Mr. Mark Aiken reports

CHRISTINA LAKE CLOSES FIRST TRANCHE OF NON-BROKERED PRIVATE PLACEMENT OF SECURED CONVERTIBLE NOTES

Further to the press release dated Feb. 5, 2024, Christina Lake Cannabis Corp. has closed the first tranche of a non-brokered private placement of secured convertible promissory notes in the principal amount of $1,925,000.

The company issued convertible promissory notes secured by land and buildings. The note bears interest at a rate of 10 per cent per annum for year 1, 15 per cent per annum for year 2 and 20 per cent per annum for the remaining three years. Repayment of the note shall be interest only payments paid annually on the anniversary dates for the first 24 months of the term, then quarterly interest payments thereafter, and $641,667 principal repayments on or before each anniversary payment date until the remaining principal amount of this note is satisfied in full. Outstanding principal and unpaid interest from the note are convertible into common shares at a conversion price of five cents per common share during the term. The noteholder shall have the right to convert the note at any time, subject to a notice period. Additionally, the company shall have the right to repay the note at any time during the term together with prepayment of any remaining interest payable under the note.

All securities issued pursuant to the offering are subject to a statutory four-month-and-one-day hold period from the date of issuance pursuant to applicable securities laws of Canada.

The proceeds of the offering are to be used for upgrades to the equipment and facilities acquired in the acquisition transaction announced on Feb. 5, 2024, and for preparation and development of the new site and facility.

The company expects to close any additional tranches of the offering in March, 2024.

Multilateral Instrument 61-101 disclosure

Certain insiders of the company participated in the first tranche of the offering for an aggregate total of $1,355,000 in notes. The participation by such insiders is considered a related party transaction within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(b), respectively, of MI 61-101, as no securities of the company are listed or quoted on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., the New York Stock Exchange, the American Stock Exchange, Nasdaq Stock Market or a stock exchange outside of Canada and neither the fair market value of the notes to be acquired by the participating directors and officers nor the consideration to be paid by such directors and officers exceeds $2.5-million. The company did not file a material change report more than 21 days before the expected closing of the offering as the details of the participation therein by related parties of the company were not settled until shortly prior to closing of the first tranche of the offering and the company wished to close on an expedited basis for sound business reasons.

About Christina Lake Cannabis Corp.

Christina Lake Cannabis is a licensed producer of cannabis under the Cannabis Act with a standard cultivation licence and corresponding processing amendment from Health Canada as well as a research and development licence. Christina Lake Cannabis's facility consists of a 32-acre property, which includes over 950,000 square feet of outdoor grow space, offices, propagation and drying rooms, research facilities, and a facility dedicated to processing and extraction. Christina Lake Cannabis also owns a 99-acre plot of land adjoining its principal site. Christina Lake Cannabis focuses its production on creating high-quality extracts and distillate for its B2B (business-to-business) client base with proprietary strains specifically developed for outdoor cultivation to enhance extraction quality.

We seek Safe Harbor.