Media Release

14th August 2019

Cannasouth announces
substantial cannabis cultivation joint venture

Cannasouth
these days announced a extended-term strategic joint venture (JV)
with Aaron Craig and his loved ones (Craig Household Interests) to
construct and create a globe-class cannabis cultivation
facility in the Waikato.

The JV will construct and
operate a medicinal cannabis and hemp cultivation and
production facility, which will service and provide
Cannasouth’s production needs. Building is
anticipated to begin ahead of Christmas and be completely operational
by the mid-2020.

The JV is structured as a joint venture
business, Cannasouth Cultivation Restricted (JV Co), which will
be owned equally by Cannasouth and the Craig Household
Interests.

JV Co will commence stage one particular of its operations
by constructing a state-of-the-art hybrid greenhouse
cultivation facility utilising aspect of the 111-acre web site. It
will develop medicinal cannabis and complementary solution,
mostly for Cannasouth, but potentially for other
medicinal cannabis corporations in New Zealand and
internationally.

JV Co will also investigate expanding
into broadacre operations (outside expanding) across the
balance of the land, and/or in conjunction with creating a
network of New Zealand-primarily based contract growers.

Cannasouth
CEO Mark Lucas says the capital charges related with the
building of a state-of-the-art cannabis cultivation
facility are substantial.

“This joint venture
arrangement has enabled Cannasouth to maximise the
allocation of capital raised for the duration of our current IPO and
reach an crucial objective of the company’s vertical
integration approach.

“Our aim is to have total
handle more than each and every stage of the production and distribution
of our medicinal cannabis items to assure we reach the
highest feasible normal of excellent at each and every step.

“It
tends to make sense for us to share the considerable capital charges
of creating a cultivation facility with a third celebration,”
he says. “Entering into a strategic partnership with a
trusted and knowledgeable companion like Craig Household Interests
will add considerable worth in terms of the talent set they
will bring to the table.”

Mr Lucas says the JV also
supplies Cannasouth with a industrial footprint and model
from which the JV can expand into other places all through
New Zealand as the medicinal cannabis industry
matures.

“We are…