Mr. Chris Wagner reports

EMERALD HEALTH THERAPEUTICS REPORTS 1ST QUARTER 2018 FINANCIAL RESULTS AND PROVIDES CORPORATE UPDATE

Emerald Health Therapeutics Inc. has filed its financial statements and management discussion and analysis for the fiscal quarter ended March 31, 2018. They are available for viewing on SEDAR or on the company's website.

"Emerald has been very productive year to date in executing on three key strategic pillars: production scaling, product innovation and branding," said Chris Wagner, chief executive officer of Emerald Health Therapeutics. "We received our cultivation licence for our Pure Sunfarms joint venture, completed our first harvest and submitted an amendment to Health Canada for Pure Sunfarms' sales licence, and started commercial production. Emerald also established a supply agreement with Pure Sunfarms and acquired a licensed indoor production facility in Quebec to allow us to strongly serve consumers in Canada's second-largest province as well as add to our capabilities to serve the Eastern Canadian market. We are taking progressive steps to advance intellectual property and product development. We are aggressively building our sales and marketing team, retained DDB Canada, a well-respected advertising agency, to help us build out our branding strategy. We also created a unique branding opportunity for Emerald in important, complementary sales channels."

Selected quarterly financial information

The financial information in the associated tables summarizes selected financial information for the company for the last eight quarters which was derived from annual financial statements prepared in accordance with IFRS (international financial reporting standards) or interim financial statements prepared in accordance with IFRS applicable to the preparation of interim financial statements, IAS 34, interim financial reporting.

                                                                            
                                            March 31        Dec. 31         Sept. 30        June 30
                                                2018           2017             2017           2017

Revenue                                     $373,218       $279,362         $211,316       $245,708
Share-based payments                       1,954,047      1,979,553          271,968        369,788
Interest revenue                             250,064         43,024           60,997         57,497
Share of (loss) from joint venture          (301,793)       (44,562)        (278,016)             -
Net (loss)                                (5,045,420)    (4,027,569)      (1,939,371)    (1,669,026)
Net (loss) per share (basic
and diluted)                                   (0.04)         (0.04)           (0.02)         (0.02)

                                            March 31        Dec. 31         Sept. 30        June 30
                                                2017           2016             2016           2016

Revenue                                     $201,268       $124,251          $48,933        $38,729
Share-based payments                         201,186        137,113          467,878         37,618
Net (loss)                                (1,205,858)      (880,424)      (1,009,841)      (546,336)
Net (loss) per share (basic
and diluted)                                   (0.02)         (0.01)           (0.02)         (0.01)

Business update for and subsequent to the reporting period

Expansion projects

The company's joint venture, Pure Sunfarms, continues to make great strides toward achieving its goal of large-scale, high-quality, low-cost cannabis production. On March 2, 2018, Pure Sunfarms received its cannabis cultivation licence from Health Canada. It completed its first harvests in May, 2018, and has submitted to Health Canada its amendment package to attain its sales licence. Pure Sunfarms is now scaling commercial cultivation.

Pure Sunfarms continues to advance the development of the 1.1-million-square-foot (25-acre) greenhouse facility located on a 50-acre parcel of land in Delta, B.C., with the entire 1.1-million-square-foot Delta 3 site expected to be in production in 2019. The facility will have 17 grow rooms and is designed to consistently deliver high-quality product and fulfill large-volume supply commitments.

Pure Sunfarms finalized a contract for the short-term rental of generating equipment to power supplemental lighting during the 2018/2019 winter months, while the installation of the approved additional 24 megawatts by the local utility is in process.

Senior growing, financial, human resources and operational personnel, including the established team transferred from Village Farms, are in place.

Pure Sunfarms conservatively projects production of approximately 7,000 to 8,000 kilograms in 2018 and 46,000 to 52,000 kilograms in 2019.

The company continues to focus on its second expansion project, a 500,000-square-foot greenhouse in Metro Vancouver, B.C., but has recently experienced delays in obtaining required permitting for this project.

Supply agreement

On April 30, 2018, the company entered into a supply agreement with Pure Sunfarms whereby the company will purchase 40 per cent of Pure Sunfarms' production in 2018 and 2019, approximately 21,000 to 24,000 kilograms using current projected production targets, at a predetermined price per gram.

This agreement secures a significant source of cannabis for the company as it endeavours to be an important supplier of high-quality cannabis in the anticipated legalized adult-use cannabis market.

Acquisitions

On May 2, 2018, the company acquired 100 per cent of the issued and outstanding shares of 8611165 Canada Inc. and its affiliate 9353-8460 Quebec Inc. for consideration of $90-million, subject to adjustment, payable 50 per cent in cash and 50 per cent in shares. The company paid $22.5-million in cash upon closing and $45-million was satisfied by the issuance of 9,911,894 common shares, of which 4,955,947 common shares will be held in escrow until May 1, 2019, pursuant to an escrow agreement. An additional $22.5-million in cash is payable on May 1, 2019.

