Cronos Group Announces Strategic Investment in PharmaCann,

The investment is intended to enable the Cronos Group to benefit from the rapid growth in the US cannabis market

PharmaCann is well positioned in limited license states in the Midwest and Northeast

TORONTO and CHICAGO, June 14, 2021 (GLOBE NEWSWIRE) – Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos Group”) and PharmaCann Inc. (“PharmaCann”), one of the largest vertically integrated cannabis companies in the United States (“US”) announced today that it has entered into an agreement whereby a wholly owned subsidiary of Cronos Group may have an option (the “Option”) to acquire approximately 10.5% of the shares in PharmaC. has acquired (the “Transaction”) on a fully diluted basis. The exercise of options is based on various factors including the status of U.S. federal cannabis law as well as regulatory approvals, including in states where PharmaCann operates, which may require exercise.

PharmaCann has a broad geographic presence in the United States and has built an efficient, effective, and scalable operating model that includes six manufacturing facilities and 23 pharmacies operating under the Verilife ™ brand in six restricted states: New York, Illinois, Ohio , Maryland, Pennsylvania, and Massachusetts. PharmaCann continues to invest in its manufacturing infrastructure and brand development to capitalize on the significant opportunities in consumer retail and business-to-business wholesale.

“Our US growth strategy is focused on generating long-term shareholder value by building a world-class brand and intellectual property portfolio and positioning to bring our products to the US market through investments and opportunities with US executives who share our vision and our commitment to responsible behavior share the distribution of disruptive cannabinoid products that improve people’s lives, “said Kurt Schmidt, President and Chief Executive Officer of Cronos Group. “We were attracted to PharmaCann as an investment because of their disciplined capital allocation, strong track record, and compelling presence in licensed manufacturing and retail. Additionally, we are excited to partner with PharmaCann because of our shared commitment to improve product quality and consistency through science and world-class operations and manufacturing. “

“We are excited to announce our strategic alliance with Cronos Group,” said Brett Novey, PharmaCann’s chief executive officer. “This investment confirms our position as the leading vertically integrated US cannabis company and underscores our ability to continue to grow and improve our strong asset base. We are excited to work with Cronos Group to advance PharmaCann’s mission to improve people’s lives through cannabis. “

Transaction Terms

Under the terms of the transaction, the total consideration paid by Cronos Group for the option was approximately $ 110.4 million, which was deposited by Cronos Group with an external paying agent and distributed directly to PharmaCann shareholders. The option is subject to certain anti-dilution and other adjustments.

Upon the election of Cronos Group and upon exercise of the option, Cronos Group and PharmaCann will enter into commercial agreements that would enable either party to offer their products through both parties’ sales channels. In addition, Cronos Group and PharmaCann will, at the discretion of the Cronos Group and after exercising the option, enter into an investor rights agreement that grants the Cronos Group certain governance rights, such as: B. a seat on the board of directors or a director observer under certain conditions, and a registration rights agreement that gives Cronos Group the usual registration rights of PharmaCann common stock.

Michael Gorenstein, Executive Chairman of the Cronos Group, and Jason Adler, a Director of the Cronos Group, have an indirect interest in PharmaCann through their participation in a fund affiliated with Gotham Green Partners, a shareholder of PharmaCann. A special committee, composed entirely of independent directors from the Cronos Group, has been set up to assess and make recommendations to the Cronos Group Board of Directors regarding the transaction and other US opportunities

The transaction was approved by the PharmaCann Board of Directors and the required PharmaCann shareholders and approved by the Board of Directors of the Cronos Group (with the exception of Mr. Gorenstein and Mr. Adler) on the unanimous recommendation of the Special Committee of Independent Directors.

Cowen served as financial advisor to the Special Committee of Independent Directors for Cronos Group and Sullivan & Cromwell LLP and McGuireWoods LLP served as legal advisor to Cronos Group. Perella Weinberg Partners LP was the financial advisor to Altria Group, Inc.

Canaccord Genuity Corp. served as financial advisor and Fox Rothschild LLP served as legal advisor to PharmaCann.

