Cresco Labs Inc. (“Cresco Labs” or the “Company“) (CSE:CL) (OTCQX:CRLBF) (FSE:6CQ), a vertically integrated multistate operator and the number one U.S. wholesaler of branded cannabis products, today announced that a final base shelf prospectus, preliminarily filed on February 26th, 2021 (the “Shelf Prospectus”), replacing the Company’s prior shelf prospectus has been receipted with the securities commissions in each of the provinces of Canada. The Company also announced that a corresponding registration statement on Form F-10 (the “Registration Statement” and, together with the Shelf Prospectus, the “MJDS Shelf”) has been deemed effective by the U.S. Securities and Exchange Commission under the U.S./Canada Multijurisdictional Disclosure System.
“As the legislative branch continues to make important, incremental steps toward cannabis banking reform, Cresco Labs is getting prepared to capture the investor demand in the U.S.,” said Charlie Bachtell, CEO of Cresco Labs. “Our U.S. shelf registration statement is now effective and over the coming months we look forward to taking additional steps, such as reporting financials under GAAP, that will help enable us to up-list onto a major U.S. exchange as soon as permitted.”
The Company preliminarily filed this Shelf Prospectus in February 2021 to replace the prior base shelf prospectus that was set to expire in August 2021 and to maintain financial strength and flexibility going forward. The Company will continue its ongoing strategy of maintaining a range of tools for financing opportunities. The MJDS Shelf provides for the offer and sale of the Company’s subordinate voting shares, debt securities, subscription receipts, warrants, and units in both Canada and the U.S.
The Company today also announced a new equity distribution agreement (the “Equity Distribution Agreement”) with Canaccord Genuity Corp. to replace the Equity Distribution Agreement filed in December 2019 due to the expiration of the prior shelf prospectus. Pursuant to this Agreement, the Company may, from time to time, sell up to US$100,000,000 of its subordinate voting shares (“Subordinate Voting Shares”) in Canada (the “ATM Program”).
Since the Subordinate Voting Shares will be distributed at trading prices prevailing at the time of the sale, prices may vary between purchasers and during the period of distribution. The volume and timing of sales, if any, will be determined at the sole discretion of the Company’s management and in accordance with the terms of the Equity Distribution Agreement. Sales of Subordinate Voting Shares, if any, under the ATM Program are anticipated to be made in transactions in Canada that are deemed to be “at-the-market distributions” as defined in National Instrument 44-102 – Shelf Distributions, as sales made directly on the Canadian Securities Exchange or any other recognized Canadian “marketplace” within the meaning of National Instrument 21-101 – Marketplace Operation. The ATM Program is being made pursuant to a Canadian prospectus supplement dated April 23, 2021 (the “Prospectus Supplement“) to the Base Shelf Prospectus.
The Prospectus Supplement (together with the related Base Shelf Prospectus) and Equity Distribution Agreement are available at the Company’s profile on the SEDAR website maintained by the Canadian Securities Administrators at www.sedar.com. The Registration Statement can be found on EDGAR at www.sec.gov.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, Subordinate Voting Shares in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
The Subordinate Voting Shares distributed under the ATM Program have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements.
