Mr. John McMullen reports

LGC CAPITAL TO ACQUIRE 47% OF EASYJOINT, ITALY'S LARGEST VERTICALLY-INTEGRATED LEGAL CANNABIS PRODUCER, DISTRIBUTOR, AND RETAILER.

LGC Capital Ltd. has entered into a formal definitive agreement to acquire 47 per cent of EasyJoint Project SRL, an Italian company, for a total cash and share consideration of 4,788,000 euros ($7,153,000 (Canadian) at today's exchange rate of one euro:1.494 Canadian dollar). Definitive documentation will now be submitted to the TSX Venture Exchange and closing of this transaction is subject only to TSX-V review and approval.

EasyJoint's market presence in Italy

EasyJoint is widely recognized as the market leader in Italy, having been extensively written up in the media, including in a New York Times article.

EasyJoint's store in Milan, Italy

EasyJoint currently controls approximately 85 per cent of the distribution of legal "cannabis light" retail products in Italy and has established itself as the leading brand in Italy. EasyJoint products are distributed in over 450 retail points of sale in Italy and rapidly expanding beyond current specialty stores to EasyJoint branded franchise stores. Eleven EasyJoint franchise stores have already opened in Rome, Milan, Piacenza, Rovato (BS), Viadana, Bassano del Grappa, Crotone, Pantelleria and Parma with an additional two stores under discussion.

EasyJoint's distribution in Italy is extensive.

EasyJoint has also been successful at penetrating the very large licensed tobacco network in Italy. EasyJoint products consist of over 150 branded items ranging from high-cannabidiol dry cannabis flowers to CBD oils and edibles. Through LGC's network of strategic investments, EasyJoint will expand its brand presence into new global markets, including legal cannabis markets across Europe, North America and the Caribbean.

For the 10 months prior to Oct. 31, 2018, unaudited revenues have grown to over four million euros ($6-million (Canadian)) with margins of 19.7 per cent, which will increase as EasyJoint achieves economies of scale through expansion. EasyJoint's revenue channels split approximately 75 per cent through retail with the remaining 25 per cent of revenues through e-commerce.

Luca Marola, co-founder and chief executive officer of EasyJoint

EasyJoint is led by its co-founder and CEO Mr. Marola, who has been an early advocate of the Italian anti-prohibitionist movement in favour of the legalization and normalization of the use of cannabis in Italy. Mr. Marola has actively participated in cannabis-related discussions in the Italian and European parliaments and has made multiple interventions at the Italian parliament, which have impacted the laws that passed in recent years. Mr. Marola is the founder of one of the oldest Italian grow shops, "Canapaio Ducale," founded in Parma in 2002, he is the host of the only Italian radio show focused on cannabis and has published four books on cannabis and its legalization.

Legal status of cannabis in Italy

In January, 2017, the Italian government passed a law (242/2016) which regulates the cultivation, transformation and sale of cannabis and cannabis-derived products. Under this new legal framework, it is legal to produce and market cannabis and related products, which contains a percentage of tetrahydrocannabinol less than 0.2 per cent.

EasyJoint is fully vertically integrated from seed to consumers in Italy. EasyJoint buys its cannabis input product from a large exclusive contracted independent farmer's network across Italy, to which EasyJoint sells female seedlings that meet its strict premium specifications, thus eliminating the risk of growing male plants. In addition, EasyJoint has established the first Italian hemp pasta for the consumer market under the brand EasyJoint. It will be officially launch in Montreal before the end of 2018.

John McMullen, chief executive officer of LGC Capital, stated: "With approximately 85 per cent of the cannabis light distribution in Italy and healthy revenue generation, EasyJoint is a significant investment opportunity for LGC. We see Italy, with a population of 60 million, as one of the key European market for cannabis growth and a springboard into other parts of the EU over time. This deal represents LGC's third investment in Europe in 2018 and allows us to work closely with other LGC investee companies to grow and sell legal cannabis products to EasyJoint for their distribution."

Luca Marola, founder of EasyJoint, stated: "Over the past 18 months, EasyJoint has pioneered the cannabis light market in Italy and by driving public opinion has created a new approach to cannabis. Today, we are proud to announce LGC Capital's investment into our company. Thanks to LGC's expertise and resources in successfully addressing the global market, EasyJoint is ready to further strengthen our leadership position and develop our growth in new markets."

Transaction details

Payment for the 47-per-cent equity in Easy Joint SRL will be effected by way of i) a cash payment in the amount of 2,565,000 euros ($3,832,110 (Canadian)) and ii) a payment in common shares for a value of 2,223,000 euros ($3,321,162 (Canadian)) in the share capital of LGC at a price per share set at 85 per cent of the five-day volume weighted average price of LGC shares immediately prior to the closing of the transaction (26,152,941 shares at current prices). In accordance with Canadian regulatory requirements, the payment shares will be subject to a four-month hold period calculated as of the closing date. For this transaction, a finder's fee of 2.5-per-cent cash and 2.5 per cent in shares will be paid to an arm's-length party. This transaction is subject to normal closing conditions and review and approval by TSX Venture Exchange.

Information relating to EasyJoint Project SRL

All information contained in this press release relating to EasyJoint Project SRL has been provided to LGC by EasyJoint Project SRL. LGC has relied upon this information without having made independent inquiries as to its accuracy or completeness and assumes no responsibility for any inaccuracy or incompleteness of such information.

About LGC Capital Ltd.

LGC Capital is a leading investment firm with a focus on the legal global cannabis market. Through its portfolio investment companies, LGC is building a world-leading, vertically integrated system of interconnected legal cannabis companies with cultivation, processing and distribution in Australia, Jamaica, Switzerland, Italy and Canada serving domestic and export markets.

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