CANN GROUP LIMITED — Capital/Financing Update 2017

May 2, 2017

ASX ANNOUNCEMENT

4 MAY 2017

TERMS AND CONDITIONS OF UNDERWRITER OPTIONS

The terms and conditions of the Options issued to the Underwriters are as follows:

Each Option entitles the holder ( Option Holder ) to subscribe for and be issued one (1) fully paid ordinary share ( Ordinary Share ) in Cann Group Ltd ACN 603 949 739 ( Company ) on the following terms:

1. Each Option is exercisable at any time after the date on which the Option issues, until and including their expiry date, namely 5:00pm (Melbourne, Victoria time) on 30 June 2019 ( Expiry Date ).

2. Any Options not exercised by the Expiry Date will automatically lapse on the Expiry Date.

3. An Option may be exercised by the Option Holder giving written notice ( Notice of Exercise ) to the Company at its registered office prior to the Expiry Date.

4. The exercise price for each Option (which is payable immediately on exercise) is $0.37 ( Exercise Price ).

5. Within 14 days of receipt by the Company of the Notice of Exercise and payment of the Exercise Price, the Company must:

   • (a) allot to the Option Holder one (1) Share in the Company for each Option exercised by the Option Holder;

   • (b) cause to be dispatched to the Option Holder the relevant acknowledgement of issue, a holding statement or share certificate (as applicable) as soon as is reasonably practicable detailing the issue of the relevant Ordinary Share/s; and

   • (c) issue (if applicable) a new holding statement (or Option Certificate) for the balance of the Options that remain unexercised.

6. Ordinary Shares allotted on the exercise of Options will rank equally in all respects with the then existing issued ordinary fully paid shares in the capital of the Company (except in respect to any dividends which shall have been declared but not yet distributed before the actual exercise of an Option) and will be subject to the provisions of the Constitution of the Company and the ASX Listing Rules.

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1. The Options are transferable by an Option Holder on written notice to the Company, and where the Ordinary Shares are quoted, in accordance with the ASX Listing Rules. The transferor of an Option remains the holder of that Option until the name of the transferee is recorded in the Option Register as the holder of that Option.

2. In the event of a pro rata issue (except a bonus issue) of Ordinary Shares by the Company, the Exercise Price for each Option will be adjusted in accordance with Listing Rule 6.22.2 of the ASX Listing Rules.

3. If any reorganisation (including consolidation, subdivision, reduction, return or cancellation) of the issued capital of the Company occurs before the expiry of any Options, the number of Options to which each Option Holder is entitled or the Exercise Price of the Options or both must be reorganised in accordance with the ASX Listing Rules applying to a reorganisation at the time of the reorganisation, but in all other respects the terms of exercise will remain unchanged.

4. An Option does not confer the right to participate in new issues of capital offered to holders of Ordinary Shares ( Rights Entitlement ) during the currency of the Options without exercising the Options. However, the Company will ensure that for the purpose of determining Rights Entitlements to any such issue, the Option Holder is to receive written notice from the Company of the pending closing or record date and sufficient time for the Option Holder to exercise the Options prior to that closing or record date in order to qualify for the participation in the Rights Entitlement.

• The Company will not apply for the Options to be quoted on ASX.

1. In the event of the liquidation of the Company, all unexercised Options will lapse upon the occurrence of that liquidation.

2. The Options do not provide any entitlement to dividends paid to ordinary Shareholders.

3. The Options do not entitle the Option Holder to vote at any meeting of Shareholders.

4. To the extent that any of these Option Terms and Conditions are inconsistent with or contrary to the ASX Listing Rules, the ASX Listing Rules provisions will prevail and these Option Terms and Conditions are deemed to incorporate the relevant ASX Listing Rules provisions as an amendment to these terms; and

5. These terms and conditions are governed by the law of Victoria. The parties submit to the non-exclusive jurisdiction of the courts of Victoria.

Mr Richard Baker

Company Secretary

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