Ryan Allway January 31st, 2019 THC Global Group Limited (THC Global or the Company) (ASX:THC) (OTCMKTS:HDRPF) is pleased to provide an update on the... THC Global Group Limited (ASX:THC) Corporate Update – January 2019

Ryan Allway

January 31st, 2019

THC Global Group Limited (THC Global or the Company) (ASX:THC) (OTCMKTS:HDRPF) is pleased to provide an update on the Company’s activities as it transitions into full-scale domestic operations having secured almost all licencing and permitting required for its vertically integrated, Farm to Pharma business model.

Key Points:

– THC Global to transition to full-scale domestic operations upon finalisation of licencing and permitting

– Commenced cultivation following permitting for research and product validation at THC Global’s manufacturing and cultivation site in Queensland

– Appointment of new CFO – specialist in cross border and high-growth strategies

– Acquisition of Nova Scotia cultivation site to complete imminently with appointments of experienced management team for Vertical Canna Inc

– Expansion into New Zealand in December to be followed by strategic positions in the Asian markets – product export and medical engagement

– Hydroponics equipment distribution agreements for its proprietary trademarked products into the European Union secured with commencement in Q1 2019

– Patient enquiries received for epilepsy, autism, pain (neurological and chronic)

– Strong balance sheet – unaudited net equity $28.3 million

The Company has commenced cultivation activities having received permits for the cultivation and R&D site owned by THC Global subsidiary Canndeo. A Manufacturing licence for this site is expected shortly which will allow product validation and study trial production additionally to the full-scale manufacturing that THC Pharma will undertake at its other manufacturing facility.

In addition to the expansion into New Zealand in December, where THC Global is providing imported CBD products to patients in New Zealand under exclusive distribution agreements, THC Global is also exploring strategic opportunities to the broader Asian region. The Company expects to announce further details of these negotiations and early-stage partnerships as they develop towards commercial outcomes in the coming months.

The Company’s expansion into Canada with its wholly owned subsidiary Vertical Canna Inc has also been successful – with Vertical Canna focussing on acquiring assets with short revenue generation runways such as the Nova Scotia cultivation site, which is being positioned to not only be a cultivation site but also allow for retail and wholesale cannabis supply. The site is fully scalable, with the Company to expand growing capacity as it secures off-take agreements to underpin revenue targets.

In order to support the Company’s expanded activities globally, the Company appointed Mark Fortugno as Group Chief Financial Officer. Mark’s expertise will support the Company’s cross border acquisition activities and progression into full-scale production.

The Company’s balance sheet is stronger than ever, with an unaudited net equity of $28.3 million expected to be reported in the 2018 Annual Report to be released in the coming months.

THC Global’s hydroponics equipment division, Crystal Mountain, expects to grow significantly as the Company enters the retail market to supply to micro-cultivators and other new markets. The Crystal Mountain CEO, Jason Colquhoun has secured a number of new distribution agreements which will see distribution of Crystal Mountain’s trademarked products such as Spinpro to be distributed across the European Union commencing Q1 2019.

Revenue generation from the sale of imported cannabis products under the exclusive Endoca distribution agreement for Australia and New Zealand will also be more prominent in upcoming quarters as the Company continues prescriber, pharmacy, and patient engagement programs for the products sold by THC Pharma and THC Pharma (NZ). Patient enquiries have been primarily for epilepsy, autism, neurological pain and chronic pain.

Chief Executive Officer, Ken Charteris commented:

“Q4 2018 has been a pivotal quarter for the Company focussing on developing a vertically integrated global cannabis business and marking the Company’s transition into production mode as its domestic facilities receive final licencing and permitting required.

“We are pleased to see first plants on site at our manufacturing and cultivation site, and look forward to commencing the first stage of our manufacturing activities to support the domestic market with a view to our larger facility being used to pursue export opportunities.”

THC Global Group Limited ( ASX:THC ) ( OTCMKTS:HDRPF ) (FRA:9TH) operates under a ‘Farm to Pharma’ pharmaceutical model and is currently delivering high quality medicinal cannabis products to Australian patients through existing access schemes. Having secured both a significant growing capacity over two grow sites, and an industry-leading pharmaceuticals biomanufacturing facility with attached testing and product development laboratory, THC Global is in prime position to service both domestic patients and the export market. THC Global’s commercial partners operate across four continents, supporting future international growth.

In addition to its core medicinal cannabis business, THC Global owns two Canadian companies, being Crystal Mountain Products and Vertical Canna Inc. Crystal Mountain Products operates a revenue generating global hydroponics retailer and distributor of equipment, material, and nutrients to cannabis growers and producers. Vertical Canna Inc is an investment vehicle through which THC Global intends to build, through acquisitions and strategic partnerships, a vertically integrated Canadian cannabis producer and retailer.

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Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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