CANN GROUP LIMITED — AGM Information 2017

Oct 17, 2017

==> picture [585 x 60] intentionally omitted <==

18 October 2017

Dear Shareholder

ANNUAL GENERAL MEETING

I am pleased to invite you to attend the Annual General Meeting of Cann Group Limited to be held at 11.00am on Wednesday 22 November 2017, in the King Room at the offices of William Buck, Level 20, 181 William Street, Melbourne and have enclosed the Notice of Annual General Meeting and Explanatory Notes.

If you are unable to attend the meeting in person, I encourage you to return the enclosed proxy form or to cast your vote online in accordance with the instructions contained in the Notice of Annual General Meeting. The proxy form should be returned in the envelope provided, or faxed to our Share Registry on 02 9287 0309 (within Australia) or +61 2 9287 0309 (outside Australia), so that it is received by 11.00am on Monday 20 November 2017.

I look forward to your attendance at the meeting.

Yours faithfully

Allan McCallum Chairman

ABN 25 603 949 739 Suite 3, Building RD2, 2 Park Drive, La Trobe University, Bundoora, Victoria, 3083 Phone +61 3 9095 7088 Email contact@canngrouplimited.com Web Address www.canngrouplimited.com.au

Notice of Annual General Meeting 2017

Notice is hereby given that the Annual General Meeting of Cann Group Limited ABN 25 603 949 739 (“the Company”) will be held in the King Room at the offices of William Buck, Level 20, 181 William Street, Melbourne at 11am on Wednesday 22 November 2017 to transact the business set out below.

Members should refer to the accompanying Explanatory Notes for further information concerning the business to be transacted at this meeting.

Business of the Annual General Meeting

1. Financial Statements and Reports

To receive the financial report, directors’ report and auditor’s report for the Company and its controlled entities for the financial year ended 30 June 2017.

(Please note that no resolution will be required to be passed on this matter and there is no requirement for shareholders to approve these reports).

2. Adoption of Remuneration Report

To consider and, if thought fit, to pass the following non-binding advisory resolution as an ordinary resolution:

“That the Remuneration Report for the financial year ending 30 June 2017 be adopted.”

(Please note that this resolution is advisory only and does not bind the Company or the Directors).

3. Re-election of Director

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ That Mr Douglas Rathbone, a Director who retires from office in accordance with the Company’s Constitution and being eligible, be re-elected a Director of the Company .”

4. Re-election of Director

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ That Mr Geoffrey Pearce, a Director who retires from office in accordance with the Company’s Constitution and being eligible, be re-elected a Director of the Company.”

5. Election of Director

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ That, Mr Neil Belot, having consented to act as a Director of the Company and being eligible in accordance with the Company’s Constitution, be elected a Director of the Company .”

6. Approval of 10% placement capacity for 12 months

To consider and, if thought fit, to pass the following resolution as a special resolution:

“ That, for the purpose of ASX Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totaling up to 10% of the issued capital, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Notes .”

2

7. Approval of Cann Group Limited Employee Share Purchase Plan

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

“ That:

• (a) the Cann Group Limited Employee Share Purchase Plan (“ESPP”), the terms of which are described in the Explanatory Notes which form part of this Notice of Annual General Meeting, be approved for the purposes of sections 260C(4) of the Corporations Act and for all other purposes; and

• (b) all issues of securities under the ESPP, the terms of which are described in the Explanatory Notes which form part of this Notice of Annual General Meeting, be approved as an exception to ASX Listing Rule 7.1 for the purposes of Exception 9(b) of Listing Rule 7.2 and for all other purposes .”

By Order of the Board

Richard Baker Company Secretary 18 October 2017

3

HOW TO VOTE

Voting entitlement

The Board has determined in accordance with regulation 7.11.37 of the Corporations Regulations that for the purpose of voting at the Annual General Meeting, shares will be taken to be held by those persons who hold them at 7.00pm (AEDT) on Monday 20 November 2017 . This means that if you are not the registered holder of a share at that time you will not be entitled to vote at the Annual General Meeting in respect of that share.

Attending the Annual General Meeting

If you attend the Annual General Meeting, please bring your personalised proxy form with you. The barcode at the top of the form will help you to register. If you do not bring your form with you, you will still be able to attend the Annual General Meeting but representatives from Link Market Services Limited will need to verify your identity. You will be able to register from 10.30am (AEDT) on the day of the Annual General Meeting.

Voting by proxy

Each shareholder who is entitled to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote on behalf of that shareholder as an alternative to attending the Annual General Meeting in person. The proxy need not be a shareholder of the Company.

Where a shareholder appoints more than one representative, proxy or attorney, those appointees are entitled to vote on a poll but not on a show of hands. A shareholder who is entitled to cast two or more votes may appoint one or two proxies and may specify the proportion or number of votes that each proxy is appointed to exercise. If a shareholder appoints two proxies and the appointment does not specify the proportion, or number, of shareholder’s votes, each proxy may exercise half the shareholder’s votes (disregarding fractions).

