StateHouse Holdings Inc. — Proxy Solicitation & Information Statement 2020

Oct 26, 2020

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CSE: HBOR

MANAGEMENT INFORMATION CIRCULAR

SUPPLEMENT

for the

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

of

HARBORSIDE INC.

October 26, 2020

HARBORSIDE INC.

LETTER TO SHAREHOLDERS

October 26, 2020

Dear Shareholder,

In response to feedback from a group of shareholders, including the Corporation’s largest shareholder, with respect to the Corporation’s upcoming annual and special meeting of shareholders scheduled to be held on November 24, 2020 (the “ Meeting ”), the Corporation has proposed an alternate slate of nominees (the “ Nominees ”) for election as directors of Harborside at the Meeting.

The desire for board renewal is focused on maximizing shareholder value and aligning the strategic vision for Harborside, including a review of the Corporation’s management team. The Corporation, under the direction of the new board of directors, to be chaired by Matthew Hawkins, will establish a new committee chaired by Mr. Hawkins to immediately begin the process of identifying a new permanent Chief Executive Officer. The committee will conduct a comprehensive review of potential candidates and is seeking a sophisticated and experienced executive based in California. I will remain as interim Chief Executive Officer of the Corporation during this search process.

The Nominees consist of the following cannabis industry and capital markets professionals:

• Matthew K. Hawkins (member of the current board) and Chairman

• Kevin K. Albert

• Michael Dacks

• Peter Kampian (member of the current board)

• Alexander Norman

• James E. Scott

• Andrew Sturner

The board recommends that shareholders vote FOR each of the Nominees.

We encourage you to read the attached supplement to the management information circular of the Corporation for further detail on the matters raised in this letter.

Yours truly,

“Peter Bilodeau”

Peter Bilodeau

Interim Chief Executive Officer, Chairman and Director

HARBORSIDE INC.

MANAGEMENT INFORMATION CIRCULAR SUPPLEMENT

This supplement dated October 26, 2020 (the “ Supplement ”) to the management information circular of Harborside Inc. (the “ Corporation ”) dated October 15, 2020 (the “ Circular ”) is being provided in connection with the annual and special meeting (the “ Meeting ”) of holders (the “ Subordinate Shareholders ”) of subordinate voting shares (the “ Subordinate Voting Shares ”) and the holders (the “ Multiple Shareholders ” and collectively with the Subordinate Shareholders, the “ Shareholders ”) of multiple voting shares (“ Multiple Voting Shares ”, and collectively with the Subordinate Voting Shares, the “ Shares ”) in the capital of the Corporation to be held on Tuesday, November 24, 2020 at 11:00 a.m. (Toronto time). The Meeting will be held in a virtual meeting format only via live audio webcast online at http://web.lumiagm.com/225002665, password: harborside2020 (case sensitive).

On October 26, 2020, the Corporation announced that it would propose an alternative slate of nominees for election as directors of the Corporation at the Meeting. The board of directors of the Corporation (the “ Board ”) supports, in addition to the re-election of incumbent directors Matthew K. Hawkins and Peter Kampian, the election of Kevin K. Albert, Michael Dacks, Alexander Norman, James E. Scott and Andrew Sturner as directors of the Corporation. The Board recommends that Shareholders vote FOR each of its nominees for director.

This Supplement amends and supplements the Circular. In particular, the sections of the Circular entitled “Particulars of Matters to be Acted Upon – Election of Directors” (found at pages 23 to 29 of the Circular) are amended and restated in their entirety, and replaced by, the information provided in the section of this Supplement entitled “Particulars of Matters to be Acted Upon – Election of Directors”.

Except as otherwise set forth in this Supplement, the matters to be placed before the Shareholders at the Meeting remain unchanged from that which was set forth in the Circular. Capitalized terms used in this Supplement that are defined in the Circular have the respective meanings given to them in the Circular.

