Horizon Petroleum Ltd. - Capital/Financing Update 2021

This short form prospectus is a base shelf prospectus. This short form prospectus has been filed under legislation in each of the provinces of Canada that permits certain information about these securities to be determined after this prospectus has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these securities.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. Unless otherwise specified in a specific prospectus supplement, the securities offered hereby have not been, and will not be, registered under the United States Securities Act of 1933, as amended (“ U.S. Securities Act ”), or any state securities laws and, unless registered under the U.S. Securities Act or pursuant to an applicable exemption from registration under the U.S. Securities Act and applicable state securities laws, may not be offered, sold, reoffered, resold or delivered, directly or indirectly, in the United States or to U.S. Persons (as defined in Regulation S under the U.S. Securities Act). Unless otherwise specified in a specific prospectus supplement, this short form prospectus does not constitute an offer to sell or solicitation of an offer to buy any of the securities offered hereby within the United States.

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of Delta 9 Cannabis Inc. at PO Box 68096 Osborne Village, Winnipeg, Manitoba, R3L 2V9, telephone 1-855-245-1259, and are also available electronically at www.sedar.com. See “Documents Incorporated By Reference”.

SHORT FORM BASE SHELF PROSPECTUS

New Issue

September 9, 2021

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$20,000,000

Common Shares Debt Securities Warrants Subscription Receipts Units

Delta 9 Cannabis Inc. (the “ Corporation ”) is a corporation incorporated under the laws of the Province of British Columbia. The head office of the Corporation is located at PO Box 68096 Osborne Village, Winnipeg, Manitoba, R3L 2V9. The registered office of the Corporation is located at Suite 2600, 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X1.

The Corporation may from time to time during the 25-month period that this short form base shelf prospectus (this “Prospectus ”), including any amendments hereto, remains valid, offer for sale and issue: (i) common shares (“ Common Shares ”); (ii) debt securities, which may consist of debentures, notes or other types of debt and may be issuable in series (“ Debt Securities ”); (iii) Common Share purchase warrants (“ Warrants ”); (iv) subscription receipts to purchase Securities (as hereinafter defined) (“ Subscription Receipts ” and, together with the Common Shares, the Debt Securities and the Warrants, the “ Securities ”); and (v) any combination of such Securities (the “ Units ”). The Corporation may sell up to $20,000,000, in the aggregate, of initial offering price of the Securities (or the equivalent amount if any Securities are denominated in currency other than Canadian dollars). The Securities may be offered for sale separately or in combination with one or more other Securities and may be sold from time to time in one or more transactions at a fixed price or prices (which may be changed) or at market prices prevailing at the time of sale, at prices determined by reference to such prevailing market prices or at negotiated prices.

The specific terms of any Securities offered will be described in one or more shelf prospectus supplements (collectively or individually, as the case may be, a “Prospectus Supplement ”), including, where applicable: (i) in the case of Common Shares, the number of Common Shares being offered, the offering price and any other specific terms; (ii) in the case of Debt Securities, the specific designation, the aggregate principal amount being offered, the authorized denominations, the currency, the issue and

delivery date, the maturity date, the issue price (or the manner of determination thereof if offered on a non-fixed price basis), the interest rate (either fixed or floating, and, if floating, the manner of calculation thereof), the interest payment date(s), the redemption, exchange or conversion provisions (if any), the repayment terms, the form (either global or definitive) and any other specific terms; (iii) in the case of Warrants, the number of Warrants being offered, the offering price, the exercise price, the form, and any other specific terms; (iv) in the case of Subscription Receipts, the number of Subscription Receipts being offered, the offering price, the procedures for the exchange of Subscription Receipts for Common Shares or any other Securities and any other specific terms; and (v) in the case of Units, (i) to (iv) above, as applicable. A Prospectus Supplement may include specific variable terms pertaining to the Securities that are not within the alternatives and parameters described in this Prospectus.

All shelf information permitted under applicable laws to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Prospectus. Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains.

The Corporation may sell the Securities to or through underwriters or dealers purchasing as principals, and may also sell the Securities directly to one or more purchasers pursuant to applicable statutory exemptions or through agents. The Prospectus Supplement relating to a particular offering of Securities will identify each underwriter, dealer or agent, as the case may be, engaged by the Corporation in connection with the offering and sale of the Securities, and will set forth the terms of the offering of such Securities, including, to the extent applicable, any fees, discounts or any other compensation payable to underwriters, dealers or agents in connection with the offering, the method of distribution of the Securities, the initial issue price (in the event that the offering is a fixed price distribution), the proceeds that the Corporation will receive and any other material terms of the plan of distribution. The Securities may be sold from time to time in one or more transactions at a fixed price or prices or at nonfixed prices. If offered on a non-fixed price basis, Securities may be offered at market prices prevailing at the time of sale, at prices determined by reference to such prevailing market prices or at negotiated prices, which prices may vary as between purchasers and during the period of distribution of the Securities.

In connection with any offering of Securities, the underwriters, dealers or agents, as the case may be, may over allot or effect transactions which stabilize or maintain the market price of the Securities at a level above that which might otherwise prevail on the open market. Such transactions, if commenced, may be discontinued at any time. See “Plan of Distribution”.

The outstanding Common Shares listed and posted for trading on the Toronto Stock Exchange (the “ TSX ”) under the trading symbol “DN” and quoted on the OTCQX Best Market (the “ OTCQX ”) under the trading symbol “VRNDF”. The outstanding 3 year 8.5% convertible unsecured debentures of the Corporation due July 17, 2022 (the “ Debentures ”) and the warrants of the Corporation issued on July 17, 2019 (the “ 2019 Warrants ”) are listed and posted for trading on the TSX under the trading symbol “DN.DB” and “DN.WT.A”, respectively. As at September 8, 2021, the closing trading prices on the TSX for the Common Shares, Debentures and 2019 Warrants were $0.415, $85.00 and $0.02, respectively.

Each series or issue of Debt Securities, Warrants or Subscription Receipts will be a new issue of securities with no established trading market. Unless specified in a Prospectus Supplement, Securities may not be listed on any securities or stock exchange. Accordingly, unless so specified, there may be no market through which these securities may be sold and purchasers may not be able to resell securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of such Securities and the extent of issuer regulation. See “Risk Factors”.

It is important for a person making an investment in Securities of the Corporation to consider the particular risk factors that may affect both the Corporation and the cannabis industry in which the Corporation operates and which may therefore affect the price of the Common Shares of the Corporation. See the section entitled “Risk Factors” in the 2020 AIF (as hereinafter defined), which document is incorporated herein by reference, which describes the Corporation’s assessment of those risk factors as well as the potential consequences to a holder of Securities if a risk should materialize. See “Risk Factors”.