About the Cronos Group
Cronos Group is an innovative global cannabinoid company with international production and distribution on five continents. Cronos Group is committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly improve the consumer experience, the Cronos Group is building an iconic brand portfolio. The Cronos Group’s portfolio includes PEACE NATURALS ™, a global wellness platform, two adult brands, COVE ™ and Spinach ™, and three CBD brands made from US hemp, Lord Jones ™, Happy Dance ™ and PEACE + ™. For more information about the Cronos Group and its brands, please visit: thecronosgroup.com.

About PharmaCann
PharmaCann is one of the largest privately held and vertically integrated cannabis companies in the country, providing safe, reliable, and high quality cannabis products for both the medical and adult markets. PharmaCann’s geographic presence includes PharmaCann pharmacies as well as cultivation and processing operations in six states. More information about PharmaCann can be found at: PharmaCann.com.

Forward-Looking Statements
This press release may contain information that may constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable Canadian and US securities laws (collectively, “forward-looking statements”). All information contained herein that is not clearly historical in nature or that necessarily depends on future or subsequent events may constitute forward-looking statements. In some instances, forward-looking statements may be made through the use of forward-looking terminology such as “may,” “will,” “expect,” “plan,” “anticipate,” “intend,” “potentially,” “estimate,” “believe” or the negative these words or other similar words, expressions, or phrases that are used to identify forward-looking statements. Some of the forward-looking statements in this press release include the intent of Cronos Group to build an iconic international brand portfolio and develop breakthrough intellectual property. Forward-looking statements are necessarily based on a number of estimates and assumptions that, although believed to be reasonable by management, inherently involve significant business, economic and competitive risks, financial results, results, performance or accomplishments expressed by these forward-looking statements or implies statements. Actual results may differ materially from current expectations due to risks associated with, among others, the following: (i) Uncertainties regarding the Cronos Group’s consideration and / or the ability to exercise the option, including status and future development of federal cannabis legalization in the US; (ii) uncertainties regarding the expected benefits to the Cronos Group from the Transaction and assumptions regarding the timing of the exercise of the option; (iii) Possibilities that the various conditions for the exercise of the option may not be met by the Cronos Group, including, but not limited to, governmental approvals required prior to the exercise of the option and the possibility that any government agency may prohibit it delay or refuse to grant government agency approval in connection with the exercise of the option; (iv) changes in US federal law relating to the cultivation, distribution, or possession of marijuana, including but not limited to the US Controlled Substances Act; (v) assuming that all conditions for exercising the option are met, possibilities that exercising the option may result in unexpected costs; (vi) opportunities that the industry in which PharmaCann and its subsidiaries operate may be exposed to future risks, including regulatory and licensing risks; (vii) Reaction of employees, customers, suppliers, business partners, regulators, markets and the public to the announcement of the Transaction and, if applicable, in connection with the exercise of the option; and (viii) other expectations and assumptions regarding the proposed transactions between the Cronos Group and PharmaCann. While the list of factors presented here is representative, it should not be viewed as a statement of all potential risks, uncertainties, or assumptions that could have a material adverse effect on the Cronos Group’s consolidated financial position or results of operations. Investors are cautioned that forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Cronos Group, which could cause actual results and developments to differ materially from those implied or projected in of, the forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, including those set out in the Cronos Group’s Annual Report on Form 10-K for the year ended December 31, 2020 and the Cronos Group’s quarterly report. Group on Form 10-Q for the period ended March 31, 2021, both of which have been submitted to SEDAR and EDGAR and can be found at www.sedar.com and www.sec.gov/edgar, respectively. All forward-looking statements contained in this press release speak as of the date of this press release and, unless required by law, Cronos Group disclaims any obligation to update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements.

For more information please contact:

Cronos group
Shayne Laidlaw
Investor Relations
Tel: (416) 504-0004
investor.relations@thecronosgroup.com

PharmaCann
Beth Coronelli
Investor Relations
Tel: 312-667-6260 ext. 322019
communication@pharmacann.com