Red White & Bloom Brands' Subsidiary, Emblem Cannabis Corporation, Completes Acquisition of Ayurcann's Health Canada-Licensed Manufacturing Operations, Leading Vape & Pre-Roll Brands, and Expanded National Distribution Capabilities

Executive Summary

• Red White & Bloom Brands Inc. (via wholly-owned subsidiary Emblem Cannabis Corporation) successfully closed the acquisition of Ayurcann Inc. and its parent company under CCAA proceedings.
• The transaction adds nationally recognized cannabis brands (Fuego, Xplor, Happy & Stoned), a Health Canada-licensed manufacturing facility in Pickering, ON, and a portfolio of 90+ SKUs distributed across ~2,500 retail locations in Canada.
• Total consideration of CDN$5,501,311 is expected to be immediately accretive to revenue and EBITDA, significantly expanding RWB's national distribution footprint and manufacturing capabilities.

Key Details

• Transaction Structure: Share purchase executed by Emblem Cannabis Corporation, acquiring 100% of newly issued shares of Ayurcann. Approved via Court order under the Companies' Creditors Arrangement Act (CCAA). All previously issued/outstanding Ayurcann securities were cancelled; certain assets/liabilities were excluded per Court order.
• Total Consideration: CDN$5,501,311
• Debt Release: CDN$2,101,075 (release of DIP Facility owed to Auxly Cannabis Group Inc.)
• Cash Consideration: CDN$3,400,236 (paid to Alvarez & Marsal Canada Inc. as Court-appointed monitor)
• Acquired Brands & Products: Fuego, Xplor, and Happy & Stoned; active portfolio of >90 SKUs, primarily in the vape and pre-roll categories.
• Distribution & Retail Footprint: Products distributed through approximately 2,500 retail locations across Canada, with distribution arrangements spanning 8 provinces and territories.
• Facilities & Operations: Health Canada-licensed formulation, manufacturing, and packaging facility in Pickering, Ontario; operational inventory and equipment; established customer and supplier relationships; all necessary cannabis licenses transferred.
• Strategic & Financial Impact: Expected to be immediately accretive to revenue and EBITDA; anticipated operational synergies across cultivation, procurement, manufacturing, logistics, and administration; enables expansion of acquired brands into additional legal cannabis markets beyond Canada.
• Advisors: Gowling WLG (Canada) LLP served as legal advisor to RWB and Emblem; Bennett Jones LLP acted as counsel to the Ayurcann Entities.

Notable Quotes

• Colby De Zen, President of Red White & Bloom Brands: "The successful completion of this acquisition marks an exciting milestone for Red White & Bloom. We are adding some of Canada's most recognized brands in the vape and pre-roll categories, a talented team, and a highly complementary operating platform that strengthens our position in one of the world's most competitive cannabis markets. We believe this transaction delivers immediate value through increased revenue and EBITDA, while also creating a powerful foundation for future growth."