The Corporation is not a trust company and is not registered under applicable legislation governing trust companies as it does not carry on or intend to carry on the business of a trust company. The Corporation’s securities are not “deposits” within the meaning of the Canada Deposit Insurance Corporation Act and its securities are not insured under the provisions of that Act or any other legislation.

GLOSSARY OF DEFINED TERMS ........................................................................................................................................ G-1 FORWARD-LOOKING STATEMENTS...................................................................................................................................... 1 DOCUMENTS INCORPORATED BY REFERENCE ................................................................................................................. 2 DELTA 9 CANNABIS INC. ......................................................................................................................................................... 4 RECENT DEVELOPMENTS ........................................................................................................................................................ 5 USE OF PROCEEDS ..................................................................................................................................................................... 5 EARNINGS COVERAGE RATIOS .............................................................................................................................................. 5 DESCRIPTION OF SECURITIES ................................................................................................................................................ 5 PLAN OF DISTRIBUTION .......................................................................................................................................................... 9 CONSOLIDATED CAPITALIZATION ..................................................................................................................................... 10 PRIOR SALES ............................................................................................................................................................................. 11 RISK FACTORS .......................................................................................................................................................................... 13 PRINCIPAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS ........................................................................... 13 INTEREST OF EXPERTS........................................................................................................................................................... 13 LEGAL MATTERS ..................................................................................................................................................................... 14 AUDITORS, REGISTRAR AND TRANSFER AGENT ............................................................................................................ 15 PURCHASERS’ CONTRACTUAL RIGHTS ............................................................................................................................. 15 PURCHASERS’ STATUTORY RIGHTS ................................................................................................................................... 15 CERTIFICATE OF THE ISSUER ............................................................................................................................................. C-1

GLOSSARY OF DEFINED TERMS

Unless otherwise specified in this Prospectus or a particular Prospectus Supplement, all references to “dollars” or “$” are in Canadian dollars.

The following terms used in this Prospectus have the meanings set out below:

“ 1884 ” has the meaning ascribed to that term in “Recent Developments - Acquisition of Two Retail Cannabis Stores in Edmonton, Alberta”;

“ 2019 Offering Warrants ” means the warrants of the Corporation issued on July 17, 2019 that are currently trading on the TSX under the trading symbol “DN.WT.A” each of which entitles the holder thereof to purchase one Common Share at a price of $1.33 per Common Share until July 17, 2022;

“ 2020 AIF ” means the annual information form dated February 27, 2020 for the Corporation’s financial year ended December 31, 2020;

“ 2020 Financial Statements ” means the Corporation’s audited consolidated financial statements as at and for the years ended December 31, 2020, restated December 31, 2019, and restated December 31, 2018 and the independent auditor’s report thereon;

“ 2020 MD&A ” means the Corporation’s management’s discussion and analysis of its financial condition and results of operations for the years ended December 31, 2020 and December 31, 2019;

“ 2021 Equity Offering ” has the meaning ascribed to that term in “Prior Sales”;

“ 2021 Equity Units ” has the meaning ascribed to that term in “Prior Sales”;

“ 2021 Meeting Circular ” means the management information circular dated May 12, 2021 in respect of the annual general meeting of Shareholders held on June 25, 2021;

“ 2021 Q2 Financial Statements ” means the Corporation’s unaudited consolidated financial statements as at and for the sixmonth periods ended June 30, 2021 and June 30, 2020;

“ 2021 Q2 MD&A ” means the Corporation’s management’s discussion and analysis of its financial condition and results of operations for the six-month periods ended June 30, 2021 and June 30, 2020;

“ 2021 Warrants ” has the meaning ascribed to that term in “Prior Sales”;

“ Auxly ” means Auxly Cannabis Group Inc.;

“ Common Shares ” means the common shares of the Corporation, and includes a fraction thereof;

“ Corporation ” means Delta 9 Cannabis Inc. and, where the context requires, includes the Subsidiaries of the Corporation;

“ COVID-19 ” means the novel coronavirus;

“ Debentures ” means the 3 year 8.5% convertible unsecured debentures of the Corporation due July 17, 2022 that are currently trading on the TSX under the trading symbol “DN.DB”;

“ Debt Securities ” means debt securities which may consist of debentures, notes or other types of debt that may be issuable in series and “ Debt Security ” means any such debt security;

“ Delta 9 Cannabis Store ” means Delta 9 Cannabis Store Inc., a corporation incorporated under the CBCA and a wholly-owned Subsidiary of the Corporation;

“ Delta 9 Bio-Tech ” means Delta 9 Bio-Tech Inc., a corporation amalgamated under the CBCA and a wholly-owned Subsidiary of the Corporation;

G-1

“ Delta 9 Lifestyle ” means Delta 9 Lifestyle Cannabis Clinic Inc., a partially-owned Subsidiary of Delta 9 Bio-Tech;

“ Delta Facility ” means the Corporation’s production facility located at 760 Pandora Avenue East, in Winnipeg, Manitoba, having a total floor area of approximately 80,000 square feet;

“ Director ” means a director of the Corporation and “ Directors ” means all of the directors of the Corporation;

“ Health Canada License ” means the license issued by Health Canada to Delta 9 Bio-Tech to produce and sell cannabis and cannabis oil, extracts and derivative products, that is valid for a three year term ending August 30, 2022;

“ Hey Bud Transaction ” has the meaning ascribed to that term in “Recent Developments - Acquisition of Two Retail Cannabis Stores in Edmonton, Alberta”;

“ Kolab ” means Kolab Projects Inc.;

“ Kolab Transaction ” has the meaning ascribed to that term in “Prior Sales”;

“ Options ” means incentive stock options to acquire Common Shares issued pursuant to the Corporation’s Stock Option Plan;

“ OTCQX ” OTCQX Best Market;

“ Prospectus ” means this short form base shelf prospectus;

“ Prospectus Supplement ” means a supplement to this Prospectus;

“ PRSU Plan ” means the performance and restricted share unit plan of the Corporation dated June 25, 2020;

“ RSU ” means a restricted share unit issued pursuant to the PRSU Plan;

“ Securities ” means, collectively, the Common Shares, Debt Securities, Subscription Receipts, Warrants and Units;

“ Shareholder(s) ” means the holder(s) of Common Shares;

“ Stock Option Plan ” means the amended and restated stock option plan of the Corporation dated June 25, 2020;

“ Subscription Receipts ” means subscription receipts to purchase Securities;

“ Subsidiary ” means any person, company, partnership, limited partnership, trust or other entity controlled, directly or indirectly, by the Corporation;

“ Tax Act ” means the Income Tax Act (Canada), as amended;

“ TSX ” means the Toronto Stock Exchange;

“ Units ” means units comprised of one or more of any of the other Securities;

“ U.S. Securities Act ” means the United States Securities Act of 1933, as amended; and

“ Warrants ” means Common Share purchase warrants, each of which entitles the holder thereof to purchase one Common Share.

