2018-04-04 09:05 ET - News Release

Mr. John Miller reports

THC SIGNS LOI TO ACQUIRE CONTROLLING INTEREST IN AUSTRALIAN CANNABIS LICENSED IMPORTER, WHOLESALER AND EXPENDS INTO LESOTHO AFRICA

THC Biomed Intl Ltd. has entered into a letter of intent with an Australian licensed importer and wholesaler of medical cannabis for the acquisition of 51 per cent of that company and has incorporated a new subsidiary in Lesotho, Africa, for the purpose of applying to become a licensed producer in that country.

Australia

THC has entered into a letter of intent to purchase 51 per cent of a licensed importer and wholesaler of medical cannabis to medical outlets in Australia.

The LOI provides that THC will purchase 51 per cent of the target company; in exchange the target company will receive $750,000 (Australian). The LOI further provides that THC will invest $1-million (Australian) into the target company for the operation of its business plan within the first year and ensure that $88,357 (Australian) in existing shareholder loans are repaid following the completion of the share acquisition. The mechanism for THC's investment into the target company has not yet been determined.

If the share acquisition is completed, THC would become the majority shareholder and parent company of the target company, although there will be a shareholder agreement in place unless and until the target company becomes a public company. THC will also have the right to appoint two out of three directors to the board of the target company. There are no assurances that the target company will ever apply to or become a public company.

To proceed with this potential share acquisition, THC and the target company must negotiate a definitive agreement, which will contain standard conditions for closing, including that the transaction will meet the requirements of Canadian Securities Exchange policies and all applicable securities laws. There are no assurances that the share acquisition will be completed.

About target company

The target company is a private, Australian, government-approved supplier of medical cannabis. It holds licences to import medical marijuana into Australia and to sell it to approved purchasers within Australia. It was incorporated on Nov. 14, 2016, and is located in Queensland.

Lesotho legal cannabis licence application and facility

THC has incorporated a new subsidiary, THC Biomed Lesotho Ltd., and has begun the process of applying to the Ministry of Health for a licence to permit the legal cultivation and export of cannabis. THC's goal is to acquire the cannabis licence and produce high-quality cannabis for export to European and other markets. THC is also interested in exploring the possibility of expanding its scientific research laboratories to its Lesotho location. In conjunction with the cannabis licence application, THC is in the process of acquiring a lease and creating a cannabis facility in Lesotho. It estimates that the process to obtain the facility and the licence, not including rental and licence fees, will cost approximately $85,000 (U.S.) and take several months. There are no guarantees that THC will receive the cannabis licence.

Lesotho is a landlocked country, entirely encircled by South Africa, with a population of a little more than two million people. Its mountainous geography, elevation and climate are well suited to cannabis cultivation.

"We are thrilled to expand into Lesotho. The country's progressive government and its location open up a whole new access point for THC into international markets. Also, we believe that the relatively low cost of production will lead to a high-quality product at prices with which products grown in North America and elsewhere can't compete," said John Miller, president and chief executive officer of THC. "Lesotho's growing conditions make it an ideal place for cannabis cultivation with a low risk of crop failure."

Mr. Miller also said: "We want to become a licensed producer in Lesotho for the benefit of THC and the Basotho people. Our presence in Lesotho will be a positive factor in the growth of the economy and employment in Lesotho."

About THC Biomed Intl Ltd.

THC is an ACMPR (Access to Cannabis for Medical Purposes Regulations) licensed producer and Canada's largest supplier of legal cannabis genetics. THC also produces and sells dried and fresh marijuana and cannabis oil for medical purposes. THC is on the leading edge of scientific research and the development of products and services related to the medical cannabis industry. Management believes THC is well positioned to be in the forefront of this rapidly growing industry.

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