The Transaction combines a premium cannabis brand house and retail focused operator in Hiku, with the significant production capabilities and differentiated medical brand in WeedMD



Vertically integrated operations over the entire cannabis value chain

Coast-to-coast and diversified cannabis cultivation platform with four facilities, and planned expansion capacity to have the ability to produce over 56,000 kg by mid-2019

Brings together an experienced management team with leading capabilities in branding, marketing, retail and cannabis production

WeedMD shareholders to receive 1.4185 common shares of Hiku for each share of WeedMD

Management to present today at GMP Securities 2018 Cannabis Conference, in Toronto

TORONTO, April 19, 2018 (GLOBE NEWSWIRE) -- Hiku Brands Company Ltd. (“Hiku”) (CSE:HIKU) and WeedMD Inc. (TSX-V:WMD) (OTC:WDDMF) (FSE:4WE) (“WeedMD”), are at the request of IIROC, providing a clarification to their joint press release of earlier today. The companies re-affirm that they are pleased to announce that today they have entered into a definitive agreement (the “Arrangement Agreement”) to merge both companies (the “Transaction”). The Transaction combines two highly-complementary businesses and creates a vertically integrated company. Upon completion of the Transaction, existing Hiku and WeedMD shareholders will own approximately 51.75% and 48.25% of the combined company, respectively, on a fully-diluted basis. Upon closing of the Transaction, it is anticipated that the common shares of the pro forma resulting entity will be listed on the TSX Venture Exchange (“TSX-V”), subject to regulatory approvals. Joint management will be hosting a conference call on Friday, April 20, 2018 beginning at 10:00AM EST. See end of the press release for details.

Highlights of the Transaction:

Highly Complementary Strengths: The Transaction combines Hiku’s portfolio of brands, visionary marketing and experiential retail stores with WeedMD’s scalable cannabis production capabilities, deep genetics library, and innovative research and development initiatives

The Transaction combines Hiku’s portfolio of brands, visionary marketing and experiential retail stores with WeedMD’s scalable cannabis production capabilities, deep genetics library, and innovative research and development initiatives Visionary Leadership with Significant Experience: Experienced management team with leading capabilities in branding, marketing, retail and cannabis production

Experienced management team with leading capabilities in branding, marketing, retail and cannabis production Dynamic Retail Growth Across Canada: The combined company plans to aggressively pursue the expansion of its existing retail store network, including the addition of legal retail cannabis stores and online cannabis sales channels where permitted in British Columbia, Alberta, Saskatchewan and Manitoba where Tokyo Smoke was conditionally awarded one of four master licenses for retail cannabis sales

The combined company plans to aggressively pursue the expansion of its existing retail store network, including the addition of legal retail cannabis stores and online cannabis sales channels where permitted in British Columbia, Alberta, Saskatchewan and Manitoba where Tokyo Smoke was conditionally awarded one of four master licenses for retail cannabis sales Diversified Cannabis Cultivation: This combination brings together four indoor and greenhouse growing facilities in Ontario and British Columbia, with the option for future expansion on more than 100 acres of property at the existing sites. Current planned capacity could exceed 56,000 kg by mid-2019 upon completion of WeedMD's 610,000 square foot greenhouse expansion at its 14 acre greenhouse facility in Strathroy, Ontario

This combination brings together four indoor and greenhouse growing facilities in Ontario and British Columbia, with the option for future expansion on more than 100 acres of property at the existing sites. Current planned capacity could exceed 56,000 kg by mid-2019 upon completion of WeedMD's 610,000 square foot greenhouse expansion at its 14 acre greenhouse facility in Strathroy, Ontario Extensive and Unique Genetics: Deep library of unique cannabis genetics is the basis for premium cannabis products in both the adult-use and medical markets

Deep library of unique cannabis genetics is the basis for premium cannabis products in both the adult-use and medical markets Enhanced Capital Markets Profile: Increased scale of the combined company will enhance its capital markets profile, in addition, the combined entity will be listed on TSX-V, subject to regulatory approvals

Increased scale of the combined company will enhance its capital markets profile, in addition, the combined entity will be listed on TSX-V, subject to regulatory approvals Expanded Platform for Future Growth : Together, the combined company will have substantial and burgeoning infrastructure to support the acceleration of future product development and expansion

: Together, the combined company will have substantial and burgeoning infrastructure to support the acceleration of future product development and expansion Synergies from being Vertically Integrated: Having branded stores, cannabis dispensing stores, and owned production facilities ensures a vertically integrated company that can best drive greater margins in the wholesale and retail markets of the new cannabis sector

