Let’s Toke Business by Ted Ohashi CFA, MBA Since 2014 An Independent Weekly Investors’ Compendium of the Global Business of Marijuana. To have your free subscription added, removed or to contact us with feedback, industry and corporate news, letstokebusi-ness@gmail.com with your name and country.

Week Ended November 17, 2017

• Rally in cannabis stocks continues………………..…………………………..….…..…..…........…p1

• How to adjust to the cannabis stock market………………..……………..………………………..p2

• Canopy Growth et al take major stake in TerrAscend…..…….………………………………...…p6

• Canopy Growth reports 107% increase in Q2 revenue..…........................................................p6

• Aurora makes an acquisition overture toward Cannimed……………………..……………….....p7

• Cannimed proceeds with Newstrike acquisition……………………...........................................p8

• MedReleaf reports 9% drop in Q2 sales……….…………..……………………………..…..…...….p8

• Emblem closes $28.8 million financing…………………………………………………….………...p8

• Lexaria files for another U.S. patent………………………..………………..……….………….……p9

• Namaste moves in on Brazil………………………………………………………………….…………p9

• European Cannabis Report identifies key trends overseas……………………………………..p10

• New Cannabis Ventures Public Company Revenue Tracker updated………………….……..p10

• WILL Cannabis in Ontario licensed this week………………………………………………….….p11 See Ted Ohashi’s articles on Seeking Alpha New Canadian Cannabis Stocks: What to do Now November 17, 2017 If You Missed Some Of LXRP’s Gains, Don’t Miss Them All November 3, 2017

U.S. Patent...Lifts Lexaria To A Much Higher Valuation Level October 31, 2017 How to Get Rich Quick: Rise Early, Work Late, Discover (Cannabis) Oil October 18, 2017 September 18th Passed - Expect Canadian Cannabis Stocks to Rally Now October 2, 2017 Health Canada Provincial Data Generates Investment Ideas September 23, 2017 Namaste: Overweight Don't Over Wait September 20, 2017 Latest Health Canada Report is Good News for Licensed Producers September 15, 2017

Marijuana Stock Market Review & Outlook

LTB MJ INDEX: 1wk +5.3% 1 mo +9.5% 3 mo +7.6 6 mo -0.6% 1 yr -9.6%

The Let’s Toke Business (LTB) Composite Index had an-other very strong week with a gain of 5.3%. The result makes one thing clear – the market is now in an uptrend. There are several factors behind the advance primarily that the market had been in oversold territory, the government clarified its taxation plans and the provinces are actively preparing for legalization. Since the Canopy Growth/Constellation Brands transaction the market is aware of acquisition possibilities and two inter-industry acquisitions came to light. Aurora Cannabis announced its plans to acquire CanniMed Thera-

peutics (TSE: CMED) at a huge premium to market price and Canopy Growth (TSX: WEED) with JW

Asset Management effectively locked up Canadian LP TerrAscend (CSE: TER). We maintain our view that the market is headed higher. Momentum not only followed prices higher, it led prices back. Gainers outpaced losers by almost four to one. This is the first time for many months that momentum looked to take a more important role in the market. Momentum indicates investors are buying the full range of cannabis stocks available. While positive it would be our preference to see a little less enthusiasm in the market. We would rather see cannabis stocks sneaking up off their recent lows.

The LTB Licensed Producer Composite Index had a mon-strous week posting a gain of 10.5%. We use the longer term chart of the Licensed Producer (LP) stocks to show the index has reached a record high. Not surprising as Aurora’s inten-tion to acquire CanniMed pushed CMED alone up over 50%. WEED effectively locked up smaller LP TerrAscend (TER). WEED has never been one to sit on its laurels; clearly they are going to be an active consolidator in this market. We ex-pect to see more acquisitions involving other names in the group.

The LTB Low-Priced Composite Index had a positive week with a gain of 3.1%. The Low-Priced Index lagged both the Marijuana Composite and Licensed Producer Indexes. As regular readers know this is a pattern we had hoped to see. The Low-Priced Index is a mandate for the more specula-tive cannabis stocks and if this group lags the others, it is a sign of a less speculative investor psychology that is a plus. We expect this group to start to outperform starting after Christmas when tax loss selling season has passed. Conclusion We still like the short term outlook for the cannabis stock group. The strong bounce this week in the indexes and the powerful performance of momentum suggests the current recovery trend will continue. Although we would prefer to see less speculative activity in the group overall, this is difficult in an environ-ment where the Canopy’s and Aurora’s are making acquisitions. So we’ll stay the course.

