BevCanna Closes Acquisition of Solventless Cannabis Extraction and Delivery Technology Provider Embark Health Inc.

Innovative health and wellness beverages and products company, BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) (“BevCanna” or the “Company”) announces today the closing of its acquisition of solventless cannabis extraction and delivery technology provider Embark Health Inc. (“Embark”).

This acquisition was pursuant to the agreement dated September 19, 2021, as amended November 12, 2021 (the “Agreement”), by and among Embark, 1323977 B.C. Ltd. (“Subco”), a wholly-owned subsidiary of BevCanna, Bruce Dawson-Scully, in his capacity as shareholder representative and not in his personal capacity, and certain shareholders of Embark, pursuant to which BevCanna acquired all of the issued and outstanding securities of Embark (each an “Embark Security”) by way of a three-cornered amalgamation (the “Transaction”) as previously announced on September 20, 2021.

“Completing the acquisition of Embark Health is a significant milestone in BevCanna’s strategic transformation into a diversified health and wellness company,” said John Campbell, CFO and Chief Strategic Officer of BevCanna. “Embark’s solventless cannabis extraction and enhanced delivery technology will be a robust driver of growth for the Company, further diversifying our unique portfolio of brands and adding valuable intellectual property and four innovative adult-use cannabis brands to our range of offerings.”

“The acquisition also bolsters BevCanna’s balance sheet,” noted Mr. Campbell. “Embark brings $17 million in tangible and intangible assets, including direct ownership of $11 million in equipment and the use of a modern production facility in Delta, BC.¹ This acquisition brings BevCanna to over $100 million in unaudited assets on the balance sheet and $2.9 million in long-term liabilities.”

Deal Highlights:

• The combined entity will have over $100M in assets on the balance sheet and $2.9 million in long-term liabilities.
• Adds a unique range of valuable brands, across all three cannabis 2.0 categories, that enables BevCanna to sell differentiated and complementary adult-use and wellness products
  • includes the “Hazel” Hash Stick, to which BevCanna now holds the exclusive worldwide license, and is the first-of-its-kind in Canadian market.
• Adds a state-of-the-art production facility in Delta, BC, with $17M¹ in tangible and intangible assets including direct ownership of $11M¹ in equipment.
• The deemed price of the BevCanna Shares being issued to former Embark securityholders in the transaction is $0.45 per share, which represents a 146 per cent premium to the volume weighted average trading price of the BevCanna Shares on the CSE for the five trading days preceding the date of this announcement.
• Bolsters beverage portfolio with the addition of proprietary nanotechnology and rapid onset delivery technology for beverage, topical and edible products, allowing BevCanna to vertically integrate its supply for select in-house and white-label clients.
• Adds innovative solventless extraction technology that enables BevCanna to offer hash, bubble hash, live rosin and other adult-use cannabis products.
• Adds experienced management and operations team members who are pioneers in cannabis, extraction, and drug delivery technology, including:
  • Bruce Dawson-Scully, Founder and Chief Executive Officer of WeedMD (TSXV:ENTG)
  • Marcus “Bubbleman” Richardson, best known as the founding pioneer of bubble hash
  • Michael West, global extraction expert who developed, designed, and built more than a dozen world class extraction facilities for companies such as Cresco Labs (CSE:CL)
• Diversifies the business between cannabis and wellness with an emphasis on novel technology and high-growth product categories.
• Enables cross-utilization of existing licenses, including:
  • Health Canada-issued adult-use sales license that gives BevCanna the ability to sell its products directly to provincial distribution boards across Canada.
  • Health Canada-issued medical sales license that allows for expanded distribution of direct-to-customer.
• Exposure to the protein-enhanced and functional food industry with majority ownership of ProteinQuest, which produces a wide range of proprietary hemp seed-derived protein powders, cooking oils, and beverages.

¹ Unaudited