Record Date

The record date for the determination of Shareholders entitled to receive notice of and vote at the Meeting remains unchanged by this Supplement and has been set by the Board to be the close of business on Thursday, October 15, 2020 (the “ Record Date ”). Shareholders of record at the close of business on the Record Date are entitled to notice of the Meeting and to vote thereat or at any adjournment or postponement thereof on the basis of: (i) one vote for each Subordinate Voting Share held; and (ii) one hundred votes for each Multiple Voting Share held.

VOTING MATTERS

The following questions and answers provide guidance on how to vote your Shares of the Corporation.

What do I do with the form of proxy that was already provided?

PLEASE DISREGARD THE FORM OF PROXY OR VOTING INSTRUCTION FORM THAT WAS DELIVERED TO YOU WITH THE NOTICE OF MEETING. A NEW FORM OF PROXY OR VOTING INSTRUCTION FORM IS BEING PROVIDED TO YOU.

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What if I already submitted my vote?

If you have already provided voting instructions, you may provide new instructions which will supersede your previous instructions. If you have already provided voting instructions and you do not provide new instructions, your initial instructions will remain valid. Mr. Peter Bilodeau, Interim Chief Executive Officer, Chairman and Director of the Corporation, or failing him, Mr. John H. “Jack” Nichols, General Counsel and Corporate Secretary of the Corporation, will remain the persons designated in the new forms of proxy and voting instruction forms, and they will use their discretionary authority to cast the votes represented by proxy appointing them at the Meeting (whether pursuant to old forms or new forms) in favour of the election of the new slate of director nominees comprised of: Matthew K. Hawkins, Kevin K. Albert, Michael Dacks, Peter Kampian, Alexander Norman, James E. Scott and Andrew Sturner as directors of the Corporation.

Who can I call with questions?

If you have questions about the information contained in this Supplement or the Circular or require assistance in completing your form of proxy, please call Odyssey Trust Company, the Corporation’s transfer agent, toll-free at 1-888-290-1175.

How do I vote?

If you are eligible to vote and you are a Shareholder of record as at the close of business on the Record Date, you can vote your Shares in person at the Meeting or by proxy, as described in the Circular under the heading “Appointment and Revocation of Proxies” (found at page 4 of the Circular). If your Shares are held in the name of a depositary or a nominee such as a trustee, financial institution or securities broker, please see the guidance provided in the Circular under the heading “Advice to Beneficial Shareholders” (found at page 5 of the Circular).

PARTICULARS OF MATTERS TO BE ACTED UPON

1. Election of Directors

Management of the Corporation has nominated seven directors for election at the Meeting, namely Matthew K. Hawkins, Kevin K. Albert, Michael Dacks, Peter Kampian, Alexander Norman, James E. Scott and Andrew Sturner. Each director elected will hold office until the next annual meeting of shareholders or until his or successor is duly elected or appointed pursuant to the by-laws of the Corporation. The enclosed form of proxy permits Shareholders to vote for all nominees together or for each nominee on an individual basis.

The Board recommends that Shareholders vote FOR each of its nominees for director.

SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED IN FAVOUR OF EACH OF THE PROPOSED NOMINEES UNLESS A SHAREHOLDER HAS SPECIFIED IN HIS, HER OR ITS PROXY THAT HIS, HER OR ITS SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECT OF ANY PARTICULAR NOMINEE OR NOMINEES. MANAGEMENT DOES NOT CONTEMPLATE THAT ANY OF SUCH NOMINEES WILL BE UNABLE TO SERVE AS DIRECTORS. HOWEVER, IF FOR ANY REASON, ANY OF THE PROPOSED NOMINEES DO NOT STAND FOR ELECTION OR ARE UNABLE TO SERVE AS SUCH, PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED FOR ANOTHER NOMINEE IN THEIR DISCRETION UNLESS THE SHAREHOLDER HAS SPECIFIED IN HIS, HER OR ITS PROXY THAT HIS, HER OR ITS SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECT OF ANY PARTICULAR NOMINEE OR NOMINEES.

