Mr. John McMullen reports

LGC CAPITAL CLOSES INVESTMENT IN SWISS CANNABIS PRODUCER, VIRIDI UNIT SA

LGC Capital Ltd. has closed its previously announced transaction with Swiss cannabis producer Viridi Unit SA. LGC has issued 35,167,001 shares of its common stock at a price of 11.43 cents each to Viridi in exchange for a 30-per-cent equity interest in Viridi plus a 5-per-cent royalty on Viridi's net sales over 10 years. All final documentation in respect of the transaction will be submitted today to the TSX Venture Exchange.

Viridi's market presence in Switzerland and Europe

Viridi produces, processes and distributes high CBD (cannabidiol) legal cannabis products under the ON? premium cannabis brand in over 500 retail locations across Switzerland.

Recently in October, LGC announced that Viridi had harvested and processed 20,000 plants that were growing at its Geneva cannabis cultivation facility, consisting of 65,000 square feet of canopy space. This recent harvest yielded 2,700 kg of high-CBD dried cannabis flowers to be used as inputs to the One premium cannabis products as well as for wholesale markets across Europe.

Viridi uses a proprietary breeding system for its high-quality, high CBD strains and seeds that comply with the Swiss regulations of less than 1 per cent tetrahydrocannabinol and European Union regulations of less than 0.02 per cent THC. Viridi will also be launching its CBD cosmetics line called Viridi Care for the global market in early 2019.

LGC Capital's investment in Viridi

On Aug. 1, 2018, LGC announced a binding agreement to acquire a 30-per-cent interest in Viridi, a vertically integrated legal cannabis supplier to the Swiss and European markets.

Under the terms of the agreement, LGC has acquired its 30-per-cent interest through the issuance to Viridi of 35,167,001 common shares of LGC at an issue price of 11.43 cents each for a total consideration corresponding to three million Swiss francs ($4,019,588.22).

The number of shares issued is based on the five-day VWAP (volume-weighted average price) of LGC's common shares at close of markets on Dec. 5, 2018. The shares issued to Viridi represent approximately 8.45 per cent of the number of issued and outstanding LGC shares on a postclosing basis.

LGC has also been granted a 5-per-cent royalty on Viridi's net sales for a period of 10 years.

For this transaction, LGC has paid a finder's fee to an arm's-length party equal to 3 per cent of the total consideration in cash and 2 per cent of the total consideration by the issuance of 703,340 common shares of LGC.

All common shares issued by LGC in connection with the transaction are subject to a four-month hold period.

John McMullen, chief executive officer of LGC, stated: "The LGC team and I are very pleased with the closing of our strategic investment in Viridi. With partners like Viridi in Switzerland, we at LGC are solidifying our presence in the legal European cannabis market which is estimated to grow upwards of $98-billion by 2025 according to a recent BMO report. As the cannabis market grows rapidly inside Switzerland and the European Union, Viridi and its One premium cannabis are building a strong name as a leading provider of high-quality, high CBD, compliant cannabis products in Europe."

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