Ms. Margot Micallef reports

GABRIELLA'S KITCHEN SECURES LONG-TERM SUPPLY OF HIGH QUALITY CBD EXTRACT

Gabriella's Kitchen Inc. has entered into a supply agreement to purchase cannabidiol (CBD) extract, including full-spectrum, high-grade cannabidiol, distillate oil and isolate crystals from Xtract Xperts, the largest producer of hemp in the state of Oregon.

"As a wellness company, GABY determined a year and a half ago that we needed to incorporate hemp-derived CBD and other cannabinoids into our product strategy because of the powerful wellness properties associated with the plant," said Margot Micallef, founder and chief executive officer of Gabriella's Kitchen. "We have been deeply immersed in research and product development since that time and sourcing high-quality, reliable CBD is fundamental to our successful execution of this strategy."

The demand for CBD and products containing CBD has dramatically expanded, following removal of CBD from Schedule 1 of the Controlled Substances Act in the United States on Dec. 11, 2018, under the Agriculture Improvement Act of 2018 (the 2018 farm bill). With rapidly increasing knowledge and awareness about its positive health impacts, mainstream consumers are increasingly seeking to realize the benefit of wellness properties associated with CBD and other cannabinoids derived from hemp. A December, 2018, Hemp Business Journal article, written by Sean Murphy and others, estimates that, in leading all hemp product categories, the hemp-derived CBD market will grow from a $390-million-dollar market in 2018 to a $1.3-billion market (3.3 times) by 2022, representing a 27.2-per-cent five-year CAGR (compound annual growth rate).

On Dec. 10, 2018, the day before the farm bill was signed into law, Bethany Gomez, director of research at the cannabis and CBD market research organization, Brightfield Group, was quoted in a Rolling Stone article stating: "This is a watershed moment for CBD in the United States. With hemp and all of its derivatives officially removed from the Controlled Substances Act, CBD moves from a legal gray area into the light." She continued, "This shift will allow for CBD to make its way to the shelves of larger-scale, mainstream distribution channels and pave the way for mainstream consumer packaged goods companies in industries like drinks, beauty, pet, skin care and tobacco to develop CBD products and capitalize on this emerging industry."

In a statement, Ms. Micallef agreed with Ms. Gomez, saying: "GABY's confidence in the explosive future potential of the CBD market led us to immediately recognize the importance of securing a supply of high-quality CBD to ensure we can successfully execute our strategy of developing new and desired products for consumers that incorporate hemp-derived CBD and other cannabinoids.

"We are excited to be in discussions with a number of retailers with whom GABY already has existing relationships and who are exploring the opportunity to sell CBD products. To date, our product development pipeline includes flavoured cooking oils, cold-brew and other coffee products, skin care products, tinctures and supplements. Having a source of high-quality CBD extract is fundamental to GABY's ability to reliably produce and distribute our CBD-infused products into the mainstream market."

"Quality control is the foundation of Xtract Xperts," said Cindy Wyant, CEO and founder of Xtract Xperts. "All of our extractions are lab tested to ensure cannabinoid potency. We use a proprietary and innovative extraction process that protects the beneficial compounds of the hemp plant, namely the terpenes, terpenoids, phytocannabinoids, and flavonoids -- characteristics that we know are important to GABY and are what consumers are looking for in a high-quality product."

All CBD extracts from Xtract Xperts are derived from hemp (not marijuana). CBD extract is different from hemp seed oil and organic hemp oil, as these are derived from hemp seeds (not the resin) and do not contain cannabidiol, which is the compound in hemp which has been correlated with specific health benefits, including anxiety, pain, high blood pressure and epileptic seizures. In fact, in June, 2018, the U.S. Food and Drug Administration (FDA) approved the first pharmaceutical formulation of hemp-derived purified CBD for use in an anti-epileptic drug. This approval was an important signal and provided clear indication of the potential pharmacological benefits associated with CBD and its extracts.

In addition to Xtract Xperts, to further advance the company's strategy, Gabriella's Kitchen has actively secured numerous acquisitions and strategic partnership arrangements over the past six months with firms across the CBD value chain, including the Oil Plant Inc. cannabis extractor and manufacturer, Sonoma Pacific Distribution, California's premier independently owned cannabis distribution and marketing company, and most recently, Eximius Coffee LLC, a U.S. coffee importer with products sold in retail grocery stores throughout the U.S. Gabriella's Kitchen will continue to build out its innovative product, marketing, distribution and retail capabilities to further its objective of becoming a leading U.S.-focused, cannabis wellness company.

About Gabriella's Kitchen Inc.

Gabriella's Kitchen is a U.S.-focused, cannabis wellness company holding a manufacturing licence and will hold a distribution licence issued by the California Bureau of Cannabis Control upon closing of its acquisition of Sonoma Pacific Distribution, announced Oct. 23, 2018. With these licences, the company's existing infrastructure of major retailers, and an extensive broker and distribution network, Gabriella's Kitchen is positioned to service mainstream grocery with CBD-infused products, as well as licensed cannabis retailers with CBD-infused and THC-infused edible and wellness products.

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