Marijuana Matters As noted, the Canadian cannabis stocks have rallied sharply in recent weeks. Those who are long the sector ask if they should take profits. Those who have no exposure ask whether it’s too late. In the markets, such decisions never get easier. And we have to consider that whenever someone is buying a stock, someone else is selling it. It’s hard for everyone to be correct. That said there are a few worrisome signs for cannabis stocks out there.

The most troublesome is the unanimity of belief that the Canadian cannabis stocks are going to roar ahead

to July 1, 2018, the widely accepted legalization date in Canada. I was taught many years ago that in the

stock market, the majority is eventually wrong. The Art of Contrary Thinking by Humphrey B. Neill, is an

outstanding read for those who want to understand how the market works. After reading the book it was

simply a case of watching markets with contrary opinion in mind. I have done for many decades. At the

present time, there is a little too much consensus in favor of the cannabis group for my liking. So I’m not

panicking but I am feeling a little less comfortable.

Another recent development is the re-emergence of the single stock circuit breaker (SSCB). Similar mecha-nisms exist in stock markets around the globe. The Investment Industry Regulatory Organization of Canada (IIROC) can order a five minute trading halt for a stock it deems has been or is too volatile. The idea is a trading halt will enable investors to respond in the expectation saner heads will prevail. They often do.

The last time we had a series of SSCB trading halts in the cannabis stocks was November 16, 2016 when there were six involving Aphria, Aurora Cannabis, Canopy Growth, Mettrum Health now owned by Canopy, Organigram and Supreme Pharmaceuticals. These were SSCBs resulting from upside volatility. In 2016 the markets continued to rally for another few months but then went into a gentle swoon for most of 2017.

On November 14, 2017, after a brief rally in the cannabis stocks following the Canopy Growth - Constellation Brands transaction (Can/Con), there was an upside SSCB on Aurora. One swallow does not a summer make so this is not a red flag. Maybe a pink flag that will turn red if more SSCBs come down the road.

It isn’t easy to tell when there is too much speculation and the market is about head lower. For example, in the dot-com cycle, the market began rising in the early 1990’s and was well into a full blown hi-tech driven bull market by early December 1996 when Federal Reserve Board Chairman Alan Greenspan made his famous “irrational exuberance” comment in a televised speech to the American Enterprise Institute to describe the stock market he saw at that time. Greenspan was saying the market was too high and about to turn down. Here is the sound bite from that speech that has become enshrined in stock market history: “… how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

On October 14, 1996, the Dow Jones had closed above 6,000 for the first time. Greenspan gave this speech less than two months later on December 5, 1996 with the Dow at 6,437. A little over two months after that the Dow crossed 7,000 and five months later it cruised past 8,000. By May 6, 1998 it surpassed 9,000, it topped 10,000 for the first time on March 29, 1999 and went over 11,000 less than two months later. In other words, Alan Greenspan with access to the best and most current financial information in the world was led to the

right conclusion over two years too early. Do you know what they call a correct stock market call that is two years early? They call it wrong! The message is cannabis stocks can exhibit “irrational exuberance” for a long time. Looking ahead to December, this seems to be a perfect year for a tax loss selling cycle. As the following charts illustrate, both the Dow Jones Average and the Toronto Stock Exchange Index are at or near all-time highs. (Charts courtesy of Big Charts)

