Tokyo Smoke Commences Stalking Horse Sale Process

TORONTO, Sept. 19, 2024 /CNW/ - Tokyo Smoke ("Tokyo Smoke" or the "Company"), an award-winning cannabis retailer, today announced that it has entered into a Share Subscription Agreement (the "Stalking Horse Agreement ") with TS Investments Corp., the parent of Tokyo Smoke (the "Buyer"), pursuant to which the Buyer will subscribe for all of the issued and outstanding shares of Tokyo Smoke. The purchase price under the Stalking Horse Agreement is approximately CAD$77 million plus the Buyer's obligation to assume certain liabilities. Tokyo Smoke is pleased to have the support of the parent company through the Stalking Horse Agreement as part of its continued commitment to the business.

As part of the Stalking Horse Agreement, the Company has obtained approval by the Court in its restructuring proceedings commenced under the Companies' Creditors Arrangement Act (the "CCAA") to implement a sale and investment solicitation process (the "Sale Process") to solicit interest in and opportunities for a sale, restructuring, recapitalization or other form of reorganization of the Company's business for a purchase price above the purchase price being offered by the Buyer under the Stalking Horse Agreement.

Interested bidders are encouraged to participate in the Sale Process. The Sale Process is a two-phase process that will commence on September 20, 2024. Phase I is intended to solicit non-binding letters of interest. The deadline to submit letters of interest compliant with the Sale Process terms is 5:00 p.m. Eastern Time on October 21, 2024. Phase II will solicit binding agreements from compliant parties with bids required to be submitted by 5:00 pm Eastern Time on November 11, 2024.

The consummation of any bid, including the bid submitted by the Buyer pursuant to the Stalking Horse Agreement is subject to closing conditions that are customary for transactions of this nature under the CCAA, including compliance with the applicable bidding procedures and approval of the Court.

Tokyo Smoke commenced restructuring proceedings under the CCAA to align its operations with current market and regulatory conditions, which have significantly changed since the initial licensing regimes were introduced. The Company intends to exit from CCAA protection as a stronger business, better positioned to continue providing premium products to its customers over the long-term, while continuing to provide jobs to its dedicated employees across Canada.

Interested parties should refer to the Sale Process for information pertaining to other important deadlines and processes thereunder. Those who are interested in participating in this Sale Process can contact the Monitor to receive additional information at:

ALVAREZ & MARSAL CANADA INC.
200 Bay Street
Toronto, Ontario M5J 2J1
Canada

Attention:
Josh Nevsky ? [email protected]
Skylar Rushton ? [email protected] 

Copies of the Sale Process and Stalking Horse Agreement may be obtained from the website of the Monitor at: https://www.alvarezandmarsal.com/TokyoSmoke. Reconstruct LLP is acting as legal advisors to Tokyo Smoke and Alvarez & Marsal Canada Inc. is acting as the CCAA Monitor. Additional information regarding the CCAA proceedings will be made available on the Monitor's website at alvarezandmarsal.com/TokyoSmoke. 

About Tokyo Smoke

Tokyo Smoke is an award-winning cannabis retailer committed to bringing Canadians the highest quality, regulated products online and across 61 convenient retail locations. Tokyo Smoke educates and empowers customers to make well-informed decisions about safe, high-quality cannabis products?curating unique offerings and product assortments that reflect Canadians' interests, neighbourhood by neighbourhood. The group operates approximately 167 locations in total across Ontario, Manitoba, Saskatchewan and Newfoundland and Labrador through its various retail programs.

Learn more at TokyoSmoke.com.

SOURCE Tokyo Smoke