Directed and Undirected Proxies

If you choose to appoint a proxy, the Board encourages you to direct your proxy how to vote on each resolution, by marking either ‘ For ’, ‘ Against ’ or ‘ Abstain ’ for the item of business on the proxy form.

If you sign the enclosed proxy form and do not appoint the chairperson or specify an individual or body corporate as your proxy, you will have appointed the chairperson as your proxy by default. In that case, your shares will be voted on the proposed resolutions in accordance with your directions on the proxy form.

If you do not direct the chairperson how to vote your shares, the chairperson will vote undirected proxies on, and in favour of, all of the proposed resolutions including Item 2 (Adoption of Remuneration Report) and Item 7 (Approval of Cann Group Limited Employee Share Purchase Plan). Where the chairperson is appointed as your proxy, you will be taken to have expressly authorised the chairperson to cast your votes on Items 2 (Adoption of Remuneration Report) and 7 (Approval of Cann Group Limited Employee Share Purchase Plan).

If you appoint as your proxy any other Director, any other of the Company’s Key Management Personnel or any of their closely related parties, they will vote undirected proxies in favour of all of the proposed resolutions except Item 2 (Adoption of Remuneration Report Remuneration Report) and Item 7 (Approval of Cann Group Limited Employee Share Purchase Plan). They will not cast any votes in respect of Item 2 (Adoption of Remuneration Report) or Item 7 (Approval of Cann Group Limited Employee Share Purchase Plan) that arise from undirected proxies.

“Key management personnel” of the Company for the financial year ended 30 June 2017 are identified in the Remuneration Report, which forms part of the Company’s 2017 Annual Report. The “closely related parties” of the Company’s Key Management Personnel are defined in the Corporations Act 2001 (Cth) (“Corporations Act”), and include certain of their family members, dependants and companies they control.

You may appoint the chairperson of the Annual General Meeting as your proxy by nominating him in the proxy form. If you return your proxy form but do not nominate the identity of your proxy, the chairperson will automatically be your proxy. If you return your proxy form but your nominated proxy does not attend the Annual General Meeting, then your proxy will revert to the chairperson. For a resolution determined on a poll, if your nominated proxy is either not recorded as attending the Annual General Meeting or does not vote on the resolution, the chairperson is taken, before voting on the resolution closes, to have been appointed as your proxy for the purposes of voting on the resolution.

Lodging your Proxy

A proxy appointment form is enclosed in this Notice of Annual General Meeting. For the appointment of a proxy to be effective for the Annual General Meeting, the following documents must be received no later than 48 hours before the scheduled time for the Annual General Meeting; that is by 11.00am (AEDT) on Monday 20 November 2017 :

• (a) the proxy’s appointment; and

• (b) if the appointment is signed by the appointor’s attorney - the authority under which the appointment was signed or a certified copy of the authority.

Documents may be lodged online, by posting, delivery or facsimile to the Company’s Share Registry at:

Link Market Services Limited

Online: www.linkmarketservices.com.au

By Post: Cann Group Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia

Delivery to Link Market Services Limited*: 1A Homebush Bay Drive Rhodes NSW 2138

or

Level 12 680 George Street Sydney NSW 2000

• During business hours (Monday to Friday, 9.00am-5.00pm)

Facsimile:

(+61 2) 9287 0309

If you have any queries and wish to contact Link Market Services Limited, please call (+61) 1300 554 474.

Bodies corporate

A body corporate may appoint an individual as its representative to exercise all or any of the powers the body corporate may exercise at the Annual General Meeting. The appointment may be a standing one. Unless otherwise specified in the appointment, the representative may exercise, on the body corporate’s behalf, all of the powers that the body corporate could exercise at the Annual General Meeting or in voting on a resolution. Unless it has previously been given to the Company, the representative should bring evidence of their appointment to the meeting, together with any authority under which it is signed. The appointment must comply with Section 250D of the Corporations Act.

Attorneys

A shareholder may appoint an attorney to vote on their behalf. To be effective for the meeting, the instrument effecting the appointment (or certified copy of it) must be received no later than 48 hours before the scheduled time for the Annual General Meeting; that is by 11.00am (AEDT) on Monday 20 November 2017.

Voting exclusion statements

Item 2 – Adoption of Remuneration Report

A vote on this resolution must not be cast (in any capacity) by or on behalf of:

(a) a member of the Key Management Personnel whose remuneration is included in the 2017 Remuneration Report; and

(b) a closely related party (such as close family members and any controlled companies) of such a Key Management Personnel.

However, the Company will not disregard a vote cast on this resolution as a proxy for a person who is entitled to vote and:

(a) the proxy appointment is in writing and specifies how the proxy is to vote (for, against, abstain); or

• (b) the vote is cast by the chairperson and:

(i) the appointment does not specify how the proxy is to vote; and

(ii) the appointment expressly authorises the chairperson to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

For the purposes of this voting exclusion, Key Management Personnel are the Directors and those others persons who have authority and responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly, as listed in the Remuneration Report for the year ended 30 June 2017. Their “closely related parties” are defined in the Corporations Act, and include certain of their family members, dependants and companies they control.

