Mr. Robert Schwartz of Lakeside Minerals reports

NUTRITIONAL HIGH AND LAKESIDE MINERALS ANNOUNCE AGREEMENT TO BUILD CULTIVATION FACILITIES IN COLORADO AND NEVADA

Nutritional High International Inc. and Lakeside Minerals Inc. have entered into a letter of intent dated Feb. 22, 2017, whereby Lakeside will build medical and adult-use cannabis cultivation facilities in Nevada and Colorado, in accordance with applicable state law.

Description of the proposed transaction and the target assets

As a part of the proposed transaction, Lakeside will enter into the following arrangements with Nutritional High:

• Nutritional High will assign to Lakeside its right to acquire a provisional marijuana cultivation licence issued by the Nevada Division of Public and Behavioral Health.
• Lakeside will form a joint venture company with Nutritional High for the purposes of acquiring and holding a real property located in Henderson, Nev., to be licensed for the operation of a medical marijuana cultivation facility.
• Nutritional High will lease to Lakeside land and a building in Pueblo, Colo., which qualify for marijuana cultivation. Lakeside will sublease the Pueblo facility to Palo Verde LLC, a party which has applied to renew a cultivation licence in Colorado respecting the Pueblo facility.

Nutritional High is under the contract to purchase the Nevada cultivation licence from a third party vendor located in Nevada for $500,000 (U.S.). The vendor acquired the Nevada cultivation licence in a competitive process and has not yet generated revenue. Further information regarding the expected buildout costs is being developed and will be available in due course. Please see below for details of the financial terms for Nevada JV and Colorado JV.

Strategic vision for Lakeside

Starting with Nevada and Colorado, Lakeside will take steps to acquire or establish cannabis cultivation operations throughout U.S. states that permit medical and adult-use cannabis. Lakeside's cultivation facilities will be designed to utilize automation and technology and data collection and analysis to produce high-quality cannabis in an efficient, safe and low-cost manner. Building on the collective experience of Lakeside's board and executive team, Lakeside is expected to build or acquire, own, and operate highly effective, low-cost cultivation facilities. Lakeside is currently engaging in discussions with various technology providers and developers to acquire, integrate and utilize best-of-breed automation systems and technology for these purposes.

Billy Morrison, director and officer of Nutritional High, commented: "The leading cultivators in Canada, Holland, Israel and the United States have demonstrated that analytics play a critical role in cannabis production. The collection and analysis of data will allow Lakeside to perfect growing processes, maintain high compliance standards and develop superior logistics channels for the express purpose of building patient and customer trust in the Lakeside brands."

Lakeside will begin designing a facility in Colorado to be operated by Palo Verde, a Colorado state licensee. The Colorado facility will be designed to allow for parallel testing of the technology solutions as medical and adult-use cannabis is grown commercially, building on a scientific approach to planned variances and control batches. Lakeside will implement these solutions in the proposed larger Nevada facility as the next step. Once its cultivation processes are validated and scaled, Lakeside may consider implementing a tissue culture (TC) lab to underpin and further enhance and standardize the phenotypes in its cultivation processes. TC is a technique widely used in other branches of industrial-scale agriculture to produce clones of a plant in a method known as micropropagation. TC rapidly multiplies the infant plant grow tissue giving rise to enhanced predictability of growth behaviour and significant scalability. Lakeside will also consider implementing a licensing model to further increase its market penetration and share.

Robert Schwartz, director of Lakeside, commented: "We are going to use and add value to optimized cannabis cultivation technologies to build smart grows that will ensure Lakeside can be profitable and scalable in an environment where cannabis growing will increasingly be commoditized. We will also develop distribution channels within each of the states to further improve the margins and accelerate growth. Colorado and Nevada are the initial two states where Lakeside aims to demonstrate its proof of concept, but will also pursue an aggressive expansion strategy in other Cole Memo-compliant jurisdictions."

Lakeside will undertake a change of business (COB), which shall be subject to approval of its shareholders and the TSX Venture Exchange.

Contemplated Lakeside financings

To finance its business plan, Lakeside intends to undertake a convertible debenture private placement financing for gross proceeds of up to $2-million. The debenture shall be convertible into common shares in the capital of Lakeside at a price of no less than 25-per-cent discount to the equity financing price (as defined below).

After completing the debenture offering, Lakeside also intends to complete an equity financing of up to 23,333,333 units of Lakeside at a price of 30 cents per unit (or such other price as may be agreed) for aggregate gross proceeds of up to $7-million. Each unit will consist of one common share of Lakeside and one-half of one common share purchase warrant. It is expected that each warrant will entitle the holder to purchase one common share at a price of 45 cents per common share for a period of 18 months from the closing date.

