circular"), the benefits of the Valens Transaction are significant:

  • Strategic Review. The Valens Transaction is the result of a robust strategic review process carried out by Citizen Stash and overseen by the Board, which review included a review of, among other things, prevailing market conditions as well as potential alternatives to maximize shareholder value while negotiating a transaction with Valens.
  • Ownership in a Larger, Stronger Company Focused on Cannabis Production. Following completion of the Valens Transaction, Citizen Stash shareholders will have an ownership interest in Valens, which is expected to have an enhanced capital markets profile, and a robust financial profile with a strong balance sheet and financial position in terms of debt, low depreciable capital base and working capital.
  • Exposure to the U.S. and International Opportunities. An ownership interest in Valens provides Citizen Stash shareholders the opportunity to participate in the future growth of the U.S. market through Valens' Green Roads products and the potential for other international opportunities. With Valens, Citizen Stash is expected to be able to better realize the potential of its brands and products as a result of Valens' additional financial resources and expertise regarding logistics, operations, marketing and sales.
  • Financing Requirements. The Board considered its existing level of indebtedness, and the possibility that, in an increasingly competitive cannabis-production industry, Citizen Stash may require additional funding in the future from the debt or equity markets to finance its business and operations. The Citizen Stash Board also considered the risk that any such funding may not be obtained in a reasonable time, or in full, or on terms satisfactory to Citizen Stash.
  • Lower Cost of Capital. In the Board's view, Citizen Stash and Citizen Stash shareholders should ultimately benefit from what it believes to be a lower cost of capital at Valens than at Citizen Stash.

The Board, together with senior management, have also considered various opportunities, including equity financing, strategic investments, business combinations, facility expansion, acquisitions and other strategic opportunities with various industry participants and other industry partners. These opportunities were evaluated against a host of relevant factors, including the relative merits and risks of Citizen Stash continuing as a standalone business enterprise, with particular emphasis on whether the pursuit of such opportunities would be in the best interests of Citizen Stash and Citizen Stash shareholders. Senior management of Citizen Stash and the Board also regularly reviewed and considered market conditions and other factors that affect the business, operations, financial conditions and affairs of Citizen Stash, including its growth and sustainability. The execution and public announcement of the Valens Transaction marked a milestone event in Citizen Stash's sustained efforts to identify viable opportunities to enhance shareholder value and provide liquidity to Citizen Stash shareholders.

A copy of the Circular has been mailed to shareholders, along with the necessary voting forms. Citizen Stash encourages shareholders to carefully read the Circular and to vote their shares. Completed proxies must be submitted prior to 10:00 a.m. (Pacific time) on October 28, 2021.

Citizen Stash shareholders are encouraged to consult with their investment dealer, broker, bank manager, lawyer or other professional advisor should they have questions with respect to the matters discussed in this press release or the Circular. Citizen Stash shareholders that require further assistance may also contact investor relations at [email protected]

About Citizen Stash Cannabis Corp.

Citizen Stash is the parent company of Experion Biotechnologies Inc., a Health Canada licensed cultivator and processor of cannabis, based in Mission, BC.

Citizen Stash is best known as a rapidly growing adult-use premium cannabis brand offered nationally in seven provinces and territories. Citizen Stash has invested and developed a portfolio of premium cannabis genetics, strains and products with a unique growth strategy incorporating a highly scalable aggregation and distribution business model to drive revenues across its national sales network.

Citizen Stash trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol "CSC" on the OTCQB Venture under the symbol "EXPFF" and on the Frankfurt Stock Exchange under the symbol "MB31".

For further information, please visit Citizen Stash's website or contact Investor Relations, Email: [email protected]

Notice Regarding Forward Looking Statements

This news release includes certain statements that constitute "forward-looking statements", and "forward-looking information" within the meaning of applicable securities laws (collectively "forward-looking statements"). When used in this news release, words such as "believe", "continue", "expect", "future", "likely", "opportunity", "potential" and similar expressions are intended to identify these forward-looking statements as well as phrases or statements that certain actions, events or results "could", "may", "should", "will", "would" or the negative connotation of such terms. As well, forward-looking statements may relate to future outlook and anticipated events, such as the timing, location and business of the Meeting and the timing, consummation and benefits of the Valens Transaction. These forward-looking statements involve numerous risks and uncertainties, including those relating to required securityholder and regulatory approvals, exercise of any termination rights under the Arrangement Agreement, meeting other conditions in the Arrangement Agreement, material adverse effects on the business, properties and assets of Valens and Citizen Stash, whether any superior proposal will be made and such other risk factors detailed from time to time in Citizen Stash's public disclosure documents including, without limitation, those risks identified in the Circular and Citizen Stash's management's discussion and analysis for the year ended November 30, 2020, which are available on SEDAR at Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, Citizen Stash assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If Citizen Stash updates any one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. All forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.

Information contained on any website or document referred to or hyperlinked in this news release shall not be deemed to form part of this news release. All information concerning Valens has been prepared solely by Valens and, as such, Citizen Stash does not assume any obligation or provide any representations regarding the statements made therein.

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

SOURCE: Citizen Stash Cannabis Corp.

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