5

Item 6 – Approval of 10% placement capacity for 12 months

In accordance with the ASX Listing Rules, the Company will disregard any votes cast on this resolution by any person who may participate in the issue of Equity Securities under this resolution and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities in the Company, if this resolution is passed, and any associates of those persons.

However, in relation to this resolution, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or

• (b) it is cast by the chairperson as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Item 7 – Approval of Cann Group Limited Employee Share Purchase Plan

In accordance with the ASX Listing Rules, the Company will disregard any votes cast on this resolution by any person who may participate in the issue of Equity Securities under this resolution and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities in the Company, if this resolution is passed, and any associates of those persons.

However, in relation to this resolution, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or

• (b) it is cast by the chairperson as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Accordingly, the Company will disregard any votes cast on this resolution by:

• (a) a member of the Key Management Personnel; and

• (b) a closely related party (such as close family members and any controlled companies) of such a Key Management Personnel.

However, the Company will not disregard a vote cast on this resolution as a proxy for a person who is entitled to vote and:

• (a) the proxy appointment is in writing and specifies how the proxy is to vote (for, against, abstain); or

• (b) the vote is cast by the chairperson and:

• (i) the appointment does not specify how the proxy is to vote; and

• (ii) the appointment expressly authorises the chairperson to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

6

EXPLANATORY NOTES

These Explanatory Notes, which accompany and form part of the Notice of Annual General Meeting, have been prepared to assist

shareholders with their consideration of the resolutions set out in the Notice of Annual General Meeting dated 18 October 2017.

Item 1 Financial Statements and Reports

During this item there will be a reasonable opportunity for shareholders to ask questions and comment on the financial report, directors’ report, auditor’s report for the Company and its controlled entities for the for the financial year ended 30 June 2017, and on the business, operations and management of the Company. No resolution will be required to be passed on this matter.

Further, in accordance with section 250PA of the Corporations Act, a shareholder who is entitled to cast a vote at the Annual General Meeting may submit a written question to the Company’s auditor if the question is relevant to:

(a) the content of the auditor’s report; or

(b) the conduct of the audit of the financial report,

by giving the question to the Company by no later than Wednesday 15 November 2017. The auditor will then compile the questions relevant to the content of the Auditor’s Report or the conduct of the audit of the Financial Report into a question list. At or before the start of the Annual General Meeting, the Company will make the question list reasonably available to the Shareholders attending the Annual General Meeting.

Shareholders who have not elected to receive a hard copy of the Company’s 2017 Annual Report can view or download it from the Company’s website at investors.canngrouplimited.com/investors/.

Item 2 Adoption of Remuneration Report

The Remuneration Report for the year ended 30 June 2017 is set out in the 2017 Annual Report.

Pursuant to section 250R(2) of the Corporations Act, a resolution that the Remuneration Report be adopted must be put to the vote at the Company’s Annual General Meeting. The vote on the proposed resolution is advisory only and does not bind the Company or its Directors. However, the Board will take the outcome of the vote into consideration when reviewing the Company’s remuneration practices and policies.

Pursuant to the Corporations Act, if 25% or more votes that are cast are voted against the adoption of the Remuneration Report at two consecutive AGM’s, shareholders will be required to vote at the second of those AGM’s on a resolution (a “spill resolution”) to decide whether a general meeting of shareholders is to be held within 90 days of the date of that AGM to consider the election of the Company’s Directors. If a spill resolution is passed (that is, more than 50% if votes cast in favour), all of the Company’s Directors will cease to hold office at the end of that General Meeting, unless re-elected at that meeting.

During this item there will be a reasonable opportunity for shareholders at the meeting to comment on and ask questions about the Remuneration Report which is contained within the 2017 Annual Report.

The chairman of the meeting intends to vote undirected proxies in favour of the adoption of the Remuneration Report.

Directors’ Recommendation

The Directors unanimously recommend that shareholders vote IN FAVOUR of adopting the Remuneration Report.

Items 3 and 4 Re-election of Directors

Mr Doug Rathbone and Mr Geoff Pearce were elected as Directors by shareholders at the 2015 Annual General Meeting and are required to retire from office under the Company’s Constitution. Being eligible, they have offered themselves for re-election and are seeking reelection by shareholders at this Annual General Meeting. Their biographical details are set out below:

Douglas Rathbone, AM, FATSE, FI ChemE, ARMIT B Comm, TTC

An experienced public company director, he is the former Managing Director and CEO of Nufarm Limited (ASX NUF) – an ASX 200 listed company and is a former Board member of the FERNZ Corporation and the CSIRO. He is Chairman of the Rathbone Wine Group, Director of Cotton Seed Distributors, Leaf Resources Limited (ASX LER), Go Resources, Queenscliff Harbour Pty Ltd and AgBiTech. He is also an Honorary Life Governor of the Royal Children’s Hospital and a former Director of the Burnett Centre for Medical Research. Doug brings to the Board experienced management and corporate governance skills together with a passion to grow the business having successfully transformed Nufarm to become one of the world’s leading crop protection and seed companies with an extensive global footprint.

