An anonymous director reports

AVICANNA ANNOUNCES CLOSING OF NON-BROKERED PRIVATE PLACEMENT OF DEBENTURE UNITS

Avicanna Inc. has closed a non-brokered private placement of 1,455,000 debenture units of the company at a price of $1 per unit for aggregate gross proceeds of approximately $1,455,000. Each unit consists of an aggregate of $1 principal amount of secured subordinated debentures and one common share purchase warrant.

The debentures will mature one year following the closing of the offering and are not convertible into equity securities of the company. The debentures will bear interest at a rate of 18 per cent per annum until the maturity date. The debentures are subject to a 2-per-cent administration fee. The company may prepay the debentures at any time prior to the maturity date subject to a one-time prepayment fee of 1.5 per cent of the principal amount.

The debentures will rank pari passu in right of payment of principal with all other debentures issued under the offering and will be subordinated to the then currently outstanding convertible debentures issued on Jan. 28, 2022, as amended on Jan. 28, 2023.

Each warrant is exercisable into one common share in the capital of the company at a price of 35 cents per share for a period of three years from the closing of the offering.

The company intends to use the proceeds from the offering for the continuing development of the company's business model and for general working capital purposes, general and administrative expenses, repayment of debt, expenditures related to production and manufacturing, and research and clinical development. All securities issued under the offering, including securities issuable on exercise thereof, are subject to a hold period expiring four months and one day from the date hereof.

The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.

The company has also entered into amending agreements with certain holders of senior debentures bearing an outstanding principal amount of $562,000. Pursuant to the amending agreements, the term of the senior debentures has been extended to Oct. 28, 2023, the company will pay to the holders of senior debentures a one-time extension fee equal to 5 per cent of the principal amount of senior debentures outstanding, and the senior debentures will bear interest at a rate of 20 per cent per annum from and after July 28, 2023. If the debentures are not repaid by the maturity date or if there is a default under the senior debentures, there will be a one-time penalty fee of 5 per cent of the outstanding principal amount, and the debentures will bear interest at a rate of 22 per cent per annum.

About Avicanna Inc.

Avicanna is a commercial-stage international biopharmaceutical company focused on the advancement and commercialization of evidence-based cannabinoid-based products for the global medical and pharmaceutical market segments. Avicanna has an established scientific platform, including research and development and clinical development, that has led to the commercialization of more than 30 products across various market segments:

• Medical cannabis and wellness products (RHO Phyto): The formulary offers a diverse range of proprietary formulations, including oral, sublingual, topical and transdermal deliveries with varying ratios of cannabinoids, and is supported with continuing patient and medical community education. RHO Phyto has been established as a leading medical brand in Canada, is currently available nationwide to patients across several medical channels and continues to expand into new international markets.
• Pharmaceutical preparations and pipeline: Leveraging Avicanna's scientific platform, vertical integration and real-world evidence, Avicanna has developed an extensive a pipeline of patent-pending drug candidates that are indication specific and in various stages of clinical development and commercialization. These cannabinoid-based drug candidates look to address unmet medical needs in the areas of dermatology, chronic pain and various neurological disorders. Avicanna's first pharmaceutical preparation (Trunerox) is in the drug registration stage in South America.
• MyMedi medical cannabis care: MyMedi is Avicanna's medical cannabis care platform that is formed with the aim to better serve medical cannabis patients' needs and enhance the patient journey. MyMedi features diverse and scientifically curated products from leading Canadian licensed producers in addition to pharmacist-led patient support programs and educational resources to facilitate the incorporation of medical cannabis into health care regimens. MyMedi also provides specialty services to distinct patient groups such as veterans, and collaborates with public and private providers for adjudication and reimbursement.

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