Canada House Provides Corporate Update Ahead of MTL Cannabis Transaction

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Canada House Wellness Group (CSE: CHV) ("Canada House" or the "Company"), a fully integrated medical cannabis company, is pleased to announce the achievement of several company milestones as it works towards the completion of the previously announced reverse takeover (RTO) of the Company by Montréal Cannabis Médical Inc. ("MTL Cannabis") (the "Transaction").  The Transaction is now expected to close in calendar Q1 2022, subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals and the shareholder approval described below.

Transaction Update

Significant progress has been made regarding the Transaction, whereby MTL Cannabis will acquire Canada House's extended sales and processing licensing capabilities, provincial supply deals, profitable online medical business with a direct-to-patient model focused on military veterans, and clinic network with fourteen (14) locations nationwide. The finalization of the circular and satisfaction of condition precedents, including confirmatory due diligence, and company audits are nearing completion, alongside internal integration work of Canada House and MTL Cannabis as we approach the closing of the Transaction.

The Transaction requires the approval of at least 66 2/3% of the votes cast by the shareholders of Canada House present at a special meeting of Canada House shareholders to be called to approve the Transaction (the "Special Meeting").  The Special Meeting is currently anticipated to be held in February 2022. Canada House is pleased to announce that, at this time, it has entered into voting and support agreements in favor of the Transaction with shareholders of Canada House representing more than 61% of Canada House's total issued and outstanding shares.

Integration and Commercialization Update

Canada House's wholly owned subsidiaries, IsoCanMed Inc. ("ICM"), a Québec-based Health Canada licence holder, and Abba Medix Corp. ("Abba"), have facilitated the successful launch of MTL Cannabis dried flower SKUs through four (4) of the nine (9) Canadian provinces in which they currently have distribution relationships.  The initial launch includes MTL Cannabis's signature strain Sage n' Sour as well as an exclusive offering of Cookies n' Crème.  Initial sales of MTL Cannabis SKUs through Abba and ICM's sales licenses have been strong and reflect MTL Cannabis' history as a top 5 selling dried flower SKU in almost all of the markets it has entered.

In addition to the above, MTL Cannabis has participated and has been successful in obtaining listings in various product calls from 3 of Canada's largest recreational markets.  These accepted SKUs have launch dates on Canada House's licenses (ICM and Abba) between December 2021 and June 2022. 

Medical LP Patient Growth - Over 1400 active patients

With respect to Abba's medical platform, Canada House is pleased to announce that Abba has now more than doubled its registered patient count since January 2021, recently surpassing 800 registered veteran patients and 1,400 total medical patients.   "Abba is committed to patient care through strength of choice in its online medical cannabis marketplace, with a focus on craft-quality product offerings including two veteran-specific dried flower cultivars," commented Chris Churchill-Smith, CEO of Canada House.  "As we work through the integration of Canada House and MTL Cannabis, this will continue to be a strong focus of our Company."

Other Medical Cannabis Updates.

Abba and Canada House Clinics ("CHC") have been working together to ensure Abba has the most effective portfolio of products which has allowed Abba to become the LP with the second highest number of Veterans amongst the twenty LP's that CHC works with.   With this growth and the previously reported acquisition of Margaree Health Group, CHC has grown from under 3,100 Veterans in January 2021 to over 3,800 Veterans.  Abba and CHC will be expanding efforts in Quebec in the coming year, starting with the launch of Abba's new bilingual shopping portal in Dec 2021.

Financing Update

Canada House announces that it has issued a $700,000 principal amount secured debenture (the "Debenture") to DMMB (Pty) Holdings Ltd. in connection with a debt financing transaction. The Debenture has a two-year term and bears interest at 18% per annum. The proceeds from the issuance of the Debenture will be used for working capital purposes and for transaction costs.

The Company also announces that its board of directors has unanimously approved the extension of the expiry date of 97,342,857 (subject to adjustment) outstanding common share purchase warrants of the Company issued on March 4, 2020 (the "Warrants") from March 3, 2023, to December 31, 2026.  Aside from the extension of the expiry date, all other terms of the Warrants will remain unchanged.  The extension of the Warrants is subject to acceptance by the CSE.

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