7

Geoff Pearce

Geoff is a successful entrepreneur and businessman with more than 40 years’ experience in the personal care industry. He established and owned Scental Pacific Pty Ltd and grew the business to become Victoria’s largest manufacturer of personal care products before selling it to the Smorgon Family. He later built a contract manufacturing business, Beautiworx Australia Pty Ltd, which was also sold. Geoff currently owns The Continental Group, which supplies pharmaceutical packaging and raw materials and has developed alliances with some of the world’s leading herbal extract manufacturers. He has extensive experience in areas including manufacturing procurement, distribution and regulatory affairs. He is Chairman of Probiotec Limited (ASX PBP).

The chairman of the meeting intends to vote undirected proxies in favour of the re-election of Mr Rathbone and Mr Pearce.

Directors’ Recommendation

The non-candidate Directors recommend that shareholders vote IN FAVOUR of the re-election of Mr Rathbone and Mr Pearce.

Item 5 Election of Director

Being eligible and having consented to act as a Director of the Company, Mr Neil Belot seeks to be appointed a Director of the Company by shareholders at this Annual General Meeting. Mr Belot is an employee of Aurora Cannabis Inc. which owns 19.9% of the issued shares of the Company and accordingly, if elected, Mr Belot will be a nominee director of Aurora Cannabis Inc.

Neil Belot biography

Mr Belot is presently the Chief Global Business Development Officer of Aurora Cannabis Inc. (“Aurora”) responsible for developing and executing business opportunities on behalf of Aurora to create shareholder value and drive long term growth utilising his comprehensive knowledge of the global regulated cannabis industry, commodity markets, cannabis cultivation, stakeholder relations, branding and marketing. Mr Belot has also held the position of Chief Brand Officer at Aurora with responsibility for strategic and operational oversight of sales, marketing, client and stakeholder relations, digital technology and business development. Prior to his roles with Aurora Mr Belot was an Executive Director of the Canadian Medical Cannabis Industry Association and the Gas Portfolio and Energy Services Manager at the Housing Services Corporation, both Canadian entities. He has post-graduate qualifications including Masters of Business Administration in Finance and International Exchange obtained from Dalhousie University (Nova Scotia, Canada) and the Copenhagen Business Scholl (Denmark) and graduate qualifications of a Bachelor of Business Administrative from Acadia University (Nova Scotia, Canada). Mr Belot is a Canadian citizen.

About Aurora

Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, and is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport. It has also acquired, and is undertaking completion of, a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island. In addition, Aurora is a cornerstone investor with a 19.9% stake in Cann Group Limited and it also owns Pedanios, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union ("EU"), based in Germany. Aurora’s common shares trade on the TSX-V under the symbol “ACB”.

The chairman of the meeting intends to vote undirected proxies in favour of the election of Mr Belot.

Directors’ Recommendation

The Directors unanimously recommend that shareholders vote IN FAVOUR of the election of Mr Belot.

Item 6 Approval of 10% placement capacity for 12 months

General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its Annual General Meeting to allow it to issue Equity Securities up to 10% of its issued capital over a period of 12 months after the Annual General Meeting (“10% Placement Capacity”). The Company is an Eligible Entity.

If Shareholders approve this resolution, the number of Equity Securities the Company may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out below).

The effect of this resolution will be to allow the Directors to issue Equity Securities up to 10% of the Company’s fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Annual General Meeting, without subsequent shareholder approval and without using the Company’s 15% annual placement capacity under ASX Listing Rule 7.1.

8

This resolution is a special resolution. Accordingly, at least 75% of votes cast by shareholders present and eligible to vote at the Annual General Meeting must be in favour of this resolution for it to be passed.

ASX Listing Rule 7.1A

ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its Annual General Meeting to issue Equity Securities in addition to those under the Eligible Entity’s 15% annual placement capacity.

An Eligible Entity is one that, as at the date of the relevant Annual General Meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalization (excluding restricted securities and securities quoted on deferred settlement basis) of $300,000,000.

The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation less than $300,000,000.

Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has two classes of Equity Securities on issue, being fully paid ordinary shares in the capital of the Company (“Shares”) (ASX Code: CAN) and Underwriter Options (unlisted).

The exact number of Equity Securities that the Company may issue under an approval under ASX Listing Rule 7.1A will be calculated according to the following formula:

(A x D) - E Where: A: is the number of Shares on issue 12 months before the date of issue or agreement: (A) plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2; (B) plus the number of partly paid Shares that became fully paid in the previous 12 months; (C) plus the number of Shares issued in the previous 12 months with approval of holders of Shares under ASX Listing Rules 7.1 and 7.4; and (D) less the number of Shares cancelled in the previous 12 months. D: is 10%. E: is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders or Shares under ASX Listing Rule 7.1 or 7.4.

Technical information required by ASX Listing Rule 7. 1A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this resolution.

