Sproutly Announces Joint Venture with Moosehead Breweries to Launch Cannabis-Infused Beverages in Canada

NOT FOR DISSEMINATION IN THE US OR THROUGH US NEWSWIRE SERVICES

VANCOUVER, British Columbia–(BUSINESS WIRE)–Sproutly Canada, Inc. (CSE: SPR) (OTCQB: SRUTF) (FSE: 38G) (“Sproutly”
or the “Company”), and OCC Holdings Ltd., an affiliate of
Moosehead Breweries Limited (“Moosehead”), are pleased to
announce that they have entered into a definitive agreement (the “Joint
Venture Agreement”) to form an exclusive joint venture (the “Joint
Venture” or the “JV”) to develop, produce, and market
non‐alcoholic cannabis-infused beverages in Canada using Sproutly’s
proprietary, naturally produced water soluble cannabinoids known as
‘Infuz₂O’. Both companies will bring their respective
strengths to the joint venture to develop a line of great tasting
cannabis beverages featuring a rapid onset and offset effect unique to
the category. Sproutly will host a conference call with Keith Dolo, CEO,
Sproutly Canada and Matthew Oland, Moosehead executive and incoming CEO
of the JV, at 9:30am Eastern Time on April 30, 2019.

Joint Venture Highlights:

• Partnership with the Oldest and Largest Independent Brewery in
  Canada
  • Over 152 years of brewing experience through six generations of
    family ownership
  • More than 140 million cans/bottles of beer sold annually
    throughout Canada, the United States and in 15 other countries
    around the world
  • Oland family’s proven ability in building, marketing and selling
    industry leading beers such as Moosehead Lager, Moosehead Radler,
    Alpine, and Hop City Barking Squirrel
• Competitive Advantage Driven by Infuz₂O
  • The JV beverages can deliver the cannabis effect as early as 5
    minutes and last up to 90 minutes, providing an edible cannabis
    experience similar to traditional flower cannabis without the need
    to inhale smoke
  • Ability to address the industry challenges of overconsumption of
    oil-based edibles and beverages
  • Capability to produce a clear cannabis beverage that is much
    easier and faster to formulate than its competitors who will be
    using emulsifiers, encapsulation or chemical modification
    techniques
  • Ability to deliver functional beverages that address a “need
    state” by producing cannabis strain specific experiences
  • Natural Infuz₂O process allows for a premium
    consumption experience and taste profile
• JV Well Positioned to Enter Cannabis Beverages Upon Legalization
  • Moosehead’s beverage experience and R&D formulation capabilities
    will ensure that the cannabis beverages produced will be premium
    in quality and have a great taste profile
  • Moosehead’s established operational infrastructure will allow the
    Joint Venture to fast track its go-to-market strategy
  • Sproutly’s cultivation facility and processing license will
    advance the formulation work that has been completed to date as
    well as production scale up
• Alignment of Interests
  • The Joint Venture is structured as a 50/50 equity ownership
  • Matthew Oland, one of Moosehead’s senior executives and Oland
    Family member, to lead the Joint Venture as Chief Executive Officer
  • Moosehead to provide infrastructure support such as R&D,
    operations, procurement, finance, and distribution
  • Sproutly to provide proprietary custom compositions using Infuz₂O
    for cannabis beverages in Canada
  • JV will have exclusive rights to utilize Infuz₂O for
    cannabis beverages for a period of 5 years with a possible 2-year
    extension
  • Ability for the JV to enter the European market once recreational
    cannabis use is legalized

“With the anticipated legalization of edibles in Canada later this year,
Moosehead has made the strategic decision to enter the cannabis beverage
market. As one of the oldest brands in Canada and a leader in the beer
category, we believe we are uniquely positioned to be a leader in the
cannabis beverage category.” said Andrew Oland, Chief Executive Officer
of Moosehead. “As a 152 year old company spanning six generations, we
are very selective about new business opportunities. After a significant
amount of due diligence on Sproutly’s APP technology and Infuz₂O
water soluble cannabinoids vs other competitive technologies, we are
excited to announce this joint venture. With their advanced technology
and our long-standing product development experience, we expect to bring
to Canadian consumers cannabis beverages that address the major issues
currently limiting appeal of this category in other markets; a beverage
that: 1) actually tastes good; and 2) provides an immediate and
controllable cannabis experience lasting up to 90 minutes.”

