Grown Rogue Closes $2.0M Convertible Debenture Financing

Grown Rogue International Inc. GRIN GRUSF, a craft cannabis company operating in Oregon and Michigan, has closed a non-brokered private placement of convertible debentures with an aggregate principal amount of $2.0 million. The convertible debentures bear an interest of 9% per year, paid quarterly, and mature 36 months from the date of issue. The principal use of funds will be to accelerate expansion efforts and for general corporate purposes.

The convertible debentures are convertible into common shares of the company at a conversion price of CA$0.20 per common share. Additionally, on closing, the company issued to the purchasers of the convertible debentures an aggregate of 6.7 million warrants, that represent 50% coverage of each purchaser's convertible debenture investment. The warrants are exercisable for a period of three years from issuance into common shares at an exercise price of CA$0.25 per common share. The company has the right to accelerate the warrants if the closing share price of the common shares on the Canadian Securities Exchange is CA$0.40 or higher for a period of 10 consecutive trading days.

The convertible debentures and warrants issued pursuant to the private placement are subject to a statutory hold period of four months and one day from the closing date.

Insiders of the company invested $50,000 in the convertible debentures. The company has relied on the exemptions from the valuation and minority shareholder approval requirements under Multilateral Instrument 61-101 - Protection of minority security holders in special transactions contained in section 5.5(b) and 5.7(a) of MI 61-101 in respect of such insider participation.

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