G-2

FORWARD-LOOKING STATEMENTS

- This Prospectus and the documents incorporated by reference herein contain forward looking statements. All statements other - than statements of historical fact contained in this Prospectus and the documents incorporated by reference herein are forward looking statements, including, without limitation, statements regarding the listing on the TSX of the Common Shares, Warrants and Common Shares issuable upon the due exercise of the Warrants; the Corporation’s use of proceeds; expectation as to future cannabis production and sales by the Corporation; expectations as to the size and value of the medical cannabis and recreational cannabis markets in Canada; future financial position; future development and growth prospects; expected operating costs, general and administrative costs, costs of services and other costs and expenses; the Corporation’s ability to meet current and future obligations; the Corporation’s ability to obtain equipment, services and supplies in a timely manner; business strategy; financial condition; capital resources and business of the Corporation and/or its Subsidiaries; the Corporation’s policy with respect to dividends; and plans and objectives of or involving the Corporation or its Subsidiaries or any businesses to potentially be acquired by the Corporation. Prospective investors can identify many of these statements by looking for words such as “believes”, “expects”, “will”, “may”, “intends”, “projects”, “anticipates”, “plans”, “estimates”, “continues” and similar words or the negative thereof.

Forward-looking statements are necessarily based upon a number of expectations or assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned to not place undue reliance on forward-looking statements which only speak as to the date they are made. Although management believes that the expectations and assumptions underlying such forward-looking statements are reasonable, there can be no assurance that such expectations or assumptions will prove to be correct. A number of factors could cause actual future results, performance, achievements and developments of the Corporation and/or its Subsidiaries to differ materially from anticipated results, performance, achievements and developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to: management of growth; conflicts of interest; competition; impact of the illicit supply of cannabis; growth strategy and expansion of operations; failure to deliver and market new products; changes in laws, regulations and guidelines; global economic, political and social conditions; contagious disease and COVID-19 (Coronavirus); risks related to the agricultural business; vulnerability to rising energy costs; product transportation cost and disruptions; unfavourable publicity or consumer perception; brand risk; product liability; shelf life of inventory; product recalls; regulatory risks; reliance on licenses; retail regulation; risks of retail store operations; constraints on marketing; limited operating history; effectiveness of quality control systems; reliance on the production facility of the Corporation and expansion facility; reliance on management; reliance on key inputs; dependence on suppliers and skilled labour; variable revenues and earnings; operating risk and insurance coverage; TSX restrictions on business; accounting policies and internal controls; cyber security risks; environmental and employee health and safety regulations; additional financing requirements; capital lending markets; unprofitable business operations; limitations on forecasting; commodity taxes and government mark-ups; litigation; price fluctuation of securities; short sales, dilution, and dividends.

The information contained or incorporated by reference in this Prospectus, including the information set forth under “R isk Factors ” in this Prospectus and “ Risk Factors ” in the 2020 AIF, identifies additional factors that could affect the operating results and performance of the Corporation and its Subsidiaries. Assumptions about the performance of the businesses of the Corporation and its Subsidiaries are considered in setting the business plan for the Corporation and its Subsidiaries and in setting financial targets. Key assumptions include that the demand for products and services of the businesses of the Corporation and its Subsidiaries will continue to grow and that the legislative and regulatory environments of the jurisdictions where the Corporation carries on business or has operations will allow the Corporation to pursue its business objective. Should one or more of the risks materialize or the assumptions prove incorrect, actual results, performance or achievements of the Corporation and its Subsidiaries may vary materially from those described in forward-looking statements.

The forward-looking statements contained herein or contained in a document incorporated by reference herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included or incorporated by reference in this Prospectus are made as of the date of this Prospectus or such other date specified in such statement. Except as required by law, the Corporation disclaims any obligation to update any forward-looking information, estimates or opinions, future events or results or otherwise.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of Delta 9 Cannabis Inc. at PO Box 68096 Osborne Village, Winnipeg, Manitoba, R3L 2V9, telephone 1-855-245-1259 and are also available electronically at www.sedar.com.

Except to the extent that their contents are modified or superseded by a statement contained in this Prospectus or in any other subsequently filed document that is also incorporated by reference in this Prospectus, the following documents, filed with applicable securities regulatory authorities in Canada, are specifically incorporated by reference herein and form an integral part of this Prospectus:

(a) the 2020 AIF;
(b) the 2020 Financial Statements;
(c) the 2020 MD&A;
(d) the 2021 Q2 Financial Statements;
(e) the 2021 Q2 MD&A;
(f) the 2021 Meeting Circular; and
(g) the material change report dated December 3, 2020 relating to the 2021 Equity Offering.

All of the Corporation’s documents of the type described in section 11.1 of Form 44-101F1 – Short Form Prospectus which are filed by the Corporation with a securities commission or similar regulatory authority in any of the provinces of Canada after the date of this Prospectus and prior to the expiration of the term of this Prospectus shall be deemed to be incorporated by reference into this Prospectus.

Upon new audited annual financial statements and related management’s discussion and analysis being filed by the Corporation with applicable securities regulatory authorities during the term of this Prospectus, the previously filed audited annual financial statements and all unaudited interim financial statements, together with related management’s discussion and analysis, relating to prior periods shall be deemed to no longer be incorporated into this Prospectus for the purposes of future offers and sales of Securities under this Prospectus.

Upon a new annual information form being filed by the Corporation with applicable securities regulatory authorities during the term of this Prospectus, the previously filed annual information form, any material change reports filed prior to the end of the financial year in respect of which the new annual information form is filed, any information circular filed since the start of such financial year, and any business acquisition report for acquisitions completed since the beginning of such financial year shall be deemed no longer to be incorporated by reference into this Prospectus for the purposes of future offers and sales of Securities under this Prospectus.

Upon new interim financial statements and related management’s discussion and analysis being filed by the Corporation with applicable securities regulatory authorities during the term of this Prospectus, all previously filed interim financial statements and related management’s discussion and analysis shall be deemed no longer to be incorporated by reference into this Prospectus for the purposes of future offers and sales of Securities under this Prospectus.

