The Valens Company Inc. (TSX:VLNS) entered into an arrangement agreement to acquire Citizen Stash Cannabis Corp. (TSXV:CSC) for CAD 51.4 million on August 30, 2021. Under the terms of the arrangement agreement, Citizen Stash shareholders will receive 0.1620 of a Valens common share for each Citizen Stash common share held. Under the Arrangement, the outstanding Citizen Stash warrants, and the in-the-money Citizen Stash options, will be transferred to Citizen Stash for their in-the-money amount, payable in Valens shares, net of applicable withholdings. The arrangement agreement provides for a break fee of CAD 2 million or 4.0% payable by Citizen Stash to Valens if the arrangement is terminated in certain specified circumstances.

The transaction is subject to the receipt of certain court and stock exchange approvals and the satisfaction of customary conditions precedent in transactions of this nature. The transaction also requires the approval of the shareholders of Citizen Stash. Dissent Rights have not been exercised with respect to more than five percent of the issued and outstanding Common Shares. The arrangement does not require Valens shareholder approval. The transaction has been unanimously approved by the Valens' board of directors. Citizen Stash's directors permitted to vote also unanimously approved the transaction. Citizen Stash Shareholders have to submit their proxies for the Special Meeting of Shareholders and Option holders on Monday, November 1, 2021. As of November 1, 2021, Citizen Stash Securityholders approved the proposed arrangement. As of November 5, 2021, the transaction has obtained a final order of the Supreme Court of British Columbia approving the previously announced plan of arrangement. The Citizen Stash acquisition is expected to close in the fourth quarter of 2021. As of November 2, 2021, the transaction is expected to close on or about November 8, 2021. The transaction is expected to be accretive to Valens in 2021 and 2022 before synergies. The acquisition represents an attractive revenue multiple of approximately 4.3x first half fiscal 2021 annualized revenue. Donald Belovich of Stikeman Elliott LLP is acting as legal counsel to The Valens Company. Sarah Gingrich, Gavin Cameron and Perry Feldman of Fasken Martineau DuMoulin LLP is acting as legal counsel to Citizen Stash and Hillcrest Merchant Partners Inc. and Evans & Evans, Inc. are acting as financial advisors to Citizen Stash. Citizen Stash's directors received the fairness opinion of Evans & Evans Inc. Computershare Investor Services Inc. acted as Depository for Citizen Stash.

The Valens Company Inc. (TSX:VLNS) completed the acquisition of Citizen Stash Cannabis Corp. (TSXV:CSC) on November 8, 2021. As of November 4, 2021, Final approval of the Arrangement was obtained from the Supreme Court of British Columbia. The consideration consists of closing consideration of CAD 0.03576 million in common shares and CAD 0.001052 million in settlement of pre-existing relationships.