“Moosehead is a truly iconic brand and we are very excited to partner
with a company that possesses such deep-rooted Canadian heritage and
over 152 years of history in the beer industry. Partnering with a
company of this caliber is a strong validation of APP Technology and
Infuz₂0.” commented Keith Dolo, Chief Executive Officer and
Director of Sproutly. “This partnership with Moosehead marks an
important milestone in Sproutly’s mission of delivering a safe and
consistent whole plant experience from cannabis, with a lead position in
the beverage market. We have developed a relationship with Moosehead
built on trust and our shared vision of creating safe, responsible and
high-quality cannabis beverages and we look forward to making this a
reality for Canadian consumers”, added Dolo.

“After careful analysis of the cannabis industry and the cannabis
beverage opportunity in Canada, we believe that Moosehead and Sproutly
together are well positioned to become a significant player in the
category.” said Matthew Oland, incoming Chief Executive Officer of the
Joint Venture. “The JV’s ability to leverage Moosehead’s rich history of
building adult-beverage brands, and its established R&D and operational
infrastructure, will enable the JV to bring great tasting cannabis
beverages to Canadian consumers. The Infuz₂0 technology
delivers a natural cannabis beverage experience, with an onset and
offset time similar to traditional flower cannabis, without the need for
chemical modification. We believe this will be a game changer for the
sector.”

Terms of the Joint Venture

The Joint Venture will be structured as a standalone company with its
own board of directors and management team. Sproutly and Moosehead will
each hold a 50% interest in the JV and have the right to nominate 3
directors. Moosehead shall appoint the Chief Executive Officer and
Sproutly shall appoint the Chairperson of the board of directors of the
JV.

Sproutly will provide Infuz₂0 exclusively to the Joint
Venture in Canada for the purpose of producing cannabis beverages
(excluding hemp) for a period of 5 years (the “Exclusivity Period”),
such Exclusivity Period being subject to a potential extension based on
the Joint Venture reaching certain revenue targets.

The formation of the Joint Venture is subject to the satisfaction of
certain conditions, including the execution and delivery of various
transaction agreements, governance documents and supply agreements. The
parties expect to form the Joint Venture on or before May 31, 2019.

Financial Advisor

Novus Merchant Partners Inc. acted as the exclusive financial advisor to
Sproutly in connection with the Joint Venture.

Conference Call Information

Sproutly will host a conference call with Keith Dolo, CEO, Sproutly
Canada and Matthew Oland, Moosehead executive and incoming CEO of the
JV, at 9:30am Eastern Time on April 30th, 2019. Please dial in 5 – 10
min prior to the scheduled start time.

Calling Information:

Canada/USA TF: 1-800-319-4610

International Toll: +1-604-638-5340

Presentation:

A presentation related to the Joint Venture is available on Sproutly’s
website www.sproutly.ca
as well as at the download link below.

Download link: bit.ly/2IQg1Y5

About Infuz₂O

Infuz₂O is a naturally water-soluble cannabis solution which
fully dissolves in water and can be directly added in beverage
formulations to deliver the effects of the cannabis plant. Infuz₂O’s
features include the following:

— Rapid onset of less than 5 minutes to feel the effects of cannabis

• Fast offset/clearing of the cannabis effect within 90 minutes of
  consumption, allowing for more usage occasions
• No added chemicals like those used in emulsifiers or encapsulation
• Delivers the cannabis strain experience through a beverage, that
  currently can only be experienced through smoking
• Produced using all GRAS certified ingredients without the use of
  organic solvents of CO2, thereby preserving the full plant experience

About Moosehead Breweries Ltd.

