SOURCE: Cannabis Wheaton Income Corp

www.cannabiswheaton.com

May 15, 2017 07:30 ET

Cannabis Wheaton Features Partner Broken Coast Cannabis

VANCOUVER, BC--(Marketwired - May 15, 2017) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Cannabis Wheaton Income Corp., (TSX VENTURE: CBW)("Cannabis Wheaton", "CW", or the "Company") is pleased to feature its partner Broken Coast Cannabis Ltd. ("Broken Coast") and discuss the CW and Broken Coast transaction in more detail.

Broken Coast is a medical cannabis producer based in British Columbia which has established itself as one of the world's leading producers of high grade cannabis products.

The clean tech production methods and systems developed at Broken Coast are delivering an industry leading ratio of yield and grade.

Current average yields are optimized at 1.33 grams per watt with an all in cost of less than $1.50 per gram. More remarkably is that the yield is comprised of 90% AAA cannabis flower and only 10% trim.

Broken Coast was recently awarded one of the few 18 month ACMPR licenses demonstrating its strong record of compliance.

Dean Kauwell, Co - Founder, Director, and COO of Broken Coast commented, "Broken Coast is very enthusiastic about our new partnership with Cannabis Wheaton.

As opposed to traditional VC's, the team at Cannabis Wheaton brings a lot more than money to the table. They are in it for the long term and add tremendous value in the areas of marketing, product innovation, distribution, legal, and regulatory compliance.

Broken Coast is also very excited about the opportunity to participate in the dynamic market place that will be created by the Cannabis Wheaton platform.

We are very confident that the funding provided by Cannabis Wheaton will enable our jointly owned entities to accelerate our expansion and achieve significant scale of high grade cannabis production in a short amount of time.

We appreciate the trust and confidence placed in us by the Cannabis Wheaton team and we look forward to a long, productive, and profitable relationship."

Chuck Rifici, Chairman and CEO of Cannabis Wheaton noted, "Broken Coast is widely regarded as one of the leading producers of medical cannabis in Canada and we are thrilled to have come to an agreement that will allow us to leverage each other's strengths and expand upon the world-class product and brand Broken Coast is best known for.

The vote of confidence from the team at Broken Coast is extremely gratifying and I believe that it sends a strong message to the industry about the powerful platform that we have put together at Cannabis Wheaton."

Under the terms of the agreement between the companies, Broken Coast will source a proposed site to compliment Broken Coast's current site in Duncan, BC (the "New Site"). The parties estimate that the New Site will accommodate a 100,000 square foot state-of-the-art cannabis cultivation facility or greater (the "Facility").

After mutually agreeing to the New Site and a construction budget and timeline to construct the Facility, the parties will form a new corporation ("Newco") which will be owned 49% by Cannabis Wheaton and 51% by Broken Coast. Broken Coast, through Newco, will submit an application for the Facility to become a federally licensed producer of cannabis. Cannabis Wheaton will pay for the New Site and fund the construction of the Facility in accordance with the agreed upon construction budget and timeline.

Broken Coast will operate the Facility in accordance with its industry best practices and the two companies will share the proceeds derived from the output from the Facility on a 49%/51% basis, 49% of which will be for the benefit of Cannabis Wheaton.

Corporate

Due to a high volume of investor enquiry, the company wishes to confirm that the 20,309,182 common shares and 20,309,182 common share purchase warrants distributed by Knightswood Financial Corp., (the previous name of Cannabis Wheaton) under a private placement which closed January 25th, 2017, have been, as disclosed February 23rd, 2017, qualified for issuance without restriction since that date.

Having been qualified by a short form prospectus filed on February 22, 2017, those special warrants were thereby converted into units consisting of common shares and warrants on February 23, 2017 and from that time have not been subject to the four month and one day statutory hold period which otherwise would have elapsed on May 26, 2017.

Streaming Partners

As previously disclosed, Cannabis Wheaton's first cohort of streaming partners includes 14 outstanding companies in six provinces across Canada. The streaming partners consist of licensed producers of cannabis (LPs) (pursuant to the Access to Cannabis for Medical Purposes Regulations (ACMPR)) and LP applicants. Collectively, our streaming agreements include future capacity of approximately 1,300,000 equivalent square feet of cannabis cultivation and production capacity net to Cannabis Wheaton by the end of 2019, according to industry recognized production averages.