This is a strong indication that American and Canadian investors have net realized taxable capital gains this year. All other things equal, there will be capital gains taxes payable on this income in the current year. The one way to defer the income taxes payable is to offset some or all of those gains by crystallizing net taxable capital losses for settlement in the current calendar year. The Canadian marijuana stocks are a potential source of capital losses. To date, the Let’s Toke Business Marijuana Composite Index is down nearly 10% year to date. At the same time, the U.S. Marijuana Index calculated by The Marijuana Index is down almost 13% year over year. So starting in December 2017 and accelerating from the middle of the month through Christmas, the cannabis stocks, the Canadian and U.S. stocks could come under selling pressure. In the shorter term, the data I rely on has been pointing to an upturn in cannabis stock prices for a few weeks. I called for an upturn in my Let’s Toke Business newsletter in the September 30, 2017 edition and I am sticking with that expectation for the time being. The explosive events of the past few weeks following Can/Con has resulted in a tumultuous trading pattern. As we said at the time of Can/Con, we expect similar transactions to take place. This week ACBFF announced it will take a run at Cannimed Therapeutics Inc. (TSE: CMED) a Licensed Producer. I use the words “…take a run at…” advisedly because CMED said the first they heard of an offer was when ACBFF announced it publicly. At a value of $582 million, this transaction is potentially larger than the previous record set when TWMJF acquired Mettrum for $430 million. The other difference of course is TWMJF and Mettrum had agreed to terms before an announcement was made. There are other acquisition/merger rumors on the street. In addition, Canopy Growth and JW Funds tied down Canadian Licensed Producer TerrAscend by making an offer to acquire shares. (see Breaking & Corporate News below) Here are some thoughts meant to guide investors in a market dominated by this kind of uncertainty. Portfolio Rebalancing: many individuals began investing in cannabis stocks by allocating a part of their existing portfolio to this relatively new sector. A normal allocation under such circumstances might have been 10% for the more cautious and up to 25% for the more aggressive. Due to market dynamics, however, you

now find your cannabis stocks have grown to represent a greater and perhaps much greater part of your total holdings. Rebalancing means selling enough of your cannabis stocks to get the allocation back to where you started. Leveraged Portfolios: some individuals might have borrowed money to invest in the cannabis group. Lev-erage can greatly accelerate returns on an investor’s equity. It is wonderful when prices are rising. If you did this with cannabis stocks, you have probably experienced the best that leverage has to offer. But like many things in life, there are two edges to leverage sword and in a down market, it can incinerate portfolios. So if you are in a profit position in your leveraged portfolio, sell some whole or partial stock positions to reduce or eliminate debt. Stock Rebalancing: in a typical portfolio, an individual stock holding might be somewhere between 2.5% to 5% of the portfolio. Because of the changes in individual stock prices, you may now find these percentages have moved higher. A big winner that started at 5% might now be 15% or more. But even a moderate gainer in the cannabis group will be up. Rebalancing means simply selling enough of an individual stock to get back to your original percentage allocation. Non-portfolio rebalancing: some investors saw cannabis as an opportunity and began to invest some cap-ital into common stocks for the first time. Non-portfolio investors are more likely to be speculators taking higher risk positions in lower quality stocks to maximize growth. Here are some thoughts for the hyper-ag-gressive or speculator group:

1. Play with house money: if you are lucky enough to double your money at the casino, the pros will tell

you to take out your original stake and set it aside. That means you are using your profits (house money) and if you lose it all, the worst case is you will break even.

2. Take some money off the table: a variation of the first point is take some gains and set them aside. You may not have doubled up or you may not want to sell as much. But as long as you sell some, it means if the tide turns, you have limited your losses and you will have cash to take advantage of lower prices.

3. Go for broke: depending on your risk tolerance, you might decide this is your once in a lifetime op-portunity to pay your money and take your chances. If you understand your personal risk tolerances, this is fine. After all, Bill Gates didn’t become the world’s wealthiest man by diversifying his portfolio. He owned Microsoft. By the way, Gates now has a tiny interest in cannabis due to an investment MSFT made last year.

Dollar-Cost-Averaging (DCA): is a method of investing that tends to drive your average cost of a stock down. The idea is you invest a set amount of money on a regular date, say, the first trading day of each month. If you do this, sometimes you will buy when prices are higher and sometimes you will buy when prices are lower. But because you invest the same amount of money each time, when prices are higher you buy fewer shares and when prices are lower you buy more shares. This creates the lower average cost effect. You can do a similar thing when selling. You don’t have to think of selling a particular stock as a one decision event that might be better or might be worse. You can split up that one major decision into several smaller decisions and reduce your holdings over time. Don’t chase stocks up or dump them down: as regular readers know, I do not advocate bidding prices up when buying and we don’t encourage knocking prices lower when selling. Generally this goes against the grain of most people’s emotional profiles. A simple stock market axiom is buy low and sell high. But it is surprising how hard this is for the average person. It means you have to buy when prices are low or falling and sell when prices are high or rising. So if you decide to put some of my thoughts into action, keep this in mind as you proceed.

