Hydropothecary Announces Results of Investigation and Expansion of Voluntary Product Recall of Dried Cannabis

GATINEAU, QC--(Marketwired - June 05, 2017) - The Hydropothecary Corporation (TSX VENTURE: THCX) ("THCX" or the "Company") has announced the results of its investigation into the low level presence of myclobutanil at the Company's facility. Myclobutanil is a pesticide approved for certain use in agriculture (e.g., apple trees, almonds, strawberries, vegetables, soybeans and grape vines, etc.), but not for use on cannabis. Based on the completion of the investigation, the Company is expanding the voluntary product recall announced on May 16, 2017. The expanded recall will include 19 lots of dried medical cannabis grown before September 16, 2016 that were supplied between July 15, 2015 and March 24, 2017. These products have tested positive for trace amounts of myclobutanil between 0.01 parts per million and 0.13 parts per million. The recalled lots are lots numbered 8, 17, 21, 27, 28, 29, 31, 42, 43, 97, 106, 107, 108, 110, 111, 116, 117, 121 and 125. Health Canada has deemed this a Type III recall, defined as "a situation in which the use of, or exposure to a product is not likely to cause any adverse health consequences". All affected clients are being notified.

An in-depth investigation was carried out by the Company from May 1 to May 28, 2017. The investigation involved the testing of 281 samples derived from all harvests ever completed by the Company, all production inputs, and the forensic sampling of equipment and key physical locations. The results of this investigation have been provided to Health Canada. As a result of the investigation, the Company has determined that the voluntary pesticide management systems implemented in September 2016 have proven effective and that the contamination occurred during an earlier period. The Company has expanded on its systems currently in place, and implemented industry leading preventative measures to mitigate the risk of a similar event from occurring.

New preventive measures include the following enhancements that are being made to the Company's standard operating procedures and policies :

1. Any live plants entering Hydropothecary's growing system will be quarantined and tested for pesticides before being introduced into production.
2. All pesticides and plant inputs are delivered and stored under camera surveillance.
3. All mixing and preparations of plant inputs is carried out under camera surveillance.
4. All mixing and preparation of plant inputs is witnessed by two individuals who co-sign the process.
5. All containers used for applying inputs are uniquely identified and are not to be removed from the secure growing area.
6. All plant applications are documented (including watering).
7. Only persons designated by Hydropothecary's Quality Assurance (QA) department can apply any inputs to plants.
8. A weekly inventory audit of spray containers will occur.
9. All application containers will be replaced and no new input application containers can enter the secure growing area without written approval from the QA department.
10. Monthly testing will be carried out on mother plants (by strain) to ensure on an ongoing basis that there is no presence of unapproved pesticides.

11. No mothers will be used for production cuttings unless they have been individually tested for pesticides and approved for use by the QA Department.
12. The central irrigation system will be caged to restrict access to only production staff who are designated by the QA Department to have access.

On announcing the results of the investigation Sébastien St-Louis, Co-founder and CEO stated: "Patient health and confidence are paramount at Hydropothecary. For this reason, we have carried out one of the most sophisticated, in-depth, and transparent investigations ever carried out in the Canadian cannabis industry, in order to identify the source of the low levels of myclobutanil detected in certain lots, and to remove affected lots from circulation.

"Based on the results of our investigation, it is clear that the low level presence of myclobutanil resulted from older production and appears to have been introduced to a small number of plants by a former employee without Hydropothecary's knowledge or authorization. Current evidence also suggests that the myclobutanil application occurred before our new head grower and current QA team were in place. Finally, it is clear from testing results that no dried cannabis that was produced by our current grow team shows any sign of contamination at reporting levels set by Health Canada.

"We are very sorry this occurred and we have been hard at work to ensure it never happens again. We are committed, as always, to providing our valued clients with safe, reliable and high quality medical cannabis. Moving forward, you will see continuous improvement and application of innovation to ensure our clients are offered the best medical cannabis in Canada."

About The Hydropothecary Corporation
The Hydropothecary Corporation is an authorized licensed producer and distributor of medical marijuana licensed by Health Canada under the Access to Cannabis for Medical Purposes Regulations (Canada). Hydropothecary rigorously tested medical marijuana of uncompromising quality. Hydropothecary's branding, marijuana product offering, patient service standards and product pricing are consistent with THCX's positioning as a premium brand for a legal source for medical marijuana within this new marketplace. In addition to medical marijuana production and sales, Hydropothecary explores various research and development opportunities for cannabinoid extracts, drugs and combinatory chemistry. In addition, the company is investigating the development and patenting of novel technologies related to medical marijuana, as well as the import and export of medical marijuana.

Forward-Looking Information
This press release contains forward-looking information which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the 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.