Mr. John McMullen reports

LGC CAPITAL TO ENTER INTO CONVERTIBLE LOAN AGREEMENT FOR US$2,340,000

LGC Capital Ltd. will enter into an investment agreement with international investors YA II PN Ltd. and RiverFort Global Opportunities PLC pursuant to which they will loan LGC an aggregate amount of $2.34-million (U.S.). The loan will have a term of 12 months and will bear interest at an annual rate of 12 per cent. The proceeds of the loan will be used to refinance upcoming debt maturity.

The principal amount of the loan will be convertible into common shares of LGC at the option of the lenders at a price per share equal to the lesser of 9.12 U.S. cents (12 Canadian cents), representing the United States dollar equivalent of 120 per cent of 10 cents, and 90 per cent of the lowest daily VWAP (volume-weighted average price) during the five trading days immediately preceding the date of the conversion notice from the lenders, subject to a minimum conversion price of 7.6 U.S. cents, representing the U.S. dollar equivalent of 10 cents. The closing price of the shares on Feb. 15, 2019, was nine cents.

The corporation will also issue common share purchase warrants to the lenders in an amount equal to 45 per cent of the principal amount of the loan divided by 8.74 U.S. cents, representing the U.S. dollar equivalent of 11.5 cents. Each warrant shall entitle the holder thereof to acquire one share at an exercise price of 11.5 cents for a period of one year from the date of issuance.

The investment agreement contains standard representations, warranties and covenants of the parties. Closing of the transaction and the issuance of all shares pursuant thereto is subject to the conditional approval of the TSX Venture Exchange. The parties intend to close the transaction as soon as reasonably possible, following the receipt of such approval. Any securities issued by the corporation at the closing of the transaction, or upon conversion of the loan or upon exercise of the warrants, will be subject to restrictions on resale for a period of four months and one day from the date of closing. LGC is at arm's length to the lenders.

About LGC Capital Ltd.

LGC is a leading cannabis investment firm with a focus on the legal global cannabis market. Through its growing portfolio investment companies, LGC is building a 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. LGC is a Canadian incorporated public company listed on the TSX-V.

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