Low Cost Expansion to Increase Aleafia’s Annual Production Capacity to 98,000 kg

TORONTO, October 9, 2018 /Globe Newswire/ – Aleafia Health Inc. (TSXV: ALEF; OTCQX: ALEAF, FRA: ARAH) (“Aleafia”) or (the “Company”), one of Canada’s leading, vertically integrated cannabis companies, is announcing that it will move forward with an industry first secure, low-cost outdoor cannabis grow. The company has now obtained local regulatory approval for a 60,000 kg capacity expansion at its Port Perry cultivation facility.

Pending standard Health Canada approvals, Aleafia will build an innovative, secure outdoor cultivation site, leading to significant reduction in up front capital investments, operating expenses and ultimately, a lower cost per gram output. The Port Perry site is currently home to a Health Canada licensed, fully operational indoor cultivation facility. The expansion will be on 30 acres of land adjacent to the cultivation facility already owned by Aleafia.

“Aleafia is once again positioning itself as an innovate leader in the cannabis industry,” said Aleafia Chairman Julian Fantino. “Secure outdoor cultivation will see Aleafia produce cannabis at among the lowest cost per gram rates in the industry, when compared to traditional greenhouse cultivation.”

The company intends to complete its first harvest in the summer of 2019.

As part of Aleafia’s commitment to corporate social responsibility, the company will also hire primarily from the local labour force, creating between 80 to 100 jobs. The proposed outdoor cultivation site would include dual perimeter fencing and 24/7 on-site security.

“The region is blessed with a climate and landscape perfectly suited to agriculture. This cultivation expansion will be a boon to the local tax base while creating good paying jobs,” said Aleafia CEO Geoffrey Benic.

Operational Update:

160,000 sq. ft. Niagara greenhouse retrofitting on schedule and expected to be complete in late 2018

Fully funded annual growing capacity of 38,000 kg of cannabis flower in 2019, increasing to 98,000 kg with Port Perry expansion

50,000 medical cannabis patients

Secured first medical cannabis sale in company’s history, only days after securing Sales Licence from Health Canada

Corporate Update

Aleafia is also pleased to announce that Lea Ray has joined its board of directors. Ray is a Chartered Professional Accountant and seasoned board director, holding an ICD.D from the Institute of Corporate Directors. Ray will also serve as chair of the audit committee which will now consist of Lea Ray, Mark Sandler and William Stewart.

Over the past decade, Ray has held multiple board leadership roles including Chair of Audit, Finance and Governance Committees and Board Vice-Chair. Her financial career began with PricewaterhouseCoopers and she is a former Vice-President Corporate Finance at Warners Bros. Entertainment Canada Inc.

Ray has also served on the Professional Conduct Committee of the Chartered Professional Accountants (Ontario) and has served as a board member and volunteer of several non-profit health, conservation and community institutions.

“The Aleafia board of directors is pleased to have Lea Ray join our ranks. Her wealth of experience as a business executive and corporate director will provide immediate value to Aleafia,” said Aleafia Chairman Julian Fantino. “Lea will be an invaluable resource for Aleafia as we expand our business and seek broader access to the U.S. investment community.”

The company granted Ms. Ray 250,000 stock options (the “Options”) under its stock option plan. Each Option is exercisable into common shares of the company at an exercise price of $2.65. The Options vest every six months over a two-year period and expire on October 5, 2023.

The company is also no longer proceeding with the proposed Early Warrant Incentive Program.

For Investor & Media Relations, please contact:

Nicholas Bergamini, VP Public Affairs

IR@AleafiaInc.com

About Aleafia Health Inc.:

Aleafia is a leading, vertically integrated cannabis company with major cannabis cultivation & processing and medical cannabis clinics business operations. Aleafia owns two cannabis cultivation facilities, one of which is licensed and fully operational and one which will be fully operational in late 2018. Aleafia will reach a fully-funded annual growing capacity of 38,000 kg in 2019. Canabo Medical Clinics are the largest brick and mortar medical cannabis clinic network in Canada with 22 locations and over 50,000 patients.

Neither Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

FORWARD LOOKING INFORMATION

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company’s current expectations. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release includes information relating to the implementation of Aleafia Health’s business plan. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: risks associated with the implementation of Aleafia Health’s business plan and matters relating thereto, risks associated with the cannabis industry, competition, regulatory change, the need for additional financing, reliance on key personnel, the potential for conflicts of interest among certain officers or directors, and the volatility of the Company’s common share price and volume. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.

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