SLANG Worldwide Creates Third Core Market with Signing of Definitive Merger Agreement to Acquire High Fidelity, Vermont’s Largest Vertically Integrated Operation

Merger includes retail, distribution and cultivation capabilities in the limited license market where adult-use sales are expected to reach up to US$230 million in 2023[1]

Toronto, Ontario–(Newsfile Corp. – June 28, 2021) – SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) (“SLANG” or the “Company“), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today announced that it has entered into an agreement and plan of merger (the “Merger Agreement”) to acquire High Fidelity, Inc. (“HI-FI”), Vermont’s largest medical cannabis company (the “Merger”).

Key Transaction Benefits:

• Delivers an accretive transaction on prospective Adjusted EBITDA basis
• Broadens SLANG’s core market footprint to include Vermont, adding to its existing core markets of Colorado and Oregon
• Adds two of the five medical cannabis licenses in Vermont with four fully operational dispensaries, including in the Burlington area, with ability to add two new retail dispensaries upon receipt of licenses
• Expands SLANG’s operational footprint with the addition of Vermont’s leading vertically integrated cannabis company, which includes a 28,000-square-foot cultivation, production, lab, and distribution facility, with a planned 50,000-square-foot expansion expected to be completed in 2022
• Strengthens SLANG’s experienced leadership further with engaged and aligned local management teams including a proven and profitable operator with an eight-year history

Key Vermont Market Benefits:

• Creates new jobs with competitive wages and benefit packages
• Brings fresh capital investment into the state, helping to build infrastructure to meet market demand
• Provides immediate opportunity for Vermont-branded product distribution to a larger US market through SLANG’s established 2200-outlet retail pipeline
• Adds expertise to support best manufacturing practices, innovation and regulatory compliance
• Creates strong partnership in supporting the social justice initiatives in Vermont’s cannabis laws

HI-FI is one of Vermont’s premier vertically integrated cannabis companies, founded in 2012 in Burlington, the state’s largest urban and cultural center. The Company owns two of the five medical cannabis licenses in Vermont, Champlain Valley Dispensary (“CVD”) and Southern Vermont Wellness (“SVW”), and services approximately 70 percent of registered patients^[2]. In June 2021, both CVD and SVW commenced operating under a new brand name, CeresMED. In the upcoming licensing process for adult use, current medical license holders will have early access to the market alongside Vermont’s craft growers, giving them a significant opportunity to build consumer loyalty. In addition to the four dispensaries, HI-FI operates statewide home delivery services and wholesale distribution of its own branded products as well as SLANG branded products. HI-FI has a long-standing mutually beneficial relationship with SLANG as a licensed manufacturer and distributor of leading vape brand, O.pen, in Vermont since 2015. Additionally, the Merger is expected to lead to the introduction of more of SLANG’s award-winning, market-leading brands (District Edibles, Firefly, Bakked and Lunchbox Alchemy) to the Vermont market.

Retail sales in Vermont for adult-use cannabis products are expected to begin in the fall of 2022, with sales expected to reach up to US$230 million in 2023.

“We recognized the value in High Fidelity as a local success story and pioneer in the Vermont cannabis community, focused on providing access to patients and consumers”, said Chris Driessen, Chief Executive Officer of SLANG. “The High Fidelity team is proud of their accomplishments to date and are committed to the ‘Vermont Way’ of doing things, which means a focus on quality, collaboration and the best consumer and employee experience. We understand these core values and are equally committed to nurturing their value-driven culture. This partnership will not only serve the cannabis community, it will bring quality jobs and revenue to the local and state economy.”

Shayne Lynn, President of HI-FI said, “Since our inception, we have led the Vermont cannabis industry with a ‘people first’ philosophy and a focus on expanding patient access and consumer education. With this transaction, we will be able to share experience and resources to help build new regional brands and create a new business model in the industry. As part of SLANG, we can continue to expand our offerings, create more jobs in our communities and remain true to our Vermont heritage, which the SLANG team values tremendously.”

In addition to four medical cannabis licenses, HI-FI also owns Ceres Natural Remedies, Vermont’s original CBD store. Since 2016, Ceres has grown to include three retail stores and a portfolio of Ceres branded products with distribution in over 1,200 retail locations, which will expand the SLANG network to over 3,400 total points of retail distribution. In addition to its own branded products, Ceres has a strong track record of scaling up regional and national brands through its sales channels. In 2019, Ceres purchased trētap, a Vermont-based sparkling beverage company and the first of its kind to utilize organic tree water from maple sugarbushes. In 2019, Ceres launched trētap CBD, with four new sparkling beverages infused with CBD.

Additionally, HI-FI is awaiting approval of a social equity application for a retail medical cannabis license in New Jersey. This application was submitted in collaboration with partners native to Trenton, N.J. with a mission to support communities disproportionately affected by the War on Drugs.

Driessen concluded, “Having already worked with the HI-FI team for a number of years, we are excited to expand our relationship with the team and participate in the Vermont market in a more significant way.”

Lynn will join SLANG’s leadership team and is expected to join the Company’s board of directors upon closing of the Merger.

Transaction details:

At the closing of the Merger, SLANG will pay US$12,000,000 of the Purchase Price by issuing an aggregate of 31,578,947 restricted voting shares in the capital of SLANG (the “SLANG Shares”) (based on an implied price per share of US$0.38), and paying US$3,000,000 in cash. At the 18-month anniversary of the closing of the Merger, SLANG will pay US$250,000 of the Purchase Price by issuing 657,894 SLANG Shares (based on an implied price per share of US$0.38), and paying US$2,000,000 in cash. Pursuant to the Merger Agreement, SLANG may issue additional SLANG Shares upon the achievement of certain performance milestones. Completion of the Merger remains subject to the satisfaction or waiver of all conditions precedent in the Merger Agreement, including the receipt of the approval of the State of Vermont’s Department of Public Safety and any other government authority whose approval is required. Closing of the Merger is expected to occur in Q3 2021.

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About SLANG Worldwide Inc.

SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. The Company specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. For more information, please visit www.slangww.com.

Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Forward-looking statements included in this news release include, but are not limited to, statements in respect of the completion of the Merger on the terms described herein or at all and the manufacture and distribution of new SLANG-branded products in Vermont.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to the COVID-19 global pandemic, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings “Risk Factors” in SLANG’s annual information form dated April 29, 2021 and other disclosure documents available on the Company’s profile on SEDAR at www.sedar.com. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

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About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.