Dr. Neil Smith reports

7,500 PATIENT OBSERVATIONAL STUDY, AND $8.4 MILLION EQUITY FINANCING

Canabo Medical Inc. intends to complete a 7,500-patient observational study in 2017. The study will be led by Dr. Andrew Davis, PhD, of Acadia University and will focus on correlations within the patient database in three specific areas:

• Relation of opioid use following cannabinoid therapies by condition and patient category;
• Relation of benzodiazepines use following cannabinoid therapies by condition and patient category;
• Change in quality-of-life measurements following cannabinoid therapies by condition and patient category.

The study will complete participant enrolment in 2017, is expected to publish initial results in late 2017 and is expected to complete study findings in 2018.

Canabo has entered into an agreement with Aphria Inc. for a private placement of six million common shares at a price of $1.40 per share to raise gross proceeds of $8.4-million. After giving effect to the offering, Aphria will own approximately 16.6 per cent of the total issued and outstanding common shares of the company (on an undiluted basis). The placement will be subject to an aggregate finders' fee, equal to 5 per cent of the gross proceeds, payable to Haywood Securities Inc., PowerOne Capital Markets Ltd. and Clarus Securities Inc. In addition, Haywood Securities shall be granted an overallotment option to sell additional common shares equal to 15 per cent of the size of the offering. This option may be exercised at any time, in whole or in part, until 30 days following the closing date.

The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange. All of the securities issued pursuant to this offering will have a hold period expiring four months after the closing date.

Dr. Neil Smith, executive chairman of Canabo Medical, stated, "The study announcement speaks to the core principles and values of Canabo, contributing to the evidence-based medical body of work to support cannabinoid therapies." Dr. Smith went on to say, "Adding an investment partner like Aphria is an obvious strategic partner aligned to advance the standard of cannabinoid treatments."

"Canabo is one of the largest and most respected referral clinics in the country. Its commitment to educating both patients and physicians when it comes to prescribing cannabinoid treatment to effectively manage patients suffering from chronic pain and disabling illnesses has resulted in Canabo becoming a market leader in cannabinoid medicine and assuring it is playing a meaningful role in improving the quality of life of their patients, consistent with the values we hold at Aphria," said Vic Neufeld, chief executive officer of Aphria. "We very much look forward to working closely with them as part of this strategic investment."

About Canabo

Canabo wholly owns and operates Cannabinoid Medical Clinics, Canada's largest referral-only clinics for medical cannabis. After opening in 2014, Canabo now has 10 clinic locations, including Toronto, Barrie, Ottawa, Hamilton, Halifax, St. John's and Edmonton, with a number of additional clinics planned for opening in 2016 and 2017.

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