Halo Provides Update On 1600 Acre California Farm

Triangle Canna and the Farm OpCo are in the process of submitting applications to the California Department of Food and Agriculture for up to 330 California state cannabis cultivation licenses, and have already submitted an application to Lake County, California, for an “early activation” cannabis cultivation permit which, upon receipt, would entitle Triangle Canna to cultivate cannabis on up to 80 acres of the Farm.

Triangle intends to complete a financing by filing an offering statement under Regulation A+ to raise up to $75M, subject to qualification by the U.S. Securities and Exchange Commission. Triangle also intends to pursue a listing of its common stock on a recognized North American stock exchange following the completion of its proposed Regulation A+ financing.

Kiran Sidhu, CEO of Halo Collective commented: “When fully operational the Farm will be the largest mixed use cannabis growing operation in California1. We expect that Triangle will become a significant cultivation player in the United States.” Sidhu continued, “Halo will benefit from its relationship with Triangle as it will provide the Company with additional access to high quality cannabis for our expansion plans in California, to ensure a full, steady supply for the FlowerShop* product line and Halo’s planned three Los Angeles dispensaries. The Company expects to also derive meaningful value from its ownership of Triangle common stock, the rents paid to LCNH, and land appreciation as the Farm is developed and permitted.”


1 Based on current active licenses in California as reported by the Bureau of Cannabis Control

Operational Plan

Subject to the receipt of the early activation license, Triangle Canna plans to cultivate two harvests of 60 acres of premium outdoor cannabis flower per calendar year. In 2021, Triangle Canna plans to initially harvest 10 acres in the summer, followed by a re-plant of 60 acres of full-term premium outdoor plants. The expected yields of the summer harvest are in the range of 800-1,000 pounds of finished flower per acre, while the full-term harvest yields are expected to range between 1,800-2,200 pounds per acre. Triangle expects to harvest over 100,000 pounds of high-grade flower in 2021. Cannabis Benchmarks reported that the average spot price for outdoor grown flower in the US was $800/lb in the week ending February 12, 2021.2

In 2022, Triangle Canna plans to add 20 acres of state-of-the-art greenhouses which will have the anticipated capacity to harvest an additional 64,000 pounds of finished flower annually on a perpetual basis. Cannabis Benchmarks reported that the average spot price for greenhouse grown flower in the US was $1,306/lb in the week ending February 12, 2021.3

In addition to the finished flower outputs described above, Triangle Canna plans to produce trim that could be used for concentrates or pre-rolls, which could add up to an additional 10,000 lbs and 80,000 lbs of biomass respectively in 2021 and 2022.

Additional Transaction Details

Triangle plans to file an offering statement under Regulation A+, subject to qualification by the U.S. Securities and Exchange Commission. Triangle has engaged the law firm of Kaufman McGowan PLLC, highly experienced U.S. securities attorneys with extensive cannabis industry and Regulation A+ experience, as its U.S. securities counsel, and has engaged Grassi & Co., a PCAOB-registered accounting firm, as its independent auditors.

Halo and Green Matter have provided start-up funding to Triangle and the Farm OpCo through their initial $44,000 capital contributions and through an unsecured Line of Credit Agreement pursuant to which they each agreed to lend up to $600,000 to Triangle and the Farm OpCo. PSG and Green Matter have also each loaned $424,322.50 to Triangle Canna pursuant to a line of credit. Europa has also funded these activities through its initial $12,000 capital contribution and by advancing $168,000 of $300,000 available to Triangle and Farm OpCo pursuant to an unsecured promissory note. These funds will be used for permit and license applications, consulting fees, drilling water wells, and building roads on the Farm.

The Farm OpCo has entered into product purchase agreements (the “Product Purchase Agreements”) with both Capital City Healthcare LLC, an affiliate of Green Matter, and Mendocino Distribution and Transportation, LLC, a subsidiary of the Company, for the 2021 and 2022 seasons. Each Product Purchase Agreement provides that the purchaser will purchase a minimum of 25% of all cannabis produced by the Farm OpCo during the term of the agreement.

LCNH and a wholly-owned subsidiary of Triangle Canna (the “Farm OpCo”) have also entered into a commercial lease agreement (the “Lease”) pursuant to which LCNH will lease to the Farm OpCo four separate parcels of property comprising the Farm, as well as certain buildings, structures, and improvements, in exchange for base rent of $55,000 per month, subject to escalation to $210,000 per month and $280,000 per month following the issuance of certain permits and the achievement of other milestones. Farm OpCo is also required to pay success fees to LCNH of $5,000,000 on achievement of licensing milestones, as well as lease term renewals.

In addition to the Company, the initial shareholders of Triangle Canna are Green Matter, which also owns 44% of the issued and outstanding shares of Triangle Canna, as well as Europa Group USA, LLC (“Europa”) and Anil Beri, who own 9% and 3%, respectively, of the initial issued and outstanding shares of Triangle Canna, all unrelated parties to the Company.

