CANN GROUP LIMITED — Capital/Financing Update 2017

Dec 19, 2017

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ASX ANNOUNCEMENT

20 DECEMBER 2017

NEW NORTHERN CULTIVATION AND R&D FACILITY COMMISSIONED

- Expands Cann’s cultivation capacity

- Tissue culture transfer from AgVic

20 December 2017 – Cann Group Limited (ASX: CAN) is pleased to announce the commissioning of Cann’s Northern cultivation and R&D facility (Northern Facility) in Melbourne.

The Northern Facility features Physical Containment Level 2 (PC2) certified greenhouse cultivation areas and adjoining laboratory/research facilities. The cultivation areas are configured as a series of individual cultivation compartments, allowing the separation of different cannabis varieties during cultivation and harvest.

The Northern Facility allows Cann to expand its cultivation capacity with up to 600m² of new flowering room capacity, complementing the existing Southern Facility (160m² flowering room capacity). The company received a permit to start cultivation at its Southern Facility in May and has since completed three harvests of medicinal cannabis material.

Cann Group CEO, Peter Crock, said the Northern glasshouse facility will enable the company to investigate possible efficiencies of glasshouse versus indoor growing systems.

“The Northern Facility also incorporates laboratory spaces which are suitable for extraction and research activities that will enable us to advance our development programs.”

The official commissioning of the facility follows receipt of the relevant permit from the Office of Drug Control (ODC). Cann Group was eligible for the new permit under its cultivation licences for medicinal cannabis supply and research, which were varied by the ODC in October to include the Northern Facility.

The Company will immediately take receipt of tissue culture material for several strains of medicinal cannabis under its technical services agreement with Agriculture Victoria (AgVic), which will be scaled up in the coming months.

The Northern Facility represents a key component in the Company’s phase 2 expansion plans. Cann Group is currently completing an equity raising which will fund the Company’s phase 3 expansion program, which includes a 16,000m[2] state-of-the-art green field development incorporating glasshouse cultivation space, research and development laboratories, and a GMP manufacturing facility. An institutional placement completed on 3 December 2017 raised $58.7 million, with the Share Purchase Plan (SPP) and final components of the equity raising to bring the total funds raised in the round to as much as $78 million.

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Mr Crock said the Company is now in a very strong position to accelerate its growth plans.

“We are making excellent progress and the commissioning of the Northern Facility reinforces our leadership position in medicinal cannabis in Australia.”

For further information please contact:

Peter Crock Matthew Wright Cann Group Limited NWR Communications +61 (0) 3 9095 7088 +61 (0) 451 896 420 contact@canngrouplimited.com matt@nwrcommunications.com.au

About Cann Group

Cann Group is building a world-class business focused on breeding, cultivating and manufacturing medicinal cannabis for sale and use within Australia. The company has established research and cultivation facilities in Melbourne and is striving to provide access to medicinal cannabis for Australian patients. Cann Group has executed collaboration agreements that will enable it to establish a leading position in plant genetics, breeding, extraction, analysis and production techniques required to facilitate the supply of medicinal cannabis for a range of diseases and medical conditions. It was issued with Australia’s first medicinal cannabis research licence in February 2017, in addition to Australia’s first medicinal cannabis cultivation licence in March 2017. Aurora Cannabis Inc – Canada’s second largest listed medicinal cannabis company – is a cornerstone investor in Cann, with a 21.8% shareholding.

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