IM Cannabis Corp. (CNSX:IMCC) entered into a definitive agreement to acquire Trichome Financial Corp. (CNSX:TFC) from Cresco Labs Inc., Opaskawayak Cree Nation and others for CAD 22 million on December 30, 2020. Under the terms of the transaction, the shareholders of Trichome will receive 0.981 common shares of IMC for each common share of Trichome. As of February 12, 2021, the consideration will be revised to 0.24525 Common Shares of IMCC for each common share of Trichome. Upon completion, the shareholders of IM Cannabis will own approximately 82% of the combined company and shareholders of Trichome will own 18%. Following completion of the transaction, the combined company will maintain offices in Glil Yam, Israel and Toronto, Canada, and will operate under the IM Cannabis Corp. corporate name with common shares trading on the Canadian Securities Exchange under the ticker symbol “IMCC.” The combined company is expected to finalize its listing on the NASDAQ Capital Market in first quarter of 2021. In case of termination, a termination fee of CAD 3.5 million is payable to IM Cannabis. Oren Schuster, Chief Executive Officer of IM Cannabis, will remain Chief Executive Officer of the combined company; Michael Ruscetta, Chief Executive Officer of Trichome, and Howard Steinberg, Chief Executive Officer of Trichome's wholly-owned subsidiary, Trichome JWC Acquisition Corp, will lead the combined company's North American operations; and Marc Lustig, Non-Executive Chairman of IM Cannabis, has been appointed Executive Chairman of IM Cannabis.

The transaction is subject to the approval of two-thirds of the votes cast by shareholders of Trichome, a majority of the aggregate principal amount of outstanding Trichome convertible debentures and 50%+1 of the Trichome shareholders, excluding Marc Lustig and Michael Ruscetta at special meetings expected to take place in first quarter of 2021. Completion of the transaction is also subject to court and regulatory approvals, which are currently expected to be received in the first half of 2021, consideration Shares to be issued upon completion of the Arrangement shall, subject only to the satisfaction of customary conditions required by the CSE, have been approved for listing on the CSE, Dissent Rights have not been exercised with respect to more than 5% of the issued and outstanding Company Shares, resignations from each director of the Trichome. IM Cannabis' Board and the independent members of the Board of Trichome unanimously recommended the transaction. As of March 15, 2021, Trichome Financial shareholders voted in favor of the proposed transaction. The Directors and Officers of Trichome and two of its largest shareholders, Cresco Labs and Opaskawayak Cree Nation, comprising approximately 34% ownership, have entered voting support agreements. Certain convertible debenture holders of Trichome representing approximately 75% of the outstanding principal amount of such Trichome convertible debentures have also entered into voting support agreements in favour of the transaction. Desjardins Capital Markets provided a fairness opinion to the Trichome's Special Committee stating that, the consideration to be received by shareholders of Trichome pursuant to the transaction is fair, from a financial point of view, to the shareholders of Trichome. The Board of Directors of Trichome has formed a special committee of independent members to review and approve the transaction. The combined company is forecasted to be adjusted EBITDA positive in 2021. As of March 15, 2021, the deal is expected to close on or about March 18, 2021.

Desjardins Capital Markets acted as fairness opinion provider for Trichome's special committee. Cormark Securities Inc. is acting as financial advisor and Peter Simeon, Jacob Cawker, Josh Almario, and Paul Carenza of Gowling WLG (Canada) LLP are acting as legal counsels to IMC. McMillan LLP acted as legal advisor to Cormark Securities. Desjardins Capital Markets acted as financial advisor and Janan Paskaran, Cheryl Reicin, Janan Paskaran, Chris Bornhorst, Michael Despres, Jerald Wortsman, Ed Fan, Brad Tartick and Frazer House of Torys LLP acted as legal advisor to Trichome. Dentons Canada LLP is acting as legal advisor to Desjardins Capital Markets.

IM Cannabis Corp. (CNSX:IMCC) completed the acquisition of Trichome Financial Corp. (CNSX:TFC) from Cresco Labs Inc., Opaskawayak Cree Nation and others on March 18, 2021. The shares of Trichome will be delisted from the Canadian Securities Exchange (“CSE”) effective immediately. In connection with the closing of the transaction, a total of 10.1 million IMC Shares have been issued to former holders of Trichome shares, resulting in former Trichome shareholders holding approximately 20.06% of the total number of issued and outstanding IMC share.