Subversive Capital Acquisition Corp. Accelerates Momentum Ahead Of Its Qualifying Transaction

Rhea-AI Summary

Subversive Capital Acquisition Corp. (SCAC) announced progress towards its Qualifying Transaction, acquiring CMG Partners, Inc. (Caliva) and Left Coast Ventures, creating TPCO Holding Corp. (The Parent Company). SCAC secured US$34.5 million in non-redemption agreements and raised over US$100 million for growth. Anticipated to close by January 15, 2021, the deal positions The Parent Company as California's largest vertically-integrated cannabis firm, leveraging Shawn "JAY-Z" Carter's influence for brand strategy. The transaction aims to enhance market share, profitability, and social equity initiatives.

Positive

• Secured approximately US$34.5 million in non-redemption agreements.
• Raised over US$100 million for growth strategy.
• Anticipated to create California's largest vertically-integrated cannabis company.
• Shawn "JAY-Z" Carter's brand strategy expected to enhance market presence.
• Plans for aggressive M&A strategy to boost growth and profitability.

Negative

• Closing of the transaction is subject to customary conditions which may cause delays.
• Potential risks related to regulatory approval and market conditions.

NEW YORK and TORONTO, Jan. 11, 2021 /PRNewswire/ -- Subversive Capital Acquisition Corp. (NEO: SCV.A.U, SCV.WT.U, OTCQX: SBVCF) ("SCAC"), a special purpose acquisition company, today announced renewed momentum ahead of the close of its proposed Qualifying Transaction.  Specifically, SCAC has finalized non-redemption agreements with certain equity holders representing approximately US$34.5 million of escrowed proceeds.  These proceeds will be released upon consummation of SCAC's Qualifying Transaction, pursuant to which SCAC will acquire, directly or indirectly, all of the equity of CMG Partners, Inc. ("Caliva") and Left Coast Ventures, Inc. ("Left Coast Ventures") (collectively, the "Transaction") to form TPCO Holding Corp. ("The Parent Company"). SCAC also entered into agreements with global icon, entrepreneur and MONOGRAM founder, Shawn "JAY-Z" Carter, and entertainment powerhouse Roc Nation.

Together with the recent upsized-close of its Private Placement, SCAC has now secured at least $100M to execute on its growth strategy going forward.

Michael Auerbach, SCAC's Chairman, said, "The last 10 days affirm shareholder support for The Parent Company and our vertically-integrated strategy which – alone among peers – will support robust organic growth as well as future mergers and acquisitions.  Just as importantly, these operational attributes will be underpinned by a brand strategy that leverages unparalleled cultural influence and consumer reach.We are grateful for these early, tangible signs of support and belief in our potential, and look forward to the anticipated close of TPCO later this week."

SCAC anticipates that the Transaction will close on or around January 15, 2021, subject to customary closing conditions. A copy of the final prospectus (the "Prospectus") associated with the Transaction is available on SEDAR at www.sedar.com and on SCAC's website at www.subversivecapital.com/s/Prospectus.

Recent Company Highlights

• SCAC announces upsize of private placement with aggregate equity commitments of approximately US$63 million. The Private Placement remains subject to the approval of the Neo Exchange Inc.
• SCAC is now included in the portfolio of AdvisorShares Pure US Cannabis ETF (NYSEArca: MSOS).
• The Parent Company will be the largest vertically integrated cannabis company in California.
• Shawn "JAY-Z" Carter, Chief Visionary Officer of The Parent Company, officially launched the first products from his cannabis line, MONOGRAM, on December 10, 2020.
• Brand strategy and marketing playbook led by Shawn "JAY-Z" Carter and Roc Nation, leverages unparalleled cultural influence of leading artists and entertainers to build the most valuable and scalable brand IP in cannabis.
• SCAC currently holds approximately $575 million in cash-in-trust, which would make The Parent Company one of the most well-capitalized cannabis companies in the United States assuming no redemptions. The Parent Company expects to pursue an aggressive M&A strategy to accelerate growth, market share gains, and profitability.
• The Parent Company will fund The Parent Company Social Equity Ventures to invest in minority-owned and Black-owned cannabis businesses and contribute to the effort to rectify the wrongs of prohibition through initiatives that are working toward meaningful change in the criminal justice system.

How to Invest

To invest in The Parent Company and Subversive Capital Acquisition Corp., investors may buy or sell shares through their usual investment platform or brokerage. U.S. investors can buy and sell OTCQX securities under the ticker symbol "SBVCF" and Canadian investors can buy and sell through the NEO Exchange under the ticker symbol "SVC.A.U."  Following closing, the securities of The Parent Company will continue trading on the OTCQX and on the NEO.

About Subversive Capital Acquisition Corp.
Subversive Capital Acquisition Corp. is a special purpose acquisition corporation incorporated under the laws of the Province of British Columbia for the purpose of effecting, directly or indirectly, a qualifying transaction within a specified period of time. Founded by Michael Auerbach and led by Chief Executive Officer, Leland Hensch, SCAC is dedicated to investing in radical companies whose core missions subvert the status quo. For more information, visit www.subversivecapital.com.

