Mr. Norton Singhavon reports

HEALTH CANADA GRANTS CULTIVATION LICENSE TO GREY BRUCE FARMS, DOUBLING GTEC'S PRODUCTION CAPACITY

GTEC Holdings Ltd.'s wholly owned subsidiary, Grey Bruce Farms, has been granted a standard cultivation licence by Health Canada.

Grey Bruce is an automated, state-of-the-art facility located in Kincardine, Ont. The facility was carefully designed, constructed and equipped with a mandate and focus on systems, technology, process flow and good production practices to optimize output of ultrapremium indoor flower. The initial phase of the facility spans 15,000 square feet and is estimated to produce 1.65 million grams annually. With the licensing of Grey Bruce, the company's current annual output is now estimated at approximately three million grams.

In accordance with the Cannabis Act and Regulations, Grey Bruce has immediately commenced cultivation of live plants from GTEC's extensive portfolio of exotic and rare cultivars (more commonly known as genetics). GTEC's exclusively sourced genetics, which have been through a meticulous and comprehensive pheno selection process, will be gradually implemented at GTEC's other facilities.

The company now has facilities licensed for cultivation in both Eastern and Western Canada. As previously announced, there has been an increased demand for GTEC's premium flower, and the Grey Bruce facility will enable GTEC to fulfill the demand for its cannabis from other licensed producers; and subject to Alberta Craft Cannabis (ACC) receiving approval of its federal sales licence, introduce GTEC products into provincial supply chains.

"With the increasing demand for our premium flower, we are excited to be delivering on another significant milestone for our shareholders," said Norton Singhavon, GTEC founder, chairman and chief executive officer. "We anticipate this licence will increase our companywide flower output by over 120 per cent. We look forward to producing and distributing our new portfolio of products to the Canadian market this fall."

In addition to the standard cultivation licences issued to ACC in Edmonton and now Grey Bruce in Kincardine, Ont., the company awaits issuance of a third standard cultivation licence at Tumbleweed Farms in Chase, B.C. ACC also completed a Health Canada inspection for its sales licence on June 25 to June 26, 2019, and received a formal inspection report from Health Canada on Friday, July 5, 2019. ACC is currently compiling its response to the regulators, in order to comply with any requests made within the required 10-business-day period.

ROK consulting -- clarification

GTEC wishes to clarify that further to the press release issued June 27, 2019, it has engaged ROK Consulting Inc. to perform advisory services in marketing communications. The services will be provided in connection with GTEC's planned expansion across Western Canada.

ROK Consulting has over 30 years of experience in implementing communication strategies for companies ranging in size from start-ups to Fortune 500 corporations.

Subject to exchange approval, in exchange for the services rendered, the company has issued 100,000 common shares of GTEC at a deemed value of 55 cents per share. The common shares will be subject to a statutory hold period of four months and one day from the date of issuance thereof and bear a legend as required by the United States Securities Act of 1933.

Satisfaction of milestone payment

In accordance with the amended and restated share purchase agreement dated Sept. 15, 2017, among GreenTec Holdings Ltd. and the vendors of Grey Bruce Farms, as assigned to GTEC Holdings by an assignment and assumption and consent dated June 11, 2018, between GTEC, GreenTec and such vendors, receipt of the cultivation licence from Health Canada entitles the vendors to a milestone payment pursuant to the agreement and GTEC will issue 2,222,222 shares to the vendors at a deemed price of 45 cents, based on the most recent three-day volume-weighted average price (VWAP), for an aggregate value of $1-million. Mr. Singhavon, who is one of the vendors, will receive approximately 1,444,768 shares (of the aggregate 2,222,222 shares) issued in connection with the milestone payment. The share issuance is subject to TSX Venture approval and, upon issuance, will be subject to a statutory four-month-and-a-day hold.

The shares to be issued to Mr. Singhavon are considered to be a related-party transaction within the meaning of Multilateral Instrument 61-101. However, the related-party transaction is exempt from minority approval, information circular and formal valuation requirements pursuant to sections 5.5(a) and 5.7(a) of MI 61-101, as neither the fair market value of the gross securities issued nor the consideration paid by the insiders exceeds 25 per cent of the company's market capitalization.

About GTEC Holdings Ltd.

GTEC Holdings is a specialized cannabis company dedicated to cultivating ultrapremium-quality cannabis in purpose-built indoor facilities. The company is vertically integrated across all major sectors of the Canadian cannabis industry and is currently licensed by Health Canada for standard cultivation at two facilities, standard processing (extraction) and analytical testing.

We seek Safe Harbor.