Conclusion: these are practical policies you should use wherever the cannabis stocks trend from here. They are tried and true methods designed to guide investors. They apply whether you are investing a few thousand or hundreds of thousands of dollars. Remember in the stock market, no one is right all the time. So if you try something and it doesn’t work out in the short run, don’t fret about it. If you keep trying to do the right thing, over time things will work out. What is next? If you follow one or more of the ideas above, you will accumulate some cash. But having a little cash never hurts in a volatile market. We are on the lookout for another good idea at the present time and we are sure one will turn up shortly. It may even be that one of the stocks we have been recommending that drops in price and creates an opportunity. Anyway you don’t have to catch every train leaving the station. So hang on to the cash and stay tuned. (this week’s Marijuana Matters is a summary and update of Ted Ohashi’s recent Seeking Alpha article Canadian Cannabis Stocks: What to do Now)

Breaking & Corporate News Canopy Growth (TSX: WEED) announced it has with Canopy Rivers and funds advised by JW Asset Management LLC entered into subscription agreements with TerrAscend Corp. (CSE: TER) to acquire 47,727,273 units on a non-brokered private placement basis at a price per Unit of CAD$1.10, for ag-gregate gross proceeds of CAD$52,500,000. Each unit will consist of one common share of TER and one warrant to purchase an additional Common Share at $1.10 per share for a period of 36 months from closing. JW Funds, Canopy Growth and Rivers will also acquire 5,220,000, 1,740,000 and 1,740,000 common shares, respectively at a price of CAD$1.00 per common share. JW Asset Management is a New York based pharmaceutical investors with an extensive portfolio of interna-tional pharmaceutical assets. Jason Wild, President of JW will join the Board of TER. WEED, benefits from tying down a significant interest in TER and working with JW Funds as a strategic partner. For JW, it is a major step into the cannabis field for their investor group alongside Canada’s largest cannabis company. For TER, there is the access to capital and the association with WEED and JW. Finally, all three parties benefit from the fact that TER closed at $1.99 per share last week. It seems like a win-win-win transaction. This is another example of the consolidation we are coming to expect in the cannabis industry. Canopy Growth (TSX: WEED) released its consolidated financial results for the second quarter ended September 30, 2017.

Second Quarter 2018 Highlights • Second quarter revenue was $17.6 million, a 107% increase over the second quarter ended Septem-

ber 30, 2016 and an 11% increase over first quarter fiscal 2018 revenues of $15.9 million. Revenue in the six months ended September 30, 2017 totaled $33.4 million, more than double the $15.5 million in the same period last year.

• Sold 2,020 kilograms and kilogram equivalents; a 73% increase over second quarter fiscal 2017, and a 10% increase over first quarter 2018 when 1,830 kilograms and kilogram equivalents were sold.

• The weighted average cost per gram1 before shipping and fulfillment was $1.25 per gram as compared to $1.27 per gram in the first quarter of fiscal 2018 and $1.70 per gram in the second quarter of fiscal 2017. The weighted average cost per gram to the point of harvest fell to only $0.72 per gram, the fifth consecutive quarter when the cost to the point of harvest was less than $1 per gram.

• Year-to-date, WEED has sold 3,850 kilograms and kilogram equivalents at an average price of $7.98 per gram compared to 2,153 kilograms at an average price of $7.05 per gram in the six months ended September 30, 2016.

• Adjusted EBITDA in the second quarter of fiscal 2018 amounted to a loss of $6.2 million compared to an Adjusted EBITDA loss of $1.9 million in the comparative quarter last year.

• Net loss in the second quarter of fiscal 2018 of $1.6 million, or $0.01 per basic and diluted share, compared to net earnings of $5.4 million or $0.05 per basic and diluted share in the second quarter of fiscal 2017.

• Inventory at September 30, 2017 amounted to $73.8 million and biological assets amounted to $23.5 million, together totaling $97.3 million.

