Mr. Chris Bunka reports

LEXARIA BIOSCIENCE SELLS NON-PHARMACEUTICAL THC-RELATED ASSETS FOR CDN$3.85M

Lexaria Bioscience Corp. has entered a definitive asset purchase agreement, through its wholly owned subsidiary, Lexaria Canpharm ULC, to sell certain non-core, non-pharmaceutical tetrahydrocannabinol-related business assets for gross proceeds of $3.85-million (Canadian) (approximately $2.85-million (U.S.)). All dollar references below refer to Canadian currency.

The buyer of the THC-related assets is Lexaria's long-standing Canadian licensee Hill Street Beverage Company Inc. Under the terms of the agreement, Hill Street will pay $350,000 in cash on closing; an additional $2-million payable over time in the form of a promissory note bearing 10-per-cent interest per annum; and $1.5-million in common shares of Hill Street equity, issuable in three equal tranches of $500,000 at closing; $500,000 eight months after closing; and $500,000 16 months after closing.

Hill Street will acquire exclusive, royalty-free and perpetual global rights including relicensing rights of Lexaria's DehydraTech technology for use in non-pharmaceutical products containing more than 0.3 per cent THC. Lexaria retains full ownership of its DehydraTech technology.

Hill Street and Lexaria have also agreed to replace previously announced agreements with a global non-exclusive licence providing Hill Street with the right to produce non-pharmaceutical cannabidiol (CBD) products with less than 0.3 per cent THC using the DehydraTech technology for a period of 10 years, for which Lexaria will receive certain agreed-upon royalties.

"DehydraTech has demonstrated its utility across multiple categories including cannabis, hemp and nicotine. Hill Street's team is executing a new and aggressive strategy in the cannabis sector through extremely challenging times, designed for new realities and enhanced consumer expectations," stated Chris Bunka, chairman and chief executive officer of Lexaria. "Their team has already built some of the best-selling and most respected brands in the alcohol-free beverage sector. Lexaria will become a strategic shareholder of Hill Street as a result of this transaction and we look forward to working together in the future."

"We have built a strong partnership with Lexaria, and have seen their technology evolve into the most researched and peer-reviewed platform upon which to create world-class consumer products for the cannabis 2.0 market," said Terry Donnelly, chairman and chief executive officer of Hill Street. "With over 60 issued patents or patent applications pending for DehydraTech, this acquisition positions us to become one of the new global leaders of this nascent industry. Lexaria's intellectual property is extremely well researched, market validated and well protected, and is the ideal platform upon which to build world-class brands."

Lexaria retains all rights to use its DehydraTech technology with THC and other cannabinoids related to pharmaceutical purposes or registered drugs within its wholly owned subsidiary Lexaria Pharmaceutical Corp. Under the agreement, CanPharm is receiving limited rights and contract manufacturing support from Hill Street to use DehydraTech royalty-free for the sale of non-pharmaceutical, therapeutic and medicinal products containing more than 0.3 per cent THC in nations outside Canada and the United States until Hill Street has paid the required $3.85-million in full, at which time CanPharm will begin paying a royalty to Hill Street for any such products using the technology. CanPharm also retains ownership of its federal licence issued by Health Canada to conduct research and development at its Kelowna, B.C., laboratory which remains fully under CanPharm's control for continuing research and development and formulation purposes.

Lexaria and Hill Street are pleased to retain a continuing relationship wherein Lexaria will hold a significant ownership position in Hill Street. Hill Street has the opportunity to create a number of cannabis 2.0 products utilizing DehydraTech's powerful enhancement technology to meet and exceed increasingly sophisticated consumer demand and, should Lexaria wish to enter therapeutic markets in nations where it is legal to do so, the companies will work closely together to do so.

Companies involved with the THC industry in the United States have historically been unable to list on U.S. national securities exchanges. Accordingly, the company, which has previously licensed its technology to third parties for use in the production of third party THC products sold in the United States, determined that, although it has never sold THC products in the United States, the sale of the THC-related assets is a prudent step toward listing on a U.S. national securities exchange.

The THC-related assets include two of Lexaria's outlicensing agreements that are related to third party cannabis products sales. The sale of the THC-related assets is expected to close within 30 days and is subject to certain regulatory approvals.

Following this asset sale, Lexaria will increase its focus on regulated pharmaceutical and medical market segments where it believes its DehydraTech technology has more highly valued utility, including: business segments relating to heart disease; reduced-risk non-combusted nicotine; anti-viral drugs; and hemp-based CBD (cannabidiol) business-to-business applications.

About Lexaria Bioscience Corp.

Lexaria Bioscience's proprietary drug delivery technology, DehydraTech, improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting healthier oral ingestion methods and increasing the effectiveness of fat-soluble active molecules, thereby lowering overall dosing. The company's technology can be applied to many different ingestible product formats, including foods, beverages, oral suspensions, tablets and capsules. DehydraTech has repeatedly demonstrated since 2016 with cannabinoids and nicotine the ability to increase bio-absorption by up to five to 10 times, reduce time of onset from one to two hours to minutes, and mask unwanted tastes; and is planned to be further evaluated for orally administered bioactive molecules, including anti-virals, cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), and nicotine. Lexaria has licensed DehydraTech to multiple companies including a world-leading tobacco producer for the development of smokeless, oral-based nicotine products and for use in industries that produce cannabinoid beverages, edibles and oral products. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 18 patents granted and approximately 60 patents pending worldwide.

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