Bhang Inc. Announces New Partnership & Closing of First Tranche of Private Placement Financing

Bhang press release

MIAMI, Feb. 10, 2020 (GLOBE NEWSWIRE) — Bhang Inc. (“Bhang” or the “Company“) (CSE: BHNG) (OTCQX: BHNGF), a global cannabis CPG brand company with an extensive, award-winning portfolio of products, announced today that it has received a commitment from long-term Bhang investor, Cannabis Growth Opportunity Corporation (CSE: CGOC) (“CGOC”), to invest up to CDN$1,500,000 million in a non-brokered private placement offering (the “Offering“) of units (the “Units”) with each Unit comprising of one subordinate voting share in the capital of the Company (the “Shares“) and one share purchase warrant (the “Warrants“). Each Warrant is exercisable into one Share at a price equal to a 25% premium to the Unit price for a period of 24 months. The Company has the right to accelerate the expiry of the Warrants to thirty (30) days following written notice to the holder if the Shares close at or above CDN$0.25 per share for a period of ten (10) consecutive trading days on the Canadian Securities Exchange.

The Company intends to use proceeds from the Offering to drive Bhang’s direct-to-consumer growth in California, the Company’s anticipated expansion across three more U.S. states in 2020, as well as the launch of the new Red Ace Organics refreshing functional beverage line.

The first tranche of the Offering for gross proceeds of approximately CDN$500,000 was completed today with 3,571,428 Units being issued by Bhang at a price of CDN$0.14 per Unit. The Units expected to be sold under the second tranche for gross proceeds of approximately CDN$500,000 will be at a price per Unit equal to the 20-day volume weighted average price (“VWAP”) calculated as of the last closing price prior to the closing of the second tranche. The Units expected to be sold under the third tranche for gross proceeds of approximately CDN$500,000 will be at a price per Unit equal to the 20-day VWAP calculated as of the last closing price prior to the closing of the third tranche. It is expected that the second and third tranches of the Offering will be completed in the next 30 days upon meeting the conditions in the subscription agreement involving the sale of certain Bhang products.

In connection with the Offering, Bhang has agreed to provide CGOC with a pre-emptive right to participate in future offerings of Bhang securities in order to maintain its percentage of ownership at the time of such offering. In addition, Bhang has agreed to nominate one board member recommended by CGOC at future shareholder meetings that are called to elect directors and the ability, while CGOC does not have its nominee on the Company’s board, to appoint a board observer.

In addition, CGOC and Bhang have entered into subscription agreements to exchange approximately CDN$2,000,000 worth of each other’s shares (the “Share Swap”). Under the terms of the Share-Swap, Bhang received 3,149,606 common shares of CGOC at a deemed price of $0.635 per share, and CGOC received 14,285,714 Shares at a deemed price of $0.14 per share. As part of the Share Swap, each of CGOC and Bhang have signed a voting and resale agreement providing that each party will be required to vote the shares acquired under the Share Swap as recommended by the other party and will be restricted from trading the shares for a period of 18 months.

All securities issued pursuant to the Offering and Share Swap are subject to a mandatory hold period of four months and a day under applicable Canadian securities laws.

The investment strengthens the existing relationship between Bhang and CGOC and the continuing support for Bhang’s award-winning brand portfolio of cannabis, hemp-derived CBD and non-cannabis products inclusive of Red Ace Organics. “The CGOC investment is a vote of confidence for Bhang’s business plan, positioning the Company for sustainable, long-term growth” said Jamie Pearson, Bhang’s President and CEO. “We look forward to providing updates throughout 2020 and putting this capital infusion to work to achieve significant milestones.”

Sean Conacher, Chief Executive Officer of CGOC commented“We have been watching Bhang very closely. Their plan is solid and we look forward to helping use both our capital and our portfolio resources to help Bhang continue to build a great business.”

Early Warning

Bhang has acquired beneficial ownership of 3,149,606 common shares of CGOC, representing over 10% of that class. The common shares were issued at a deemed value $0.635 per share. Immediately prior to the acquisition, Bhang owned or controlled no securities of CGOC.

This disclosure is provided pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires a report to be filed with regulatory authorities in each of the jurisdictions in which CGOC is a reporting issuer containing information with respect to the foregoing matters (the “Early Warning Report“). A copy of the Early Warning Report will appear with CGOC’s filings on the System for Electronic Document Analysis and Retrieval (SEDAR).

Bhang’s registered office is located at 40 King Street West, Suite 5800, Toronto, Ontario, M5H 3S1.

About Bhang
Bhang is committed to delivering exceptional sensory experiences to consumers at every point in their cannabis journey through its award-winning portfolio of brands. Bhang is a trusted global cannabis company with an extensive portfolio of over 100 cannabis, hemp-derived CBD and terpene products, including chocolates, pre-rolls, gums, and beverages through its wholly-owned Red Ace Organics division, among others. Since 2010, Bhang has mastered the art of harnessing mutually-beneficial partnerships to bring safe, consistent and delicious products to the world. Learn more at and purchase our award-winning CBD products at


This press release contains statements which constitute “forward‐looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward‐ looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and include information regarding: (i) statements regarding the future direction of the Company (ii) the ability of the Company to successfully achieve its business and financial objectives, (iii) plans for expansion of the Company into new jurisdictions, and (iv) expectations for other economic, business, and/or competitive factors. Investors are cautioned that forward‐looking information is not based on historical facts but instead reflect the Company’s management’s expectations, estimates or projections concerning the business of the Company’s future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward‐looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements. Among the key factors that could cause actual results to differ materially from those projected in the forward‐looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; and in particular in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; decreases in the prevailing prices for cannabis and hemp products in the markets that the Company operates in; adverse changes in applicable laws; or adverse changes in the application or enforcement of current laws; the cannabis market is highly regulated and those regulations and enforcement priorities of governmental authorities may change; compliance with extensive government regulation and related costs; and other risks described in the Company’s Listing Statement dated July 9, 2019 and filed on Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward‐looking information except as otherwise required by applicable law.

This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and may not be offered or sold within the United States or to any “U.S. Person” (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

The Canadian Securities Exchange has not reviewed, approved or disapproved the ‎content of this news release. ‎

Jamie L. Pearson
President & CEO
Bhang Inc.

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