PRESS RELEASES

StillCanna Signs Definitive Agreement for the Acquisition of a Leading European Hemp Cultivator Olimax

March 18, 2019 – Vancouver, British Columbia – StillCanna Inc. (CSE: STIL) ("StillCanna" or the "Company") is pleased to announce that today, March 18th, 2019, the Company signed of a definitive agreement to complete the acquisition of Olimax NT SP. Z .O.O (“Olimax”), a fully-licensed, privately-owned, vertically-integrated cultivator and producer of cannabidiol (“CBD”) in Poland, for total consideration consisting of 24 million common shares of StillCanna at a deemed per share price of C$1.15 and a cash payment of C$2 million (the “Olimax Transaction”).

StillCanna, a European-focused CBD producer with operations in Romania will acquire Olimax as a means to further its strategy of providing large quantities of high-quality CBD extracts to the European and global markets. The Olimax Transaction provides StillCanna with a vertically-integrated and licensed cultivator, extractor and formulator of CBD. Olimax’s core strength is in agriculture, with over 20-years of experience in farming hemp, in addition to having a fully-developed product line and a proprietary, European Union (“EU”) certified, high-CBD content hemp varietal. Olimax successfully cultivated and harvested hemp from over 600 hectares in 2018.

Jason Dussault, Chief Executive Officer of StillCanna commented, “It is rare when the core competencies of two companies complement each other so well. Olimax’s agricultural experience matched with our extraction expertise creates the perfect storm. The combined company will have the capacity to produce 16 million grams of high-potency CBD for the European and global market in 2019.  We estimate that with a further investment of C$10 million for land lease, planting and harvesting we expect to expand to over 60 million grams by 2021.”

TRANSACTION RATIONALE

The transaction bolsters StillCanna’s pro-forma production profile to 16 million grams of CBD in 2019, with potential to grow to 32 million grams in 2020 and over 60 million grams in 2021.
The addition of Olimax’s two founders, with their extensive 20-year history and academic background, provides StillCanna with significant internal cultivation expertise.
Improves alignment of management as Olimax’s founders would hold 29% of the pro-forma company (20 million shares subject to a 36-month escrow).

TERMS OF THE TRANSACTION

Under the terms of the Olimax Transaction, StillCanna will acquire all the issued and outstanding shares of Olimax from the arm’s length shareholders of Olimax for total consideration consisting of 24 million common shares of StillCanna and a cash payment of C$2.0 million. Following the acquisition, Olimax will become a wholly-owned subsidiary of StillCanna. Subject to completion of the Olimax Transaction and the Brokered Financing, StillCanna plans to invest up to C$12.0 million to expand Olimax’s capacity in agriculture, associated infrastructure, and working capital. Additionally, StillCanna has secured the services of the Olimax founders for a period of a minimum of three years to aid with the anticipated expansion of the business in Poland and throughout the EU. The Olimax Transaction is subject to customary conditions, including regulatory and exchange approval, due diligence, and StillCanna closing the Brokered Financing. The Olimax Transaction is expected to close shortly after satisfaction of all outstanding conditions under the Definitive Agreement, which closing date is expected to occur in the second quarter of 2019.

PRIVATE PLACEMENT FINANCING

StillCanna is also pleased to announce that it has entered into an  agreement with Canaccord Genuity Corp. (the “Agent”) to raise, on a commercially reasonable efforts private placement basis up to 17,400,000 subscription receipts (the "Subscription Receipts") at a price of C$1.15 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds of up to C$20,010,000 (the “Brokered Financing”). In addition, the Company has granted the Agent an option to increase the size of the Brokered Financing by up to 4,350,000 Subscription Receipts for additional gross proceeds of C$5,002,500, exercisable in whole or in part at any time prior to the closing of the Brokered Financing, for aggregate gross proceeds of up to C$25,012,500.

Each Subscription Receipt shall entitle the holder thereof to receive, upon satisfaction of certain escrow release conditions (including the completion of the Olimax Transaction) and without payment of any additional consideration or any further action on the part of each holder thereof, one unit of StillCanna (a "Unit"). Each Unit will consist of one common share of the Company (a “Common Share”) and one-half of one common share purchase warrant (each whole warrant, a “Warrant”).  Each Warrant will be exercisable to acquire one Common Share for a period of 12-months from the date the escrow release conditions are satisfied at an exercise price of C$1.73. If the escrow release conditions are not satisfied by June 30, 2019, the Subscription Receipts will be canceled and all proceeds from the Brokered Financing will be returned to subscribers.

The Company intends to use the net proceeds of the Brokered Financing to expand CBD processing capacity at the Company’s facility in Romania, to build out Olimax’s CBD extraction facility and agricultural capabilities, along with working capital and general corporate expenditures.

The Agent will be paid a cash commission equal to 7.0% of the gross proceeds of the Brokered Financing and will also receive warrants (the “Compensation Warrants”) to acquire that number of Units which is equal to 7.0% of the aggregate number of Subscription Receipts sold under the Brokered Financing. Each Compensation Warrant will be exercisable at the Issue Price for a period of 12-months following the date the Escrow Release Conditions are satisfied.

The Brokered Financing is expected to be completed on April 11th, 2019 (the “Closing Date”), or such other date as mutually agreed to by the Company and the Agent, subject to the receipt of all necessary regulatory approvals, including the approval of the Canadian Securities Exchange. All securities issued pursuant to the Brokered Financing will be subject to a four month and one day hold period from the Closing Date, in accordance with applicable Canadian securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or any state securities laws and may not be offered or sold in the United States or to or for the account or benefit of US persons unless registered under the US Securities Act and applicable state securities laws or an pursuant to an exemption from such registration as available.

For more information, please visit www.StillCanna.com

On Behalf of the Board,

Joel Leonard,
Chief Financial Officer and Director
E-mail: joel@stillcanna.com
Phone: 778-838-3692

ABOUT OLIMAX

Olimax is a fully integrated and licensed cultivator, extractor and formulator of CBD in Poland with operations spanning over 20 years. Having recently successfully cultivated and harvested over 600 hectares of hemp, they intend to expand their agricultural footprint to over 5,000 hectares by 2021. Olimax has registered a high-potency CBD hemp varietal with the EU and holds rights to proprietary harvesting and processing equipment and techniques. In addition to being experienced in agriculture, Olimax has also formulated a large number of CBD and hemp-based products which span from CBD oils and hemp protein to cosmetics and beverages.  Through significant experience and industry connections, Olimax has established itself as a leader in hemp cultivation and processing throughout Europe. The company has more recently focused on cultivating an extensive bank of seeds from their proprietary and registered Glyana strain.  This seed bank gives the company the freedom to significantly and independently expand its cultivation holdings.  Olimax’s founders have over 20 years of experience in growing and formulating CBD products, are widely considered agricultural experts in their field and hold degrees in chemistry and physics.  The combination of education, practical experience and a true passion for the hemp plant has propelled them to be true leaders in their field and widely respected throughout the European hemp industry.

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