Mr. Marc Lustig reports

CANNAROYALTY CLOSES RVR DISTRIBUTION ACQUISITION

CannaRoyalty Corp. has closed the previously announced acquisition of RVR Distribution. With the closing of the acquisition, as formerly disclosed, CannaRoyalty will assume the merged California operations of RVR and Alta Supply. Additionally, Ted Simpkins, co-founder and chief executive officer of RVR, joined the company's board of directors, effective Oct. 18, 2018.

Together, the companies generated $31.9-million (U.S.) in consolidated revenue in fiscal 2017. The acquisition close will combine the strengths of both companies, and position CannaRoyalty as a major third party distribution platform in the California cannabis marketplace.

Marc Lustig, chief executive officer of CannaRoyalty, commented: "The close of this acquisition is a major milestone as we work toward our objective of becoming the premier home for promising growth brands in the California market. I am proud to welcome co-founders and experienced consumer products distribution executives Ted Simpkins and Henry Pilger to the team. As a combined organization we now have the pieces in place to scale our California operations and rapidly leverage our brand IP and expertise into additional global markets such as Canada. The second quarter marked a financial inflection point for CannaRoyalty and this is just the beginning. We expect the closing of the acquisition and the resulting acceleration of our growth plans to generate a sustained, multiquarter step change in our revenue run rate."

Transaction summary:

• All consideration will be in CannaRoyalty shares and issued in instalments.
• The vendors will receive exchangeable shares that will enable the recipients to acquire 70,000 Class A CannaRoyalty shares (21,000 shares at close and 49,000 shares over the next 24 months) for no additional consideration.
• Each Class A compressed share shall be convertible into 100 common shares.
• On closing, it is anticipated that CannaRoyalty will have 56,318,410 common shares outstanding and 83,393,404 shares outstanding on a fully diluted basis.

About CannaRoyalty Corp.

CannaRoyalty is a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world's largest regulated cannabis market. By building a world-class logistics platform and supporting contract manufacturing assets, the company intends to support the growth of new and established cannabis brands. The company believes California, home to some of the world's most discerning consumers and a nexus of information and trends, will be the point of inception for the global cannabis brands of the future. CannaRoyalty has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support its existing brands, partner products, and distribution networks.

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