In 1867, the Oland family – led by matriarch Susannah Oland – began
brewing and selling October Brown Ale on the family farm located on the
Dartmouth shore of the Halifax Harbour. What started as a small brewery,
grew with grit and determination throughout time as the commitment to
brewing quality beer passed on from generation to generation. Located in
Saint John, New Brunswick, Moosehead is the last major brewery in Canada
owned by Canadians. Now in its sixth generation of ownership, the Oland
family’s passion for beer has helped them steer Moosehead through
devastating fires, Prohibition, the Great Depression, two world wars,
obstructive trade barriers, and bruising competition from breweries 100
times its size. As Canada’s oldest and largest independent brewer, the
company stands committed to the same values that transformed a small
brewery in Saint John, NB into a Canadian icon of resilience. Moosehead
sells its beer throughout Canada, the United States and in 15 other
countries around the world under its 14 wholly-owned and 8 partner
brands.

About Sproutly Canada, Inc.

Sproutly’s core mission is to become the leading supplier to the
cannabis beverage and edibles market. The Company’s Toronto based
facility, licensed under the Cannabis Act, was built to cultivate
pharmaceutical grade cannabis to supply a technological breakthrough in
producing and formulating the first natural, truly water-soluble
cannabis solution. Our water-soluble ingredients and our bio-natural
oils will deliver revolutionary brands to international markets that are
clamouring for well-defined commercial products. Sproutly’s business
focus is to execute on partnerships with local and globally established
consumer brands to leverage their existing customer bases, further
expand brand loyalty, assist with marketing, and support distribution
networks to deliver this scientific breakthrough with speed and
efficiency worldwide.

For more information on Sproutly, please visit: www.sproutly.ca.

Forward-Looking Statements

Cautionary Note Regarding Forward-Looking Statements: This release
includes certain statements and information that may constitute
forward-looking information within the meaning of applicable Canadian
securities laws or forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to future events or future performance
and reflect the expectations or believes regarding future events of
management of Sproutly. Generally, forward-looking statements and
information can be identified by the use of forward-looking terminology
such as “intends” or “anticipates”, or variations of such words and
phrases or statements that certain actions, events or results “may”,
“could”, “should”, “would” or “occur”. This information and these
statements, referred to herein as “forward‐looking statements”, are not
historical facts, are made as of the date of this news release and
include without limitation, statements regarding discussions of future
plans, estimates and forecasts and statements as to management’s
expectations and intentions with respect to, among other things, timing
relating to the formation of the Joint Venture and the Company realizing
anticipated benefits and synergies from the Joint Venture. These
forward‐looking statements involve numerous risks and uncertainties and
actual results might differ materially from results suggested in any
forward-looking statements. These assumptions, risks and uncertainties
include, among other things, the Company’s inability to successfully
develop and produce its first line of beverage products, the Company’s
inability to obtain any necessary regulatory approvals, failure to
complete or realize anticipated benefits and synergies from the Joint
Venture; potential negative consumer, investor or public perception of a
party’s respective current brand or company; changes in consumer
preferences and product trends; and political, legal and regulatory
uncertainty relating to cannabis products generally. In making the
forward looking statements in this news release, the Company has applied
several material assumptions, including without limitation, that the
Company will be successful in completing the development and production
of its first line of beverage and cannabis products and the Company will
obtain all applicable regulatory approvals from global jurisdictions
including Health Canada, the Company will be able to successfully
satisfy all of the conditions in the Joint Venture Agreement. Although
management of the Company has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements or forward-looking information,
there may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such statements
will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements and forward-looking information. Readers are cautioned that
reliance on such information may not be appropriate for other purposes.
The Company does not undertake to update any forward-looking statement,
forward-looking information or financial out-look that are incorporated
by reference herein, except in accordance with applicable securities
laws. We seek safe harbor.

Contacts

Contact: Keith Dolo, Chief Executive Officer of Sproutly Canada
Email:
[email protected]
For
more information on Moosehead, please visit: www.moosehead.ca.
Contact:
Stella Mok-Sutherland, Craft Public Relations
Email: [email protected]