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Advance Notice Requirement

The Corporation’s By-Law No. 2 contains a requirement providing for advance notice of nominations of directors (the “ Advance Notice Requirement ”) in certain circumstances where nominations for election to the Board are made by Shareholders. For an annual meeting of Shareholders, notice to the Corporation must be provided not less than 30 and not more than 65 days prior to the date of the annual meeting; save and except where the annual meeting is to be held on a date less than 50 days after the date on which the first public announcement of the date of such annual meeting was made, in which event notice may be given not later than the close of business on the 10th day following such public announcement. For a special meeting of Shareholders (that is not also an annual meeting), notice to the Corporation must be given not later than the close of business on the 15th day following the day on which the first public announcement of the date of such special meeting was made. The Corporation’s By-Law No. 2 is available under the Corporation’s profile on SEDAR at www.sedar.com.

Director Nominee Profiles

The following table sets out certain information as of the date of this Supplement (unless otherwise indicated) with respect to the persons being nominated at the Meeting for election as directors. Information regarding Shares owned by each director of the Corporation is presented to the best knowledge of management of the Corporation and has been furnished to management of the Corporation by such directors.

Director Nominee	Principal Occupation and Biographical Information	Current Board/ Committee Membership	Other Public Board Memberships	Number of Securities Beneficially Owned, Controlled or Directed(1)
MATTHEW K. HAWKINS Texas, United States Director Since: May 2019	Matt Hawkins is the founder and managing principal of Cresco Capital Management, LLC, a manager of Entourage Effect Capital, formerly known as Cresco Capital Partners, a private investment firm focused specifically on investing in the legalized cannabis industry. Prior to the founding of Cresco, he was a partner and President of a private real estate investment company which acquired REO and NPL from banks and financial institutions across the country. The company completed more than 55 bank-direct acquisitions, deploying over $500 million of capital since Q4 2008. At the end of 2013, Matt and his partners sold their interest. Prior to this, Matt was a Principal/Co-founder of San Jacinto Partners, a fund focused on the bulk acquisition of single-family residential assets and the Managing General Partner of Adjacent Capital, L.P., a private equity/specialty lending fund. He was earlier affiliated with Treadstone Partners, L.L.C.,a distressed debt and equityfund.	Board Compensation Committee	None	1,332,915(2)

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Director Nominee	Principal Occupation and Biographical Information	Current Board/ Committee Membership	Other Public Board Memberships	Number of Securities Beneficially Owned, Controlled or Directed(1)
	He has an extensive background in both turnaround management and private equity. Prior to joining Treadstone and forming Adjacent Capital and San Jacinto Partners, was associated with Hull & Associates, a regional turnaround management firm. Matt is a graduate of The University of Texas at Austin.
KEVIN K. ALBERT New York, United States Director Since: N/A	Kevin is currently managing private investments he has made during the last decade, the majority of which are in the cannabis industry, and is as an independent director on the board of NorCal Cannabis Company. Previously, Kevin was a Senior Partner of Pantheon Ventures LLC and a member of its six-person Partnership Board. He was responsible for the firm’s global business development, including all capital raising and M&A for ten years. During this period, Pantheon’s assets under management increased from $25 billion to $50 billion. Prior to joining Pantheon, he was a Managing Director and co-founder of Elevation Partners, a private equity firm that made large-scale investments in market- leading consumer-tech businesses such as Facebook. Prior to Elevation, Kevin worked in the investment banking division of Merrill Lynch & Co. for 24 years where, for most of this period, he served as a Managing Director and the Global Head of the Private Placement Group managing a market leading private equity fund placement business. In this role he led the Merrill Lynch effort to launch “first-time” funds for several of the most enduring manager franchises in the private equity industry including TPG Capital, Silver Lake Partners, Cinven and Triton. From 2006 until 2017, Kevin served as an independent director on the board of Merrill Lynch Ventures, LLC, a series of private equity partnerships offered to key Merrill Lynch employees aggregating over $1.8 billion of original committed capital. Kevin has a BA and an MBA from the University of California,Los Angeles where he continues	N/A	None	547,468(3)