A Prospectus Supplement containing the specific terms in respect of any offering of Securities and any additional or updated information the Corporation may elect to include (provided that such information does not describe a material change that has not already been the subject of a material change report or a prospectus amendment) will be delivered to purchasers of such Securities, together with this Prospectus, and will be deemed to be incorporated into this Prospectus as of the date of such Prospectus Supplement, but only for the purposes of the offering of such Securities.

Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this Prospectus, to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed in its unmodified or superseded form to constitute part of this Prospectus.

DELTA 9 CANNABIS INC.

General

The Corporation is a vertically integrated cannabis company, with operations in cannabis cultivation, processing, extraction, wholesale distribution, retail, and business to business activities. The Corporation, through its wholly-owned subsidiary, Delta 9 Bio-Tech, is a licensed producer of cannabis pursuant to the Access to Cannabis for Medical Purposes Regulations (Canada). Delta 9 Bio-Tech holds the Health Canada License. The Health Canada License is currently valid until August 30, 2022.

Delta 9 Bio-Tech owns one operating subsidiary, Delta 9 Lifestyle. Delta 9 Lifestyle was incorporated under The Corporations Act (Manitoba) on February 9, 2017. Delta 9 Bio-Tech owns 68.27% of the issued and outstanding shares of Delta 9 Lifestyle. The remaining 31.73% of the issued and outstanding shares are owned by 7217804, an arm’s length third party.

As of the date hereof, Delta 9 Lifestyle owns and operates a chain of ten retail cannabis stores in Manitoba, operating as the “Delta 9 Cannabis Store”, offering cannabis flower, cannabis oils, cannabis pre-rolls, cannabis derivative products, and cannabis accessories to adult recreational consumers in Manitoba, with seven cannabis retail stores in Winnipeg, one cannabis retail store in Brandon, one cannabis retail store in Selkirk, and one cannabis retail store in Thompson.

As of the date hereof, the Corporation operates four retail cannabis stores owned by Delta 9 Cannabis Store in Alberta, operating as the “Delta 9 Cannabis Store”, offering cannabis flower, cannabis oils, cannabis pre-rolls, cannabis derivative products, and cannabis accessories to adult recreational consumers in Alberta, with two cannabis retail stores in Edmonton, one cannabis retail store in Calgary, and one cannabis retail store in Grand Prairie.

As of the date hereof, the Corporation operates one retail cannabis store owned by Delta 9 Cannabis Store in Saskatchewan, operating as the “Delta 9 Cannabis Store”, offering cannabis flower, cannabis oils, cannabis pre-rolls, cannabis derivative products, and cannabis accessories to adult recreational consumers in Lloydminster.

Delta 9 Lifestyle also operates a medical clinic, which markets the “Delta 9” brand to patients and provides physician consultation services to patients seeking a medical recommendation to use medical cannabis.

For a detailed description of the business of the Corporation, prospective investors should refer to the Corporation’s 2020 AIF, which is incorporated by reference and available at www.sedar.com.

Management of the Corporation

Overall governance of the Corporation is under the direction of the Directors. The business and operations of the Corporation are subject to the control of the Directors.

The Directors of the Corporation are Nitin Kaushal (Chairman of the board of Directors), John William (John) Arbuthnot IV, Joanne Duhoux-Defehr, John William Arbuthnot III, and Hugh Aird. The officers of the Corporation are John William (John) Arbuthnot IV (Chief Executive Officer) and James Lawson (Chief Financial Officer and Secretary).

United States Related Cannabis Activities

The Corporation does not sell cannabis or cannabis derivative products in the United States. The Corporation has no assets or investments in the United States. The Corporation occasionally sells equipment that could be used in cannabis production to customers located in the United States. As at September 8, 2021, the Corporation had revenue of $928,760 from sales of grow pods to one customer located in the United States. These sales represent a very small portion of the Corporation’s overall revenues in 2020, approximately 2%.

Cannabis is illegal under United States federal law. Due to the Corporation’s sales in the United States there is a small risk that third party service providers could suspend services provided to the Corporation or that regulatory bodies could impose restrictions on the Corporation’s ability to operate in the United States. Neither of these would have a material impact on the Corporation.

No formal legal advice has been obtained by the Corporation regarding its United States sales. The Corporation is not aware of any specific non-compliance with United States law in connection with its sales in the United States.

RECENT DEVELOPMENTS

The following is a summary of recent developments involving the Corporation since June 30, 2021:

Health Canada License Expansion

On August 6, 2021, Health Canada approved two expansions to the Health Canada License. The approvals allow for: (i) an expansion of the licensed perimeter of the Delta Facility from 80,000 square feet to approximately 95,000 square feet; and (ii) the licensing of a new 7,500 square foot purpose-built storage and distribution area. The expanded licensed perimeter will allow the Corporation to improve control systems within its licensed perimeter, improve the operational flow of its operations, and to position the Corporation to better plan for future expansions of the Corporation’s licensed cannabis operations areas. The new purpose-built storage and distribution area will allow the Corporation to improve its product packaging, case-packing, and distribution efficiency to better allow it to cater to its provincial distribution markets across Canada.

Opening of Thirteenth Retail Cannabis Store

On August 26, 2021, the Corporation opened its thirteenth retail cannabis store. The store is located in the City of Selkirk, Manitoba. The store features ample parking and easy access from the street. The new store offers customers a modern shopping décor, highly trained staff and a wide range of products; including dried cannabis flower, cannabis oil, edibles, drinkables, vape pens, concentrates and more.

Acquisition of Two Retail Cannabis Stores in Edmonton, Alberta

On August 31, 2021, the Corporation closed a transaction with 1884356 Alberta Ltd. (the “ 1884 ”) to acquire all or substantially all of the 1884’s assets relating to the operation of two retail cannabis stores in Edmonton, Alberta (the “ Hey Bud Transaction ”). The acquisition was completed through Delta 9 Cannabis Store pursuant to an asset purchase agreement between Delta 9 Cannabis Store and 1884 dated July 9, 2021. The purchase price paid by Delta 9 Cannabis Store relating to the Hey Bud Transaction was $2,350,000, subject to customary adjustments. $940,000 of the purchase price was satisfied through the issuance of 2,243,437 Common Shares at a deemed price of $0.419 per Common Share, which is the 10-day volume weighted average price per Common Share on the TSX as at August 30, 2021. The balance of the purchase price was paid in cash, of which $175,000 remains held in escrow for a period of approximately six months.

USE OF PROCEEDS

Our management will have substantial discretion concerning the use of proceeds of an offering under any Prospectus Supplement as well as the timing of the expenditure of the proceeds thereof. As a result, investors will be relying on the judgment of management as to the specific application of the proceeds of any offering of Securities under any Prospectus Supplement.

