Mr. Kiran Sidhu reports

HALO LABS ANNOUNCES START OF PRODUCTION IN CALIFORNIA

Halo Labs Inc. started production in Cathedral City, Calif., on Nov. 28, 2018. The initial 1,600-square-foot dedicated extraction facility is capable of producing approximately 120,000 grams of cannabis distillate per week. This facility will initially be used to supply Falcon International Corp. with a minimum of 50,000 and up to 70,000 grams per week of bulk cannabis distillate to be used for vaping cartridges and disposable pens at $7.50 (U.S.) per gram with monthly revenue expected to range between approximately $1.6-million (U.S.) and $2.3-million (U.S.) after an initial 30- to 45-day ramp-up period. The company expects to begin generating revenue from this facility by the first week of January, 2019.

Summary of current California production capabilities:

• Commencement of production at the company's 1,600-square-foot dedicated extraction facility in Cathedral City, Calif., began on Nov. 28, 2018;
• Total production capacity at the company's Cathedral City facility is expected to be approximately 120,000 grams of oils or concentrates per week;
• It is expected that the Cathedral City facility will initially supply the Falcon contract with between 50,000 and 70,000 grams of distillate per week;
• The company is in the process of securing a steady supply of raw material from multiple sources throughout California to ensure steady throughput.

In preparation for the commencement of production from the Cathedral City extraction facility, the company is securing a supply of raw material inputs, trim and small buds from multiple sources within the state of California in order to maintain a steady state of production. Further, the company is in active discussion to provide contract manufacturing services that, combined with the Falcon contract, are expected to allow the company to achieve 95-per-cent-plus utilization rate in early 2019.

In Cathedral City, the company has an additional 8,000-square-foot facility currently in preconstruction. Construction at the second Cathedral City facility is scheduled to commence in the first quarter of 2019 and production is expected to commence by the second quarter of 2019.

Kiran Sidhu, Halo's chief executive officer, commented: "We are very excited to announce the start of production at our first California facility, as we see California as the major growth driver for the company. California is the largest cannabis market in the world and a leader in cannabis products with demand for cannabis oils and concentrates growing at a rapid pace. The opening of our first California facility is a major milestone for the company. We are currently evaluating requests from other large potential clients to provide manufacturing services at both our first and second facilities."

About Halo Labs Inc.

Halo Labs is a cannabis extraction company that develops and manufactures quality cannabis oils and concentrates, which are the fastest-growing segments in the cannabis industry. Founded in Oregon in 2016, Halo has expertise in all major cannabis manufacturing processes, leveraging proprietary processes and products, and has produced over 2.5 million grams of oils and concentrates since inception. The forward-thinking company is led by a strong management team with deep industry knowledge and blue-chip experience. The company is currently expanding its operations with new facilities in Nevada and California.

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