Mr. John Philpott reports

CANABO MEDICAL INC. ANNOUNCES CLOSING OF BROKERED FINANCING BY ALEAFIA INC.

Further to the press release dated Jan. 30, 2018, regarding Canabo Medical Inc.'s business combination with Aleafia Inc., Aleafia has now closed its brokered private placement with Mackie Research Capital Corp. as the lead agent and sole bookrunner, together with a syndicate of other registered investment dealers, including Canaccord Genuity Corp., Clarus Securities Inc. and PowerOne Capital Markets Ltd. The Aleafia private placement was oversubscribed, and a total of 24,171,000 subscription receipts were sold to raise gross proceeds for Aleafia of $30,213,750 at an offering price of $1.25 per subscription receipt. The proposed transaction will proceed by way of a three-cornered amalgamation between Aleafia and Canabo's Ontario subsidiary, 2412550 Ontario Inc. The combined listed entity of Aleafia and Canabo is referred to below as the resulting issuer. The TSX Venture Exchange has conditionally approved the proposed transaction.

Following the completion of the proposed transaction, and the satisfaction of certain escrow release conditions, each subscription receipt will entitle the holder to receive, without the payment of additional consideration or the taking of further action, one unit of the resulting issuer. Each unit will consist of one common share and one-half of a common share purchase warrant in the capital of the resulting issuer, as previously announced. Each whole warrant will be exercisable for one common share of the resulting issuer at a price of $1.75 for 18 months following the date of listing of the resulting issuer's common shares on the TSX Venture Exchange. The gross proceeds from the Aleafia private placement, less any agent expenses incurred up to and including the listing date, have been deposited into escrow, pending completion of the proposed transaction. If, for any reason, the proposed transaction does not close, then the gross proceeds will be refunded to the subscribers without penalty or deduction. Upon completion of the proposed transaction, it is expected that the resulting issuer will meet the listing requirements of an exchange Tier 1 life science issuer.

The agents received a cash commission equal to 6.0 per cent (reduced to 3.0 per cent for subscribers on the president's list to a maximum of $5-million) and were issued compensation options to purchase 1,336,920 units of Aleafia (or units of the resulting issuer, after the closing of the proposed transaction). Further details with respect to the proposed transaction and the Aleafia private placement, as well as a description of Aleafia and its business, are contained in Canabo's news release dated Dec. 22, 2017.

The completion of the proposed transaction is expected to occur on the day that is the seventh business day following the satisfaction or waiver of the conditions precedent or such other date as mutually agreed to by the company and Aleafia, but in any event, no later than March 30, 2018. Each of the company and Aleafia will bear its own respective costs and expenses associated with the proposed transaction. Aleafia has called a shareholder meeting to take place at 7 p.m. Toronto time today, March 1, 2018, whereby shareholders of Aleafia will be asked to approve the proposed transaction.

Overview of Aleafia

Aleafia operates the Aleafia total health network in Vaughan, Ont. Aleafia seeks to make a difference in cannabinoid therapy delivery by providing an interconnected medical service model. While most clinical programs are geared primarily toward postinjury rehabilitation, the Aleafia network is focused on the strong link between early intervention and successful treatment. The intent is to manage health through a patient-focused, assessment-based and interdisciplinary resourced organization.

Recently, Aleafia completed a transaction under which it acquired 100 per cent of the issued and outstanding shares of 755064 Ontario Inc., a licensed producer under the Health Canada Access to Cannabis for Medical Purposes Regulations (ACMPR), as well as the land and building in Scugog, Ont., where the facility operates. Aleafia acquired 755064 Ontario to directly support the Aleafia network.

About Canabo Medical Inc.

Canabo wholly owns and operates cannabinoid medical clinics, or CMClinics, Canada's largest physician-led referral-only clinics for medical cannabis. Established in 2014, Canabo now has 22 clinics across Canada, with additional locations planned to open in 2018. Canabo operates referral-only medical clinics dedicated to evaluating the suitability of prescribing and monitoring cannabinoid treatments for patients suffering from chronic pain and disabling illnesses. Clinics operated by Canabo are staffed by physicians and qualified health care practitioners specifically trained to assess patient suitability for cannabinoid treatment, recommend treatment regimes and monitor treatment progress.

In accordance with exchange policy, the company's shares are currently halted from trading and are expected to remain halted until after the exchange has reviewed the materials in support of the proposed transaction.

We seek Safe Harbor.