Mr. Clint Sharples reports

HERITAGE CANNABIS ANNOUNCES THE ACQUISITION OF OPTICANN, INC.

Heritage Cannabis Holdings Corp., further to its press release issued on Aug. 5, 2020, has completed its acquisition of all of the issued out outstanding securities of Opticann, Inc., a Colorado-based oral and topical cannabinoid company with the rights to exclusively sell CBD and CBG products made with the patented VESIsorb drug delivery system for optimized absorption and stability.

"Bringing Opticann on board the Heritage platform provides us with a significant advantage in the advancement of our U.S. presence and the ability to participate in the rapidly growing multibillion-dollar U.S. CBD market," stated Clint Sharples, chief executive officer of Heritage. "We are advancing our offering with Opticann and are already leveraging our existing U.S. presence with our Empower joint venture in Oregon. Together, our U.S. team has the proven medical cannabis expertise to excel in this market."

Heritage issued 15,838,982 common shares of the company on closing of the acquisition, the majority of which will be held in escrow by Heritage and released, subject to any reductions related to indemnification claims. Additionally, the vendors received i) 7,919,493 warrants exercisable for exchangeable shares of a subsidiary of the company, with each warrant exercisable at a price of 20 cents per Class A exchangeable share for a period of 24 months following the closing date; ii) 3,511,110 warrants exercisable for Class A exchangeable shares, with each warrant exercisable at a price of 30 cents per Class A exchangeable share for a period of 36 months following the closing date; and iii) 100 million Class B exchangeable shares of a subsidiary of the company (the milestone shares), said milestone shares being exchangeable by the vendors for common shares upon Opticann achieving certain milestones. The Class A exchangeable shares and milestone shares are exchangeable for common shares on a 1:1 basis, and the milestone shares are exchangeable for up to 100 million common shares, subject to certain earn-out conditions, the future price of the common shares and other terms. If the earn-out conditions are not achieved within certain time frames, the milestone shares can be cancelled by the issuer.

The company has also agreed to pay additional consideration on certain conditional events being met, such payment to be determinable at the time such events occur and will be satisfied in the form of common shares. All securities issued on closing of the transaction will be subject to a statutory four-month-and-one-day hold period. The additional milestone common share payments, when and if paid, will be subject to a statutory four-month-and-one-day hold period from the date of issuance.

The company has also agreed to issue 6,079,716 common shares to Geocann LLC pursuant to the terms an exclusive distribution and supply agreement between Opticann and Geocann LLC dated June 30, 2020, as amended by the first amending agreement dated Sept. 29, 2020. The Geocann distribution consideration shares will be subject to a statutory four-month-and-one-day hold period from the date of issuance.

The participation in the transaction of Peter Kampian, the vice-president of finance and a consultant of Heritage and an executive officer of one of the vendors, may constitute a related-party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, but is otherwise exempt from (i) the formal valuation requirements of Section 5.4 of MI 61-101 by virtue of Subsection 5.5(a) of MI 61-101, and (ii) the minority shareholder approval requirements of Section 5.6 of MI 61-101 by virtue of Subsection 5.7(1)(a) of MI 61-101, on the basis that at the time of completion of the transaction the fair market value of the consideration provided to the corporation in which Peter Kampian is an executive officer did not exceed an amount equal to 25 per cent of the company's market capitalization at such time. The company did not file a material change report more than 21 days prior to the closing of the transaction as the company wished to complete the transaction on an expedited basis for sound business reasons.

About Heritage Cannabis Holdings Corp.

Heritage Cannabis is a vertically integrated cannabis provider that currently has two Health Canada-approved licensed producers, through its subsidiaries Voyage Cannabis Corp. and CannaCure Corp., both regulated under the Cannabis Act Regulations. Working under these two licences, Heritage has two additional subsidiaries, Purefarma Solutions, which provides extraction services, and a medical services division which is focused on cannabis-based medical solutions. In the United States, Heritage operates under Opticann Inc., a Colorado-based oral and topical cannabinoid company with the rights to exclusively sell CBD and CBG products made with the patented VESIsorb drug delivery system for optimized absorption and stability. As the parent company, Heritage is focused on providing the resources for its subsidiaries to advance their products or services to compete both domestically and internationally.

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