Mr. Robert Cheney reports

C21 INVESTMENTS ENTERS INTO DEFINITIVE AGREEMENT FOR THE ACQUISITION OF SWELL COMPANIES LIMITED

C21 Investments Inc. has entered into definitive agreements for the July 9, 2018, announced acquisition of Swell Companies Ltd. Swell is an extraction, manufacturer and distributor of THC (tetrahydrocannabinol) and CBD (cannabidiol) products. Swell has more than 50 of its branded products available in over 275 licensed retail locations across Oregon. Raw oil, encapsulates and vaporizers are distributed under its in-house brands: Dab Society Extracts and Hood Oil. The capacity of Swell's Portland processing facility will reach up to 5,000 pounds of raw material throughput a month. This throughput will translate into 220,000 to 270,000 grams of processed high-quality oil-based extracts per month, making Swell one of the largest processing groups in Oregon. Additionally, a new state-of-the-art facility located in Bend, Ore., will be operational in December adding a further capacity to process 1,200 lb of raw material per month delivering a further 65,000 grams of processed high-quality extracts monthly.

"Swell is C21 Investment's fourth U.S. operation within its asset portfolio to sign a definitive agreement," said Robert Cheney, president and chief executive officer of C21 Investments. "Acquiring Swell fulfills a critical segment in the company's expansion strategy making C21 Investments a leading force in processing and manufacturing in the United States."

"Consumption of cannabis concentrates, such as vapes and edibles, saw a 49-per-cent (1) increase in 2018," said Alleh Lindquist, chief executive officer of Swell. "This segment is quickly becoming the most significant component in cannabis consumption and with the support of C21, Swell will have the necessary resources to further expand its extraction and manufacturing capabilities to new markets."

Terms of Swell Companies acquisition

Upon receipt of approval of the Oregon Liquor Control Commission, and satisfaction of other customary closing conditions, C21 Investments is to acquire 100 per cent of Swell's membership units. The aggregate purchase price payable is (1) $500,000 (U.S.) cash; (2) $14.7-million (U.S.) payable by the issue of 4.9 million common shares at a deemed value price of $3 (U.S.) per share; (2) 1.58 million share purchase warrants of C21 Investments having an exercise price of $1.50 (Canadian) per share; and (3) up to an additional six million shares upon C21's Oregon business achieving certain performance targets over up to a five-year period following the closing date.

About Swell Companies Ltd.

Swell has a 10,000-square-foot facility in Portland, Ore., and has expansion rights for an additional 18,000 square feet, adjacent to the primary facility. It also operates a 5,000-square-foot distribution warehouse. Swell currently employs 30 full-time industry professionals and prides itself on being one of the first cannabis companies in Oregon to offer comprehensive benefits to all its employees.

Operating since 2015, Swell has been recognized as a leader in the extraction and manufacturing of THC and CBD derived products; always demonstrating a commitment to quality, consistent innovation and execution at scale. In 2017, Swell shipped over 500,000 product units within Oregon and has more than doubled its product units shipped through existing sales channels in 2018.

About C21 Investments Inc.

C21 Investments is a vertically integrated cannabis company that cultivates, processes and distributes quality cannabis and hemp-derived consumer products in the United States. The company owns Eco Firma Farms in Oregon, and has definitive agreements in place that are expected to close prior to the company's year-end of Jan. 31, 2019, to acquire Silver State Relief and Silver State Cultivation in Nevada and Phantom Farms and Swell in Oregon, and letters of intent to acquire and expected to also close prior to year-end with three dispensaries in Oregon. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, prerolls, cannabis oil, vaporizer cartridges and edibles. C21 Investments is also in active discussions to acquire additional operations in the United States and globally that will add to the company's ability to compete aggressively in the rapid growth of the cannabis industry and to grow revenue and EBITDA (earnings before interest, taxes, depreciation and amortization).

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