Mr. Pat McCutcheon reports

MEDIPHARM LABS CORP. AND EMERALD HEALTH THERAPEUTICS, INC. SIGN CANNABIS CONCENTRATE PROGRAM AGREEMENT

Medipharm Labs Corp. has entered into a cannabis concentrate program agreement with Emerald Health Therapeutics Inc. Pursuant to the agreement, signed on Oct. 5, 2018, Emerald will provide Medipharm with dried cannabis to create premium-quality cannabis oil. The program will be for an initial term of three years.

The agreement enables Emerald to provide pharmaceutical-grade cannabis concentrate products produced by Medipharm to its large base of registered patients, as well as provide adult-use recreational consumers with premium-quality cannabis concentrates commencing Oct. 17, 2018.

Medipharm is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. Medipharm currently operates one of the largest cannabis concentrate manufacturing facilities in Canada and is built to cGMP (current Good Manufacturing Practices) and ISO standards. Leveraging Medipharm's proprietary pharmaceutical manufacturing expertise, the company's purpose-built state-of-the-art centre of excellence currently has the capacity to process over 100,000 kilograms of dry cannabis a year at its wholly owned Access to Cannabis for Medical Purposes Regulations-licensed facility. With phase 2 financed and scheduled to be completed by the end of the second quarter of 2019, Medipharm Labs' processing capacity is anticipated more than double to an expected 250,000 kg annually.

Emerald 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 greenhouse in Delta, B.C., and is now in commercial production. Emerald also owns Agro-Biotech, a Quebec-based licensed cannabis grower with a 75,000-square-foot indoor facility which is planning to add a 500,000-square-foot greenhouse in Metro Vancouver.

This is truly a partnership of two leaders in the Canadian cannabis industry. This program represents the advancement of a market to better serve cannabis consumers and patients.

Under the agreement, Emerald will ship dried cannabis to Medipharm which Medipharm will use to produce purified cannabis oil. The parties intend that, under the program, Medipharm may provide cannabis oil to Emerald or to other approved distributors of medical cannabis at the direction of Emerald. Alternatively, Emerald may release the cannabis extract for use by Medipharm. The program will be established at no capital cost to Emerald, however, Medipharm will charge Emerald a processing fee for the cannabis oil produced and the revenue earned on sales of cannabis oil by Medipharm will be shared between Medipharm and Emerald.

"We are very pleased to have Medipharm as our partner," said Rob Hill, chief financial officer of Emerald. "Their large processing capacity and ability to produce high-purity cannabis extracts and isolates increases our flexibility and capabilities in bringing to market high-value and unique products."

Pat McCutcheon, Medipharm's president and chief executive officer, said: "We are very excited to begin this relationship with one of Canada's leading cultivators. This partnership further highlights Medipharm's commitment to work as a trusted, agnostic value-add supplier to licensed producers across Canada to better serve the cannabis market. Our geographic location also serves as a strategic asset to the relationship with our ability enable Emerald to provide their consumers in central and Eastern Canada with premium-quality pharmaceutical-grade cannabis oil."

About Medipharm Labs Corp.

Medipharm Labs, through its subsidiary, is a pioneer in the cannabis industry and has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the Access to Cannabis for Medical Purposes Regulations (ACMPR) without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from the company's cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory allows Medipharm Labs to work with its established, Health Canada-approved cultivation partners to produce pharmaceutical-grade cannabis oil with a competitive advantage. Medipharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification.

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