Mr. Rob Hill reports

EMERALD HEALTH THERAPEUTICS CLOSES EMERALD HEALTH NATURALS JOINT VENTURE

Further to its news releases dated April 17, 2018, and Nov. 19, 2018, Emerald Health Therapeutics Inc. has closed its 51:49 joint venture with San Diego-based Emerald Health Bioceuticals (EHB), called Emerald Health Naturals (EHN).

Emerald has invested $5-million for 51-per-cent equity ownership of EHN. EHB has granted EHN the exclusive Canadian distribution rights to EHB's award-winning product line in exchange for 49-per-cent equity ownership of EHN. EHB's product line consists of nutritional supplements that use non-cannabis, non-psychoactive plant-based bioactive compounds to support the body's endocannabinoid system.

Market research commissioned by the company identified that approximately 60 per cent of legal cannabis users also use natural health products. This strong consumer overlap between the two markets is expected to create a unique opportunity for Emerald to build its health brand through EHN and begin sales of endocannabinoid-supporting products in natural health product channels. These channels are not authorized to sell cannabis under the Canadian federal cannabis regulations for recreational use which came into force on Oct. 17, 2018. However, if these channels are approved in the future, the company expects to be well positioned to introduce its cannabis-based products into these channels.

The formation of the joint venture is a related party transaction as such term is defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions as EHB is approximately 71 per cent owned by Emerald Health Sciences Inc., which is also the holder of approximately 30.6 per cent of the outstanding common shares of the company. The company is relying on the exemption from the formal valuation requirements of MI 61-101 set out in Section 5.5(b) of MI 61-101 and the exemption from the minority shareholder approval requirements of MI 61-101 set out in Section 5.7(a) of MI 61-101 in respect to the creation of the joint venture.

In connection with the formation of the joint venture, EHN has also acquired the assets of GAB Innovations and has granted non-exclusive subdistribution rights to Avricore Pharmaceuticals Inc. (formerly VANC Pharmaceuticals Inc.). Both GAB and Avricore have established networks and a history of sales success in the natural health product and pharmacy channels. Gaetano Morello, ND, the founder of GAB, has been appointed chief executive officer of EHN.

Emerald also announces that Chris Wagner has resigned as a director of the company. As previously announced, Mr. Wagner stepped down as CEO effective Nov. 28, 2018. Mr. Wagner will continue to act as a consultant to Emerald and provide assistance when needed.

About Emerald Health Therapeutics Inc.

Emerald Health Therapeutics is a Canadian licensed producer of cannabis. Its 50-per-cent-owned Pure Sunfarms joint venture in British Columbia is completing the conversion of its 1.1-million-square-foot (25-acre) greenhouse for cannabis cultivation in the Lower Mainland and its Agro-Biotech operation in Quebec is completing its 75,000-square-foot indoor facility. Commercial production is expanding in both facilities. In addition, Emerald secured over 500 acres of hemp harvest in 2018 and has contracted for approximately 1,000 acres in 2019 to 2022, with the objective of extracting low-cost cannabidiol.

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