• On September 21, 2017, Canopy established a binding strategic partnership in the Danish market. Spectrum Denmark ApS will be a joint venture between Canopy Growth and Danish Cannabis ApS which will serve the needs of Danish medical cannabis patients with Spectrum’s proven products.

• On September 11, 2017, the Company and its wholly-owned subsidiary Spektrum Cannabis GmbH (“Spektrum”) announced a supply license agreement with Spain’s Alcaliber, S.A. (“Alcaliber”). Per the supply license agreement, Canopy Growth and Spektrum granted Alcaliber a licence to use certain strains and seeds to be grown and cultivated at Alcaliber’s facilities for sale worldwide.

• On September 8, 2017, the Company announced construction of a new 212,000 sq. ft. greenhouse and the purchase of a neighbouring 450,000 sq. ft. greenhouse in Niagara-on-the-Lake, Ontario; which upon completion will expand the total area under glass at Tweed Farms to over 1 million sq. ft.

• $108.2 million in cash and cash equivalents at quarter end prior to the infusion of approximately $245 million from the Constellation investment that closed on November 2, 2017. Subsequent to Second Quarter 2018

• Canopy Growth entered into a strategic relationship with Fortune 500 global beverage leader Constel-lation Brands. As part of the agreement, an affiliate of Constellation has invested approximately $245 million in Canopy Growth in exchange for 9.9% equity in the Company and the parties have agreed to collaborate on new product development.

Given Canopy’s accomplishments, we are not concerned about the lack of positive EBITDA or net income. We agree with CEO Bruce Linton’s statement "With our objective to win and retain significant future market share, and backed by the recent $245 million investment from Constellation, we remain focused on the ex-pansion of our cultivation capacity, extraction platform and finished branded products programs." There is more information in the report than we can summarize here. For the full report (see here) Aurora Cannabis (TSX: ACB) announced last Tuesday it offered to acquire CanniMed Therapeutics (TSX: CMED) in an all-stock transaction with a value of $582 million. The implied value for CMED is $24 a share, 57 per cent above its previous closing price. ACB added that investors holding 38% of CMED support the offer and said CMED has until November 17, 2017 to respond before a formal bid is issued. What is unusual here is that ACB and CMED have not had “active discussions” about the transaction. When an acquisition of this nature occurs, it can imply dissatisfaction on the part of the target’s shareholders, in this case CMED shareholders since almost 40% of CMED shareholders believe this is a positive outcome. This transaction falls into the industry consolidation category as well. We see at least two key points from this and the WEED/JW/TER report. First, the big LPs are in a scramble to get bigger by acquiring smaller Licensed Producers with advanced operations. Second, the stock market valuations of the smaller LPs may be too low. Although a business can have accretive operating value as part of a larger unit, the clear implication of the Canopy and Aurora transactions last week strongly suggest the stock market valuations are also too low.

In the meantime, CanniMed (TSX: CMED) is proceeding with a plan to Acquire Up Cannabis Inc. (New-strike Resources Ltd. – TSXV: HIP). This transaction has been agreed to by both CMED and HIP Boards of Directors which recommend their shareholders accept. CMED and HIP are Licensed Producers under the Access to Cannabis for Medical Purposes Regulations (ACMPR). Under the agreement HIP shareholders will be entitled to receive 0.033 common shares of CMED for each HIP common share implying a value of approximately C$0.505 per share based on the November 14, 2017 closing price of CMED. After closing HIP will be a wholly‐owned subsidiary of CMED with CMED shareholders owning approximately 65% of the combined company and HIP shareholders 35%. After closing, HIP will appoint two persons to the Board. Although CMED management had indicated shareholders should wait to see a formal offer from Aurora, the CMED/HIP transaction can impact that decision as well. It is not known what percentage of the combined company will vote in favor of the ACB offer. It seems probable that a larger part of the new company share-holders will favor proceeding on their own as the “unhappy” 38% of CMED shareholders are now only around 25% of the combined company. MedReleaf (TSX: LEAF) announced financial and operating results for the second quarter fiscal 2018 ending September 30, 2017. Second Quarter Fiscal 2018 Financial Highlights

• Sales of $9.8 million, a decrease of 9% year-over-year. • Sales of cannabis-based extract products were $1.8 million, or 18% of total revenue compared to 14%

of total revenue for the first quarter of fiscal 2018. • Adjusted EBITDA of $0.7 million, a decrease of $4.0 million from the prior year period. • Sold 1,051 kilograms of cannabis products an increase of 23% year-over-year • Average selling price per gram of $9.34, an increase from $9.04 for the first quarter of fiscal 2018 and

a decrease from $12.61 for the prior year period due to the reduction in Veterans Affairs Canada reimbursement pricing.