Under each streaming agreement, upon the satisfaction of certain conditions precedent including having sufficient capital available for financing, performance of satisfactory due diligence and receipt by certain streaming partners of applicable regulatory approvals, Cannabis Wheaton will provide financing to the applicable streaming partner in consideration for: (i) the issuance of an equity interest in the streaming partner at an agreed-upon valuation; and (ii) an allocation of a portion of the streaming partner's cannabis production yield at either a fixed price or a cost-plus price ("Yield Component"). The Yield Component will be for a defined period of time ranging from 10 to 99 years depending on the streaming partner.

Table of Partnerships, Estimated Future Production Net to CW At Full Capacity & CW Equity Ownership

Stream Name  Province  Licensing Stage  Annual Expected Production for CW (Kg)  ­ Ownership %1

2368523 Ontario Limited (Curative Cannabis)
 
ON
 
Pre-Affirmation
 
15,000
 
46%
Artiva Inc. ON Early-Stage 17,800 16.70%

Beleave Inc.
 
ON
 
Affirmation Letter
 
15,000
 
49%2

Broken Coast Cannabis Ltd.
 BC  Sales License  15,000  10%, 49%2
Cannabco Pharmaceutical Corp.  ON  Pre-Affirmation  5,300  15.30%
Cannahort Agriculture Ltd.  NS  Pre-Affirmation  10,400  18.20%
CannTx Life Sciences Inc.  ON  Affirmation Letter  1,980  16%
Evergreen Medicinal Supply Inc.  BC  Cultivation License  6,600  6.60%
Great White North Growers Inc.  QC  Affirmation Letter  8,300  17.60%
Green Relief Inc.  ON  Sales License  115,500  24.45%
Harvest One Cannabis Inc.  BC/SK  Cultivation License  18,000  49%2
Lotus Ventures Inc.  BC  Pre-Affirmation  6,000  15.60%
PlanC BioPharm Inc.  BC  Affirmation Letter  7,000  49%
Sundial Growers Inc. AB Affirmation Letter 5,500 18.35%

1 These are estimates based on current funding commitments and assume that CW has provided the streaming partner with the aggregate contribution amount set out in each streaming agreement. Some agreements have floating valuations which can impact ownership percentages at time of funding. 2 Represents equity in a new applicant.

"Early-Stage" indicates that the streaming partner's application is currently being reviewed internally by such streaming partner to determine whether it will amend its current application for resubmission pursuant to the ACMPR, acquire an existing LP or enter into a joint venture with an existing LP whereby such existing LP will use the streaming partner's current facility and related application materials to submit an LP application pursuant to the ACMPR.

"Pre-Affirmation" indicates that the LP applicant has yet to successfully proceed past the "Review" stage of the licensing processing. Once an LP applicant completes the "Review" stage of the licensing process, Health Canada will issue an "Affirmation Letter" which requires among other things, the LP applicant to provide an affirmative response to Health Canada that all necessary security features are present, installed and operational at the proposed facility. Upon providing an affirmation response to Health Canada, a Pre-Licensing Inspection will be scheduled for the proposed facility.

Website

We invite shareholders and interested parties to visit our new corporate website at: http://www.cannabiswheaton.com and the Company's new Investor Section http://www.cannabiswheaton.com/investors/ to learn more.

ON BEHALF OF THE BOARD

"Chuck Rifici"

Chairman & CEO

About Cannabis Wheaton Income Corp. (TSX VENTURE: CBW)

Backed by a team of industry experts, Cannabis Wheaton is the first cannabis streaming company in the world. Our streams will include production from across Canada coming from our partners comprised of licensed producers of cannabis (LP) and LP applicants. Cannabis Wheaton's mandate is to facilitate real growth for our streaming partners by providing them with financial support and sharing our collective industry experience.

Stay Connected

For more information about Cannabis Wheaton and our management team, please visit http://www.cannabiswheaton.com, or follow us on Twitter @CannabisWheaton. Call: 1-604 687 7130 Email: Mario@skanderbegcapital.com http://www.skanderbegcapital.com

This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the ability to generate revenue through the streaming agreements, requirements to obtain additional financing, timeliness of government approvals for granting of permits and licences, including licences to cultivate cannabis, completion of the facilities, where applicable, actual operating performance of the facilities, regulatory or political change, competition and other risks affecting the Company in particular and the medical cannabis industry generally. Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States.

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