Transaction Summary

The Transaction will be carried out by way of a plan of arrangement of WeedMD under the Business Corporations Act (Ontario), pursuant to which WeedMD shareholders will receive 1.4185 Hiku common shares (each, a “Hiku Share”) in exchange (the “Exchange Ratio”) for each WeedMD common share (a “WeedMD Share”), representing the equivalent of C$2.52 per WeedMD Share and a premium of 60% based on the closing prices of Hiku Shares on the Canadian Stock Exchange (“CSE”) and the WeedMD Shares on the TSX-V on April 18, 2018, and a premium of 79% based on the 20-day volume-weighted-average-price (“VWAP”) of the Hiku Shares on the CSE and WeedMD Shares on the TSX-V as of April 18, 2018. In addition, each outstanding option and warrant to purchase a WeedMD Share will be exchanged for an option or warrant, as applicable, to purchase a Hiku Share, based upon the Exchange Ratio. Assuming no convertible securities of WeedMD are exercised prior to the completion of the Transaction, Hiku will issue approximately 142 million Hiku Shares in exchange for the WeedMD shares to be exchanged pursuant to the Transaction.

The implementation of the Transaction will be subject to the approval of at least 66 2/3% of the votes cast by holders of WeedMD Shares at the annual and special meeting of WeedMD shareholders expected to take place in June 2018. In addition to the WeedMD shareholder approval, the Transaction is also subject to the receipt of certain regulatory, court and stock exchange approvals and certain other closing conditions customary in transactions of this nature.

The Arrangement Agreement has been unanimously approved by the boards of directors of each of WeedMD and Hiku. The financial advisor to Hiku, BMO Capital Markets, has provided an opinion to the board of directors of Hiku that, subject to the assumptions, limitations and qualifications set out in such opinion, the Exchange Ratio provided for in the Arrangement Agreement is fair, from a financial point of view, to Hiku. Eight Capital has provided a fairness opinion to the board of directors of WeedMD that, subject to the assumptions, limitations and qualifications set out in such fairness opinion, the consideration to be received by WeedMD shareholders in connection with the Transaction is fair, from a financial point of view, to such WeedMD shareholders.

The directors and senior officers of WeedMD have entered into customary voting support agreements to vote in favour of the Transaction.

The Arrangement Agreement includes certain non-solicitation covenants subject to the right of WeedMD and Hiku to accept a superior proposal in certain circumstances, with both Hiku and WeedMD having a five-business day right to match any such superior proposal for the other party. The Arrangement Agreement also provides for the payment of a C$10 million mutual termination fee if the Transaction is terminated in certain specified circumstances.

Furthermore, upon completion of the Transaction, Alan Gertner will remain the Chief Executive Officer of Hiku and Keith Merker, currently the Chief Financial Officer of WeedMD, will assume the position of President of Hiku. It is expected that the combined company will have a seven-member board, with three members to be appointed by Hiku, three members to be appointed by WeedMD, and one member to be mutually agreed to by Hiku and WeedMD.

The combination of Hiku and WeedMD creates a premium cannabis brand house with fully vertically integrated operations, an expanding network of retail stores, a growing medical business and four scalable cannabis production facilities, two of which are currently licensed. As a result of the Transaction, Hiku will operate a diverse cannabis supply chain that includes a large portfolio of unique genetics for its growing brand portfolio and emerging nationwide retail sales channels. The entity combines Hiku’s strength in retail and branding – ensuring a high quality, consistent and educational consumer experience in the adult-use cannabis market – with WeedMD’s existing service and quality in the medical market.

“Our vision at Hiku has always been that cannabis is a consumer product – in which brands, retail and customer experience will ultimately win,” said Alan Gertner, Chief Executive Officer of Hiku. “The combination of Hiku and WeedMD creates a cannabis company capable of fulfilling the vision of delivering the best in class experiences from in-store to product, from medical to adult-use, but also capturing full retail and wholesale margins.”

Bruce Dawson-Scully, Chief Executive Officer of WeedMD, said, “WeedMD was founded on the principles of product and patients first. Our goal since inception has been on procuring world class genetics, cultivating premium medical cannabis, and delivering it with best-in-class service to our valued patient base. We look forward to the next step in WeedMD’s journey by merging with Hiku, a complimentary group that furthers our mission by bringing our focus and passion into a more robust platform. Having access to brands and a growing retail footprint to execute on our growth plan together with our cultivation and existing medical expertise is intended to ensure significant benefits to our shareholders and expected to present significant upside as Canada marches towards legalization.”

Hiku has built a portfolio of engaging cannabis brands, immersive retail experiences and handcrafted cannabis production. Hiku's Tokyo Smoke retail banner was awarded Brand of the Year at the 2017 Lift Cannabis Awards. In February 2018, Tokyo Smoke, Hiku’s wholly owned subsidiary, was awarded one of only four conditional master licenses for cannabis retail in Manitoba, an important milestone in Hiku’s Canada-wide cannabis retail expansion plans.