EARNINGS COVERAGE RATIOS

Earnings coverage ratios will be provided as required in the applicable Prospectus Supplement(s) with respect to the issuance of Debt Securities pursuant to this Prospectus.

DESCRIPTION OF SECURITIES

The following is a summary of the material attributes and characteristics of the Securities as at the date of this Prospectus. This summary does not purport to be complete. These descriptions may be modified by disclosure in the applicable Prospectus Supplement.

Common Shares

For a complete summary of the general terms that apply to Common Shares of the Corporation as at the date of this Prospectus, see “Description of Capital Structure” in the 2020 AIF, which document is incorporated by reference in this Prospectus.

The Common Shares may be offered separately or together with other Securities, as the case may be.

As at the date of this Prospectus, the Corporation is authorized to issue an unlimited number of Common Shares. Common Shares represent a Shareholder’s proportionate undivided beneficial interest in the Corporation. No Common Share has any preference or priority over another. No Shareholder has or is deemed to have any right of ownership in any of the Corporation’s assets. Each Common Share confers the right to one vote at any meeting of Shareholders and to participate pro rata in any distributions by the Corporation and, in the event of the termination or winding up of the Corporation, in the net assets of the Corporation remaining after the satisfaction of all liabilities. Common Shares are transferable. Fractional Common Shares will not entitle the holder thereof to vote. No Common Shares shall be issued other than as fully paid and non-assessable. There are no pre-emptive rights attaching to the Common Shares.

Debt Securities

This section describes the general terms that will apply to any Debt Securities that may be offered by the Corporation pursuant to this Prospectus.

The Debt Securities may be offered separately or together with other Securities, as the case may be.

The following sets forth certain general terms and provisions of the Debt Securities that may be offered under this Prospectus. The specified terms and provisions of the Debt Securities offered pursuant to an accompanying Prospectus Supplement, and the extent to which the general terms described in this section apply to those Debt Securities, will be set forth in the applicable Prospectus Supplement.

The Debt Securities will be direct, secured or unsecured obligations of the Corporation. The Debt Securities will be senior or subordinated indebtedness of the Corporation as described in the relevant Prospectus Supplement. In the event of the insolvency or winding up of the Corporation, the subordinated indebtedness of the Corporation, including the subordinated Debt Securities, will be subordinate in right of payment to the prior payment in full of all other liabilities of the Corporation (including senior indebtedness), except those which by their terms rank equally in right of payment with or are subordinate to such subordinated indebtedness.

The Debt Securities will be issued under one or more trust indentures (each, a “ Trust Indenture ”), in each case between the Corporation and a trustee (each, an “ Indenture Trustee ”). The statements made hereunder relating to any Trust Indenture and the Debt Securities to be issued thereunder are summaries of certain anticipated provisions thereof and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable Trust Indenture.

Each Trust Indenture may provide that Debt Securities may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Corporation.

The particular terms of each issue of Debt Securities will be described in the related Prospectus Supplement. This description will include, where applicable:

(a) the designation, aggregate principal amount and authorized denominations of such Debt Securities;
(b) the currency or currency units for which the Debt Securities may be purchased and the currency or currency unit in which the principal and any interest is payable (in either case, if other than Canadian dollars);
(c) the percentage of the principal amount at which such Debt Securities will be issued;
(d) the date or dates on which such Debt Securities will mature;

(e) the rate or rates per annum at which such Debt Securities will bear interest (if any), or the method of determination of such rates (if any);
(f) the dates on which any interest will be payable and the record dates for such payments;
(g) the Indenture Trustee of the Debt Securities under the Trust Indenture pursuant to which the Debt Securities are to be issued;
(h) the designation and terms of any securities with which the Debt Securities will be offered, if any, and the number of Debt Securities that will be offered with each security;
(i) whether the Debt Securities are subject to redemption or call and, if so, the terms of such redemption or call provisions;
(j) whether such Debt Securities are to be issued in registered form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;
(k) any exchange or conversion terms;
(l) whether the Debt Securities will be subordinated to other liabilities of the Corporation and, if so, to what extent;
(m) certain material Canadian tax consequences of owning the Debt Securities, if any; and
(n) any other material terms and conditions of the Debt Securities.

Debt Securities may be issued at various times with different maturity dates, may bear interest at different rates and may otherwise vary.

Warrants

This section describes the general terms that will apply to any Warrants that may be offered by the Corporation pursuant to this Prospectus.

Warrants may be offered separately or together with other Securities, as the case may be.

The following sets forth certain general terms and provisions of the Warrants offered under this Prospectus. The specific terms of the Warrants, and the extent to which the general terms described in this section apply to those Warrants, will be set forth in the applicable Prospectus Supplement. The Warrants will be issued under a warrant indenture. The applicable Prospectus Supplement will include the details of the warrant indenture governing the Warrants being offered.

The particular terms of each issue of Warrants will be described in the related Prospectus Supplement. Such description will include, where applicable:

(a) the number of Warrants being offered and, if offered as a unit with another Security, the number of Warrants or the fraction of a Warrant being offered with such other Security;
(b) the Common Shares which are underlying the Warrants;
(c) the exercise price of the Warrants;
(d) the expiry date of the Warrants;
(e)
the procedure for exercising Warrants into underlying Common Shares;
(f) the indenture trustee of the Warrants under the warrant indenture pursuant to which the Warrants are to be issued, if applicable;

(g) certain material Canadian tax consequences of owning the Warrants (if any); and
(h) any other material terms and conditions of the Warrants.

Subscription Receipts

This section describes the general terms that will apply to any Subscription Receipts that may be offered by the Corporation pursuant to this Prospectus.

Subscription Receipts may be offered separately or together with other Securities.

The following sets forth certain general terms and provisions of the Subscription Receipts offered under this Prospectus. The specific terms of the Subscription Receipts, and the extent to which the general terms described in this section apply to those Subscription Receipts, will be set forth in the applicable Prospectus Supplement. The Subscription Receipts will be issued under a subscription receipt agreement. The applicable Prospectus Supplement will include details of the subscription receipt agreement governing the Subscription Receipts being offered.

The particular terms of each issue of Subscription Receipts will be described in the related Prospectus Supplement. Such description will include, where applicable:

(a) the number of Subscription Receipts being offered;
(b) the price at which the Subscription Receipts will be offered;
(c) the Securities into which the Subscription Receipts are exchangeable;
(d) the procedures for the exchange of the Subscription Receipts into Securities;
(e) the number of Securities that may be exchanged upon exercise of each Subscription Receipt;
(f) the designation and terms of any other Securities with which the Subscription Receipts will be offered, if any, and the number of Subscription Receipts that will be offered with each security;
(g) certain material Canadian tax consequences of owning the Subscription Receipts (if any); and
(h) any other material terms and conditions of the Subscription Receipts.

