Mr. Tyler Robson reports

VALENS GROWORKS CREATES VALENS FARMS SUBSIDIARY, COMMENCES EXPANSION UNDER JOINT DEVELOPMENT PARTNERSHIP

Valens Groworks Corp. has created a new subsidiary company, Valens Farms, to commercially produce premium-quality specialty-strain cannabis using dedicated, sustainable monocropping technology and to further expand the company's supercritical carbon-dioxide-extracted cannabis oil capacity.

"This is a pivotal initiative for the Okanagan Valley, for British Columbia, the Canadian cannabis sector, and our goal of providing premium cannabis and derivatives to the world's natural health products industry," said Tyler Robson, chief executive officer of Valens Groworks. "We are very proud of what Valens Farms represents, as an important contributor to the local economy through investments and job creation and as a partner in our previously announced centre of excellence in plant-based medicine analytics initiative under way in nearby Kelowna."

Valens Farms enters into joint venture with Kosha Projects Inc.

Valens Farms has broken ground and initiated construction on a purpose-built, $75-million, 400,000-square-foot commercial cannabis production facility, being built-in joint venture partnership with Kosha. The municipality of the City of Armstrong has approved the building of up to 851,200 square feet of greenhouse and indoor facilities, representing 40-per-cent site coverage on the 50-acre property currently owned by Kosha.

Ashley McGrath, president of Kosha, stated: "I feel very fortunate to have the opportunity to work with a company that is passionate about what they do, about the products they produce, and has a particular focus on innovation and value. Valens benefits from our real estate planning and development experience and as an off-balance sheet funding source, and we in turn participate in the exciting growth potential of this nascent industry."

The joint venture partnership will see Kosha contribute the land and all facility development and construction costs and related expertise. Valens will provide design and outfitting inputs, budgetary guidance, consulting and advisory services during construction and development of the facility.

Valens Farms will operate the facility to commercially produce premium-quality cannabis and expand the company's supercritical carbon-dioxide-extracted cannabis oil capacity. Upon initial construction and development cost recoupment by Kosha, each of Valens Farms and Kosha are entitled to 50 per cent of the revenues earned, and a 50-per-cent interest in all the assets connected therewith.

Valens Farms is a wholly owned subsidiary established to develop purpose-built cannabis-specific facilities to enable sustainable closed-system premium hybrid cannabis production of the company's specialty strains, where Valens's master growers can control the fundamentals from day 1 rather than converting a greenhouse built for other purposes.

The first initiative for Valens Farms is to complete a 400,000-square-foot, controlled-environment, strain-segregated hybrid greenhouse as part of a large-scale indoor facility on the 50-acre property through its joint venture with Kosha. All-in development costs to Kosha are estimated at $75-million. This property also allows for additional expansion beyond the current 40-per-cent site coverage limitation should the City of Armstrong recognize cannabis greenhouse cultivation similarly to other crop greenhouse operations, currently allowed 75-per-cent site coverage. Also, once Health Canada approves outdoor cultivation as anticipated, significant additional cannabis under cultivation is enabled, unbounded by current site coverage restrictions, which provides the company with increased control over cannabis supply dedicated to its extraction capacity. Valens Farms is positioning to be the first partnership to serve the international medical cannabis market as well as the coming adult-use Canadian recreational market.

About Valens Groworks Corp.

Valens Groworks is a multilicensed, vertically integrated provider of Canadian cannabis products located in Kelowna, B.C. Subsidiary Valens Agritech has initiated cannabis production, processing and sales under a Health Canada dealer licence, which includes a supply agreement with Canopy Growth Corp. under its extensive CraftGrow distribution network. Subsidiary Supra THC Services is a Health Canada-licensed cannabis testing lab providing sector-leading analytical services and has partnered to develop a centre of excellence in plant-based medicine analytics.

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