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Director Nominee	Principal Occupation and Biographical Information	Current Board/ Committee Membership	Other Public Board Memberships	Number of Securities Beneficially Owned, Controlled or Directed(1)
	to be involved as the Chair of the Board of Visitors of the Economics Department.
MICHAEL DACKS Ontario, Canada Director Since: N/A	Mike is Founder and President of Type 2 Ventures Ltd. a global advisory firm where he is an investor in, and advisor to, a number of ventures across the global cannabis and plant-based medicines industries. Mike serves on the advisory board of Kanabo, an Israeli cannabinoid formulation company where he advises on global strategy. Prior to founding Type 2 Ventures, Mike was SVP Global Affairs at Plena Global Holdings Inc., working with large scale cultivation assets in South America to provide raw materials and cannabis derived active pharmaceutical ingredients to global manufacturing partners. Prior to that, Mike was VP Legal & International Business Affairs at Canadian Licensed Producer MedReleaf Corp. He held this position with MedReleaf through a variety of industry pioneering milestones both operationally and in the capital markets through to its acquisition by Aurora Cannabis for C$3.2 Billion, the largest cannabis industry exit to date. Mike has been licensed to practice law in Canada and Israel where he articled in the IP and Technology Licensing department of Meitar, Israel’s leading international law firm where he worked with some of the world’s leading technology companies and is a former international law clerk to the Hon. Justice Asher Grunis at Supreme Court of Israel.	N/A	None	Nil
PETER KAMPIAN Ontario, Canada Director Since: August 2020	Mr. Kampian CPA, CA, ICD.D, has a long track record as a financial executive with a number of Canadian public companies and has over 30 years of financial management experience. Mr Kampian is currently the Chief Executive Officer of Edge Financial Consulting Services Corp where he is acting as Chief Restructuring Officer for Muskoka Grown Inc and PharmHouse Inc, both Canadian Cannabis Licensed Producers. Mr Kampian has served as Chief Financial Officer of DionyMed	Board Audit Committee Governance & Nominating Committee Special Committee	Red Pine Exploration Inc. (TSXV)	130,000(4)

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Director Nominee	Principal Occupation and Biographical Information	Current Board/ Committee Membership	Other Public Board Memberships	Number of Securities Beneficially Owned, Controlled or Directed(1)
	Brands Inc and Chief Financial Officer of Mettrum Health Corp., which was acquired by Canopy Growth Corp in early 2017. Previously Mr Kampian was Chief Financial Officer of Algonquin Income Fund (now Algonquin Power and Utilities) where he led and supported debt and equity capital raising. Mr Kampian also served on the Board of James E. Wagner Cultivation Corporation, where he was on the special committee during its restructuring process. Mr Kampian also serves on the Board of Red Pine Exploration Ltd where he is Chair of the Audit Committee. He previously served on the boards of Grenville Strategic Royalty Corp (currently Flow Capital Corp.) and CannaRoyatly Corp where he was the Chair of the Audit Committee for both companies. Mr. Kampian is a Chartered Accountant and a member of the Charter Professional Accountants of Ontario and the Institute of Corporate Directors.
ALEXANDER NORMAN Ontario, Canada Director Since: N/A	Alex is focused on building the Canadian technology ecosystem and has several active roles. Alex is the Canadian Partner of AngelList, the most successful start-up investing platform in the world with over $2 billion of assets under management. Alex launched the platform in Canada in early 2017 and is responsible for $90 million in assets under management. Alex is the founder and managing director of Tech Toronto, an organization that develops the technology and innovation economy in Canada. Alex is also the Managing Partner of N49P, a venture fund that invests in early stage Canadian technology companies. Prior to his current activities, Alex has extensive operating experience having worked for technology companies in Canada, the United States and the United Kingdom. This includes co-founding HomeSav which was acquired by Rebellion Media, and helping launch Simply Business which was acquired by The Travelers Cos. Alex also has significantprofessional	N/A	None	Nil

