Hiku Brands Files Fiscal Year 2017 Results

Hiku Brands Company Ltd. (CSE:HIKU,OTCUS:DJACF) (“Hiku” or the “Company”) is pleased to announce the filing of its financial statements and management discussion and analysis for the fiscal year ending December 31, 2017. These filings are available for review on SEDAR.

“2017 was a transformational year as we worked to establish a solid foundation for Hiku leading into Canada’supcoming legalization of adult use cannabis,” said Alan Gertner, CEO of Hiku Brands. “In 2018, Hiku continues its mission to add to its portfolio of iconic brands, grow its retail footprint and enter into partnerships to advance the vision of becoming the preeminent vertically integrated cannabis brand house. With our recently announced merger with WeedMD, Hiku will immediately add 1,500 kg of indoor annual cannabis production capacity, fully funded production expansion capacity of more than 50,000 kg/yr and a well known, highly regarded medicinal brand. From our products to our in-store experiences, the combined company is poised to be a formidable force in the cannabis industry.”

Fiscal Year 2017 Highlights

June

• Received License to Cultivate – Hiku’s wholly-owned subsidiary, DOJA Cannabis Ltd. (“DOJA”), received its license to cultivate under the ACMPR (Access to Cannabis for Medical Purposes Regulations) from Health Canada;

August

• Go-public – Completed a go-public transaction on the Canadian Securities Exchange

October

• Completed First Harvest – Harvested and cured DOJA’s first batches of premium handcrafted cannabis flower in October at its Dominion facility in West Kelowna, British Columbia (with annual production capacity of 660 kg of dried flower);
• First DOJA Cafe Opened – Opened the first DOJA Cafe, a retail store in downtown Kelowna, focused on building brand awareness, cannabis education, and medical patient pre-registration. The location is non-cannabis dispensing and sells artisanal coffee, clothing and accessories;
• Secured Expansion Property – Purchased a building and land out of receivership in Kelowna, British Columbia, home to DOJA’s second site facility (the “FUTURE LAB”), which is anticipated to expand annual corporate production capacity by an additional 4,500 kg;

November

• FUTURE LAB Construction – Commenced construction on the FUTURE LAB, the facility will incorporate solar power, LED lighting, two-tier vertical farming and a state-of-the-art extraction lab;

December

• Imported Cannabis Seeds – Received an import permit from Health Canada for cannabis seeds to build DOJA’s genetics library to differentiate the brand, not only through its products and approach to the market, but also by curating a diverse and proprietary cultivar offering;
• Raised $20 Million – Strengthened the Company’s balance sheet by a total of $20 million through equity and convertible debt financings;
• DOJA & Tokyo Smoke Merger – Announced a transformational merger of DOJA and TS Brandco Holdings Ltd. (“Tokyo Smoke”), bringing together industry leading management teams, British Columbia curated handcrafted cannabis production, a portfolio of visionary brands and a growing nationwide retail footprint; and
• Aphria Strategic Investment – Announced a strategic financing of $12.5 million led by Aphria Inc. (Hiku subsequently closed the financing on January 9, 2018.)

2018 Highlights to Date

January

• Launched Hiku – The merger of DOJA and Tokyo Smoke closed and the combined company was renamed Hiku Brands Company Ltd. – becoming Canada’s first vertically integrated cannabis brand house and uniting the cannabis brands DOJA, Tokyo Smoke, and Van der Pop;

February

• Added Quebec Brand – Hiku signed a binding LOI with Maïtri Group Inc, a Quebec based cannabis brand, to acquire 100% of the issued and outstanding shares (Hiku subsequently entered into the definitive agreement on April 30);
• Awarded Manitoba Retail License – Tokyo Smoke, with participation of BOBHQ, was conditionally awarded one of four master retail licenses in Manitoba’s Request for Proposal process for the right to operate retail cannabis stores. The license gives Tokyo Smoke the ability to operate legal retail cannabis stores and an online cannabis e-commerce platform in Manitoba;
• Entered into First International Partnership in Jamaica – Hiku entered into a LOI with Kaya Inc., the first licensed medical cannabis producer and dispensary operator in Jamaica, to launch a strategic alliance to pursue medical and adult-use cannabis branding, genetics, and retail opportunities in Jamaica and Canada;

