Mr. Ian Atacan reports

PHARMACIELO TO SUPPLY EASE LABS WITH COMMERCIAL SHIPMENTS OF API TO FULFILL CONTRACT WITH STATE GOVERNMENT OF SAO PAULO, BRAZIL

Pharmacielo Ltd., the Canadian parent of Pharmacielo Colombia Holdings SAS, and Ease Labs Pharma, a leading good manufacturing practices (GMP)-certified pharmaceutical company in Brazil specialized in developing, manufacturing and distributing pharma-grade cannabis-based products, has noted that the pharmaceutical product "Cannabidiol Ease Labs 100 mg/ml (milligrams per millilitre)," owned and manufactured by Ease Labs in Brazil, has been selected by the state government of Sao Paulo to be distributed as part of its new public-health distribution program. The product is based on Pharmacielo's active pharmaceutical ingredient (API).

Highlights:

• The contract to supply the State of Sao Paulo is the largest public sector contract awarded to date in Brazil -- the state of Sao Paulo is the largest state in the country.
• Ease Labs to supply up to 1.871 tons of pharma-grade CBD (cannabidiol) to the government over a 12-month period. Ease Labs' product is based on Pharmacielo's proprietary API.

The program was created by Law No. 17,618 in January, 2023, with the purpose of providing the population with free access to cannabidiol products through public-owned health institutions throughout the state of Sao Paulo, the largest state in Brazil. Initially, patients with Dravet syndrome, tuberous sclerosis and Lennox-Gastaut syndrome will be eligible for access to the product and to receive free treatment.

Management commentary

Marc Lustig, chairman and chief executive officer CEO of Pharmacielo, commented: "This is a milestone event for Pharmacielo, highlighting the returns available as large international markets continue to open to cannabinoid-based drugs and therapeutics. Our team has diligently worked to ensure that our pharma-grade APIs are included early in drug development pipelines. While many of these products are still early stage, once they are approved and in market, Pharmacielo stands to reap significant benefit with APIs that are integral to the approval and viability of these products. Ease Labs is a leader in the Brazilian market and we look forward to many years of fruitful partnership as they continue to build a leadership position in this country of over 210 million people."

Gustavo de Lima Palhares, founder and CEO of Ease Labs, added: "We are very happy to be part of the largest cannabis-public health program in the world right now, providing access to patients that need these solutions. Pharmacielo has been a key partner in our sales expansion, with a consistent, scalable supply chain and pharma-grade APIs, meeting and exceeding the quality standards required by our regulators."

Additional background

In 2014, the Superior Court of Justice ruled in favour of underprivileged patients, deciding that the government is responsible for providing CBD treatment to this segment of the population. This created an important legal precedent and, since that time, the number of lawsuits referencing this decision has increased across several states in Brazil, forcing the state governments to make large purchases of cannabinoid products to support their patient populations. With the launch of the new program, the state government of Sao Paulo not only seeks to reduce its ongoing costs related to these lawsuits, but also to create a new public policy giving access to any patient within the program's rules.

Shares for settlement of certain amounts owing

Today, the company announced that, as approved by TSX Venture Exchange, it issued 609,439 common shares of the company, in satisfaction of $134,077 debt owed to certain former service providers of the company.

The company also announced that it intends to further issue, subject to the approval of TSX-V, up to 1,562,500 settlement shares, in satisfaction of $250,000 debt owed to certain former service providers of the company. The deemed price of the common shares to be issued have been determined as 16 cents, being the higher of the price of common shares at market close, or 10-day volume-weighted average price on the date the board of directors of the corporation approved issuance of shares. The settlement shares will be subject to a four-month hold period under applicable Canadian securities laws, starting from the date of issuance of the settlement shares.

About Pharmacielo Ltd.

Pharmacielo is a global company, headquartered in Canada, with a focus on ethical and sustainable processing, and supplying of all natural, pharmaceutical-grade medical cannabis products to large channel distributors. Pharmacielo's principal (and wholly owned) subsidiary is Pharmacielo Colombia Holdings SAS, headquartered at its cultivation and processing centre located in Rionegro, Colombia.

The board of directors and executive team of Pharmacielo are composed of a diversely talented group of international business executives and specialists with relevant and varied expertise. Pharmacielo recognized the significant role that Colombia's ideal location plays in building a sustainable business in the medical cannabis industry, and the company, together with its directors and executives, is executing on a business plan focused on supplying the international marketplace.

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