• Adjusted product contribution margin per gram sold of $6.75, an increase from $6.53 for the first quar-ter of fiscal 2018 and a decrease from $9.82 for the prior year period

• Cash cost per gram sold of $1.46, down from $1.49 for the first quarter of fiscal 2018 and the prior year period representing the lowest cash cost per gram in the Company’s operating history

• Total yield produced across the Markham Facility and first harvest at the Bradford Facility for the quar-ter was approximately 2,500 kilograms, equivalent to approximately 300 grams per sq. ft. per year.

Subsequent to the quarter end

• On October 4, 2017 LEAF became the first Licensed Producer in Canada to launch a topical cream. • On October 20, 2017, received its amended licence for two additional cultivation rooms increasing

annual production capacity to an estimated 5,600 kilograms at the Bradford Facility. • On November 3, 2017 received an additional amended licence which permits the activity of sale to

clients from the Bradford Facility. The expiration of the amended licence is April 10, 2020. • On November 8, 2017 announced the January 2018 launch of ReleafDxTM, the first pharmacogenetics

based cannabis compatibility test to be available from a Canadian licensed producer. Cannabis oils continue to dominate sales growth and LEAF has not been in position to take advantage of the trend. Emblem Corp. (TSXV:EMC) announces it has closed its previously announced bought deal short form prospectus offering, including the exercise in full of the underwriters’ over-allotment option. In the offering, EMC issued 7,885,734 units and 15,000 8.0% convertible unsecured debentures due in 2020. The units were

sold at a price per Unit of $1.75 for gross proceeds of $13,800,034.50 and the Convertible Debentures were sold at a price per debenture of $1,000 for gross proceeds of $15,000,000, for total aggregate gross proceeds of $28,800,034.50. The Offering was underwritten by a syndicate of underwriters led by Eight Capital and included Canaccord Genuity Corp., Echelon Wealth Partners Inc. and GMP Securities L.P. Approximately 90% of the net proceeds are expected to be allocated toward the currently unfunded portion of the planning, design, development, construction and implementation (including the purchase of certain designated capital equipment) of the new facility which is expected to be comprised of up to approximately 120,000 square feet of greenhouse space and 50,000 square feet of infrastructure space. Although no spe-cific investments are currently contemplated, it is expected that approximately ten percent of the net proceeds will be invested in, among other things, medical marijuana related technologies, seeds, clinical trials, genetics and research and development initiatives or other infrastructure, all within the industry. Lexaria Bioscience Corp. (OTCQB: LXRP) announced filing a new patent application with the US Pa-tent and Trademark Office ("USPTO") utilizing the Lexaria DehydraTECH TM technology for delivery of phosphodiesterase type 5 (PDE5) inhibitors. Trade names of existing well-known products include ViagraTM (sildenafil) and CialisTM (tadalafil). In its application, LXRP has named several specific PDE5 in-hibitors that may be combined with a cannabinoid such as cannabidiol ("CBD"), where the cannabinoid de-livered may provide complementary vasodilatory activity beneficial together with the PDE5 inhibitor. A com-mon complaint of existing PDE5 delivery is the slow-acting nature of the substances. LXRP believes its pa-tented DehydraTECHTM technology will allow for faster acting treatments in many cases utilizing lower dosage quantities. We continue to find LXRP attractive especially given the consolidation in the stock price recently. Namaste Technologies (CSE: N) (USOTC: NXTTF) announced it has acquired the domain and cus-tomer database of Brazil’s largest vaporizer retailer, vaptvupt.lojaintegrada.com.br (“VapeBr”), in con-sideration of signing an exclusive services agreement for fulfillment for NXTTF's Brazilian operations. There was no cash consideration for the acquisition. Based on VapeBr’s 90-day sales history with monthly sales over CAD $80,000 per month and through implementation of NXTTF’s SEO and machine learning algorithms, it is expected to add over CAD $1M in additional annual revenue to the current revenue stream. Further it is expected that the acquisition of VapeBR and the establishment of a local fulfilment center, the Brazilian op-erations will be profitable immediately. NXTTF has acquired the VapeBr domain and will therefore inherit all future associated revenue, in exchange for an exclusive fulfillment services agreement. VapeBr management will receive a USD$20.00 fulfilment fee for each order fulfilled. Management has also agreed to work with the VapeBr management team to solicit top brands in order to provide local warranty and repair services for the Brazilian market. Many of the top brands do not have local facilities and NXTTF believes that working VapeBr management, it can provide added value to these brands in the quickly emerging Brazilian market. We believe this is an important transaction because, following similar transactions in Australia and Israel, it establishes NXTTF as the dominant industry consolidator. As more of these transactions are reported, NXTTF will grow faster than the cannabis industry itself. Despite its disappointing market performance, we continue to like the investment prospects for the company. We only had time for a brief chat with management but will follow up in more detail next week. The European Cannabis Report published by the UK-based Prohibition Partners concludes “Ger-many, Poland and Netherlands are the most advanced countries in Europe, with the most advanced local industries. But other markets are following quickly.” It further reports “…production and data companies are generating most interest from international investors.” In terms of size, it says, “We believe the European medical cannabis market will be valued at almost €50b once all markets have implemented legislation and