About Halo

Halo is a leading, vertically integrated cannabis company that cultivates, extracts, manufactures and distributes quality cannabis flower, oils and concentrates, and has sold approximately eight million grams of oils and concentrates since inception. Halo continues to evolve its business and scale efficiently, partnering with trustworthy leaders in the industry, who value the Company’s operational expertise in bringing top-tier products to market. Current growth includes expansion in key U.S. markets, the United Kingdom, Africa, the Republic of Malta in partnership with MedCan Ltd., and planned expansion into the Canadian retail market.

Halo is led by a strong, diverse and innovative management team with deep industry knowledge and blue-chip experience. The company is currently operating in the U.S. in California, Oregon and Nevada. The Company sells cannabis products principally to dispensaries under its own brands Hush, Mojave, Exhale, and under partnership or license with OG DNA Genetics, Terphogz (doing business as Zkittlez™), Winberry Farms and FlowerShop.

As part of continued expansion and vertical integration in the U.S., Halo boasts several grow operations throughout Oregon and California. In Oregon, the Company has a combined seven acres of outdoor cultivation, including East Evans Creek, a six-acre grow site in Jackson County, and Winberry Farms, a one-acre grow site in Lane County. In California, the Company is building out Ukiah Ventures, a planned 30,000-square-foot indoor grow, processing and manufacturing facility, including up to an additional five acres of industrial land to expand.
Recently, the Company has entered into a non-binding letter of intent with Red Light Holland Corp. for the purpose of creating a joint venture to become a licensed psilocybin manufacturer to supply psilocybin products to licensed service centers in the State of Oregon.

Internationally, the Company is currently cultivating cannabis at Bophelo Bioscience & Wellness (Pty) Ltd (“Bophelo”) in Lesotho, Africa, which holds one of the largest marijuana cultivation licenses in Africa with a future capacity of up to 495 acres. To further Halo’s global presence, the Company recently acquired cannabis-based product for medicinal use (“CBPM”) importation and distribution licensing in the United Kingdom via cannabis suppliers Canmart Ltd. Halo expects the cultivation and manufacturing operations of Bophelo, combined with the importation and distribution capabilities of Canmart, to drive growth of a well-positioned business to serve the U.K. market.

For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.

About Green Matter

As the sister company of Humboldt Standard, which is comprised of the same founders, GMH has an enormous breadth of cultivation experience and owns a valuable library of cannabis genetics. Humboldt Standard maintains a large a following on Instagram (22,000 followers), and is well-known in Northern California as an industry leader in the cannabis space. After several years of operating a caregiver/coop model, in 2017 Humboldt Standard launched what was then the largest, licensed cultivation operation in California, known as The Mill, in Humboldt County, that totaled an unprecedented 8.5 acres.

Humboldt Standard features award-winning strains that place it among the best-known and most recognized brands in the California market. GMH continues to grow each year, using the finest organic ingredients and artisanal practices to produce the look, taste, and THC content of the top-shelf cannabis for which they are known. GMH currently farms twenty-four acres of licensed cannabis operations, spread out over five separate farms in Northern California, that have been and will be harvested in 2020.

As an independent, family-run, Humboldt-based business, GMH maintains vital roots in the community, while accessing the broader California market through one of the largest distribution centers in the state, a 34,000 sq. ft. facility with 172,000 cubic feet of refrigerated space. There is no other facility like it in all of California. GMH’s expertise extends beyond growing, drying, trimming, harvesting and packaging; it also operates both type 6 (non-volatile for distillate) and type 7 (volatile for wax and hash) extraction facilities.

GMH (and Humboldt Standard) founders, Jed Morris and Josiah Spohn, are also part-owners of Connected Cannabis, a highly respected leader in the cannabis space (with 162,000 Instagram followers), that competes with Cookies in a rare echelon of companies known for their quality strains. This relationship provides GMH a large customer in Connected Cannabis, further insuring the relevance and longevity of the company in California and worldwide. GMH also engages in international operations through its subsidiary GMH, which is currently engaged in the ambitious initiatives to found and operate the first legal hemp farms in Thailand, Malaysia and other countries; Green Matter Global Thailand S.A. is poised to plant the first legal hemp and medicinal THC farms in Thailand in 2021.

Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein include, but are not limited to, statements regarding the proposed licensing and development of the Farm, the anticipated capacity and yield of cannabis from the Farm, the proposed financing and stock exchange listing of Triangle Canna, the Company’s prospects and proposed distribution of CBPM’s in the UK, Canmart’s importation of cannabis products, the granting of licenses and accreditations to Bophelo and Canmart, the expected size and capabilities of the final facility planned at Ukiah Ventures, the size of Halo’s planned cultivation facility in Northern California and the ability of Bophelo and Canmart to serve the U.K. market.

By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: delays in obtaining required approvals from regulators, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company’s annual information form dated April 16, 2020 and available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.

Third Party Information

This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.

SOURCE Halo Collective Inc.

For further information: Halo Collective, Investor Relations, [email protected], www.haloco.com/investors

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