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Director Nominee	Principal Occupation and Biographical Information	Current Board/ Committee Membership	Other Public Board Memberships	Number of Securities Beneficially Owned, Controlled or Directed(1)
	services experience having worked for McKinsey & Company and for Lehman Brothers in their technology mergers and acquisition group. Alex has a BCom from McGill University and an MBA from The Wharton School of the University of Pennsylvania.
JAMES E. SCOTT Colorado, United States Director Since: N/A	Jim Scott is an accomplished entrepreneur and investor with a unique blend of transaction, operating and leadership experience and a passion for business. He has nearly 30 years of investing and advisory experience and has completed successful transactions for clients of all sizes – from start up to multibillion dollars. In 2018 and 2019, Jim invested in and led Receptra Naturals, one of the fastest growing hemp and CBD product companies in the US. As its President, CEO and Board Member, Jim oversaw the hypergrowth of the company experiencing a six time increase in revenue. Jim is also the Managing Partner of Littlehorn Investments, LLC, a Denver-based investment fund focused on investing in, or buying, lower market operating businesses. Jim began his career in investment banking in 1992 with Salomon Brothers Inc. in their domestic mergers and acquisitions group. He moved to London to assist in launching Warburg's global chemicals investment banking group. Once successfully launched, Jim transitioned back into mergers and acquisitions in London, with a specific focus on cross border transactions. During his tenure at Salomon Brothers and UBS Warburg, Jim advised clients on over $20 billion in transactions in multiple industries and worked with companies such as The Dow Chemical Company, Metallgesellschaft AG, Swiss Air, General Motors, Roadmaster Industries, Inc. and British Petroleum. Jim graduated Summa Cum Laude from Boston University School of Management in finance and operations management.	N/A	None	Nil

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Director Nominee	Principal Occupation and Biographical Information	Current Board/ Committee Membership	Other Public Board Memberships	Number of Securities Beneficially Owned, Controlled or Directed(1)
ANDREW STURNER Florida, United States Director Since: N/A	Andrew Sturner is the co-founder and managing principal of Entourage Effect Capital, LLC, a private investment firm focused specifically on investing in the legalized cannabis industry. Andy is also an investor in, and advisor to, Cresco Capital Management, LLC. Prior to the co- founding of Entourage Effect Capital, Andy has been a seasoned senior executive, C- suite officer, founder, serial entrepreneur, consultant, angel investor and board member with nearly 30 years of success across technology, media, internet, real estate, cannabis and nonprofits. A seasoned executive with a proven track record of creating innovative partnerships and joint ventures, he has significant experience growing and expanding companies with an emphasis on leadership development. In his executive career, Andy has founded, co- founded and held leadership positions at many successful venture backed companies including two publicly traded companies: CBS SportsLine.com (NASDAQ: SPLN) and MovieFone (NASDAQ: MOFN). Andrew earned a B.S. in Business Administration from Washington University, Saint Louis; and a Juris Doctor (J.D.) from Brooklyn Law School. While no longer a practicing attorney, he worked as a workout and restructuring attorney at Stroock & Stroock & Lavan LLP a US- based law firm providing transactional and litigation guidance to leading multinational corporations, investment banks and private equity firms in the U.S. and abroad and was admitted to the New York, Connecticut, and Washington,D.C. bar associations.	N/A	None	1,179,565(5)

Notes :

(1) Represents Subordinate Voting Shares together with Multiple Voting Shares, Options and any other convertible securities, on a fully diluted basis.

