Mr. Chris Wagner reports

EMERALD HEALTH THERAPEUTICS SECURES LONG-TERM SUPPLY OF HEMP FOR CBD EXTRACTION

Emerald Health Therapeutics Inc. has agreed to purchase from Emerald Health Hemp Inc. (EHH) CBD-containing hemp biomass for extraction into CBD oil. EHH has established agreements to purchase approximately 500 acres of harvested hemp chaff, plant material consisting mainly of flower and leaf, in Manitoba and Prince Edward Island in 2018, with a plan to expand field operations in 2019. Emerald has signed an agreement with EHH to purchase approximately 500 acres of chaff in 2018 and approximately 1,000 acres in 2019 to 2022, with an option to renew for an additional two-year period. The hemp chaff will be processed via Emerald's exclusive alliance with Factors R&D Technologies Ltd., a division of Factors Group of Nutritional Companies Inc., which has extensive extraction experience and large capacity.

In conjunction with Bill C-45, Health Canada recently issued an exemption to holders of industrial hemp licences to begin collecting, drying, storing and transporting the chaff of hemp. After Oct. 17, farmers will be able to sell hemp chaff to licensed processors under Bill C-45.

"We see non-smoked, non-psychoactive CBD consumption as a major growth opportunity in both the medical and adult-use market in Canada, and our Factors Group alliance uniquely positions us with the largest biomass extraction and softgel encapsulation facility in Canada to produce value-added products to serve this market," said Chris Wagner, chief executive officer of Emerald. "Our intent is to secure significant low-cost cannabinoid supply to serve all our manufacturing and marketing goals and hemp is expected to be our lowest-cost source of CBD. We are very pleased with the rapid advancement of our Pure Sunfarms production joint venture with Village Farms and our St. Eustache facility in Quebec. Our collaboration with Emerald Health Hemp now expands our ability to produce CBD products."

"Canada is one of the largest producers of hemp in the world and with Bill C-45 the value of hemp will continue to grow," said the Honourable Robert L. Henderson, Minister of Agriculture and Fisheries for the Province of Prince Edward Island. "I am pleased that farmers in Prince Edward Island are embracing the commercial opportunities that this plant brings to the region with the investment and assistance of businesses like Emerald. We will encourage and support our farmers as this industry matures, while continuing to implement appropriate policies in our province to protect the public health and safety of our citizens."

Emerald is finalizing the terms of an exclusive arrangement with Factors R&D Technologies Ltd. (FTI) to initially provide Emerald with access to a facility with operating extraction infrastructure capable of up to one million kilograms of biomass processing and 600-million-softgel-capsule production capacity annually. Apart from providing pharmaceutical-grade, industrial-scale manufacturing and expertise, the plan for this collaboration is to also leverage the Factors Group's decades of experience in product development, formulation and innovation.

FTI is a division of Factors Group of Nutritional Companies Inc., Canada's largest nutritional supplement marketer and manufacturer, and has over one million square feet of production facilities, research and development, quality control laboratories, and distribution centres. Factors Group has established deep roots and relationships in Canada and worldwide in the nutrition industry and sells its products under multiple brands.

EHH is a wholly owned subsidiary of Emerald Health Sciences, which also owns approximately 32 per cent of the issued and outstanding shares of Emerald Health Therapeutics.

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 owns 50 per cent of Pure Sunfarms, which is converting a licensed existing 1.1-million-square-foot greenhouse in Delta, B.C., and is in commercial production. It owns Agro-Biotech, a Quebec-based licensed cannabis grower with a 75,000-square-foot indoor facility and is planning to add a 500,000-square-foot greenhouse in Metro Vancouver.

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