March

• Announced Cannabis Oil Partnership – Signed a strategic partnership agreement with Vitalis Extraction Technology Inc., a Kelowna based company at the forefront of CO2 extraction innovation;
• Bolstered Leadership Team – Made several key additions to the leadership team with significant expertise in retail, branding, government relations and communications;
• Redefining the Cannabis Retail Experience – Entered into an exclusive collaboration agreement with Jackman Reinvention Inc. (a strategic and creative brand consultancy with deep experience in retail execution) to create a blueprint for Hiku’s dispensary build-outs in select provinces;
• Bringing Exceptional Products to Market – Entered into a letter of intent to establish a co-marketing, retail and select distribution relationship with dosist (previously known as hmbldt), a leading wellness brand providing consistent, controlled and effective cannabis-based solutions

April

• Received Sales License – DOJA received an amendment to its sales license from Health Canada to include the sales of dried cannabis, cannabis plants and seeds; and
• Hiku & WeedMD Merger – Hiku entered into a definitive agreement to merge with WeedMD, combining a premium cannabis brand house and retail focused operator in Hiku, with the significant production capabilities and differentiated medical brand in WeedMD. The combined company will have a diversified cannabis cultivation platform with four facilities from coast-to-coast with planned expansion capacity to have the ability to produce over 56,000 kg by mid-2019.

Definitive Agreement with Maïtri

Further to the press release dated February 1, 2018, Hiku is pleased to announce it has entered into a definitive share purchase agreement (the “Share Purchase Agreement”) to acquire 100% of the issued and outstanding shares ofMaïtri Group Inc. (“Maïtri”), a Quebec-based cannabis accessory and design brand (the “Acquisition”).

Pursuant to the Share Purchase Agreement, shareholders of Maïtri will receive upfront consideration of an aggregate of $550,000 in a combination of $50,000 cash and 318,471 Hiku shares (the “Consideration Shares”), and may earn up to an additional 764,329 Hiku shares in earn out and contingent payments if certain performance milestones are met. A portion of the Consideration Shares will be held in escrow and released to the shareholders of Maïtri over twenty-four months following the closing of the Acquisition. The parties intend to proceed to close the Acquisition as soon as possible and in accordance with the Canadian Securities Exchange policies.

About Hiku Brands

Hiku is focused on building a portfolio of engaging cannabis brands, unsurpassed retail experiences and handcrafted cannabis production. With a national retail footprint led by Tokyo Smoke, craft cannabis production through DOJA’s ACMPR licensed grow, and Van der Pop’s female-focused educational platforms, Hiku houses an industry-leading portfolio that aims to set the bar for cannabis brands in Canada.

Hiku’s wholly-owned subsidiary, DOJA Cannabis Ltd., is a federally licensed to cultivate and sell cannabis pursuant to the ACMPR, owning two production facilities in the heart of British Columbia’s Okanagan Valley. Hiku’s wholly-owned subsidiary, Tokyo Smoke has been conditionally awarded one of four master retail licenses in Manitoba. Hiku also operates a network of retail stores selling coffee, clothing and curated accessories, across British Columbia, Alberta and Ontario.

Forward-looking statements

This news release contains statements that constitute “forward-looking statements”. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Hiku’s actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur.

Forward-looking statements in this document include, among others, the Company’s expectations concerning the completion of the merger with WeedMD and the planned production capacity of the combined company. By their nature, forward-looking statements are 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. Hiku is not under any 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.

The Canadian Securities Exchange has not approved nor disapproved the contents of this news release.

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