An original purchaser of Subscription Receipts will have a contractual right of rescission against the Corporation, following the issuance of the underlying Common Shares or other Securities to such purchaser, upon the surrender or deemed surrender of the Subscription Receipts, to receive the amount paid for the Subscription Receipts in the event that this Prospectus (including any documents incorporated by reference) and any amendment hereto contains a misrepresentation or is not delivered to such purchaser, provided such remedy for rescission is exercised within one hundred and eighty (180) days.

Units

This section describes the general terms that will apply to any Units that may be offered by the Corporation pursuant to this Prospectus.

The following sets forth certain general terms and provisions of the Units offered under this Prospectus. The specific terms of the Units, and the extent to which the general terms described in this section apply to those Units, will be set forth in the applicable Prospectus Supplement.

Each Unit will be issued so that the holder of the Unit is also the holder of each of the Securities included in the Unit. Accordingly, the holder of a Unit will have the rights and obligations of a holder of each included Security. The unit agreement, if any, under which a Unit is issued may provide that the Securities included in the Unit may not be held or transferred separately, at any time or at any time before a specified date.

The material terms and provisions of Units offered by any Prospectus Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in the applicable Prospectus Supplement filed in respect of such Units. This description will include, where applicable:

(a) the number of Units offered;
(b) the price or prices, if any, at which the Units will be issued;
(c) the currency at which the Units will be offered;
(d) the Securities comprising the Units;
(e) whether the Units will be issued with any other Securities and, if so, the amount and terms of these Securities;
(f) any minimum or maximum subscription amount;
(g) whether the Units and the Securities comprising the Units are to be issued in registered form, “book‐entry only” form, non‐certificated inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;
(h) any material risk factors relating to such Units or the Securities comprising the Units;
(i) any other rights, privileges, restrictions and conditions attaching to the Units or the Securities comprising the Units; and
(j) any other material terms or conditions of the Units or the Securities comprising the Units, including whether and under what circumstances the Securities comprising the Units may be held or transferred separately.

The terms and provisions of any Units offered under a Prospectus Supplement may differ from the terms described above and may not be subject to or contain any or all of the terms described above.

PLAN OF DISTRIBUTION

The Corporation may from time to time during the 25-month period that this Prospectus, including any amendments hereto, remains valid, offer for sale and issue Common Shares, Debt Securities, Warrants, Subscription Receipts and Units. The Corporation may sell up to $20,000,000, in the aggregate, of initial offering price of Securities (or the equivalent amount if any Securities are denominated in currency other than Canadian dollars).

The specific terms of any Securities offered will be described in one or more Prospectus Supplements, including, where applicable: (i) in the case of Common Shares, the number of Common Shares being offered, the offering price and any other specific terms; (ii) in the case of Debt Securities, the specific designation, the aggregate principal amount being offered, the authorized denominations, the currency, the issue and delivery date, the maturity date, the issue price (or the manner of determination thereof if offered on a non-fixed price basis), the interest rate (either fixed or floating, and, if floating, the manner of calculation thereof), the interest payment date(s), the redemption, exchange or conversion provisions (if any), the repayment terms, the form (either global or definitive) and any other specific terms; (iii) in the case of Warrants, the number of Warrants being offered, the offering price, the exercise price and any other specific terms; (iv) in the case of Subscription Receipts, the number of Subscription Receipts being offered, the offering price, the procedures for the exchange of Subscription Receipts for Common Shares or any other Securities and any other specific terms; and (v) in the case of Units, (i) to (iv) above, as applicable. A Prospectus Supplement may include specific variable terms pertaining to the Securities that are not within the alternatives and parameters described in this Prospectus.

The Corporation may sell the Securities to or through underwriters or dealers purchasing as principals, and may also sell the Securities directly to one or more purchasers pursuant to applicable statutory exemptions or through agents. The Prospectus Supplement relating to a particular offering of Securities will identify each underwriter, dealer or agent, as the case may be, engaged by the Corporation in connection with the offering and sale of the Securities, and will set forth the terms of the offering of such Securities, including, to the extent applicable, any fees, discounts or any other compensation payable to underwriters, dealers or agents in connection with the offering, the method of distribution of the Securities, the initial issue price (in the event that the offering is a fixed price distribution), the proceeds that the Corporation will receive and any other material terms of the plan of distribution. The Securities may be sold from time to time in one or more transactions at a fixed price or prices or at non-fixed prices. If offered on a non-fixed price basis, Securities may be offered at market prices prevailing at the time of sale, at prices determined by reference to such prevailing market prices or at negotiated prices, which prices may vary as between purchasers and during the period of distribution of the Securities.

Any public offering price and any discounts, concessions or omissions allowed or re-allowed or paid to underwriters, dealers or agents may be changed from time to time.

In connection with any offering of Securities, the underwriters, dealers or agents, as the case may be, may over allot or effect transactions which stabilize or maintain the market price of the Securities at a level above that which otherwise might prevail on the open market. Such transactions, if commenced, may be discontinued at any time.

The outstanding Common Shares listed and posted for trading on the TSX under the trading symbol “DN” and quoted on the OTCQX under the trading symbol “VRNDF”. The outstanding Debentures and the 2019 Warrants are listed and posted for trading on the TSX under the trading symbol “DN.DB” and “DN.WT.A”, respectively. As at September 8, 2021, the closing trading prices on the TSX for the Common Shares, Debentures and 2019 Warrants were $0.415, $85.00 and $0.02, respectively.

Underwriters, dealers and agents who participate in the distribution of the Securities may be entitled under agreements to be entered into with the Corporation to indemnification by the Corporation against certain liabilities including liabilities under securities legislation, or to contribution with respect to payments that they may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for the Corporation in the ordinary course of business.

The Securities have not been and will not be registered under the U.S. Securities Act or any state securities laws. Accordingly, except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws, the Securities may not be offered, sold or delivered within the United States, and each underwriter or agent for any offering of Securities will agree that it will not offer, sell or deliver the Securities within the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws, in addition, until 40 days after the commencement of an offering of Securities, an offer or sale of such Securities within the United States by a dealer (whether or not participating in the offering) may violate the registration requirements of the U.S. Securities Act.

CONSOLIDATED CAPITALIZATION

Except as described below, there have been no material changes in the consolidated capitalization of the Corporation since June 30, 2021.

On August 31, 2021, the Corporation issued 2,243,437 Common Shares to 1884 in connection with the terms of the Hey Bud Transaction at a deemed price of $0.419 per Common Share.

