Mr. Andreas Gedeon reports

HARVEST ONE ANNOUNCES CLOSING OF ACQUISITION OF ACMPR LICENSED MEDICAL CANNABIS PRODUCER AND SWISS MEDICAL CANNABIS-BASED HEALTH PRODUCTS COMPANY

Harvest One Cannabis Inc. has closed its previously announced acquisition from MMJ PhytoTech Ltd. (MMJ) of 100 per cent of the issued and outstanding shares of United Greeneries Holdings Ltd. and Satipharm AG from PhytoTechMedical (U.K.) Pty. Ltd., a wholly owned subsidiary of MMJ. In connection with the closing of the acquisition, the net proceeds of the company's $25-million private placement in support of the acquisition have been released to the company from escrow. Immediately prior to closing of the acquisition, the company completed a consolidation on the basis of one postconsolidation common share for 1.79 preconsolidation common shares and changed its name from Harvest One Capital Inc. to Harvest One Cannabis Inc.

The acquisition constitutes the company's qualifying transaction within the meaning of the TSX Venture Exchange policies. In connection with the acquisition, the company has filed an amended filing statement dated April 19, 2017. More information about the acquisition, as well as additional disclosure about United Greeneries and Satipharm, can be obtained from the company's filing statement filed on SEDAR.

Unless otherwise expressed, all references herein to securities issuable in the offering and acquisition, and corresponding subscription prices, are made on a postconsolidation basis.

Conversion of subscription receipts

Pursuant to an agency agreement dated Feb. 22, 2017, among MMJ, the company, and a syndicate of agents led by Mackie Research Capital Corp. and including Canaccord Genuity Corp., Eight Capital and GMP Securities LP, the agents agreed to act as exclusive agents to the company to arrange for the sale of up to 29,334,000 subscription receipts for aggregate gross proceeds of up to $22,000,500 on a best efforts private placement basis. The agency agreement also provided the agents with an option to purchase up to an additional four million subscription receipts for additional gross proceeds of $3-million. The agents exercised the agent option in full, resulting in the sale of 33,334,000 subscription receipts for aggregate gross proceeds of $25,000,500 under the offering.

Each subscription receipt has been automatically exchanged, without any further action by the holder thereof and for no additional consideration, for one unit of the company. Each unit consists of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share for an exercise price of $1 per warrant share for a period of 36 months from the issuance of such warrant.

Following the satisfaction of certain conditions precedent, proceeds of the offering, less the agents' 6-per-cent commission and certain expenses, have been delivered to the company pursuant to a subscription receipt agreement among the company, Computershare Trust Company of Canada, the lead agent and MMJ dated Feb. 22, 2017.

The agents also received compensation options that entitle the agents to acquire that number of units equal to 6.0 per cent of the number of subscription receipts issued pursuant to the offering, including the agent option, at an exercise price of 75 cents per unit at any time on or prior to the date that is 36 months from the closing date.

Completion of acquisition

Pursuant to a share exchange agreement dated Dec. 7, 2016, as amended, the company acquired from Phyto U.K. all of the purchased shares. In consideration for the purchased shares, Phyto U.K. received $33,180,997 payable by way of a combination of $2-million in cash and the issuance of 41,574,662 common shares at 75 cents per common share. In consideration for the transfer to Harvest and extinguishment of certain intercorporate debts of United Greeneries and Satipharm owed to MMJ, MMJ received $8,819,003 payable to MMJ by way of the issuance of 11,758,671 common shares.

Board of directors

The board of directors of the company will initially consist of Andreas Gedeon, Peter Wall, Jason Bednar and Anne Chopra. Will Stewart will join the advisory board of the company, and it is intended that Mr. Stewart be nominated for election to the board at the 2017 annual general meeting of shareholders of the company. Select biographical details regarding Mr. Gedeon, Mr. Wall, Mr. Bednar, Mr. Stewart and Ms. Chopra can be found in the filing statement.

Option issuance

The board of directors of the company has authorized the grant of 8.05 million incentive stock options to certain of its directors, officers, employees and consultants. Each such option entitles the holder to acquire one common share for a period of five years at an exercise price of 75 cents per share. The options are subject to vesting over the course of 24 months following the grant date.

Escrowed securities

As disclosed in the filing statement, the 41,574,662 common shares held by Phyto U.K. and the 11,758,671 common shares held by MMJ are subject to a Tier 1 value security escrow agreement. One million common shares of the company remain subject to a capital pool company escrow agreement.

Listing

The company has obtained final approval to list its common shares on the TSX Venture Exchange as a Tier 1 industrial or life sciences issuer. The common shares are expected to begin trading on the TSX-V at the opening of markets on or about April 28, 2017, under the symbol HVST.

Issued and outstanding

Following completion of the acquisition, consolidation and offering, there are 88,953,992 issued and outstanding common shares on a non-diluted basis, and 117,516,451 common shares on a fully diluted basis, as disclosed in the filing statement.

We seek Safe Harbor.