US Crackdown on Recreational Cannabis Good for Canadian Industry

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WINNIPEG, Jan. 4, 2017 /CNW/ - The CEO of Delta 9 Cannabis Inc. says the crackdown on marijuana legalization by the US Department of Justice will benefit Canadian cannabis companies in the long term.

Cannabis company stock prices fell sharply on both sides of the border shortly after US Attorney General Jeff Sessions rescinded the policy known as the 'Cole Memo' that allows individual states to legalize cannabis, without fear that federal prosecutors will charge companies with trafficking.

While cannabis has been legalized in several states, it remains an illegal, Schedule 1 drug under federal law. Today Sessions rescinded the Cole Memo, giving US federal prosecutors complete latitude to lay charges under federal drug laws, even in states where cannabis has been legalized.

Delta 9 CEO John Arbuthnot says that while both US and Canadian stock prices declined on the news, the long-term implications are positive for Canadian cannabis companies.

"Canada is already, without question, the global leader in the legal cannabis industry, and this is due largely to our own federal government's support of sensible legalization policy," Arbuthnot says. "That support is allowing companies to expand both in Canada and now throughout the world, whereas American companies are being held back.

"There is a real fear about investing in US-based cannabis companies at a time when it is possible people connected with those companies could be prosecuted under federal drug laws."

Arbuthnot says the implications are particularly positive for publicly traded companies north of the border.

"There is a demonstrated interest among investors globally to invest in cannabis companies, which is only logical given the rapid growth of this industry," Arbuthnot says. "But right now, due to the stated US policy, Canadian companies remain the only safe haven for cannabis investors."

Arbuthnot says Delta 9 takes no position on the US government's decision, but does feel it will hurt the US industry while boosting the Canadian industry.

"It's up to the United States' government to decide what is best for their people and their country, just as it is up to our government to decide what is best for Canada and Canadians," he said. "But, from a purely practical point of view, this move does give Canadian companies a huge advantage when competing globally in what is likely the fastest growing industry on the planet, and I think over the long term investors in Canada, the US, and elsewhere will see that as a major factor."

Like many other cannabis companies in Canada, Delta 9 has undertaken a massive expansion of its production facility in Winnipeg, Manitoba. Delta 9 also submitted a proposal on Dec. 22, 2017 to open a chain of retail cannabis stores in Manitoba, in response to the provincial government's Request For Proposals (RFP). "These types of developments, where federal and provincial governments are codifying the industry into the normal routine of business, shows just how different the situation is in Canada as opposed to the United States," Arbuthnot said.

About Delta 9 Cannabis Inc.

Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9's shares trade on the TSX Venture Exchange under the symbol "NINE".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) Delta 9's expansion plans; (ii) Delta 9's production of cannabis; (iii) the price to be received by Delta 9 per gram of cannabis; (iv) demand for Delta 9's products; (v) Delta 9's cost to produce its grow pods; and (vi) the number of employees of Delta 9. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that Delta 9's currently contemplated expansion and development plans may cease or otherwise change, Delta 9's production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9's products may be lower than anticipated, Delta 9's cost to produce its grow pods may be higher than expected and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

SOURCE Delta 9 Cannabis Inc.