market infrastructure. This does not include revenue that will be generated from the additional secondary market and ancillary services. European International Hemp Association, Nova-Institute and HempConsult estimate that the European market for CBD as a pharmaceutical product is already worth €2b alone.” The European cannabis industry has been active since 2013 when some countries including the Czech Re-public, France, Ireland, and Italy legalized specific prescription cannabinoid medicines like Nabilone and Sa-tivex. “Early research has shown that patients not only outnumber but also outspend recreational users in legal markets. This will clearly make the European medical cannabis market a key target for pharmaceutical companies over the next 5-10 years.” European hemp cultivation grew by 32% in 2016 and is forecast to grow by another 20% in 2017. Europe will quickly be “…on par with the North American market when it comes to the hemp CBD category.” France accounts for almost half of Europe’s total hemp production. The European Union does not have a central cannabis policy and has left it up to members to determine their own law. In this respect it is similar to the U.S. which can be a problem. But overall it demonstrates why Canadian companies are interested in expanding into Germany and the rest of Europe. The Public Company Revenue Tracker service offered by New Cannabis Ventures is a very useful service. The report has been recently updated and makes several comparisons. Here is the one based on revenue:

The table shows the top eight companies and we want to highlight the name at the top and bottom of the list. The #1 company is Canopy and their position is significant because they are not only involved in practically every ma-jor event in the industry, they generate more revenue than anyone else at the same time. In #8 position is Namaste Technologies. This is a small cap company that is one of our fa-vorites. We think it is an achievement for a smaller company to make a revenue list along with much larger cap companies. (see full report here)

Applications Watch One more new license issued last week: WILL Cannabis Group of Ontario as cultivation. There are 74 Li-censed Producers approved. Eight producers were licensed in 2016 and thirty-eight so far in 2017. Over half of all Licensed Producers have been approved this year. In the past 27 weeks there have been 32 new Licensed Producer approvals. Of the 74 LPs: 31 are Cultivation & Sale, 38 are Cultivation and 5 are Sale Only. On the list of Fresh Marijuana & Oil producers, there are 30 LPs approved: 19 as Production & Sale, 7 approved for Production and 3 approved as Sale Only. In the category “Sale of Starting Materials,” 10 LPs are approved to sell starting materials: 8 approved to sell plants and 2 approved to sell seeds. There are now 23 public companies that are LPs or own an interest in one or more LPs. That increase makes 13 so far this year.

