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Leviathan Cannabis to acquire late-stage ACMPR applicant

Leviathan Cannabis to acquire late-stage ACMPR applicant

Leviathan Cannabis Group Inc. has unveiled a transaction that will elevate the company's operating capacity in the cannabis industry.

Leviathan has agreed to acquire Woodstock Biomed Inc. Woodstock is a late stage applicant that has received its Confirmation of Readiness from Health Canada's Office of Medical Cannabis. Woodstock owns a prime, late stage ACMPR greenhouse production facility in Pelham, Ontario. This 29.5-acre property (the "Property") will serve as the Company's cornerstone for cannabis cultivation operations in Canada.

The Property features a 350,000 sq. ft. facility, which the Company will transform into a state-of-the-art cannabis cultivation centre.

Conversion construction on 164,000 sq. ft. is well underway with an expected completion date in the summer of 2018. In this first phase of operations, Health Canada has approved a total annual production capacity of 20,000 kg.

Leviathan plans to rapidly expand the footprint on this facility into one million square feet of growing and production capacity in three phases. The Company intends to raise up to $15,000,000 in combined debt and equity financing as described below to finance the expansion. Through this cultivation facility, the Company is committed to producing high-yield, pharma-grade, and competitively priced cannabis within predictable, dependable timelines.

Key Terms of the Acquisition

The total Transaction value is $15,750,000, to be paid by $750,000 in cash and the remainder in Leviathan common shares, and is subject to customary closing conditions, including receipt of all necessary consents and regulatory approvals. Shares issued to Woodstock shareholders will be issued at a deemed price of $0.50. Thirty million Leviathan common shares will be issued at closing of the Transaction with 10 million Leviathan common shares to be held in escrow and released once Woodstock has obtained its license to produce cannabis under the ACMPR. In addition, at the closing of the Transaction, Leviathan shall advance $1,250,000 as a loan to Woodstock to be used to pay existing liabilities other than mortgages on the Property. The Transaction is expected to close by June 14, 2018 (the "Closing Date"). Post-closing, Woodstock will be a fully-owned subsidiary of Leviathan.

Private Placement Financing

Leviathan intends to raise up to $15,000,000 in combined debt and equity financing (the "Financing") within 60 days of the Closing Date. Proceeds from the Financing will be used to fund other M&A, the conversion of the Property and for general corporate purposes.

About Leviathan Cannabis

Leviathan plans on executing a series of strategic acquisitions that extend across all vertical markets both here in Canada and internationally, to support the Company's proprietary brand strategy. This global reach positions the Company to be a leading multi-jurisdictional medical and recreational cannabis enterprise — one that brings together the best cannabis products, brands and expertise from Canada and around the world. In addition to the acquisition of Woodstock Biomed Inc., the Leviathan portfolio includes Jekyll+Hyde Brand Builders Inc., a cannabis focused, marketing services agency and the Company's fully owned subsidiary.


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