PRIOR SALES

Prior Sales

During the 12-month period prior to the date of this Prospectus, the Corporation has not sold or issued Common Shares or securities convertible into Common Shares, other than as follows:

(a) On August 31, 2021, the Corporation issued 2,243,437 Common Shares to 1884 in connection with the terms of the Hey Bud Transaction at a deemed price of $0.419 per Common Share.
(b) On July 7, 2021, the Corporation issued 8,750 Common Shares pursuant to the redemption of 8,750 RSUs.
(c) On June 8, 2021, the Corporation issued 8,750 Common Shares pursuant to the redemption of 8,750 RSUs.
(d) On June 1, 2021, the Corporation issued 569,250 Common Shares pursuant to the redemption of 569,250 RSUs.
(e) On March 9, 2021, the Corporation issued 144,231 additional Common Shares to Auxly in connection with the terms of the Kolab Transaction at a deemed price of $0.52 per Common Share.
(f) On December 21, 2020, the Corporation issued 10,454,546 Common Shares pursuant to a bought deal financing of equity units (“ 2021 Equity Units ”) at a price of $0.55 per 2021 Equity Unit for aggregate gross proceeds of $5,750,000.30 (the “ 2021 Equity Offering ”). Each 2021 Equity Unit consisted of one Common Share and one half of one Common Share purchase warrant (each whole Common Share purchase warrant, a “ 2021 Warrant ”). Each 2021 Warrant entitles the holder thereof to purchase one Common Share at an exercise price of $0.70 at any time up to 36 months following the date of issuance.
(g) On November 27, 2020, the Corporation granted 1,228,482 Options to certain directors, officers, employees and consultants of the Corporation in accordance with the Stock Option Plan. Each Option is exercisable into one Common Share of the Corporation at an exercise price of $0.60 per Common Share for a period of five years from the date of grant. The Options vest over twelve months, with 50% vesting every six months from the date of grant.
(h) On November 27, 2020, the Corporation granted 1,243,500 RSUs to certain directors and officers of the Corporation in accordance with the PRSU Plan. Each RSU is redeemable into one Common Share of the Corporation for period of five years from the date of grant. The RSUs vest over twelve months, with 50% vesting every six months from the date of grant.
(i) On November 9, 2020, the Corporation issued 1,282,270 Common Shares to Auxly at a deemed price per Common Share of $0.5849 as part of the purchase price for in connection with a transaction with Auxly and Kolab whereby Delta 9 Cannabis Store acquired from Kolab substantially all of the assets of related to or used in a licensed retail cannabis store located at 3427 – 50 Avenue, Unit 7, Lloydminster, Saskatchewan (the “ Kolab Transaction ”).
(j) On October 15, 2020, the Corporation issued 990,056 Common Shares pursuant to the redemption of 990,056 RSUs.
(k) On August 17, 2020, the Corporation granted 1,590,056 RSUs to certain directors and officers of the Corporation in accordance with the PRSU Plan. Each RSU is redeemable into one Common Share of the Corporation for period of five years from the date of grant. 990,056 of the RSUs vested immediately. 600,000 of the RSUs vested on June 30, 2021.

Trading Price and Volume

Common Shares

The Common Shares are listed for trading on the TSX under the trading symbol “DN”. The table below sets out the high and low trading prices for the Common Shares on the TSX for the twelve-month period prior to the date of this Prospectus Supplement.

Month	High ($)	Low ($)	Volume
September, 2020	$0.62	$0.53	1,808,297
October, 2020	$0.62	$0.53	1,236,992
November, 2020	$0.62	$0.54	3,772,361
December, 2020	$0.60	$0.495	1,998,981
January, 2021	$0.55	$0.43	2,416,054
February, 2021	$0.75	$0.455	7,780,732
March, 2021	$0.61	$0.47	6,846,900
April, 2021	$0.61	$0.53	2,539,887
May, 2021	$0.56	$0.48	2,386,120
June, 2021	$0.495	$0.435	2,281,684
July, 2021	$0.46	$0.395	1,794,589
August, 2021	$0.46	$0.39	1,409,725
September,2021(to September8)	$0.42	$0.39	214,338

Debentures

The Debentures are listed for trading on the TSX under the trading symbol “DN.DB”. The table below sets out the high and low trading prices on the TSX for the Debentures for the twelve-month period prior to the date of this Prospectus Supplement.

Month	High ($)	Low ($)	Volume
September, 2020	$91.00	$88.00	27,000
October, 2020	$92.50	$92.00	224,000
November, 2020	$92.20	$92.00	58,000
December, 2020	$97.00	$94.00	10,000
January, 2021	$99.00	$95.00	127,000
February, 2021	$100.00	$100.00	50,000
March, 2021	$100.00	$100.00	170,000
April, 2021	$100.00	$100.00	90,000
May, 2021	$100.50	$100.50	10,000
June, 2021	$100.00	$98.00	35,000
July, 2021	$90.00	$90.00	5,000
August, 2021	$85.00	$80.00	1,154,000
September,2021(to September8)	$85.00	$85.00	0

2019 Warrants

The 2019 Warrants are listed for trading on the TSX under the trading symbol “DN.WT.A”. The table below sets out the high and low trading price for the 2019 Warrants for the twelve-month period prior to the date of this Prospectus Supplement.

Month	High ($)	Low ($)	Volume
September, 2020	$0.10	$0.065	204,950
October, 2020	$0.09	$0.07	62,000
November, 2020	$0.08	$0.065	163,868
December, 2020	$0.09	$0.065	31,780
January, 2021	$0.065	$0.06	24,000
February, 2021	$0.15	$0.065	198,604
March, 2021	$0.10	$0.08	37,000
April, 2021	$0.08	$0.08	0
May, 2021	$0.10	$0.04	95,650
June, 2021	$0.085	$0.04	35,489
July, 2021	$0.04	$0.04	0
August, 2021	$0.04	$0.02	46,000
September, 2021 (to September 8)	$0.02	$0.02	0

RISK FACTORS

An investment in the Corporation is subject to a number of risks, including risks relating to: management of growth; conflicts of interest; competition; impact of the illicit supply of cannabis; growth strategy and expansion of operations; failure to deliver and market new products; changes in laws, regulations and guidelines; global economic, political and social conditions; contagious disease and COVID-19 (Coronavirus); risks related to the agricultural business; vulnerability to rising energy costs; product transportation cost and disruptions; unfavourable publicity or consumer perception; brand risk; product liability; shelf life of inventory; product recalls; regulatory risks; reliance on licenses; retail regulation; risks of retail store operations; constraints on marketing; limited operating history; effectiveness of quality control systems; reliance on the production facility of the Corporation and expansion facility; reliance on management; reliance on key inputs; dependence on suppliers and skilled labour; variable revenues and earnings; operating risk and insurance coverage; TSX restrictions on business; accounting policies and internal controls; cyber security risks; environmental and employee health and safety regulations; additional financing requirements; capital lending markets; unprofitable business operations; limitations on forecasting; commodity taxes and government mark-ups; litigation; price fluctuation of securities; short sales, dilution, and dividends and any additional risks that are incorporated by reference or described in a particular Prospectus Supplement.