Licensed producers by province are Ontario (41 or 56%), British Columbia (17 or 23%), Alberta (4 or 5%), Saskatchewan (4 or 5%), Manitoba (2 or 3%), New Brunswick (2 or 3%), Quebec (2 or 3%), Nova Scotia (1 or 1%) and Prince Edward Island (1 or 1%). Percent totals may not add up to 100% due to rounding. Producer Prov Dried Marijuana Fresh Mari & Oil Sale Start Materials 1. 7 Acres ON Cultivation & Sale 2. Abba Medix ON Cultivation 3. ABcann Medicinals ON Cultivation & Sale 4. A.B. Laboratories ON Cultivation 5. Acreage Pharms AB Cultivation 6. Aero Farms ON Cultivation 7. Agrima Botanicals BC Cultivation Production 8. Agripharm Corp. ON Cultivation & Sale Production & Sale 9. Agro-Greens Natural Prod SK Cultivation Production 10. Aphria ON Cultivation & Sale Production & Sale 11. Aurora Cannabis AB Cultivation & Sale Production & Sale 12. Aurora 2nd site QC Cultivation 13. Bedrocan Canada ON Sale 14. Bedrocan Canada 2nd site ON Cultivation & Sale Production & Sale 15. Bloomera ON Cultivation 16. Bonify MB Cultivation 17. Breathing Green Solutions NS Cultivation 18. Broken Coast Cannabis BC Cultivation & Sale Production & Sale 19. Canada’s Island Garden PEI Cultivation & Sale 20. Canna Farms Ltd BC Cultivation & Sale Production & Sale Plants 21. CanniMed Ltd SK Sale Sale 22. CannTrust ON Cultivation & Sale Production & Sale Seeds 23. CannTrust 2nd site ON Cultivation Production 24. Canveda ON Cultivation 25. DelShen Therapeutics ON Cultivation 26. Delta 9 Bio-Tech MB Cultivation & Sale 27. Emblem Cannabis ON Cultivation & Sale Production 28. Emerald Health Botanicals BC Cultivation & Sale Production & Sale 29. Emerald Health 2nd site BC Sale Sale 30. Evergreen Medicinal BC Cultivation 31. Experion Biotechnologies BC Cultivation 32. First Access Medicinal ON Cultivation 33. FV Pharma ON Cultivation 34. Green Relief ON Cultivation & Sale 35. GrenEx Pharms AB Cultivation 36. Hydropothecary QC Cultivation & Sale Production & Sale 37. HydRx Farms ON Cultivation 38. Indiva ON Cultivation 39. In the Zone BC Cultivation & Sale 40. International Herbs BC Cultivation 41. Int’l Herbs 2nd site NB Cultivation 42. James E. Wagner Cultivation On Cultivation 43. Maricann ON Cultivation & Sale Production & Sale Plants 44. Maricann 2nd site ON Sale Sale 45. MedReleaf ON Cultivation & Sale Production & Sale

46. MedReleaf 2nd site ON Cultivation 47. Mettrum ON Cultivation & Sale Production & Sale 48. Mettrum Bennet ON Cultivation 49. Natural Med ON Cultivation 50. Natura Naturals ON Cultivation 51. Northern Lights BC Cultivation 52. Organigram NB Cultivation & Sale Production & Sale 53. Peace Naturals Project ON Cultivation & Sale Production & Sale 54. Potanicals Green Grow BC Cultivation 55. Prairie Plant Systems SK Cultivation Production 56. Quality Green ON Cultivation 57. RedeCan Pharm ON Cultivation & Sale 58. RedeCan Pharm 2nd site ON Cultivation 59. Rock Garden Medicinals ON Cultivation 60. rTrees Producers SK Cultivation 61. Solace Health ON Cultivation 62. Sundial Growers AB Cultivation 63. Tantalus Labs BC Cultivation 64. THC Biomedical BC Cultivation & Sale Production & Sale Plants 65. Green Organic Dutchman ON Cultivation & Sale 66. Tilray BC Cultivation & Sale Production & Sale 67. Tweed ON Cultivation & Sale Production & Sale Seeds 68. Tweed Farms ON Cultivation & Sale 69. United Greeneries BC Cultivation 70. UP Cannabis ON Cultivation Production 71. We Grow B.C. BC Cultivation 72. WeedMD ON Cultivation & Sale Production 73. Whistler Medical Marijuana BC Cultivation & Sale Production & Sale Plants 74. WILL Cannabis Group ON Cultivation

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