Canna 8 Investment Trust Provides Update on the Proposed Qualifying Transaction with Real Industrial Investment Trust

Toronto, Ontario--(Newsfile Corp. - September 18, 2020) - Canna 8 Investment Trust (TSXV: RCR.P) ("Canna 8") is pleased to provide an update on its previously announced proposal for a Qualifying Transaction (the "Proposed Transaction") with Real Industrial Investment Trust ("Real Industrial"), a trust formed pursuant to the laws of the Province of Ontario.

Canna 8's prior news release of April 17, 2020 noted that Canna 8 has entered into a letter of intent (the "LOI") with Real Industrial Investment Trust ("Real Industrial") whereby Canna 8 and Real Industrial will complete an arrangement, merger, unit exchange or similar transaction to ultimately form the resulting issuer (the "Resulting Issuer").

Subject to TSX Venture Exchange (the "TSXV") approval, it is intended that the Proposed Transaction will constitute Canna 8's "Qualifying Transaction" under Policy 2.4 - Capital Pool Companies ("Policy 2.4") of the TSXV and that the Resulting Issuer will be listed as a Tier 1 Real Estate Issuer on the TSXV.

The LOI was conditional on Real Industrial completing the acquisition of certain real property located in Kirkland, Ontario (the "Kirkland Property") and completing a private placement for minimum gross proceeds of $5 million (the "Concurrent Private Placement"). Both Canna 8 and Real Industrial (the "Parties") recently agreed to amend the LOI to change the following:

1. The real property from Kirkland Property to Fish Creek property located in Calgary, Alberta (the "Fish Creek Property").

2. Delete the requirement of a Concurrent Private Placement for minimum gross proceeds of $5 million (the "Concurrent Private Placement").

3. Amend the outside closing date from September 30, 2020 to December 30, 2020.

If the Proposed Transaction is completed, it is currently anticipated that the board of trustees and executive officers of the Resulting Issuer (the "New Slate") will be as follows:

• Dean Parmar - Trustee and Chief Executive Officer
  
  
• Scott Bartholomew - Trustee and Chief Financial Officer
  
  
• Lawrence Guy - Trustee
  
  
• Shant Poladian - Trustee

It is expected that at least one additional director and/or officer will be added to the board and/or management team of the Resulting Issuer upon completion of the Proposed Transaction subject to acceptance of the TSXV. The biographical information of the proposed directors and officers of the Resulting Issuer will be contained in the filing statement to be filed with the TSXV in connection with the Proposed Transaction and will be made available on Canna 8's profile on www.sedar.com.

Canna 8 and Real Industrial are working together to negotiate and enter into a definitive agreement in respect of the Proposed Transaction (the "Definitive Agreement"). If and when entered into, the Definitive Agreement will supersede the Letter of Intent. The final structure of the Proposed Transaction is subject to receipt of tax, corporate and securities law advice for both Canna 8 and Real Industrial.

It is intended that all of the outstanding units of Real Industrial will be acquired by the Resulting Issuer at an approximate purchase price of $21.6 million, subject to adjustments and excluding closing costs. The purchase price shall be satisfied by (i). adjusting of the outstanding debt of Real Industrial estimated to be at $12.2 million. (ii). Resulting Issuers issuing Convertible Debentures for $2 million paying 5.5% annual interest until conversion, with the Conversion methodology and strike price to be determined prior to closing, (iii). the issuance of Trust Units equal to the balance of the Purchase Price, based on the net value as set out in the appraisal report. An audit of the Real Industrial and Fish Creek Property financial is currently being undertaken and based on review of property financials, the property is cash flowing and is capable of servicing both Convertible Debenture and outstanding debt assumed by the Resulting Issuer.

It is anticipated that Canna 8 will undergo a 22 for 1 consolidation (the "Consolidation") in conjunction with this transaction. This consolidation ratio may be adjusted based on the final appraised valuation of the underlying real estate assets being acquired. Pursuant to the Proposed Transaction it is anticipated that: (i) the outstanding Trust Units of Canna 8 will be assigned a deemed value of $0.15 (on a pre-Consolidation ratio basis) and (ii) the holders of Real Industrial units will receive one Trust Unit of the Resulting Issuer in exchange for each outstanding Real Industrial Trust Unit (on a post-Consolidation basis). The outstanding options and broker warrants of Canna 8 will be adjusted accordingly to reflect the Consolidation.

It is anticipated that the Proposed Transaction will not be considered a Non-Arm's Length Qualifying Transaction (as that term is defined in Policy 2.4).

A comprehensive press release with further particulars relating to the Proposed Transaction, Definitive Agreement and the Resulting Issuer will follow in accordance with the policies of the TSXV.

Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to: completion of satisfactory due diligence; execution of a definitive agreement in respect of the Proposed Transaction; receipt of requisite regulatory approvals; acceptance of the Proposed Transaction as Canna 8's Qualifying Transaction by the TSXV; receipt of all requisite approvals from the unitholders of each of Canna 8 and Real Industrial for the Proposed Transaction and/or ancillary matters relating thereto; and the completion of all other actions necessary to consummate the Proposed Transaction. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

Notice on forward-looking statements:

This press release includes forward-looking statements regarding Canna 8, Real Industrial, and their respective businesses, which may include, but is not limited to, statements with respect to the completion of the Proposed Transaction and the Concurrent Private Placement, the terms on which the Proposed Transaction and Concurrent Private Placement are intended to be completed, the ability to obtain regulatory and unitholder approvals and other factors. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity, and are based on assumptions and subject to risks and uncertainties (including the risk factors listed below). Although the management of each entity believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release, including completion of the Proposed Transaction and the Concurrent Private Placement, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the real estate industry, failure to obtain regulatory or unitholder approvals, market conditions, economic factors, the equity markets generally and risks associated with growth and competition. Although Canna 8 and Real Industrial have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Canna 8 and Real Industrial undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Canna 8 is a capital pool company governed by the policies of the TSXV. The principal business of Canna 8 is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction.

For further information concerning Canna 8 Investment Trust, please contact:
Dean Parmar, CEO and Trustee of Canna 8 Investment Trust
dean@simplexinvestment.com or 780-499-7833

For further information concerning Real Industrial Investment Trust please contact:
Dan Forigo, CEO and Trustee of Real Industrial Investment Trust
dforigo@realindustrialreit.com or 403-993-2600

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/64098