(a) Minimum Price The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before: (i) the date on which the price at which the Equity Securities are to be issued is agreed; or (ii) if the Equity Securities are not issued within 5 ASX trading days of the date on which the price at which the Equity Securities are to be issued is agreed, the date on which the Equity Securities are issued. (b) Date of Issue The Equity Securities may be issued under the 10% Placement Capacity commencing the date of this Annual General Meeting and expiring on the first to occur of the following:

(i) 12 months after the date of this Annual General Meeting; and (ii) the date of approval by shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking).

or such longer period if allowed by ASX (“10% Placement Capacity Period”).

(c) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of shareholders who do not receive any Shares under the issue.

If the Resolution is approved by shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares is shown in the table below.

9

The table below seeks to demonstrate the potential dilution of existing shareholders resulting from the issue of Equity Securities under the 10% Placement Capacity calculated in accordance with the formula contained in Listing Rule 7.1A(2). The table does this by setting out the potential number of Shares issued and funds raised on the basis of:

• (i) the current number of Shares on issue;

• (ii) the number of Shares on issue changing (variable ‘A’ in the formula); and

• (iii) a variation in the issue price of the Shares (noting that Shares may only be issued at up to a 25% discount based on the volume weighted average price of the Shares calculated over the 15 ASX trading days preceding the issue).

Number of Shares on issue - Variable ‘A’ in Listing Rule 7.1A.2			Dilution
		$0.61 50% decrease in Issue Price	$1.225 Current Issue Price	$2.45 100% increase in Issue Price
Current Shares on issue 108,353,334 Shares	Additional 10% Shares issued	10,835,333	10,835,333	10,835,333
	Funds raised	$6,636,642	$13,273,283	$26,546,567
50% increase * 162,530,003 Shares	Additional 10% Shares issued	16,253.000	16,253,000	16,253,000
	Funds raised	$9,954,963	$19,909,925	$39,819,850
100% increase * 216,706,670	Additional 10% Shares issued Funds raised	21,670,667 $13,273,283	21,670,667 $26,546,567	21,670,667 $53,093,134

*The number of Shares on issue (variable A in the formula) could increase as a result of Shares that do not require shareholder approval to be issued (such as under a pro-rata rights issue, Shares issued under a takeover offer or Shares issued on the exercise of options) or that are issued with shareholder approval under ASX Listing rule 7.1.

The table above uses the following assumptions:

1. The current number of Shares on issue is the Shares on issue as at 17 October 2017.

2. The current issue price set out above is the closing price of the Shares on the ASX on 16 October 2017.

3. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.

4. The Company has not issued any Equity Securities in the 12 months prior to this Annual General Meeting that were not issued under an exception in ASX Listing Rule 7.2.

5. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

6. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

Shareholders should note that there is a risk that:

• (i) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of this Annual General Meeting; and

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

Purpose of Issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for various purposes including the following:

• (i) a cash issue price , in this case, the Company may use the funds for acquisition of new assets or investments (including expenses associated with such acquisitions or investments), working capital or for other corporate purposes; or

• (ii) non-cash consideration , such as for the acquisition of new assets or investments, subject to any applicable ASX requirements. In such circumstances, the Company will provide a valuation of the non-cash consideration as required by ASX Listing Rule 7.1A.3.

10

Allocation under the 10% Placement Capacity

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue under the 10% Placement Capacity. The identity of the allottees under the 10% Placement Capacity will be determined on a case by case basis having regard to the factors including the following:

• (i) the purpose of the issue;

• (ii) alternative methods of raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

• (iii) the effect of the issue of the Equity Securities on the control of the Company;

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisors (if applicable).

The allottees under the Additional 10% placement have not been determined as at the day of finalisation of this Notice of Annual General Meeting and may include existing substantial shareholders and/or new shareholders. However, the allottees cannot include any directors, related parties or associates of a related party of the Company without further specific shareholder approval.

Previous Approval

The Company has not previously obtained shareholder approval under ASX Listing Rule 7.1A.

Special Resolution

This resolution is a special resolution. Accordingly, at least 75% of votes cast by shareholders present and eligible to vote at the Annual General Meeting must be in favour of this resolution for it to be passed.

Voting Exclusion

A voting exclusion statement is included in this Notice of Annual General Meeting. As at the date of this Notice of Annual General Meeting, the Company has not invited any existing shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing shareholders will be excluded from voting on this resolution.

The Directors understand that many eligible companies have sought this form of shareholder approval to enable a capital raising to be implemented where appropriate during the following year, without incurring costs for obtaining shareholder approval or incurring any time delay for obtaining such approval.

Accordingly, shareholder approval of this resolution is considered to be a prudent approach. The Directors believe that this resolution will provide the Company with flexibility to raise capital quickly if advantageous terms are available, and is in the best interests of the Company.

The chairman of the meeting intends to vote undirected proxies in favour of this resolution.

Directors’ Recommendation

The Directors unanimously recommend that shareholders vote IN FAVOUR of this resolution.

