2018-09-07 09:07 ET - News Release

Mr. Hugo Alves reports

AUXLY ANNOUNCES DEFINITIVE INTERNATIONAL SUPPLY AGREEMENT WITH APHRIA

Further to its previously announced interim supply agreement on Jan. 17, 2018, Auxly Cannabis Group Inc., through its wholly owned subsidiary Dosecann Inc., has entered into a definitive supply agreement with Aphria Inc. Pursuant to the agreement, Dosecann will have the option to purchase cannabis, including dried flower and cannabis oil for distribution to certain international markets, including Mexico, Portugal and Serbia, as well as a limited amount for distribution into the Canadian market.

Subject to Aphria receiving the necessary regulatory approvals for expansion of its cultivation facilities, Dosecann will have the option to purchase up to 20,000 kilograms of cannabis products on an annual basis, until such time, Dosecann will have the option to purchase up to 100 kilograms of cannabis products on a monthly basis. The agreement extends until Jan. 31, 2022, and may be renewed for additional 12-month terms. The agreement also includes certain minimum quantities of cannabis products that must be purchased by Dosecann during the term.

Hugo Alves, president and director of Auxly, stated: "We are pleased to have reached a definitive supply agreement with Aphria, an industry-leading operator, to supply our international distribution channels which represent an increasingly important market segment to us. This agreement serves as a key source of interim supply that bridges the gap between now and when the bulk of our streaming partners come on line. We look forward to working and building a meaningful strategic relationship with the team at Aphria."

Restricted stock awards

The company also announces that it has granted 5,913,334 restricted common shares of the company at a price per share of $1.02 to certain of its non-executive employees pursuant to the terms of the company's equity incentive plan, which was approved by shareholders at the company's recent annual general meeting. All of the restricted shares vest immediately upon grant and are otherwise subject to the terms of the plan. Further information regarding the plan can be found in the information circular of the corporation dated May 7, 2018, a copy of which is available at SEDAR.

About Auxly Cannabis Group Inc.

Auxly Cannabis Group is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Its mandate is to facilitate growth for its partners by providing them with financial support and sharing its collective industry experience.

About Dosecann Inc.

Dosecann is a Canadian licensed dealer dedicated to developing cannabis solutions for the cannabis industry. Located in Charlottetown, PEI, Dosecann's purpose-built, 42,000-square-foot facility will be the hub for cannabis extraction, quality testing, research and development, product formulation, and manufacturing.

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