All securities issued in connection with the debenture offering and the equity financing will be subject to a four-month hold from the date of issuance in accordance with applicable securities laws. The closing of the offering is subject to receipt of approvals of the TSX-V and other applicable securities regulatory authorities.

The net proceeds from the debenture offering and the equity financing will be used by Lakeside to build legal cannabis cultivation facilities in Nevada and Colorado, for product development, for research and development, and for financing the costs relating to the COB and general working capital.

Strategic vision of Nutritional High

Nutritional High considers the proposed transaction with Lakeside as a strategic opportunity to ensure Nutritional High will be able to continue to focus all of its resources on the oils and edibles segment of the marijuana market. While growing marijuana can be a lucrative endeavour, such effort takes focus and capital. With the increasingly vast opportunities for oils and edibles in the U.S., Nutritional High is pleased to continue its focus in that segment while working with Lakeside as a partner that will focus on excellence and innovation in cannabis cultivation.

This arrangement will allow both Lakeside and Nutritional High to bifurcate the economics of the future integrated cultivation/extraction operations as they present themselves by matching the projects with the appropriate management teams and shareholder base. Sharing the capital cost would also augment the economics for Nutritional High.

In the short term, this relationship will allow Nutritional High to secure additional revenue from its Pueblo facility, spread out the capital expenditures of the project in Nevada and reduce product distribution costs. Over the long term, it is expected that the Lakeside relationship will ensure a consistent and high-quality supply of trim, without the capital costs of growing.

Details of the proposed transaction

Henderson, Nev.:

• Lakeside will purchase the Nevada cultivation licence from Nutritional High for a cash payment of $500,000 (U.S.), payable on completion of the debenture offering. If Lakeside does not receive requisite approvals for the transaction on or before June 30, 2017 (drop dead date), Nutritional High shall return to Lakeside the amounts paid for the Nevada cultivation licence within 10 business days of the termination of the proposed transaction.
• The parties will form a joint venture company (Land Holdco) to purchase the Henderson property that Nutritional High is in the process of acquiring (please see Nutritional High's press release dated Feb. 21, 2017), or such acceptable alternative location. Each of Lakeside and Nutritional High will own Land Holdco on a 50/50 basis and be responsible for financing Land Holdco on a basis relative to its shareholdings.
• Land Holdco will enter into long-term lease agreements with each of Nutritional High and Lakeside to lease the facility at an agreed-upon price per square foot.
• Up until closing of the debenture financing, Nutritional High will cover all costs, of which Lakeside will reimburse to Nutritional High all amounts expended with respect to the Nevada cultivation licence, and one-half of the costs incurred by Nutritional High in relation to the due diligence and the development of the Henderson property or such acceptable alternative location. Lakeside and Nutritional High will each be responsible for its own respective internal buildout costs, equipment and related infrastructure.
• Lakeside will issue to Nutritional High one million Lakeside shares. In the event that the Lakeside costs are not paid by Lakeside to Nutritional High by April 27, 2017, then Lakeside shall be obligated to issue to Nutritional High an additional two million Lakeside shares for a total of three million Lakeside shares. Lakeside shall pay interest on the outstanding balance of the Lakeside costs at a rate equal to 12 per cent per annum.
• It is expected that Lakeside and Nutritional High shall enter into long-term agreements for Nutritional High to buy trim and for the parties to share distribution costs, on such terms to be mutually agreed.

West Pueblo, Colo.:

Nutritional High owns a property with three buildings in Pueblo, Colo., which has been leased by Palo Verde, an arm's-length entity which holds a marijuana-infused products licence (MIPs licence). Palo Verde currently uses building 1 to manufacture adult-use marijuana-infused products. Palo Verde had previously been granted a cultivation licence (OPC licence) for buildings 2 and a3, which has expired and is now in the process of being renewed. Nutritional High will lease to Lakeside building 2 and other portions of the Pueblo property, where a greenhouse can be erected with the purposes of Lakeside building a cannabis cultivation facility for Palo Verde to operate once the OPC licence is renewed.

Nutritional High will lease building 2 to Lakeside at a rate of $15 per square foot of usable space per year, payable monthly. The lease amount payable will accrue for up to nine months during the time of the buildout bearing an interest of 12 per cent per annum. Lakeside will sublet the leased space to Palo Verde on a basis to be determined. Additional provisions will include:

• Lakeside will design and manage the cultivation facility buildout. Palo Verde will incur the cost of the buildout, which shall be financed by Lakeside by providing an unsecured loan to Palo Verde on terms to be agreed.
• Lakeside will develop and acquire certain automation technologies and cultivation systems, which will be licensed to Palo Verde at agreed-upon rates and as permitted by applicable regulation.
• Lakeside will purchase all the equipment required for the cultivation facility and lease it to Palo Verde on terms to be agreed upon.
• Lakeside will supply Palo Verde with non-marijuana inputs (such as fertilizer) and branded packaging, at prices to be determined, and will also provide consulting services to Palo Verde.

