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Breaking News: Newleaf Brands Inc. Signs Definitive Agreement to Acquire 37.5% of Trellis Holdings And Comments on Initiative Petition 34 to Legalize Psilocybin Therapy in Oregon

NewLeaf Brands Inc. (OTC: NLBIF) (CSE: NLB) is pleased to announce that it has signed a definitive agreement (the “Agreement’) dated May 5, 2020 with Trellis Holdings Oregon, LLC (“Trellis”) to acquire 37.5% of the issued and outstanding share capital of Trellis Holdings Oregon Op LLC (“Trellis”) from David Joshua Bartch and Benjamin Martch (the “Vendors”) by way of a share exchange (the “Transaction”), as previously announced on February 6th, 2020.

Trellis Holdings Oregon, LLC has been successfully operated since 2015 by a group of cannabis industry veterans and cultivates thousands of pounds of high-quality cannabis per year, including strains that exceed 30% in THC content, and has 7 figure revenues that continue to grow significantly year over year. Trellis holds various licenses with the OLCC in the state of Oregon and operates in both the medical and recreational cannabis markets, maintaining an 11-acre recreational cultivation property in Southern Oregon and operating a medical and recreational cannabis dispensary in Portland, Oregon.

“We announced the LOI to acquire a position in Trellis some time back and have been working diligently to close the transaction,” commented Joshua Bartch, CEO of NewLeaf Brands. “This transaction is significant in a number of ways for the company. Not only does Trellis bring a wealth of assets, potential revenue and key personnel but the crossover between the cannabis space and the mycology space is immense.”

Mr. Bartch continued, “Through Initiative #34, Oregon is poised to be the first territory on the planet to not just decriminalize, but actually legalize, psychedelic mushrooms in some capacity. Given that Trellis operates its cultivation in Sothern Oregon on an 11-acre property that is already owned, debt-free, by NewLeaf Brands, the Company has a unique opportunity to share the land and staff for a potential future mycology cultivation space and laboratory.” He concluded, “With recent donations to the tune of $1,000,000 towards the Petition from prominent companies such as Dr. Bronner’s Soap, the likelihood of the initiative becoming a reality is beginning to look truly promising.”

According to the campaign for the initiative, “IP 34 gives those suffering from depression, anxiety, and anyone that would benefit, a new treatment option by creating a licensed and supervised psilocybin-assisted therapy system. Rigorous studies at leading medical research institutions such as Johns Hopkins, UCLA, and NYU show that psilocybin therapy is uniquely effective in treating depression, anxiety, and addiction. This promising research has prompted experts in Oregon to advance IP 34 for the November ballot — IP 34 will create a licensed psilocybin therapy program so Oregonians have the best therapeutic options available.”

The Company has entered into the Agreement to acquire 37.5% of the issued and outstanding share capital of Trellis, (the “Acquisition”). Pursuant to the Agreement, the Company will purchase 37.5% of the issued and outstanding share capital of Trellis in exchange for 28,000,000 common shares in the capital of the Company (the “Shares”) at a deemed value of $0.106 per Share representing, in the aggregate, 33.20% of the issued and outstanding Shares on a non-diluted and partially diluted basis for an aggregate gross proceeds of $2,968,000 CAD ($2,250,000 USD). The transaction does not constitute a change of control.

Additional Information Regarding the Transaction

Each of the Vendors are a “related party” to the Company as they are directors of the Company. Accordingly, the Transaction is considered a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). However, The Transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 in reliance on the exemptions set forth in sections 5.5(e) and 5.7(1)(c) of MI 61-101, as the Transaction is supported by a control person of the Company in the circumstances described in section 5.5(e) of MI 61-101. Copies of the early warning reports filed by each Vendor, in accordance with applicable securities laws, are available under the profile for the Company on SEDAR (www.sedar.com). All of the Shares issued pursuant to the Transaction are subject to a statutory hold period of four months plus one day from the date of issuance, in accordance with applicable securities legislation.

ABOUT NewLeaf Brands

NewLeaf Brands, Inc. is an innovative Cannabidiol (“CBD”) lifestyle Company. Through the Company’s wholly-owned subsidiaries We are Kured, LLC, Drink Fresh Water, LLC, ReLyfe Brand, LLC and TeaLief Brand, LLC the Company’s main business activities encompass the development, marketing, and distribution of CBD products (including vaporizer pens/cartridges, hot/cold tea, softgel capsules and beverages) throughout North America, South America, and Europe. In addition, NewLeaf Brands, Inc. has extensive retail and cultivation land investments in Oregon, USA.