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Letter from Chairman Julian Fantino

November 08 2018

There are few industries that evolve as rapidly as the cannabis industry. That has certainly been the case for Aleafia. In that vein, I am pleased to provide our shareholders with an update on some key initiatives being pursued by the company.

NASDAQ Application

On October 2nd, Aleafia applied to list its common shares on NASDAQ. Successfully listing on a major US stock exchange would broaden Aleafia’s shareholder base, increase appeal to institutional investors, and ultimately, we believe will provide lasting value to our shareholders.

With that objective in mind, Aleafia has asked for shareholder support to allow for a consolidation of Aleafia’s common and outstanding shares. This will assist in ensuring Aleafia’s meet NASDAQ’s minimum share price requirement.

In order for this to proceed, we require shareholder approval to secure the NASDAQ listing at a time that will most benefit shareholders.

There are three items I would like to make completely clear to our investors:

  1. Aleafia will only pursue a share consolidation if it is deemed necessary to meet NASDAQ requirements. This resolution simply allows the flexibility to pursue this option at an advantageous time for Aleafia’s shareholders.
  2. If a share consolidation is enacted, it will not have an effect on the percentage ownership of each individual shareholder or the company.
  3. Depending on our share price, we may not need to pursue a consolidation. 

Medical Focus

Since its inception, Aleafia’s core focus has been on providing quality healthcare to our patients. By building trust and lasting relationships, we have grown our business, and in turn, securing lasting value for our shareholders. That work is ongoing.

That commitment has led us on a journey in which Aleafia is now a truly national organization, with 22 clinics, 50,000 patients and major cannabis cultivation facilities. As Aleafia has grown, we have been afforded new opportunities to treat a larger number of patients with more advanced medical treatment methods.

With that in mind, there are two new exciting initiatives of which the Aleafia team is particularly proud.

Aleafia Labs

The field of medical cannabis science has made great strides in recent years as more medical professionals, researchers, scientists and innovators develop new ways in which this plant can provide tremendous benefit to various health problems. These innovations have yielded great benefit to patients and commercial opportunities to those who show the initiative in developing new medical products and treatment methods.

Aleafia will not sit idly by during this medical transformation. Instead, we will be at the forefront of medical cannabis research, developing proprietary products and intellectual property. That is why we have formed a new business division, Aleafia Labs.

Aleafia Labs is pleased to partner with leading institutions including universities, clinical researchers and our peers in the cannabis industry.

Due to our position in the medical cannabis space, with brick and mortar clinic locations, an active patient base and physicians who specialize in cannabis treatment, we are particularly well suited to hold a leadership position in research and development.

We are currently undertaking a medical cannabis sleep study with Cronos Group Holdings Inc. which will aim to develop products that could replace addictive sleeping pills. More recently, we also announced a joint study with AKESOgen Inc. and Guided G420 Inc. on a first of its kind cannabinoid pharmacogenetics study.

And this is just the beginning.

International Expansions

As part of our mission to provide quality medical care to the broadest possible patient base, Aleafia is proud to be entering Australia’s fledgling medical cannabis market. Aleafia will take a proposed 10 per cent equity stake in CannaPacific Inc., one of the first government licensed medical cannabis operators in Australia. The team they have in place and their shared philosophy of providing quality healthcare has made this partnership a natural fit for Aleafia.

Aleafia will provide CannaPacific with cultivation and clinic expertise and plant genetics. I expect that this targeted investment will be the first of many international partnerships as governments around the world increase patient access to medical cannabis.

These new initiatives, along with the foundation we have laid over the last year has positioned Aleafia for success. We have recently begun our third crop and now have significant cannabis sale revenue joining clinic operation revenue. The retrofitting of our Niagara greenhouse is well underway, and we have secured local approval for a 60,000 kg, industry first outdoor grow at our Port Perry cultivation facility.

Our fundamentals are strong, backed by a solid balance sheet with cash on hand and no debt.

The future for Aleafia has never looked brighter.

I thank you, our shareholders, for your continued support.

 

Sincerely,

Julian Fantino

 

Fantino, Julian Signature 

Chairman, Aleafia Health Inc.

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