Pivot Pharma Executes Binding Letter of Intent to Acquire ACI Foods Inc.

VANCOUVER, BC--(Marketwired - Oct 19, 2017) - Pivot Pharmaceuticals Inc. (OTCQB: PVOTF) ("Pivot" or the "Company"), an emerging biopharmaceutical company engaged in the development and commercialization of therapeutic pharmaceuticals and nutraceuticals, today announces the execution of a Binding Letter of Intent to acquire Absorbent Concepts Inc. ("ACI Foods" or "ACI"). Based in Abbotsford, British Columbia, ACI processes, packages and distributes gluten-free, organic hemp nutrition products including hulled seeds, cold-pressed hemp seed oil, and high percentage protein powder. For the 12-month period ending October 31, 2017, ACI forecasts revenues of approximately CAD $2.0 million, a 300% increase over the comparable period in the prior year. ACI holds hemp processing and cultivation licenses under Health Canada Industrial Hemp Regulations (IHR). The transaction is subject to customary closing conditions.

"We are excited to welcome ACI Foods to the Pivot family and together look forward to becoming a dominant force in the global hemp industry," says Pivot CEO Patrick Frankham. "With impressive revenue and rapid growth in only three years of existence, we see an opportunity to help expand ACI Foods to significantly increase product offerings and sales. We consider this acquisition to be a strategic initiative to enable market share dominance in the hemp segment of the cannabis industry. The timing of this acquisition is in anticipation of the forthcoming legislative changes in Canada regarding the legal status of cannabidiol ("CBD"). Accordingly, the recent announcement by the World Anti-Doping Agency (WADA) that CBD will be removed from its list of banned substances effective January 1, 2018, further solidifies Pivot's strategy of developing fast-to-market cannabinoid based products."

ACI intends to submit an application to Health Canada for an authorized Dealer's License which will allow it to produce and supply CBD oil as well as conduct cannabinoid research and development. Pivot Pharmaceuticals will use CBD produced at ACI's facility, as well as other cannabinoids, to formulate nutraceutical and pharmaceutical products which can support health claims and provide therapeutic benefits. The market for CBDs in the form of functional foods, oils, orals and topicals is expected to show substantial growth, reaching $2.1 billion in consumer sales by 2020, with hemp-based sources attributing for $450 million of sales.