Item 7 Approval of Cann Group Limited Employee Share Purchase Plan

Approval for the purposes of the ASX Listing Rules – ASX Listing Rule 7.2

This resolution seeks shareholder approval for the Cann Group Limited Employee Share Purchase Plan (“ESPP”) for the purposes of ASX Listing Rule 7.2 exception 9.2(b), the Corporations Act and for all other purposes.

ASX Listing Rule 7.1 provides that a company must not, subject to specific exceptions, issue or agree to issue more equity securities during any 12-month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12-month period without shareholder approval.

If this resolution is passed, the Company will be able to allocate fully paid ordinary shares in the capital of the Company (“Shares”) under the ESPP to eligible participants during the period up to 22 November 2020 without affecting the Company’s ability to separately issue up to 15% of its total ordinary shares in any 12-month period (without having to obtain further shareholder approval). The Directors believe this will provide the Company with the flexibility necessary to raise additional capital as and when appropriate.

11

The purpose of the ESPP is to provide eligible employees of the Company with an incentive to remain with the Company and to improve the longer-term performance of the Company and its returns to shareholders. It is intended that this ESPP will enable the Company to retain and attract skilled and experienced employees and provide them with the motivation to make the Company more successful.

Under the ESPP, the Board of the Company may by notice in writing instruct the Trustee to acquire (whether by subscription or an on-market or off-market purchase or any combination of them) a number of Shares specified in the notice, to be held by the Trustee on behalf of an eligible participant or participants entitled under the terms of the ESPP.

In respect of all Shares are acquired by the Trustee under the ESPP on behalf of participants entitled under the terms of the ESPP, the Company will provide the necessary funding to the Trustee in order to enable it make such acquisition and pay any associated costs and expenses including any brokerage fees.

Where the Company agrees to issue new Shares under the ESPP, the subscription price for each of the Shares will be as determined by the Board of the Company on the date on which the Shares are allocated and issued to the Trustee. For the purposes of the issue of new Shares under the ESPP, the Board of the Company has determined that the issue price of each of the Shares under the ESPP will be the five-day Volume Weighted Average Price of the Company’s Shares as traded on the ASX up to (but excluding) the allocation date.

Approval for the purposes of the Corporations Act – Financial Assistance

Under Section 260A of the Corporations Act provides that a company may financially assist a person to acquire shares in the company or a holding company of the company only if:

• (a) giving the assistance does not materially prejudice:

• (i) the interests of the company or its shareholders; or

• (ii) the company’s ability to pay its creditors; or

• (b) the assistance is approved by shareholders under section 260B; or

• (c) the assistance is exempted under section 260C.

Section 260C of the Corporations Act provides for certain specific instances of exempted financial assistance, including a special exemption for employee share schemes that have been approved by a resolution passed at a general meeting of the company (section 260C(4)).

To the extent that the Company provides funds to the trustee of the ESPP to acquire Shares (and pay any associated costs) on behalf of participants under the ESPP, the Company will be providing financial assistance for the purposes of section 260A.

Whilst the Directors do not believe that the provision of this financial assistance will materially prejudice the interests of the Company or its shareholders or the Company’s ability to pay its creditors, the Directors have recommended that the shareholders approve the ESPP to ensure that the ESPP qualifies for the special exemption under section 260C(4) of the Corporations Act and for all other purposes of any other relevant provisions of the Corporations Act.

The chairman of the meeting intends to vote undirected proxies in favour of this resolution.

Directors’ Recommendation

The Directors unanimously recommend that shareholders vote IN FAVOUR of this resolution.

A summary of the terms of the ESPP is set out below.

Summary of Cann Group Limited Employee Share Purchase Plan

Structure

Pacific Custodians Pty Ltd (ACN 009 682 866)(or any other company appointed by the Board of Company) (Trustee) will act as trustee for theCann Group Employee Share Purchase Plan Trust. The Trustee will hold the ESPP Shares on behalf of the relevant employees until the restrictions on the disposal of the Shares expire.

Eligibility and Participation

Employees are eligible to participate in the ESPP if they are a permanent full-time or part-time employee of Cann Group Limited or its wholly-owned subsidiaries, are an Australian tax resident and are aged 18 years or over on the date of the offer. There are no minimum service requirements. Participation in the ESPP is entirely at the employee’s discretion. An employee cannot transfer their right topurchase Shares under the offer to anyone else.