Prospective investors in a particular offering of Securities should carefully consider, in addition to information contained in the Prospectus Supplement relating to that offering and the information incorporated by reference herein, the risk factors described in the Corporation’s annual information form and management’s discussion and analysis which are incorporated by reference herein as at the date of the Prospectus Supplement relating to the particular offering of Securities.

PRINCIPAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The applicable Prospectus Supplement will include a general summary of the principal Canadian federal income tax considerations which may be applicable to a purchaser of Securities offered thereunder.

INTEREST OF EXPERTS

The following persons or companies are named as having prepared or certified a report, valuation, statement or opinion in this prospectus, either directly or in a document incorporated herein by reference, and whose profession or business gives authority to the report, valuation, statement or opinion made by the expert. The 2020 Financial Statements incorporated by reference in this Prospectus have been so incorporated in reliance on the report of Baker Tilley HMA LLP, given on the authority of said firm as experts in auditing and accounting. Baker Tilly HMA LLP is independent of the Corporation

within the meaning of the Rules of Professional Conduct of the Institute of Chartered Professional Accountants of Manitoba.

LEGAL MATTERS

Certain legal matters relating to the offering of Securities will be passed upon on behalf of the Corporation by MLT Aikins LLP. As of the date hereof, the partners and associates of MLT Aikins LLP beneficially own, directly or indirectly, less than 1% of the outstanding Common Shares of the Corporation. In addition, certain legal matters in connection with any offering of Securities will be passed upon for any underwriters, dealers or agents by counsel to be designated at the time of the offering of such Securities.

AUDITORS, REGISTRAR AND TRANSFER AGENT

The Corporation’s auditors are Baker Tilly HMA LLP (formerly known as Collins Barrow HMA LLP) at 701-330 Portage Ave, Winnipeg, MB R3C 0C4.

The transfer agent and registrar for the Common Shares, the indenture trustee for the Debentures and the warrant agent for the 2019 Offering Warrants is Computershare Trust Company of Canada at its principal offices in Vancouver, British Columbia.

PURCHASERS’ CONTRACTUAL RIGHTS

Original purchasers of Subscription Receipts, Warrants or Units (if offered separately) which are convertible into other securities of the Corporation will have a contractual right of rescission against the Corporation in respect of the conversion, exchange or exercise of such Subscription Receipts, Warrants or Units, as the case may be. The contractual right of rescission will entitle such original purchasers to receive, in addition to the amount paid on the original purchase of the Subscription Receipts, Warrants or Units, as the case may be, the amount paid upon conversion, exchange or exercise, upon surrender of the underlying securities gained thereby, in the event that this Prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus; and (ii) the right of rescission is exercised within 180 days of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus. This contractual right of rescission will be consistent with the statutory right of rescission described under section 141 of The Securities Act (Manitoba), and is in addition to any other right or remedy available to original purchasers under section 141 of The Securities Act (Manitoba) or otherwise at law. Original purchasers are further advised that in certain provinces the statutory right of action for damages in connection with a prospectus misrepresentation is limited to the amount paid for the convertible, exchangeable or exercisable security that was purchased under a prospectus, and therefore a further payment at the time of conversion, exchange or exercise may not be recoverable in a statutory action for damages. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights, or consult with a legal advisor.

PURCHASERS’ STATUTORY RIGHTS

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. The securities legislation in certain of the provinces of Canada further provides a purchaser with remedies for rescission or damages if the prospectus and any amendment thereto contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province, for the particulars of these rights or consult with a legal advisor.

In an offering of Debt Securities that are convertible into Common Shares, Warrants, Subscription Receipts and Units, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial securities legislation, to the price at which the Debt Securities that are convertible into Common Shares, Warrants, Subscription Receipts and Units are offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon conversion,

exchange or exercise of the security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of this right of action for damages or consult with a legal adviser.

CERTIFICATE OF THE ISSUER

Dated: September 9, 2021

This short form prospectus, together with the documents incorporated in this prospectus by reference, will, as of the date of the last supplement to this prospectus relating to the securities offered by this prospectus and the supplement(s), constitute full, true and plain disclosure of all material facts relating to the securities offered by this prospectus and the supplement(s) as required by the securities legislation of each of the provinces of Canada, except Québec.

(Signed) JOHN WILLIAM ARBUTHNOT IV Chief Executive Officer

(Signed) JAMES LAWSON Chief Financial Officer

ON BEHALF OF THE BOARD OF TRUSTEES

(Signed) NITIN KAUSHAL Chairman and Director

(Signed) HUGH AIRD Director

C-1

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Horizon Petroleum Ltd. — Capital/Financing Update 2021

43393_rns_2021-09-10_5049b821-1568-4551-bff0-b34e73cfad93.PDF

SHORT FORM BASE SHELF PROSPECTUS

TABLE OF CONTENTS

GLOSSARY OF DEFINED TERMS

FORWARD-LOOKING STATEMENTS

DOCUMENTS INCORPORATED BY REFERENCE

DELTA 9 CANNABIS INC.

General

Management of the Corporation

United States Related Cannabis Activities

RECENT DEVELOPMENTS

Health Canada License Expansion

Opening of Thirteenth Retail Cannabis Store

Acquisition of Two Retail Cannabis Stores in Edmonton, Alberta

USE OF PROCEEDS

EARNINGS COVERAGE RATIOS

DESCRIPTION OF SECURITIES

Common Shares

Debt Securities

Warrants

Subscription Receipts

Units

PLAN OF DISTRIBUTION

CONSOLIDATED CAPITALIZATION

PRIOR SALES

Prior Sales

Trading Price and Volume

Common Shares

Debentures

2019 Warrants

RISK FACTORS

PRINCIPAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

INTEREST OF EXPERTS

LEGAL MATTERS

AUDITORS, REGISTRAR AND TRANSFER AGENT

PURCHASERS’ CONTRACTUAL RIGHTS

PURCHASERS’ STATUTORY RIGHTS

CERTIFICATE OF THE ISSUER

ON BEHALF OF THE BOARD OF TRUSTEES

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Horizon Petroleum Ltd. Capital/Financing Update 2021