It is expected that Palo Verde will sell the cannabis flower produced to various retailers, and will utilize the trim and shake it produces in the Lakeside cultivation facility in its oil extraction and edibles operation established with the assistance of Nutritional High. For greater clarity, neither Lakeside nor Nutritional High will own a cultivation or production licence in the state of Colorado.

Pennsylvania

Nutritional High is considering applying for a marijuana production/processing licence in Pennsylvania, and has identified a property to acquire and service providers to assist on the application. If Nutritional High proceeds with this application, Lakeside will have the right to partner with Nutritional High on a similar basis to that being undertaken in Nevada.

Material and related party interests in the proposed transaction

Nutritional High holds no interest in Lakeside. David Posner, a director of both Nutritional High and Lakeside, beneficially owns 6,117,370 common shares in the capital of Nutritional High and 1.14 million common shares in the capital of Lakeside. Adam Szweras, a director of Nutritional High and corporate secretary of Lakeside, beneficially owns 1,161,701 Lakeside shares and 1,134,227 Nutritional High shares. FMI Capital Advisory Inc. (FMICAI) acts as a financial adviser to both Nutritional High and Lakeside, and owns 8,341,143 Nutritional High shares and 1,071,075 Lakeside shares. Peter Bilodeau, chief executive officer and director of Lakeside, is also an executive officer of FMICAI, and Mr. Szweras is a chairman of FMICAI. No related parties or third parties own a controlling interest in Lakeside or Nutritional High. FMICAI is not receiving a finder's fee in connection with the proposed transaction.

Notwithstanding these relationships, the proposed transaction is considered to be an arm's-length transaction, as Mr. Szweras, Mr. Bilodeau and Mr. Posner have recused themselves from approval of the proposed transaction, and the proposed transaction was independently negotiated by special committees appointed by each of Lakeside and Nutritional High. On behalf of Nutritional High, the proposed transaction was negotiated and approved by Robert Keeler, Brian Presement, David Caplan, and headed by Jim Frazier, CEO of Nutritional High. On behalf of Lakeside, the proposed transaction was negotiated and approved by Aurelio Useche and Hamish Sutherland, and headed by Mr. Schwartz.

On completion of the proposed transaction, Nutritional High will own one million Lakeside shares, representing approximately 3 per cent of the issued and outstanding Lakeside shares, or in the event the Lakeside costs are not paid in a timely manner, Nutritional High will own three million Lakeside shares, representing approximately 9 per cent of the issued and outstanding Lakeside shares.

As required, both of Lakeside and Nutritional High will be seeking shareholder consent or approval of disinterested shareholders for the proposed transaction.

It is not contemplated that the board of Lakeside will change after completion of the proposed transaction, and will continue to be made up of Mr. Schwartz, Mr. Sutherland, Mr. Posner, Mr. Bilodeau and Mr. Useche (please see Lakeside press release dated Dec. 22, 2016), and FMICAI will remain an insider in its capacity as financial adviser.

Lakeside wishes to advise that Yannis Banks has resigned as a director of Lakeside, effective Feb. 17, 2017. Lakeside expresses gratitude to Mr. Banks for his assistance and wishes him the best in his future endeavours.

Closing of the proposed transaction is subject to requisite shareholder and regulatory approval, including the approval of the TSX-V, successful completion of due diligence on the part of Lakeside, closing of financing in requisite amounts, and other standard closing conditions.

Sponsorship of a proposed transaction may be required by the TSX-V, unless exempt in accordance with TSX-V policies. Lakeside has not retained a sponsor and intends to apply for an exemption from the sponsorship requirements. There is no assurance that Lakeside will ultimately obtain an exemption from sponsorship.

It is anticipated that the proposed transaction may be considered a related party transaction under Policy 5.9 of the TSX-V, which incorporates by reference Multilateral Instrument 61-101 -- protection of minority securityholders in special transactions. The company believes that the proposed transaction is exempt from the requirement of having a formal valuation based on the exemption available under Section 5.5 (b) of MI 61-101, because the Lakeside shares are not listed on the Toronto Stock Exchange and other exchanges enumerated therein. The company believes that the proposed transaction is exempt from the requirement of minority approval based on the exemption available under Section 5.7 (1)(b) of MI 61-101, because the proposed transaction is a distribution of securities for cash for not more than $2.5-million. Neither Lakeside or Nutritional High has knowledge of any material information concerning Lakeside or Lakeside's shares that has not been generally disclosed.

We seek Safe Harbor.