Harvest One Acquires Majority Interest in Greenbelt Greenhouse

Greenhouse Grow Facility Will Provide Extract Capabilities for Branded Products

TORONTO, April 1, 2019 /PRNewswire/ - Harvest One Cannabis Inc. (TSXV: HVT, OTCQX: HRVOF – “Harvest One”) is pleased to announce today that it has acquired an initial 52% interest in Greenbelt Greenhouse Ltd. (“Greenbelt”), an Ontario private company located in Hamilton, Ontario (herein, the “Transaction”).

This strategic acquisition will supply Harvest One with high quality greenhouse grown cannabis from Greenbelt’s 152,000 sq. ft. facility which will primarily be dedicated to Harvest One’s expanding cannabis-infused health, wellness, and self-care products under the Dream Water and Satipharm brands, and expanding products resulting from the recently announced acquisition of Delivra, following the closing of that transaction. The Transaction ensures that Harvest One remains a vertically integrated house of brands by controlling the production of cannabis through cultivation and extraction, and ultimately to packaged good for consumers.

In addition to the greenhouse, the Greenbelt facility also has a 42,000 sq. ft. headhouse which is an ideal location for future extraction and processing capabilities. Greenbelt has an application pending with Health Canada for a standard cultivation license and a standard processor license under the Cannabis Regulations.

Strategic Rationale

• Harvest One will now control significant production to supply new infused formulations of existing brands already controlled by the company.
• Harvest One secures a location to build out extraction capabilities for its infused products.
• The Transaction ensures good value for shareholders and provides economical access to a potential 15,000 kgs. or more of flower per year, once licensed.
• Offtake agreement ensures access to additional supply without further significant capital investment.

“We are excited to acquire a majority interest in Greenbelt which significantly increases Harvest One’s cannabis supply, as we continue our formulations on cannabinoid infused health, wellness, and self-care products across our house of brands” said Grant Froese, CEO of Harvest One. “In addition to the exceptional greenhouse facility, this acquisition also gives Harvest One space to build out its own extraction capabilities upon licensing which fulfills our goal of vertical integration from cultivation, to processing, extraction and, ultimately, premium infused products.”

Ian Adamson, President of Greenbelt commented, “We are delighted to be partnering with Harvest One and look forward to completing the final retrofit of our greenhouse facility and securing our licensing approvals from Health Canada. With Harvest One’s expanding portfolio of brands and their experience in licensing, coupled with our larger grow facility and space for extraction, we see tremendous upside for Greenbelt, its shareholders, and its professional team of operators, as we work together to provide cannabis and cannabis infused products that consumers will come to know and trust.”

TERMS OF THE TRANSACTION

In connection with the Transaction, Harvest One entered into a securities purchase agreement dated March 29, 2019, with Greenbelt pursuant to which Harvest One acquired $3,250,000 of treasury common shares of Greenbelt (the “Treasury Shares”). In addition, pursuant to a share purchase agreement dated March 29, 2019, between Harvest One and certain existing shareholders of Greenbelt, Harvest One acquired additional common shares of Greenbelt (the “Shareholder Shares”), giving Harvest One an aggregate 52% controlling interest in Greenbelt. In consideration for the Shareholder Shares, Harvest One issued 3,521,600 common shares (each share being issued at $0.923 per Harvest One share based on Harvest One’s 30-day VWAP ending two days prior to the closing of the transaction), representing approximately 1.9% of the issued and outstanding shares of Harvest One (on a non-diluted basis).

Contemporaneous with Harvest One’s investment, Greenbelt raised an additional $1,000,000 of equity from outside investors. The proceeds from Harvest One’s investment ($3,250,000) and from the outside investors ($1,000,000) has been used to retire indebtedness in full owing to existing lenders to Greenbelt and to payout certain equipment leases, with the balance of proceeds being used for working capital purposes. After completion of the Transaction, Harvest One now holds 52% of the outstanding shares of Greenbelt. In limited circumstances, Harvest One’s interest may be diluted down to 50.1%.

In addition to the foregoing, Harvest One entered into a loan facility agreement with Greenbelt dated March 29, 2019, pursuant to which Harvest One has agreed to provide a secured bridge loan facility to Greenbelt - in an amount of up to $3,500,000 bearing interest of 4.5% over a 1-year term - pursuant to which Greenbelt may draw down funds for the purpose of completing the planned retrofit of Greenbelt’s greenhouse facility.

In connection with the Transaction, Harvest One’s wholly-owned subsidiary, United Greeneries Ltd. (“United Greeneries”) and Greenbelt have also entered into an offtake agreement dated March 29, 2019, pursuant to which United Greeneries will be entitled to purchase a minimum of 50% of the offtake from Greenbelt’s harvest production following Greenbelt’s licensing. The offtake agreement is perpetual in nature and provides United Greeneries with agreed minimum volumes at preferential pricing for the first five years of production and, thereafter, at the then current market rates.

The Transaction is subject to final approval of the TSX Venture Exchange.

ABOUT HARVEST ONE CANNABIS INC.

Harvest One is a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world. The Company’s range of lifestyle solutions is designed to enhance quality of life. Shareholders have significant exposure to the entire cannabis value chain through three wholly-owned subsidiaries: United Greeneries, a Licensed Producer; Satipharm (medical and nutraceutical); and Dream Water Global (consumer), and a minority interest in Burb Cannabis (retail operations). For more information, please visit www.harvestone.com.

Cautionary Note Regarding Forward-Looking Statements

This news release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (“forward-looking statements”). Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements in this news release include, but are not limited to statements with respect to accretive earnings, future financial position and results of operations, anticipated benefits and costs synergies associated with the Transaction, internal expectations, estimated margins, expectations for future growing capacity, costs and opportunities, liquidity of Harvest One Shares, effect of the Transaction on Harvest One and its future strategy, plans, objectives, goals, targets and future developments, expectations for receipt of licenses to process or distribute cannabis in legal markets, the completion of any capital projects or expansions.

These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release, including assumptions regarding the expected growth, results of operations, performance, industry trends and growth opportunities for Harvest One.

Forward-looking statements are based on the opinions and estimates of management of Harvest One at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; market or other events limiting the liquidity of the Harvest One Shares; inability to realize anticipated synergies; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada and elsewhere generally; income tax and regulatory matters; the ability of Harvest One to implement its business strategy; competition; crop failure; currency and interest rate fluctuations and other risks. Readers are cautioned that the foregoing list is not exhaustive.

Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Harvest One. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

These forward-looking statements are made as of the date of this news release and Harvest One assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as expressly required by applicable law.

Neither TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accept responsibility for the adequacy or accuracy of this release.

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SOURCE Harvest One Cannabis Inc.

Company Codes: OTC-QX:HRVOF, TorontoVE:HVT