Origin House Subsidiary Trichome Financial Corp Announces Launch of Financing in Connection with Go-Public Transaction and Provides Corporate Update

 In News Release

Not for distribution to U.S. news wire services or for dissemination in the United States.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Toronto, Canada – February 14, 2019 – Trichome Financial Corp. (“Trichomeor the “Company”) is pleased to announce the launch of a non-brokered private placement of subscription receipts (the “Financing”) in connection with its reverse take-over of 22 Capital Corp (TSXV: LFC.P) (“22 Capital”). Trichome intends to use the proceeds of the Financing to fund the Company’s growing pipeline of cannabis sector credit opportunities and for general corporate purposes.

“The growing depth and breadth of our pipeline reflects the increasing maturation of the cannabis industry, as more companies seek customized solutions to address business expansion, working capital, M&A and other opportunities in the industry”, commented Michael Ruscetta, CEO of Trichome. “Our near-term pipeline of actionable transactions is indicative of Trichome’s commitment to be a valued-added financing partner to the cannabis industry and our thoughtful approach to allocating investors’ capital.”

Corporate Update

In addition to the launch of the Financing, Trichome is pleased to provide the following corporate updates:

Portfolio and Pipeline:

180 Smoke: Trichome’s first loan was to vape retailer 180 Smoke, which announced on September 27, 2018 their acquisition by Origin House.  The Company expects that this transaction will close within the next 2 weeks, resulting in repayment in full of Trichome’s loan. The Company will realize a gain of approximately 1.5x our loan amount, resulting in an IRR of 84% over the 8-month term that it was outstanding.

Ontario Retail:  In connection with the recent AGCO retail lottery, Trichome was contacted by a lottery winner and has to date provided limited financing to secure the application process.  Trichome management believes that it will have an on-going role in financing both this entity as well as other entrants into the legal cannabis retailing vertical.

Pipeline: Trichome’s pipeline of opportunities continues to be very robust. The Company’s management continues to see significant demand for alternative forms of capital to finance expansion, working capital, equipment, M&A and other requirements and is actively engaged on a select number of opportunities.  The Company has established syndication relationships with commercial lenders, other alternative lenders, and family offices.  This enables Trichome to target larger and more diverse opportunities, manage risk and potentially leverage our capital for the benefit of shareholders.

US Opportunities:  Given the size and rapid evolution of the cannabis landscape in the US over the last 6 months, Trichome has seen an increasing amount of inbound deal flow from US operators.  With the core of our infrastructure in place and the ability to leverage Origin House’s (CSE: OH) significant US market knowledge, the Company believes that it is uniquely positioned to capitalize on credit market opportunities in the US cannabis market. While our pending transaction with 22 Capital on the TSX Venture Exchange currently prohibits such investment activities, Trichome management have been working with counsel to create structures that may enable us to pursue these opportunities while complying with our listing obligations. We expect to be able to share more information about our US-focused plans in the coming months.

Reshaping the Board of Directors:  As the Company prepares to become publicly traded, ensuring good governance and proper oversight are foremost objectives. On January 14, 2019, Trichome welcomed Howard Steinberg, CFA to the Board of Directors.  Howard brings more than 25 years of experience in private credit, private equity and real estate investing, having served as a Managing Director of Fortress Investment Group, President of The Rose Corporation, Senior Vice President at GE Capital, and Managing Director with RBC Capital Partners. He currently sits on a number of boards and manages a real estate investment fund. We would like to thank Afzal Hasan and Brent Cox for their service and valuable contributions to Trichome, with both having stepped down in order to accommodate the reshaping of the Board of Directors.

About Trichome Financial Corp.

Trichome is a specialty finance company focused on providing flexible and creative capital solutions to the global legal cannabis market. Trichome was created to address the lack of credit availability in the large, growing and increasingly complex cannabis market. Founded by industry leaders Origin House, Stoic Advisory, and Sprott Inc. (TSX: SII), Trichome’s experienced management team has a unique edge to capitalize on proprietary deal flow and insight while developing a first mover advantage as a global cannabis focused specialty finance company. Trichome provides customized financing solutions across the industry value chain to support growth, capital expenditures, M&A, working capital and other needs.  Transactions are typically structured to earn attractive rates of contractual cash flows, retain optionality on value creation and ensure return of capital. Leveraging the combined resources and knowledge of its founders and management, it is able to offer significant value-added financial, product, market and operational support to its partner companies. Trichome’s current assets are all based in Canada and it has no operations or assets in the United States. For more information, please visit us at www.trichomefinancial.com or @trichomefinance on Twitter.

About Origin House

Origin House is a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world’s largest regulated cannabis market. By building a world-class logistics platform and supporting contract manufacturing assets, Origin House intends to support the growth of new and established cannabis brands. Origin House believes California, home to some of the world’s most discerning consumers and a nexus of information and trends, will be the point of inception for the global cannabis brands of the future. Origin House has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support our existing brands, partner products and distribution networks. The company’s leadership and staff combine passion and a hands-on understanding of the cannabis industry, with proven financial and legal expertise. Origin House’s shares trade on the Canadian Stock Exchange (CSE) under the symbol OH and in the US on the OTCQX under the symbol ORHOF. For more information, visit www.originhouse.com.

About 22 Capital

22 Capital is incorporated under the provisions of the Business Corporations Act (Ontario) with its registered and head office in Toronto, Ontario. It is a capital pool company and intends the transaction with Trichome to constitute its “Qualifying Transaction” as such term is defined in the policies of the TSXV.  22 Capital is a “reporting issuer” within the meaning of the Securities Act (Ontario), Securities Act (British Columbia) and Securities Act (Alberta).

Trading in the Pre-Consolidation Shares of 22 Capital is halted at present. It is unlikely that the Pre-Consolidation Shares of 22 Capital will resume trading until the transaction with Trichome is completed and approved by the TSXV.

Further Information

For further information, please contact:

Michael Ruscetta, Chief Executive Officer, Trichome Financial Corp.

Telephone:       (416) 561-2541

Email:                mruscetta@trichomefinancial.com  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION: 
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the proposed Financing, Trichome’s plans for the United States and Trichome’s pipeline of opportunities and the terms and conditions of the proposed Offering. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Trichome assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.