12

Administration of the ESPP	The Trustee will administer the ESPP as delegated by the Board of the Company. Shares will be acquired and allocated through the Trustee.
Types of shares	Fully paid ordinaryshares in the capital of the Company (beingShares acquired under the ESPP).
Invitation	The Board of the Company may make an invitation to participate in the ESPP to an employee who is eligible to participate to acquire Shares (whether by subscription or an on-market or off-market purchase or any combination of them) on such terms and conditions as the Board decides from time to time, including: (a) the number of Shares for which that employee may acquire; (b) the amount payable (if any) for the acquisition of a Share or how it is calculated; and (c) any salary sacrifice and/or bonus sacrifice arrangement.
Issue Price	The Shares allocated under the ESPP may be purchased on-market on the ASX by the Company or issued directly by the Company. (a) If Shares are purchased on-market by the Company, the allocation price for Shares under the ESPP will be the current market price of Cann Group Limited Shares traded on the ASX at the time of purchase. (b) If Shares are issued directly by the Company, the allocation price for Shares under the ESPP will be the five-day Volume Weighted Average Price of Cann Group Limited’s Shares traded on the ASX up to (but excluding) the allocation date. The Company will pay any costs and expenses including any brokerage costs associated with the acquisition of Shares through the ESPP.
Restriction on the size of the ESPP	The number of Shares offered to participants under the ESPP must not, when aggregated with the number of Shares (and outstanding offers to issue under the ESPP) over the prior 5 years under the ESPP or any other incentive scheme extended to employees, exceed 5% of the total number of issued Shares in the Company, at the time the offer is made, excluding certain offers. Examples of excluded offers include those made under a disclosure document or not requiring disclosure pursuant to section 708 of the Corporations Act.
Restriction Period	For the Shares purchased under the ESPP to qualify for a tax exemption, there must be a restriction period in place. Tax legislation specifies that the minimum restriction period is three years from the allocation date. All Shares acquired under the ESPP for a particular financial year will be transferred to the employee on the third anniversary of acquisition. The participant is subject to restrictions in dealing with the Shares whereby a participant may not dispose of, deal in, or grant a security interest over, any interest in a participant Share until the earlier of: (a) the end of the period of three years (or any longer period specified by the Board of the Company in the invitation) commencing on the date of the issue or transfer of that participant Share; or (b) the date on which the participant is no longer employed by the Company or a related body corporate of the Company; or (c) the end of any other period determined by the Board of the Company in accordance with any relevant law. The Company is entitled to make any arrangements it considers necessary to enforce the restrictionperiod.
Shareholder Meetings	During the three-year restriction period, participants will be able to direct the Trustee how to vote the ESPP Shares held by the Trustee on their behalf. Once the ESPP Shares have passed their three-year restriction period, and have been transferred to an Employee as ordinary fully paid Shares,the Employee will be able to vote as a regular Cann GroupLimited shareholder.
Tax Concession	The tax concession is only available up to a maximum of $1,000 of ESPP Shares therefore the ESPP is set upto a maximum of $1,000 for anyfinancialyear. This applies to all eligible employees.

13

Rights attaching to Shares	Ranking Shares issued under the ESPP rank equally with all other fully paid ordinary shares on issue in the capital of the Company at the time of issue. Dividends and Dividend Plans Holders of Shares are entitled to receive from the Trustee all dividends and distributions paid by the Company on the holders ESPP Shares. A holder is entitled to participate in any scheme for the reinvestment of dividends paid or payable from time to time by the Company, or any bonus election scheme which permits dividends paid or payable from time to time by the Company to be foregone and bonus shares to be issued in lieu, in respect of the Holder’s ESPP Shares. Voting Rights Holders of Shares granted under the ESPP will be entitled to exercise all voting rights attached to the Shares in accordance with the Company’s Constitution. New and Bonus Issues Holders of Shares granted under the ESPP have the same right to participate in new and bonus issues of shares as conferred on other shareholders.
Amendments to the ESPP	Subject to the conditions below regarding no reduction of existing rights and the ASX Listing Rules, the Company and the Trustee may at any time, by deed, amend any or all of the provisions of the Trust Deed, including the clauses regarding amendment of the Trust Deed. No reduction of existing rights No amendment of the provisions of the Trust Deed may be made which reduces the rights of any participant in respect of Shares acquired under the ESPP prior to the date of the amendment, other than an amendment introduced primarily: (a) for the purpose of complying with or conforming to present or future State, Territory or Commonwealth legislation or the ASX Listing Rules, or a requirement, policy or practice of the Australian Securities and Investments Commission or other foreign or Australian regulatory body; (b) to correct any manifest error or mistake; (c) to enable contributions or other amounts paid by a group company to the ESPP to qualify as income tax deductions for that or another group company; (d) to enable any employer to reduce the amount of fringe benefits tax under the_Fringe_ Benefits Tax Assessment Act 1986(Cth), the amount of tax under the Tax Acts, or the amount of any other tax or impost that would otherwise be payable by the employer in relation to the ESPP; (e) for the purpose of enabling the participants generally (but not necessarily each Participant) to receive a more favourable taxation treatment in respect of their participation in the ESPP; or (f) to enable the ESPP or any member of the Company to comply with the Corporations Act, the Listing Rules or its constitution.
Termination or suspension of the ESPP	The Board of the Company may, in its absolute discretion, from time to time suspend the operation of the ESPP and may at any time terminate the ESPP. The suspension or termination of the ESPP must notprejudice the existingrights(if any)ofparticipants.

Further information regarding the Company’s corporate governance arrangements and the Board’s role can be found on the Company’s website at investors.canngrouplimited.com/investors/.