About The Parent Company
The Parent Company (TPCO Holding Corp.) (OTCQX: SBVCF, NEO: SVC.A.U, SVC.WT.U) will be California's leading vertically-integrated cannabis company combining best-in-class operations with leading voices in popular culture and social impact. The Parent Company brings together global icon and entrepreneur Shawn "JAY-Z" Carter, entertainment powerhouse ROC NATION, California's leading direct-to-consumer platform CALIVA, and leading cannabis and hemp manufacturer, LEFT COAST VENTURES, to form a cannabis industry leader for the post-prohibition era. Chief Visionary Officer Shawn "JAY-Z" Carter, one of the most recognized and celebrated entrepreneurs of our time, will guide The Parent Company's brand strategy in partnership with Roc Nation, the world's preeminent entertainment company with a roster of culture-making artists, athletes and influencers. The brands we build together will pave a new path forward for a legacy rooted in equity, access, and justice. See "Forward Looking Statements" below for more information on The Parent Company.

About Roc Nation
Roc Nation, founded in 2008 by JAY-Z, has grown into the world's preeminent entertainment company. Roc Nation works in every aspect of modern entertainment, with recording artists, producers, songwriters, and more. Roc Nation's client list includes some of the world's most recognizable names in entertainment, from Rihanna and Rapsody to Buju Banton and Snoh Aalegra. Roc Nation is a full-service organization, supporting a diverse roster of talent via artist management, music publishing, touring, production, strategic brand development, and beyond. Roc Nation Sports was founded in 2013, bringing the organization's full-service touch to athletes across the NFL, NBA, MLB, and global soccer. For further information, visit rocnation.com.

About Caliva
Caliva is a leading single-state cannabis operator in California. Founded in 2015, Caliva's industry advantage comes from its vertical integration and direct-to-consumer platform. This direct-to-consumer experience enables customers to purchase cannabis at Caliva's retail stores and place orders online for in-store pickup or same-day delivery straight to their door. Caliva's plant-based solutions serve over 1 million customers and are designed to fit any lifestyle. Caliva's commitment to compliance and quality reinforce its position as THE MOST TRUSTED NAME IN CANNABIS™. For more information visit caliva.com or follow along on Instagram, @GoCaliva.

About Left Coast Ventures
Headquartered in Santa Rosa, CA, Left Coast Ventures is a diversified cannabis and hemp company specializing in cultivation, extraction, manufacturing, brand development, and distribution. Left Coast Ventures and its subsidiaries are working to shape the future of the legal cannabis industry in the United States through acquisitions, investments, and incubation while building a respected portfolio of top shelf brands. Wholly owned, licensed, and/or distributed brands within the Left Coast Ventures portfolio include Marley Natural, Mind Your Head by Mickey Hart, Mirayo by Carlos Santana, JEF, SoulSpring, Provault, Chill, Headlight, Get Zen, New Frontier Brewing, and Yummi Karma/High Gorgeous.

Forward-Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation which reflects SCAC's current expectations regarding future events. The words "will", "expects", "intends" and similar expressions are often intended to identify forward looking information, although not all forward-looking information contains these identifying words.

Specific forward-looking information contained in this press release includes, but is not limited to, statements concerning the completion of the Transaction and the expected timing thereof, The Parent Company's size and operations following closing of the Transaction and planned use of proceeds from the Transaction. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond SCAC's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: failure to complete the Transaction, inability to obtain requisite regulatory or shareholder approvals, changes in general economic, business and political conditions, changes in applicable laws, the U.S. and Canadian regulatory landscapes and enforcement related to cannabis, changes in public opinion and perception of the cannabis industry, reliance on the expertise and judgment of senior management, as well as the factors discussed under the heading "Risk Factors" in the Prospectus which is available on SEDAR at www.sedar.com. SCAC undertakes no obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Contacts:

Berrin Noorata
media@subversivecapital.com 

Investor Relations
investor@subversivecapital.com 

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SOURCE Subversive Capital Acquisition Corp.

FAQ

What is the status of Subversive Capital Acquisition Corp's Qualifying Transaction with CMG Partners and Left Coast Ventures?

The Qualifying Transaction is on track to close around January 15, 2021, pending customary closing conditions.

How much funding has Subversive Capital Acquisition Corp secured for its growth strategy?

SCAC has secured at least US$100 million for its future growth initiatives.

What will be the impact of the acquisition on The Parent Company?

The acquisition will position The Parent Company as California's largest vertically-integrated cannabis firm, enhancing market share and profitability.

What role will Shawn 'JAY-Z' Carter play in The Parent Company's brand strategy?

JAY-Z will guide the brand strategy in partnership with Roc Nation, leveraging cultural influence to build a strong cannabis brand.