(2) Mr. Hawkins holds an aggregate of 8,915.65 Multiple Voting Shares and 288,000 Subordinate Voting Shares indirectly through CCP FLRISH, LLC, Cresco Capital Partners II, LLC and Cresco Capital Partners, LLC. Mr. Hawkins also holds 153,350 Options directly. Each Option is exercisable into one Subordinate Voting Share in accordance with its terms.

(3) Mr. Albert owns 547,468 Subordinate Voting Shares directly.

(4) Mr. Kampian holds 130,000 Options directly. Each Option is exercisable into one Subordinate Voting Share in accordance with its terms.

(5) Mr. Sturner holds an aggregate of 8,915.65 Multiple Voting Shares and 288,000 Subordinate Voting Shares indirectly through CCP FLRISH, LLC, Cresco Capital Partners II, LLC and Cresco Capital Partners, LLC.

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Corporate Cease Trade Orders

Except as disclosed herein, to the knowledge of the Corporation, no proposed director is, as at the date of this Supplement, or has been, within 10 years before the date of this Supplement, a director, chief executive officer or chief financial officer of any company (including the Corporation) that:

• (a) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under applicable securities legislation, and which in all cases was in effect for a period of more than 30 consecutive days (an “ Order ”), which Order was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer of such company; or

• (b) was subject to an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer of such company.

On June 8, 2020, the Ontario Securities Commission (the “ OSC ”) issued a cease trade order (“ CTO ”) against the Corporation in connection with the Corporation’s refiling of certain historical financial statements of FLRish for the fiscal years ended December 31, 2017 and 2018 and the interim period ended March 31, 2019, and financial statements and related management's discussion and analysis for the interim periods ended June 30, 2019 and September 30, 2019 due primarily to changes in the application of accounting treatments related to certain transactions by FLRish. On June 16, 2020, the OSC issued a management cease trade order (“ MCTO ”) against the Corporation in respect of the delayed filing of its Financial Statements and MD&A. The MCTO was subsequently revoked and, on July 15, 2020, the OSC issued a CTO against the Corporation in connection with the Corporation’s failure to file its Financial Statements and MD&A by the prescribed deadline. The CTOs were revoked on August 31, 2020. Mr. Hawkins was a director of the Corporation at the time the OSC issued the CTOs and the MCTO. In addition, Mr. Kampian was appointed to the Board on August 25, 2020 prior to the revocation of the CTOs.

The foregoing information, not being within the knowledge of the Corporation, has been furnished by the proposed directors.

Bankruptcies, Penalties or Sanctions

To the knowledge of the Corporation, no proposed director:

• (a) is, as at the date of this Supplement, or has been within 10 years before the date of this Supplement, a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;

• (b) has, within 10 years before the date of this Supplement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or become subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold his assets;

• (c) has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

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• (d) has been subject to any penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

Peter Kampian was CFO of DionyMed Brands Inc. (“ DionyMed ”) from November 2018 to March 2020. A receiver was appointed for DionyMed by the Supreme Court of British Columbia on October 29, 2019.

Peter Kampian was a director of James E Wagner Cultivation Corporation (“ JWC ”) and also a member of the special committee of the board of JWC, which is mandated to restructure the financial affairs of JWC. JWC filed for protection under the Companies’ Creditor Arrangement Act on April 1, 2020. On August 28, 2020, the sale of the JWC assets was completed and the Mr. Kampian resigned from the board of JWC.

The foregoing information, not being within the knowledge of the Corporation, has been furnished by the proposed directors.

APPROVAL OF BOARD OF DIRECTORS

The contents of this Supplement and the sending of it to each director of the Corporation, to the auditor of the Corporation, to the Shareholders and to the appropriate governmental agencies, have been approved by the directors of the Corporation.

Dated: October 26th, 2020.

“Peter Bilodeau”

Peter Bilodeau

Interim Chief Executive Officer, Chairman and Director