Body and Mind Inc. and Australis Capital Inc announced an investment by BaM into Green Light District Holdings, Inc. ("GLDH") by way of a USD $5,200,000 senior secured convertible note at a rate equal to 20% per annum.  The note is convertible into 89.75% of the shares of GLDH at the option of the Company.  In addition, BaM has an agreement to issue additional consideration to David Barakett totalling USD $6,297,580 payable in shares of BaM at price of CAD $0.7439 upon meeting certain milestones ("Earn Out Shares").  The price was calculated using a 5-day volume weighted average price as of November 28, 2018.  BaM's investment in GLDH was funded in part by a $4,000,000 secured loan from Australis.

GLDH is the owner of the well-known ShowGrow dispensary brand and owner of the ShowGrow Long Beach dispensary, 43% of the equity interest and 60% of the voting rights in the ShowGrow San Diego dispensary, 30% equity interest in ShowGrow Las Vegas, and 100% ownership of the popular ShowGrow app.  The dispensaries are in various stages of licensing: Long  Beach has a medical license, San Diego has a conditional use permit ("CUP"), and Las Vegas has a recreational license.  GLDH focuses on building dispensaries in high volume locations and will continue to work toward receiving its recreational status at both Long Beach and San Diego.  ShowGrow San Diego still requires build out and is not yet open for business

The highlights of this transaction are as follows:

Provides a beachhead for BaM to establish operations in California, which will assist BaM in rolling out its brands beyond Nevada and Ohio;

Expands exposure to retail and provides BaM access to a seasoned retail management team that can also assist in adding value to the Ohio and Nevada platforms;

Provides exposure to high-growth, near-term revenue producing assets with solid earnings potential;

Provides additional optionality of new retail licensing via ShowGrow Nevada, which has applied for new retail licenses that could be awarded in early December;

Access to deep domain knowledge of the California cannabis industry, and a solid pipeline of deal flow; and

Provides shareholders first hand evidence of the strong relationship with Australis, which enabled BaM to capitalize on a timely opportunity.

Leonard Clough, BaM's CEO commented, "Our gratitude goes to the team at Australis, who worked tirelessly in assisting us in getting this deal completed within a one-week period.  Australis not only provided BaM with a secured credit facility, but also agreed to exercise approximately 3.2 million warrants to allow us to maintain a responsible debt to equity ratio.  This is a demonstration of how the Australis and BaM relationship benefits both our shareholders. Secondly, I am happy to welcome David to our team and believe that this opportunity is multi-dimensional as it provides a benefit to almost all our business segments."

]Scott Dowty, CEO of Australis commented, "We are consistently looking for high impact transactions that can assist our portfolio companies in creating outsized returns and the ShowGrow deal does exactly that for BaM.  This deal provides BaM access to a tremendous market beyond Nevada and Ohio, and the ability to leverage the BaM brand further.  David Barakett's experience in the industry is also a great addition to an already strong management team at BaM. We will continue to support BaM in new deals while also identifying opportunities within our ecosystem that can further benefit BaM, our largest and most significant investment to date."

Funding Agreements

To fund this transaction, Australis provided BaM a two-year USD $4,000,000 loan ("AUSA Debt Financing") by way of a senior secured note bearing an interest rate of 15%.  The terms require semi-annual interest payments unless BaM elects to accrue the interest by adding it to the principal amount of the debt facility.  The Company will maintain prepayment rights at any time, in any amount, unless it is within the first year in which case the Company will be required to pay a 5% prepayment penalty on the amount repaid.  The Company paid a finance fee to Australis in the amount of 1,105,083 BaM shares at a deemed price of CAD $0.72 per share.

In addition, Australis has agreed to exercise USD $1.2m in warrants out of the 16m warrants they already hold in BaM at CAD $0.50, which will equate to approximately 3.2m shares depending on the USD / CAD exchange rate when exercised.  Australis will have 5 business days from the funding agreement dated November 28th, 2018 to exercise its warrants in BaM.

As a result of this transaction, and the potential dilution associated with the Earn-Out Shares owed to David Barakett, who is entitled to receive shares in BaM subject to meeting certain performance milestones, the Company has granted anti-dilution warrants with a 2-year term from issuance to Australis at a ratio of 0.4337 for every share issued to David Barakett, at a price equal to the Earn-Out Shares  or otherwise at the lowest price permitted under the policies of the Canadian Securities Exchange.

The Company also agreed to increase the monthly services fee to Australis to total $16,500 per month for 5 years unless ownership held by Australis drops below 10% in which the fee will cease.

Canaccord Genuity Corp. acted as financial advisor to BaM in connection with the Transaction.