Simply Solventless closes on $6M financing for Delta 9 Bio Tech deal

February 14, 2025 | Sarah Clark

Simply Solventless Concentrates Ltd. closed on a previously announced financing deal of $6 million, with $375,000 of the offering subscribed by insiders.

The proceeds from this non-brokered financing, which is expected to amount to $2.25 million, are expected to fund the outstanding purchase price for the Bio-Tech acquisition.

Simply Solventless has also received TSXV conditional approval for the closing of the Bio-Tech acquisition, which it says it is in a position to close imminently. The company will provide an update once a closing date has been determined.

At the end of 2024, Simply Solventless Concentrates Ltd. entered into a share purchase agreement with Delta 9 Cannabis Inc. to acquire all of Delta 9 Bio-Tech Inc.’s issued and outstanding shares.

The deal was expected to add around $12 million in revenue when it was first announced.

In January, Simply Solventless launched a non-brokered private placement financing with gross proceeds of up to $5 million. The proceeds were also expected to fund the purchase price of the previously announced acquisition of all Delta 9 Bio-Tech Inc.’s issued and outstanding shares.

In a press release at the time, SSC, which does not produce flower itself, said that the acquisition of Delta 9 will help the company continue to make inroads in the dried flower market following its recent acquisition of pre-roll manufacturer ANC Inc. for $10 million. SSC expects that the all-in cash cost to cultivate cannabis through Delta 9 will be approximately $0.60-$0.70 per gram, among the lowest for indoor cannabis in Canada.

SSC reports that Bio-Tech currently produces approximately 9,000 kilograms of cannabis per year. The cannabis processor believes that with roughly $4 million in capital investment, production could potentially increase to 15,000-18,000 kilograms per year, but this is not planned at this time.

“We would like to thank Plaza Capital and all Offering participants for their confidence in our high-impact growth strategy, which will be further fuelled by the proceeds from the Offering,” said Jeff Swainson, SSC president and CEO. “As we move forward, we are steadfastly focused on our exciting Q1 2025 product launches to support organic revenue growth, and the high grading of our pipeline of accretive acquisition opportunities.”

A court recently rejected the CRA’s concerns about Delta 9’s creditor protection case, allowing the Winnipeg company to proceed with several deals.

Simply Solventless’ portfolio includes the brands Frootyhooty, Lamplighter, Astro Lab, Roilty, Zest Cannabis, Status, and 34th Street.

The Alberta-based producer brought in net revenue of nearly $5 million in their most recent quarterly report (Q3 2024), with gross profits of almost $2 million and $424,446 in net and comprehensive income.