Mr. Hugo Alves of Auxly reports

AUXLY AND LOTUS VENTURES ANNOUNCE INVESTMENT AND SIGNING OF DEFINITIVE LONG TERM PURCHASE AND SALE AGREEMENT

Auxly Cannabis Group Inc. has closed an additional investment to partially finance the completion of Lotus Ventures Inc.'s 22,500-square-foot facility in Armstrong, B.C. Lotus is a late-stage applicant pursuant to the Access to Cannabis for Medical Purposes Regulations (ACMPR) and anticipates completing the construction of the facility by the end of September, 2018.

Pursuant to the transaction, which is in addition to Auxly's $1-million subscription of common shares of Lotus completed in January, 2018, Auxly advanced an additional $4-million to Lotus to partially finance the completion of the facility. In connection with the transaction, Auxly was issued an additional 3,755,868 common shares of Lotus and will be entitled to purchase or otherwise direct the sale of 50 per cent of the facility's total production which is expected to be 2,000 kilograms of cannabis per annum. Auxly also retains a right of first offer to purchase the remaining 50 per cent of cultivation output from the facility as well as a right of first refusal to finance a prescribed portion of the first expansion to the facility and all or a portion of any further expansions of the facility. Following the receipt of Lotus's cultivation licence at the facility, Auxly will be entitled to designate one nominee to the board of directors of Lotus for as long as Auxly holds at least 25 per cent of the purchased Lotus shares. The purchased Lotus shares are subject to a statutory hold period expiring four months and one day from the date of issuance.

Hugo Alves, president of Auxly, commented: "Lotus is a partner that we value deeply, having been part of the original cohort of streaming partners at the inception of Auxly. We are incredibly pleased to be making this subsequent investment into Lotus to complete the buildout of the first phase of their current facility in Armstrong, B.C. We continue to look forward to working closely with Lotus's team to design and build out additional phases of this asset."

Dale McClanaghan, president and chief executive officer of Lotus, commented: "Auxly is emerging as a large player in the distribution and marketing of cannabis in Canada. Lotus Ventures benefits in several ways from the Auxly streaming relationship, in addition to access to equity, the relationship provides us with assured offtake of at least half of our production as well as access to their market and industry expertise. This will enable Lotus to grow more rapidly than it otherwise would while working towards establishing a reputation as a top-tier licensed producer."

Corporate presentation

Auxly's corporate presentation and related investor materials are available on its investor relations website, which includes a capitalization table of the company as of Aug. 29, 2018. The company notes that the number of outstanding share purchase warrants of the company disclosed in the company's management's discussion and analysis for the interim period ended June 30, 2018, was incorrectly stated to be 67,723,835 when it should have been 108,536,926. This discrepancy has been corrected in the capitalization table contained on the company's investor relations website.

About Auxly Cannabis Group Inc.

Auxly Cannabis Group is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. The company's mandate is to facilitate growth for its partners by providing them with financial support and sharing its collective industry experience. The company's partners all have different visions, voices and brand values, and all share a common goal -- to build a world-class industry based on ethics, diversity, quality and innovation.

About Lotus Ventures Inc.

Lotus is a late-stage licensed producer applicant under the ACMPR, in active review with Health Canada. The unique business model combines an upstream royalty financing model with Auxly and a downstream licensing model with farmer/grower partners using Lotus technology and intellectual property. The first facility in Armstrong, B.C., is a purpose-built, state-of-the-art indoor facility with proprietary processes. The company has previously announced its first farmer/grower partner with its second facility slated in Ontario.

We seek Safe Harbor.