Mr. Douglas Mason reports

NATURALLY SPLENDID SUBMITS DEALER LICENSE APPLICATION

Naturally Splendid Enterprises Ltd. has completed and submitted its dealer licence application to Health Canada for processing. The dealer licence application is a comprehensive document that includes critical areas such as: facility layout and construction details; standard operating procedures; quality person in charge selection; criminal record checks; safety protocols; and security plans.

As announced in a previous news release dated Feb. 6, 2018, the company engaged Cannabis Compliance Inc. to prepare the dealer licence application in order for the company to become a licensed dealer of cannabis extracts under the Canadian regulatory regime. Cannabis Compliance has a 100-per-cent success record in securing dealer licences for its clients.

Becoming a licensed dealer allows the company to pursue a number of research and development activities related to cannabis, including but not limited to the extraction, formulation and distribution of cannabinoids such as CBD (cannabidiol) and/or THC (tetrahydrocannabinol), amongst other activities. Regulatory compliant activities include:

1. Manufacturing;
2. Packaging;
3. Preparation of research and development formulations for future manufacturing;
4. Resale and distribution to other licensees;
5. Importing and exporting for global sales;
6. Laboratory testing;
7. Contract NSE services for any of the listed activities.

The company has secured an additional 4,000 square feet of manufacturing space adjacent to its existing processing facility, specifically for the extraction facility as outlined in the dealer licence application. An extensive review of extraction technologies has been completed and construction of the facility has begun.

Cannabis Compliance representative and chief financial officer Sid Hathiraman states: "From the R&D and manufacturing perspective, licensed dealers are permitted to prepare formulation from cannabis whether that be from hemp or marijuana. On the other hand, licensed producers, who are the growers of medical marijuana, are limited to formulations with only carrier oils. LPs cannot add additives, for example, flavour, stabilizer, or any other ingredient that would be required to manufacture or alter the cannabis product in the form of an edible, natural health products (NHPs), nutraceutical or pharmaceutical products. This is the role of the licensed dealer, thus creating business opportunities not available to LPs."

According to the Prime Minister's Office, new regulations regarding hemp and marijuana in Canada will come into effect October, 2018. The new cannabis regulations will include provisions for licensed dealers to transition into the new regulatory framework as licensed processors. Additionally, the revised hemp regulations will allow for the extraction of CBD from hemp. Currently CBD is only allowed to be extracted from marijuana which legally limits the uses of CBD.

In regards to CBD extraction from hemp, the company announced in a news release dated June 28, 2018, that it has contracted with a long-established organic hemp farmer, Fresh Air Farms, located in Saskatchewan, Canada, for 330 acres of organic agricultural land to provide organic hemp production for the 2018 and 2019 growing seasons. Naturally Splendid has the right to purchase up to 100 per cent of the organic hemp production from the 330 acres. Although the company initially secured the acreage for organic hemp seed production, the company has the option to convert some or all the acreage to CBD (cannabidiol) production.

Naturally Splendid intends to expand this model of identifying organic acreage for hemp seed and/or CBD cultivation to secure additional acreage in the future. Additionally, the company anticipates designating a portion of organic cultivation for research and development of high-yielding CBD (cannabidiol) hemp.

Naturally Splendid chief executive officer Douglas Mason states: "Securing organic acreage, obtaining our dealer's licence, and the imminent positive changes to hemp and marijuana regulations in Canada, as well as a more global acceptance of cannabis allows Naturally Splendid to continue to evolve our business, and to execute our strategic plan. This allows the company to position itself as growing global trends toward CBD have become more acceptable. Naturally Splendid intends to be at the forefront of that opportunity utilizing our IP; formulating and processing expertise; and distribution through our existing and developing distribution channels globally in jurisdictions that allow for CBD and CBD fortified products."

Naturally Splendid executive vice-president of sales Alan Maddox states: "Production of our own cannabinoids, such as CBD and THC, is a strategic component to our vertically integrated business plan. Our recent acquisition of hemp processor ACI Foods strengthens our efficiencies in product supply of organic hemp seed, hemp hearts, hemp oil and hemp protein into existing company retail brands NATERA and Chii, while increasing our margins considerably. This acquisition allows us to go from farm to plate, a marketing and sales dream for food products. As importantly, the ability to introduce new CBD fortified products currently under development by our experienced team of formulators into multiple product categories provides competitive advantages for our retail lines. In addition, CBD fortified products under development include food and supplements, beverages, skin care and cosmetics, and pet care and pet nutrition, which we plan to market through established distribution channels."

About Naturally Splendid Enterprises Ltd.

Naturally Splendid is a biotechnology and consumer products company that is developing, producing, commercializing and licensing an entirely new generation of plant-derived, bioactive ingredients, nutrient dense foods and related products. Naturally Splendid is building an expanding portfolio of patents (issued and pending) and proprietary intellectual property focused on the commercial uses of industrial hemp and non-psychoactive cannabinoid compounds in a broad spectrum of applications.

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