Press Release

By John Philpott – Stockwatch – December 29, 2017

CANABO MEDICAL INC. ANNOUNCES FINANCING SYNDICATE FOR $20 MILLION OFFERING IN CONJUNCTION WITH THE ALEAFIA INC BUSINESS COMBINATION

Further to a press release disseminated on Dec. 22, 2017, Canabo Medical Inc., in conjunction with Aleafia Inc., has named the participants of the syndicate as described in the earlier business combination release.

The offering will consist of Mackie Research as co-lead agent with Canaccord Genuity Corp. Clarus Securities and Power One Capital Markets Ltd. are also participating in the syndicate.

Concurrently with the proposed business combination transaction described in the Dec. 22, 2017, release, Aleafia intends to complete a brokered private placement of subscription receipts on a best-effort basis for gross proceeds of approximately $20-million at an offering price of $1.25 per subscription receipt. The agents (as defined herein) will have the option exercisable any time up to 24 hours prior to the closing of the offering to increase the size of the Aleafia private placement by up to 15 per cent for a total of up to $23-million. Each subscription receipt will, following the completion of the Aleafia private placement and the satisfaction of certain escrow release conditions, entitle the holder to receive, without payment of additional consideration or taking of further action, one unit consisting of common share and one-half of one common share purchase warrant in the capital of the resulting issuer. Each whole warrant is exercisable into one common share in the resulting issuer at a price of $1.75 for 18 months following issuance.

Overview of Aleafia

Aleafia operates the Aleafia Total Health network in Vaughan, Ont. Aleafia seeks to make a difference in cannabinoid therapy delivery by providing an interconnected medical service model. While most clinical programs are geared primarily toward postinjury rehabilitation, the Aleafia network is focused on the strong link between early intervention and successful treatment. The intent is to manage health through a patient-focused, assessment-based and interdisciplinary-resourced organization.

Recently, Aleafia completed a transaction under which it acquired 100 per cent of the issued and outstanding shares of 755064 Ontario Inc. (operating as AeroFarms Canada), a licensed producer under the Health Canada Access to Cannabis for Medical Purposes Regulations (ACMPR), as well as the land and building in Scugog, Ont., where the facility operates. Aleafia acquired AeroFarms Canada to directly support the Aleafia network.

About Canabo Medical Inc.

Canabo wholly owns and operates Cannabinoid Medical Clinics, or CMClinics, Canada’s largest physician-led, referral-only clinics for medical cannabis. Established in 2014, Canabo now has 22 clinics across Canada, with additional locations planned to open in 2018. Canabo operates referral-only medical clinics dedicated to evaluating the suitability of prescribing and monitoring cannabinoid treatments for patients suffering from chronic pain and disabling illnesses.

In accordance with exchange policy, the company’s shares are currently halted from trading and are expected to remain halted until after the exchange has reviewed the materials in support of the proposed transaction.

We seek Safe Harbor.

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