Agro-Biotech is a licenced producer under Access to Cannabis for Medical Purposes Regulations. Located in Saint-Eustache, Que., Agro-Biotech's assets include land and a 75,000-square-foot indoor grow facility. The acquisition will increase the company's growing capacity and strengthen its ability to market its products in Quebec and Eastern Canada.

The indoor hydroponic growing facility, which has access to very low-cost energy and water, will be capable of high-yield production of Emerald's unique cannabis strains, several of which are currently being grown in Agro-Biotech's facility. Agro-Biotech has built out 20,000 square feet of this facility and expects to have a total of 50,000 square feet equipped for indoor cannabis cultivation by year-end. Emerald intends to meet the requirements for an ACMPR sales licence for this facility before the end of August. This operation is estimated to have a have full production capacity exceeding 10,000 kilograms annually in 2019 and beyond.

On April 24, 2018, a statement of claim was served on Agro-Biotech and its former shareholders by a party with whom Agro-Biotech and its former shareholders had previously entered into a non-binding letter of intent with respect to a potential sale of Agro-Biotech. Management believes that the claim is without merit and intends to defend the claim to the fullest extent possible.

Sales and marketing

In January, Emerald hired Paul Dillman as vice-president, sales and marketing. With three decades of experience in global marketing, sales and general management, he has held senior leadership positions at the Coca-Cola Company, AB InBev, Philip Morris and Kraft Foods. Mr. Dillman is building Emerald's sales and marketing team to prepare for the expected initiation of legal recreational cannabis use in Canada in the second half of 2018.

As part of this preparation, Emerald retained DDB Canada to assist with Emerald's branding and marketing. The agency was named 2015 digital agency of the year by Strategy magazine and was ranked No. 2 agency in Canada by the Gunn Report in 2015.

Emerald Health Naturals

Emerald Health Therapeutics entered into a 51:49 partnership with another Emerald Health group company, San Diego-based Emerald Health Bioceuticals Inc. (EHB), to create Emerald Health Naturals (EHN). EHN has secured exclusive Canadian rights to sell EHB's award-winning non-cannabis health products that support the endocannabinoid system.

Market research shows that six of 10 cannabis users also purchase natural health products, which are primarily bought in natural health product, grocery and pharmacy stores. While cannabis products are not expected to be distributed through these sales channels in the immediate future, EHN will have the opportunity to introduce this new non-cannabis product line into these stores and build brand recognition that may be broadly beneficial for Emerald's cannabis product line.

DMG Blockchain Solutions joint venture

On Jan. 28, 2018, the company and DMG Blockchain signed a non-binding letter of intent to form a joint venture, to be named CannaChain Technologies, for the purpose of developing a blockchain solution to complement cannabis supply chain management and an e-commerce marketplace.

Namaste Technologies collaboration

On Jan. 30, 2018, the company and Namaste signed a non-binding letter of intent whereby the company and Namaste propose to enter into a definitive agreement to collaborate on strategic business opportunities worldwide and develop a fully integrated e-commerce platform to serve as a retail channel for the company's patients.

TSX Venture 50 performer

The company achieved the No. 1 ranking in the TSX Venture 50 for the clean technology and life science sector in 2017 and was recognized as a top-performing company for the second consecutive year. The TSX Venture 50 is the TSX Venture Exchange's annual ranking of Canada's top 50 emerging publicly traded companies.

Capital resources

Subsequent to year-end, the company raised additional gross proceeds of $71.7-million from private placement offerings and warrant exercises, bringing total gross proceeds raised since February, 2017, from unit issuances and warrant exercises to $140.6-million.

The company had approximately $74-million in cash and cash equivalents as at May 25, 2018.

As of May 25, 2018, the company had 135.4 million common shares outstanding and 157.8 million common shares outstanding on a fully diluted basis, after giving effect to outstanding options, warrants and restricted stock units.

Financial reports

Full details of the financial reports and operating results for the first quarter of 2018 are described in the company's consolidated financial statements with accompanying notes and related management's discussion and analysis. These documents and additional information on Emerald are available on SEDAR.

About Emerald Health Therapeutics Inc.

Emerald Health Therapeutics is a licensed producer under Canada's Access to Cannabis for Medical Purposes Regulations and produces and sells dried cannabis and cannabis oil for medical purposes. Emerald is preparing to serve the anticipated legal Canadian adult-use cannabis market starting in 2018. Emerald owns 50 per cent of a joint venture with Village Farms International Inc. which is converting an existing 1.1-million-square-foot greenhouse in Delta, B.C., to grow cannabis.

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