14

ACN 603 949 739

==> picture [106 x 41] intentionally omitted <==

LODGE YOUR VOTE

ONLINE  www.linkmarketservices.com.au

BY MAIL  Cann Group Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia



BY FAX

+61 2 9287 0309

 BY HAND Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138; or Level 12, 680 George Street, Sydney NSW 2000

 ALL ENQUIRIES TO Telephone: +61 1300 554 474

X99999999999 X99999999999 PROXY FORM I/We being a member(s) of Cann Group Limited and entitled to attend and vote hereby appoint: APPOINT A PROXY the Chairman of the OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or Meeting (mark box) body corporate you are appointing as your proxy or failing the person or body corporate named, or if no person or body corporate is named, the Chairman of the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the following directions or, if no directions have been given and to the extent permitted by the law, as the proxy sees fit) at the Annual General Meeting of the Company to be held at 11:00am on Wednesday, 22 November 2017 in the King Room at the offices of William Buck, Level 20, 181 William Street, Melbourne (the Meeting ) and at any postponement or adjournment of the Meeting. Important for Resolutions 2 and 7: If the Chairman of the Meeting is your proxy, either by appointment or by default, and you have not indicated your voting intention below, you expressly authorise the Chairman of the Meeting to exercise the proxy in respect of Resolutions 2 and 7, even though the Resolutions are connected directly or indirectly with the remuneration of a member of the Company’s Key Management Personnel ( KMP ). The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. VOTING DIRECTIONS Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the Meeting. Please read the voting instructions overleaf before marking any boxes with an T Resolutions For Against Abstain * For Against Abstain * 2 Adoption of Remuneration Report 6 Approval of 10% placement capacity for 12 months 3 Re-election of Director - 7 Approval of Cann Group Limited Mr Douglas Rathbone Employee Share Purchase Plan

• 4 Re-election of Director - Mr Geoffrey Pearce

• 5 Election of Director - Mr Neil Belot

==> picture [79 x 51] intentionally omitted <==

 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED

Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one)	Joint Shareholder 3 (Individual) Director

This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

CAN PRX1701C

HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM

YOUR NAME AND ADDRESS

LODGEMENT OF A PROXY FORM

This is your name and address as it appears on the Company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form.

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11:00am on Monday, 20 November 2017, being not later than 48 hours before the commencement of the Meeting. Any Proxy Form received after that time will not be valid for the scheduled Meeting.

APPOINTMENT OF PROXY

Proxy Forms may be lodged using the reply paid envelope or:

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman of the Meeting as your proxy, please write the name of that individual or body corporate in Step 1. A proxy need not be a shareholder of the Company.

• ONLINE

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the Proxy Form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the Proxy Form).

DEFAULT TO CHAIRMAN OF THE MEETING

Any directed proxies that are not voted on a poll at the Meeting will default to the Chairman of the Meeting, who is required to vote those proxies as as shown on the front of the Proxy Form). directed. Any undirected proxies that default to the Chairman of the Meeting will be voted according to the instructions set out in this Proxy BY MAIL  Form, including where the Resolutions are connected directly or indirectly Cann Group Limited with the remuneration of KMP. C/- Link Market Services Limited VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT Locked Bag A14 You may direct your proxy how to vote by placing a mark in one of the Sydney South NSW 1235 boxes opposite each item of business. All your shares will be voted in Australia accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or  BY FAX number of shares you wish to vote in the appropriate box or boxes. If you +61 2 9287 0309 do not mark any of the boxes on the items of business, your proxy may BY HAND vote as he or she chooses. If you mark more than one box on an item your  vote on that item will be invalid. 1A Homebush Bay Drive APPOINTMENT OF A SECOND PROXY Rhodes NSW 2138 You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an or additional Proxy Form may be obtained by telephoning the Company’s Level 12 share registry or you may copy this form and return them both together. 680 George Street To appoint a second proxy you must: Sydney NSW 2000 (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and (b) return both forms together. SIGNING INSTRUCTIONS You must sign this form as follows in the spaces provided: Individual: where the holding is in one name, the holder must sign. Joint Holding: where the holding is in more than one name, either shareholder may sign.

BY MAIL  Form, including where the Resolutions are connected directly or indirectly Cann Group Limited with the remuneration of KMP. C/- Link Market Services Limited VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT Locked Bag A14 You may direct your proxy how to vote by placing a mark in one of the Sydney South NSW 1235 boxes opposite each item of business. All your shares will be voted in Australia accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or  BY FAX number of shares you wish to vote in the appropriate box or boxes. If you +61 2 9287 0309 do not mark any of the boxes on the items of business, your proxy may BY HAND vote as he or she chooses. If you mark more than one box on an item your  vote on that item will be invalid. delivering it to Link Market Services Limited 1A Homebush Bay Drive APPOINTMENT OF A SECOND PROXY* Rhodes NSW 2138 You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an or additional Proxy Form may be obtained by telephoning the Company’s Level 12

• During business hours (Monday to Friday, 9:00am–5:00pm)

Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

CORPORATE REPRESENTATIVES

If a representative of the corporation is to attend the Meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the Company’s share registry or online at www.linkmarketservices.com.au.

IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.