Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF) Receives Temporary License to Break Ground on Cannabis Cultivation Facility in California

• Permanent, annual state license for this facility to be applied for within the next 120 days
• Production capacity projected to reach over 100,000 kg of medical cannabis per year
• Californian facility will provide tenancy for other licensed cannabis cultivators

On April 12, 2018, Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF) announced that its subsidiaries in the United States have received the necessary temporary licenses from the State of California to proceed with the construction of the company’s cultivation facilities in Cathedral City, California (http://ibn.fm/2XzEf). Licenses are temporary while the state develops permanent regulations for its newly legalized cannabis industry. Sunniva will apply for an annual state license within the next 120 days, as per state regulations.

The company refers to its purpose-built, state-of-the-art greenhouse cultivation facility in Cathedral City as the Sunniva California Campus. The Californian licenses will allow Sunniva to grow and process top-quality medical and adult-use cannabis and cannabis products. The facility will also accommodate licensed tenant cultivators who will leverage the infrastructure and services provided by the Sunniva California Campus. This provides them access to world-class cultivation infrastructure as well as Sunniva’s management and operational expertise through the provision of turnkey services. These include Sunniva’s genetics, management and consulting services, processing and manufacturing capabilities, distribution network, brand partnerships and retail relationships.

“This is a very significant milestone for Sunniva’s operations in California,” Sunniva CEO Dr. Anthony Holler said following the announcement. “An important aspect of the licensing process has been completed and now our focus is on completing construction on time and entering into supply contracts with distribution partners, leading brands and creating Sunniva branded products for the California marketplace.”

Sunniva’s U.S. subsidiary, CP Logistics, LLC, holds licenses for eight 10,000-square foot cultivation facilities, as well as two manufacturing licenses, a 22,000-square foot cultivation license, a 22,000-square foot nursery license and another 10,000-square foot nursery license. In addition, the company will lease seven 22,000-square foot cultivation bays to selected licensed tenants.

Along with the announcement, the company also provided an update on the construction progress for the Sunniva California Campus. Rough grading, steel erection and greenhouse glass and glazing are 100 percent complete. The installation of blackout screening and fire suppression equipment is 60 percent complete. The construction of header house roof panels is 30 percent complete, while 10 percent progress has been made on the construction of utility work. The company anticipates onboarding of plant propagating materials late Q3 2018.

Highest quality at the lowest cost

With headquarters in Calgary, Alberta, Canada, Sunniva is a vertically integrated medical cannabis company currently operating in Canada and California, two of the world’s largest cannabis markets. The company will strive to become the lowest-cost, highest-quality cannabis producer in these markets with a commitment to deliver safe, high-quality products and services at scale. This will be achieved by building large-scale purpose-built greenhouses that conform to current Good Manufacturing Practices (cGMP). These facilities will offer top-notch quality assurance to deliver cannabis products free of pesticides, provide better doctor and patient access to cannabis education, and source better therapeutic delivery devices.

Sunniva operates through several wholly-owned subsidiaries:

• Sunniva Medical Inc.

This company’s ACMPR license application is in the final review stage. It is building a 700,000-square foot purpose-built and cGMP-compliant greenhouse facility in British Columbia. This is expected to produce more than 100,000 kg of premium medical cannabis per year, and over 25,000 kg of trim to be used for extraction.

Sunniva expects to break ground for the construction of this facility in early 2018. It will produce pesticide-free products and will convert trim to a range of extracted products such as cannabis oil. The oil will be used for drug formulations in delivery formats that include capsules, dissolvable strips, creams, tinctures and vaporization cartridges.

• CP Logistics, LLC

This is Sunniva’s U.S.-based subsidiary which has started construction of the Sunniva California Campus in Cathedral City, California. This facility has been cGMP designed and will be built in two phases. The first phase is designed to cover an area of 325,000 square feet to produce more than 60,000 kg of premium quality cannabis a year.

After the completion of phase 2, the facility is projected to produce over 100,000 kg of cannabis per year. It is estimated that 30 percent of all product will be used for the manufacture of higher margin extracted products, which will be produced free of the pesticides commonly used in cannabis cultivation today.

• Natural Health Services Ltd.

Natural Health Services (NHS) owns and operates a network of eight medical, ACMPR-licensed clinics in Canada which specialize in medical cannabis. The company provides patients with safe and effective medical cannabis products sources through Licensed Producers (LPs). Its clinics employ in-house physicians and nurse practitioners who specialize in the endocannabinoid system to provide patients with expert consultation, education and product recommendations.

NHS’s proprietary technology infrastructure helps LPs, physicians and patients comply with the rules of Health Canada for the supply and use of medical cannabis. The company currently has 93,000 patients and over 129,000 active medical documents outstanding.

• Full-Scale Distributors, LLC

Full-Scale Distributors (FSD) is a provider of custom, private-label vaporizers and accessories. FSD’s signature brand, Vapor Connoisseur, is recognized for its high quality and innovative vaporization devices. The company currently serves the needs of more than 80 brands that are active in the North American marketplace.

FSD’s vaporization products are tailored to specific client needs, while ensuring safety and reliability. The company will continue to provide these services and will be supplied by both of Sunniva’s production facilities in Canada and California.

Sunniva intends to offer its business partners the highest level of comprehensive white labeling services in the industry through a stringent quality assurance program to ensure pesticide-free production. Currently, the cannabis industry in North America is beset with significant problems around the use of pesticides and fungicides in cultivation that make cannabis products unsafe for consumption. It is estimated that over 90 percent of products made from cannabis flower and extracts in California are contaminated, and will most likely not pass new state testing protocols to be introduced in 2018.

The company will solve this problem by building cGMP-compliant greenhouse facilities free of pesticides and other contaminants. Its endeavor will be supported by an executive management team and board of directors that have a proven track record of creating significant shareholder value, both in the healthcare and biotech industries.

For more information, visit the company’s website at www.sunniva.com

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