Mr. Craig Goodwin reports

NATURALLY SPLENDID USA SECURES AGREEMENT TO LICENSE HEMP AND CANNABINOID EXTRACTION AND FORMULATION

Naturally Splendid USA Ltd., Naturally Splendid Enterprises Ltd.'s wholly owned subsidiary, has entered into a novation agreement with Full Spectrum Laboratories Ltd., Boreal Technologies Inc. and Naturally Splendid whereby Boreal has agreed to assign, and Naturally Splendid USA has agreed to assume, all rights, title and interest in and to a restated and amended licence agreement between FSL and Boreal.

Under the terms of the novation agreement, Naturally Splendid USA has agreed to pay $725,000 to Boreal and Naturally Splendid has agreed to issue to Full Spectrum Partners LLLP (an entity controlled by FSL) such number of common shares of Naturally Splendid equal to $1,025,000 divided by the greater of 35 cents or a 20-per-cent premium above the closing price on closing of the transaction.

On closing of the novation agreement, Naturally Splendid USA will be the licensee under the license agreement. The license agreement provides that the licensee has a worldwide licence to manufacture, commercialize and sell products based on the following proprietary technology of Full Spectrum:

• On an exclusive basis, Naturally Splendid USA has licensed the terpene, hemp oil and cannabinoid formulation technology, the omega formulation technology, the protein formulation technology, the cannabinoid technology, and the tongkat ali formulations.
• On a non-exclusive basis, Naturally Splendid USA has licensed the supercritical carbon dioxide and plant oil extraction technology, the genetic plant and artificial seed technology, the biosynthesis of cannabinoids, and the microencapsulation of cannabinoid oils.

In consideration of the licence, the licensee will be required to pay to FSL, on a quarterly basis, a 4.5-per-cent gross revenue royalty. Commencing after Nov. 17, 2016, the licensee will be obligated to pay a minimum gross revenue royalty of $1.6-million (U.S.). Notwithstanding the foregoing, no royalties will be payable to FSL on the first $1.75-million of royalties payable under the licence agreement.

Craig Goodwin, Naturally Splendid's chief executive officer, stated: "This transaction is a major milestone for Naturally Splendid. We have positioned Naturally Splendid to capitalize on the continued global growth trend in products and technologies related to cannabis sativa, which includes industrial hemp and marijuana. In this regards, the technologies we have secured under this agreement allow Naturally Splendid to develop, market and distribute functional foods and ingredients related to oil and protein extraction. As well, there is increasing demand for cannabinoid formulation technology that allows for more measurable efficacious products as market trends indicate patients are looking for alternative ways to consume their medical marijuana prescriptions other than smoking. To address this growing trend, Naturally Splendid will develop, market and distribute water-soluble cannabinoid products and technologies in jurisdictions where these products are legal, beginning with the U.S. market."

Naturally Splendid will also be seeking to complete a minimum private placement financing of $1.5-million. Terms of the private placement will be disclosed in a subsequent news release.

The novation agreement is subject to a number of conditions, including acceptance of the above transaction by the TSX Venture Exchange and Naturally Splendid completing the financing. In the event that the transaction does not close by Dec. 15, 2014, the novation agreement will be terminated and be of no further force or effect.

Charles Brink was appointed as president of Naturally Splendid USA in October, 2014, as part of the negotiation process of the novation agreement. As Mr. Brink is also a director of FSL, the transaction is considered to be a related-party transaction, subject to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. Naturally Splendid is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of Multilateral Instrument 61-101 on the basis that participation in the private placement by insiders will not exceed 25 per cent of the fair market value of Naturally Splendid's market capitalization.

About Full Spectrum Labs

Full Spectrum Laboratories, incorporated in Ireland, is a bio-research and product development company with operating subsidiaries in Canada and the United States. The company has principally focused on the plant cannabis sativa, and has developed numerous technologies and made several discoveries resulting in two granted patents and over 11 patent applications in just under five years. FSL currently concentrates on formulation and extraction technologies, analytical cannabis testing in Canada, advance cannabis plant breeding specializing in CBD expression, and cannabinoid biosynthesis.

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