Mr. Edward Miller reports

NORTH BUD FARMS ANNOUNCES MANAGEMENT CHANGE AND CORPORATE UPDATE

North Bud Farms Inc. has appointed Ryan Brown as executive chairman of the board of directors, Jennifer Ross-Carriere to the board of directors and Sean Homuth as chief executive officer of the company, effective immediately.

"Since Sean has joined our team, he has been instrumental in structuring and closing the first round of our debenture financing, as well as completing our acquisitions in California and Nevada," said Ryan Brown, executive chairman of North Bud. "As North Bud evolves its operations in the [United States], we are very excited in our future as 2020 will be a significant year of growth for the company. The extensive operational experience Sean brings to the team will be essential in executing our strategic plan and guiding the company through its next level of growth. Moving forward, North Bud is committed to the highest level of financial management and diligence as we move from a prerevenue start-up into the revenue-generating operational phase of development. Having someone with Sean's experience and background at the helm of North Bud's day-to-day operations is a natural evolution for our company. This transition will allow me to focus on overseeing the corporate strategy while supporting the management team in its execution.

"We are also pleased to welcome Jennifer Ross-Carriere to our board as she brings a strong legal and business background, coupled with a wealth of corporate governance experience, to our board," said Mr. Brown. "Her knowledge, perspective and diverse skill set will complement our existing board members and be an incredible asset for our company as we advance our strategic plan."

Mr. Brown further stated, "I am pleased to take on the role of executive chairman supported by our first-class independent board of directors consisting of lead independent director and former Altria executive, Micheal Saxon, former multiple-term Canadian federal cabinet minister, Leona Aglukkat, Dr. Terresa DeLuca, managing director of the N.Y. Life Science Venture Fund, Jennifer Ross-Carriere, and experienced capital markets executive and co-founder, Andre Audet."

"I am extremely pleased to be assuming the role of chief executive officer working alongside Ryan, a seasoned veteran of our industry, as we move towards placing our vision into action," said Mr. Homuth. "Our strategy is to build a company focused on operating cost-efficient cultivation facilities in the largest addressable markets in North America. With a world-class board and executive team, we are poised to lead North Bud through a period of tremendous growth and opportunity."

Annual and special meeting

The company expects to hold its annual and special meeting in Ottawa, Ont., toward the last week of January, 2020, or in early February, 2020. The company will update shareholders and file the required notices on its website and under its issuer profile on SEDAR.

Corporate update

On Nov. 22, 2019, the company received a request for information from Health Canada. The request required the company to provide certain information and confirmations related to the company's outstanding cultivation licence application and evidence package. The company is pleased to report that the request was responded to in full in advance of the Dec. 8, 2019, deadline. The request did not contain any notices of deficiencies in the company's cultivation licence application, nor did it require the company to make any modifications to its facilities. On Nov. 27, senior management of the company partook in a conference call with the company's assigned reviewer at Health Canada to ensure the completeness of the company's responses to the request prior to submission. The company is confident that the approval process is on track but, at this time, cannot predict when it will be granted a cultivation licence by Health Canada. The company will update shareholders on any material advancement of the application.

In preparation for the anticipated licensing of the company's Canadian production facility, the company has entered into a purchase agreement with Ottawa-based licensed producer apollogreen Inc. apollogreen's business is focused on the sale of clones and starting genetics. Under the terms of the agreement, apollogreen will provide the company with starting materials, which the company expects to be cultivated and sold under its business-to-business (B2B) sales program.

"We are very happy to be working with the team at apollogreen, who we have known for many years," said Mr. Brown. "Their services will significantly expedite our ability to achieve revenue postreceipt of our cultivation licence. The company is in negotiation with multiple licensed producers and expects to sign one or more letters of intent for wholesale B2B supply in the coming weeks. The company's intention is to secure immediate line of sight on revenue through the process of obtaining our direct sales licences and preparing our unique genetics for commercialization under the North Bud brand. Historically, many producers have chosen to bank inventory for the first 12 months pending the receipt of a sales licence. We believe this is an inefficient strategy and has resulted in large inventory valuation writedowns and inferior product being released to consumers. This provides us with a focused cultivation strategy from day one, which will increase profitability and allow us to incrementally enter the market with higher-margin branded products while ensuring cash flow needs will be met in the near and medium term."

Option grants

On Dec. 9, 2019, the board of directors of the company approved the grant of 1,025,000 incentive stock options to certain directors and senior officers of the company. The options vest immediately and are exercisable to acquire common shares of the company at a price of 25 cents per common share, subject to the rules of the Canadian Securities Exchange and the company's newly adopted 2019 omnibus equity incentive compensation plan. The options expire five years from the date of grant. The omnibus plan was adopted by the board of directors on Dec. 9, 2019, and is subject to ratification and approval by the shareholders of the company at the meeting. The foregoing grant of options is subject to the ratification and approval of the omnibus plan.

Restricted share unit grants

On Dec. 9, 2019, the board of directors of the company also approved the grant of 3,388,889 restricted share units (RSUs) to certain officers, directors, key employees and consultants of the company. The RSUs vest in four equal tranches starting three months from the date of grant. Each vested RSU entitles the holder thereof to receive one common share of the company upon delivery of an exercise notice, in accordance with the omnibus plan. The foregoing grant of RSUs is subject to the ratification and approval of the omnibus plan at the meeting by the shareholders of the company.

About Mr. Homuth

Mr. Homuth brings extensive experience with both Canadian and U.S. publicly traded organizations both in industry and from a client perspective during his tenure at Ernst & Young and, more recently, as an independent consultant. Previously, Mr. Homuth was chief financial officer at Orezone Gold Corp. (and vice-president, finance and administration, for its predecessor company, Orezone Resources Inc.), a publicly listed company headquartered in Canada with operations in West Africa. At Orezone, Mr. Homuth led a global team of finance professionals and was involved in over $800-million in financings and merger-and-acquisition transactions with the company and its predecessor. Mr. Homuth holds accounting designations in both Canada (CPA and CA) and the United States (CPA, Illinois).

About Ms. Ross-Carriere

Ms. Ross-Carriere brings over 20 years of experience, working with global companies in the technology industry, providing strategic and operational advice to organizations of all sizes at the senior leadership and board levels with a particular emphasis on legal matters and employee relations. Previously, Ms. Ross-Carriere held the roles as general counsel and vice-president, people and culture, at IFS Aerospace & Defense, and general counsel and vice-president, people and culture, at Mxi Technologies. In these roles, she demonstrated strong skills in many areas, including intellectual property, licensing, M&A, corporate governance and employment. She is a senior human relations professional with a focus on the development of an employee support organization truly matched to company culture. Ms. Ross-Carriere was called to the Bar of Ontario in 1999, holds a bachelor of laws (LLB) from McGill University and a bachelor of arts from Carleton University. She has served as a board member of several technology companies and non-profit organizations.

About North Bud Farms Inc.

North Bud Farms, through its wholly owned subsidiary GrowPros MMP Inc., is pursuing a licence under The Cannabis Act. The company has built a state-of-the-art purpose-built cannabis production facility located on 135 acres of agricultural land in Low, Que., Canada. North Bud through its wholly owned U.S. subsidiary, Bonfire Brands USA, has acquired cannabis production facilities in California and Nevada.

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