Mr. George Kveton of Invictus MD reports

INVICTUS ANNOUNCES STRATEGIC MERGER WITH GTEC HOLDINGS FORMING WESTERN CANADA'S LARGEST INDOOR VERTICALLY INTEGRATED CANNABIS COMPANY

Invictus MD Strategies Corp. has entered into a non-binding letter of intent with GTEC Holdings Ltd. for the acquisition by Invictus of all of the issued and outstanding shares in the capital of GTEC in an all-share transaction valued at approximately $100-million, forming Western Canada's largest indoor vertically integrated cannabis companies.

Under the terms of the proposed transaction, which will be completed by way of a plan of arrangement, holders of GTEC common shares will receive approximately 40 per cent of the issued and outstanding shares of Invictus after closing. Concurrently with the closing of the transaction, the holders of options and warrants in the capital of GTEC will receive a proportionate number of options and warrants of Invictus.

Assuming completion of the transaction, the issuance of Invictus shares to the current GTEC shareholders represents an approximate 25-per-cent premium to the 30-day volume-weighted average trading price of the common shares of both GTEC and Invictus on the TSX Venture Exchange as of Nov. 15, 2018.

The combined entities would provide a robust vertically integrated cannabis company, focused on producing premium flower and complementary product portfolio, cultivated in purpose-built indoor facilities complemented with superior genetics. The transaction would produce the following assets:

• 400,000 square feet of financed purpose-built indoor cultivation that span across British Columbia, Alberta and Ontario;
• A robust and diverse range of products and brands, complemented with a genetic portfolio of over 80 strains;
• An EU-GMP-certified (European Union good manufacturing practices) facility to meet the rigorous requirements of the European Union markets;
• 30-plus retail stores located across British Columbia, Alberta and Saskatchewan;
• An e-commerce website to service the non-medical market in Saskatchewan;
• Two purpose-built state-of-the-art extraction labs;
• An analytical testing lab;
• A combined senior management team with pedigree from some of the world's largest food and beverage, wine and spirits, and tobacco companies, including Phillip Morris International, Diageo PLC and Saputo Inc.

For the six months ended July 31, 2018, Invictus generated unaudited revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.8-million and $9.3-million, respectively. Invictus had $10.7-million in cash as at July 31, 2018. For the nine months ended Aug. 31, 2018, GTEC had no revenue and unaudited EBITDA of $7.2-million. GTEC had $4.4-million in cash as at Aug. 31, 2018.

"As we now see the cannabis industry shift into non-medical use in Canada, and further medical markets expanding globally, this merger is synergistic and complementary. Combined, we offer a much stronger team with aligned visions on executing a pathway to become a global leader within the cannabis industry," said Norton Singhavon, chairman and chief executive officer of GTEC.

"We have been pleased with the continued execution of the team and business strategy at GTEC," said George E. Kveton, chief executive officer of Invictus. "The dedication to producing a premium product medical and adult-use recreational portfolio for the industry has always been our relentless pursuit. This merger allows for both companies to leverage the combined core competencies to further execute our vision to be at the forefront of the Canadian cannabis industry and beyond."

The transaction will require approval by at least 66-2/3rds of the votes cast by shareholders of GTEC at a special meeting of the shareholders of GTEC. It is anticipated that the directors, officers and insiders of GTEC and Invictus will enter into support agreements, pursuant to which they will agree to vote their shares in favour of the transaction.

The transaction will be effected by way of a plan of arrangement completed under the Business Corporations Act (British Columbia). The transaction remains subject to board approval of both parties, shareholder approval, regulatory approval from the TSX-V and court approval, as applicable. The agreement remains subject to approval of the board of Invictus.

Subject to TSX-V approval, Invictus will advance an amount equal to $500,000 of a non-revolving unsecured convertible loan at an interest rate of prime plus 8 per cent. The convertible debenture is part of an up-to-$6-million loan facility provided by Invictus to GTEC as previously disclosed on Aug. 30, 2018, Oct. 19, 2018, and Oct. 23, 2018.

It is anticipated that Invictus and/or GTEC will hire financial advisers in connection with the transaction. The appointment of such advisers will be disclosed at such time.

About Invictus MD Strategies Corp.

Invictus is a global cannabis company offering a selection of products under a wide range of brands. The company's integrated sales approach is defined by five pillars of distribution, including medical, adult use, international, licensed producer to licensed producer and retail stores.

About GTEC Holdings Ltd.

GTEC was founded in 2017 to capitalize on opportunities in the nascent and rapidly growing legal cannabis industry. GTEC is focused on growing premium-quality craft cannabis in purpose-built indoor facilities. GTEC currently holds a 100-per-cent interest in GreenTec Bio-Pharmaceuticals Corp., Alberta Craft Cannabis Inc. Grey Bruce Farms Inc., Tumbleweed Farms Corp., Zenalytic Laboratories Ltd. and Spectre Labs Inc.

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