Mr. Rob Hill reports

EMERALD HEALTH THERAPEUTICS SIGNS CANNABIS SUPPLY MEMORANDUM OF UNDERSTANDING WITH BRITISH COLUMBIA LIQUOR DISTRIBUTION BRANCH

Emerald Health Therapeutics Inc. has signed a memorandum of understanding (MOU) with the British Columbia Liquor Distribution Branch (BCLDB) to supply its high-quality cannabis products to the BCLDB to serve the adult-use market throughout the province.

"Emerald has a strong relationship with the BCLDB team, and our new supply partnership will allow us to provide them with local access to our large cannabis production capacity," said Chris Wagner, chief executive officer at Emerald. "We have been in negotiations with the BCLDB for a number of months and elected to wait until we could achieve suitable pricing before committing to an MOU. The initial MOU references 1,086 kg of cannabis products, which aligns with our production ramp-up while allowing for adequate supply for other provincial supply agreements and our medical strategy. Based on our assessment of the B.C. market opportunity and our expected production capacity, we are now allowing for approximately 13,000 kg of product allocation for the B.C. non-medical market over the next year and a half.

"Our relationship with the B.C. government is a cornerstone of Emerald's nationwide distribution and sales strategy and we aim to be a key cannabis supplier in the province. We are in similar discussions with other provinces and expect to announce additional supply commitments in the near future. As with B.C., our focus is not on how quickly we can enter into supply agreements. Our aim is to ensure we achieve terms that provide the best long-term return for Emerald and its shareholders."

Emerald is focused on product innovation that will command high profit margins; differentiating marketing, distribution and sales strategies; and securing significant supplies of safe, quality and low-cost production, whether internally cultivated or externally sourced.

Emerald currently has two facilities in commercial production. Emerald's Pure Sunfarms joint venture has a cultivation site licence for its 1.1-million-square-foot (25-acre) greenhouse in Delta, B.C., with 225,000 square feet converted and operating. Conversion of the entire 25-acre greenhouse is expected to be completed before year-end. Emerald's 75,000-square-foot Agro-Biotech indoor cultivation facility in Montreal, Que., is operating with an initial 20,000 square feet. The company expects the Agro-Biotech facility to also be completed by year-end.

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 fully legalized Canadian adult-use cannabis market starting Oct. 17, 2018. Emerald owns 50 per cent of Pure Sunfarms, which is converting a licensed existing 1.1-million-square-foot (25 acres) greenhouse in Delta, B.C., and is in commercial production. It also wholly owns Agro-Biotech, a Montreal-based licensed cannabis grower with a 75,000-square-foot indoor facility and is planning to add a 500,000-square-foot wholly owned greenhouse in Metro Vancouver.

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