With a retail footprint led by Tokyo Smoke, cannabis production through DOJA’s ACMPR licensed facility, and Van der Pop’s female-focused educational platforms, Hiku houses a portfolio for cannabis in Canada’s adult-use market. WeedMD operates a 26,000 square foot indoor facility with over 1,500 kg of current production capacity and is fully funded for a large-scale production expansion of a 14-acre greenhouse on a 98-acre property representing the possibility for an increase to more than 50,000 kg of capacity upon completion of its 610,000 square foot greenhouse expansion. The combined companies create a brand-focused retail business with the ability to provide product quality and selection on par with the retail experience itself.

Further information regarding the Transaction will be included in WeedMD’s information circular that WeedMD will prepare, file and mail in due course to its shareholders in connection with the annual and special meeting of WeedMD shareholders to be held to consider the Transaction. All WeedMD shareholders are urged to read the information circular once it becomes available as it will contain additional important information concerning the Transaction. The Arrangement Agreement will be filed on the SEDAR profiles of Hiku and WeedMD on the SEDAR website at www.sedar.com. A copy of the transaction presentation will be available online at www.hiku.com.

Advisors and Counsel

BMO Capital Markets is acting as exclusive financial advisor to Hiku. Wildeboer Dellelce LLP is acting as legal counsel to Hiku.

Eight Capital and Stoic Advisory are acting as financial advisors to WeedMD. Fogler, Rubinoff LLP is acting as legal counsel to WeedMD.

Conference Call Information

A conference call on the Transaction will be held on Friday, April 20, 2018 beginning at 10:00AM EST. Participants are asked to use the following information:

Toll-free dial in number (Canada) 1-800-806-5484 Local dial-in number: 416-406-0743 International dial-in numbers: https://www.confsolutions.ca/ILT?oss=7P7R8008065484 Passcode 2900959#

About Hiku Brands



Hiku is focused on building a portfolio of engaging cannabis brands, unsurpassed retail experiences and handcrafted cannabis production. With a national retail footprint led by Tokyo Smoke, craft cannabis production through DOJA’s ACMPR licensed grow, and Van der Pop’s female-focused educational platforms, Hiku houses an industry-leading portfolio that aims to set the bar for cannabis brands in Canada.

Hiku’s wholly-owned subsidiary, DOJA Cannabis Ltd., is a federally licensed to cultivate and sell cannabis pursuant to the Access to Cannabis for Medical Purposes Regulations (“ACMPR”), owning two production facilities in the heart of British Columbia’s Okanagan Valley. Hiku’s wholly-owned subsidiary, Tokyo Smoke has been conditionally awarded one of four master retail licenses in Manitoba. Hiku also operates a network of retail stores selling coffee, clothing and curated accessories, across British Columbia, Alberta and Ontario.

About WeedMD

WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer and distributor of medical cannabis and oils under the ACMPR. The Company operates a 26,000 sq. ft. indoor facility in Aylmer, Ontario, and is awaiting its second-site cultivation license for its greenhouse facility located in Strathroy, Ontario, representing 610,000 sq. ft. or 14 acres under glass. WeedMD has entered into supply agreements in addition to strategic relationships with established cannabis brands. WeedMD is focused on providing medical cannabis to the seniors’ markets in Canada through its proprietary seniors care program. It is dedicated to educating healthcare practitioners and furthering public understanding of the role that medical cannabis plays – including as it pertains to regulatory requirements, indications and potential side effects.

Cautionary Statement on Forward-Looking Information



This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Hiku and WeedMD to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to our expectations with respect to: the timing and outcome of the Transaction; the anticipated benefits of the Transaction to the parties and their respective security holders; impact of the Transaction and anticipated growth of the combined entity, including planned capacity; and the anticipated timing of the WeedMD shareholder meeting. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, Hiku and WeedMD have provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare and mail security holder meeting materials; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholders approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and other expectations and assumptions concerning the Transaction. There can be no assurance that the Transaction will occur, or that it will occur on the terms and conditions contemplated in this news release. The Transaction could be modified, restructured or terminated. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of the parties are included in reports on file with applicable securities regulatory authorities.

The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date. Hiku and WeedMD do not assume any obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, except as required by applicable law.

None of the TSX Venture Exchange or the Canadian Securities Exchange and their Regulation Services Providers accept responsibility for the adequacy or accuracy of this release.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of WeedMD and Hiku should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

For Further Information, Please Contact:

Will Stewart

Hiku Vice President of Corporate Communications and Public Affairs

416-899-9422

wstewart@hiku.com

Keith Merker

WeedMD CFO

519-706-4900

keith@weedmd.com



