Mr. Steven McAuley reports

EMPOWER ANNOUNCES SECOND TRANCHE CLOSING OF DEBENTURE AND UNIT OFFERINGS AND ANNOUNCES BOARD OF DIRECTOR CHANGES

Empower Clinics Inc. has closed the second tranche of a non-brokered private placement of unsecured convertible debentures, pursuant to which it has issued debentures in the aggregate principal amount of $207,270, and the second tranche of a non-brokered private placement of an aggregate of 5,762,500 units of the company at a price of 10 cents per unit for gross proceeds of $576,250, for combined total proceeds of $783,520.

The proceeds of the offerings are expected to be used by the company for the completion of strategic acquisitions and for general working capital and corporate purposes.

"The strong support of our financing round demonstrates that shareholders and investors have faith in our ability to execute on initiatives, as we establish vertical integration connecting patient efficacy in our clinics with a diverse CBD [cannabidiol] product strategy and the backing of the science of extraction, all driven by data and analysis," stated Steven McAuley, Empower's chairman and chief executive officer.

Recent highlights:

• Intention to launch CBD extraction facility: The company intends to open a fully functioning hemp-based CBD extraction facility in greater Portland, Ore., in Q2 2019, with the first extraction system expected to have the capacity to produce 6,000 kilograms of extracted product per year. The 5,000-square-foot facility in Sandy, Ore., has now been secured through a five-year lease agreement and preparations are under way to begin licensing and permit requirements to commence operations in 2019.
• Acquisition of Sun Valley Certification Clinics Holdings LLC: Empower has completed the acquisition of the business of Sun Valley, including its interests in certain affiliates, by way of a share acquisition. Sun Valley operates a network of professional medical cannabis and pain management practices, with five clinics in Arizona, one clinic in Las Vegas, a tele-medicine platform serving California and a fully developed franchise business model for the domestic cannabis industry. The current Sun Valley clinic locations are as follows:
  • 4218 W Dunlap Ave., Phoenix, Ariz.;
  • 12801 W Bell Rd. No. 145, Surprise, Ariz.;
  • 4015 E Bell Rd. No. 130, Phoenix, Ariz.;
  • 2011 E University Dr., Mesa, Ariz.;
  • 7074 E Speedway Blvd., Tucson, Ariz.;
  • 2550 S Rainbow Blvd., Las Vegas, Nev.
• Focus on CBD product sales: Empower has commenced selling its proprietary line of CBD-based products, called Sollievo, through its network of company-owned clinics in the United States. Empower's patient base and customers are expected to benefit from access to high-margin derivative products, including CBD lotion, tinctures, spectrum oils, capsules, lozenges, patches, e-drinks, topical lotions, gel caps, hemp extract drops and pet elixir hemp extract drops. Patients and customers will be able to access Empower's home delivery and e-commerce platform.
• CBD market demand: The passing in the United States of the $867-billion (U.S.) Agriculture Improvement Act (farm bill) has legalized hemp and hemp-based products. This has created an opportunity for the production and sale of a variety of CBD-based products that can provide genuine help and effective relief to millions of people suffering from a variety of qualifying conditions. Recent reports and studies indicate the approval of the farm bill could create a $20-billion (U.S.) industry by 2022.
• Increased patient access: With a rapidly expanding company-owned clinic network and significant expansion opportunity assuming the successful acquisition of the Sun Valley franchise model, Empower anticipates it will grow its total patient list substantially in the years ahead. This is expected to provide greater opportunity for treatment analysis using artificial intelligence (AI).
• Market-leading technology: Empower utilizes a market-leading patient electronic management and point-of-sale system that is HIPAA (Health Insurance Portability and Accountability Act) compliant and provides insight to patient care. The company supports remote patients using its tele-medicine portal, enabling patients who are unable to come to a location to benefit from a doctor consultation.

The debentures bear interest at the rate of 6 per cent per annum and mature on May 3, 2020, being 12 months from the closing of the offerings. The debentures are convertible, at the option of the company or the holder, into units of the company at a conversion price of 11 cents per debenture unit, with each debenture unit comprising one common share in the capital of the company and one share purchase warrant, with each warrant exercisable into one share at a price of 16 cents per warrant share for a period of two years following the closing, provided that the company will have the right to accelerate the expiry date of the warrants in the event that the closing sale price of the shares on the Canadian Securities Exchange (or such other stock exchange as the shares are then principally traded) is greater than 40 cents per share for a period of 10 consecutive trading days at any time after the issuance of the warrants.

Each unit comprises one share and one warrant, with each warrant exercisable into one warrant share at an exercise price of 16 cents per warrant share for a period of two years following the closing, provided that the company will have the right to accelerate the expiry date of the warrants in the event that the closing sale price of the shares on the CSE (or such other stock exchange as the shares are then principally traded) is greater than 40 cents per share for a period of 10 consecutive trading days at any time after the issuance of the warrants.

The debentures and the units, along with the underlying shares, warrants and warrant shares, are subject to restrictions on resale under applicable Canadian securities laws for a period of four months and one day from the closing of the offerings.

The company also announces that Emily Davis has resigned as a director, effective immediately. The company thanks Ms. Davis for her valuable contributions.

In addition, the company announces that Dustin Klein has been appointed as a director in conjunction with the previously announced closing of the Sun Valley acquisition.

About Empower Clinics Inc.

Empower is a leading multistate operator of a network of physician-staffed clinics focused on helping patients improve and protect their health through innovative physician-recommended treatment options. It is expected that Empower's proprietary product line, Sollievo, will offer patients a variety of delivery methods of doctor-recommended cannabidiol-based products in its clinics, on-line and at major retailers. With over 165,000 patients, an expanding clinic footprint, a focus on new technologies, including tele-medicine, and an expanded product development strategy, Empower is undertaking new growth initiatives to be positioned as a vertically integrated, diverse, market-leading service provider for complex patient requirements in 2019 and beyond.

We seek Safe Harbor.