Operations Update, Covid-19

The Board of Cannasouth Limited (NZX:CBD) provides the following update on the operations of Cannasouth and group companies ("CBD", "Group") in relation to the Coronavirus (Covid-19) global pandemic. The health, safety and wellbeing of our people, and their families is our top priority. An Action Plan for each entity and site has been implemented and aligns with advice from the New Zealand Government and Ministry of Health. Cannasouth Limited (parent company) & Cannasouth Plant Research Limited (100% subsidiary) Cannasouth has developed a modern working environment with IT systems and infrastructure that allow for agile work practices. Our people use video conferencing and online communications daily so the transition to mandatory working from home has been seamless. The Hamilton based business has suspended some research activities to comply with the current Covid-19 alert level while continuing with other product development activities and building business capability to support future product sales when the regulatory environment allows. Several of the conferences CBD had scheduled to attend in the upcoming months have either been postponed or cancelled. We continue to communicate with our stakeholders online. Cannasouth Cultivation Limited (50% owned) This operation is located in the Waikato and construction of its state-of-the-art hybrid greenhouse cultivation facility is now on hold during the Covid-19 lockdown. Our project team can use this time to make further progress with planning and system design for the new facility while working from home. Midwest Pharmaceutics NZ Limited (60% owned) This GMP manufacturing operation is located in Hastings and currently has two key focuses. One is the development of its medicinal cannabis production capability and the other is existing pharmaceutical and health & wellness product production and contract manufacturing. For the latter, Midwest will continue its operations as it falls under the Covid-19 essential service, producing health sector medicines. Production is currently running at full capacity with the team working hard to keep up with an increase in demand from its customers. The GMP and clean room protocols, along with other pandemic management measures, ensure safe working conditions for our people. Summary Health precautions were implemented early on for the safety of our teams and anyone physically interfacing with the Group. CBD currently has no debt, significant cash reserves and the ability to make adjustments to its business strategy and plans to extend cash reserves while still making progress towards its objectives and achieving key milestones. Applications are underway for the various Government Covid-19 employer support measures, as appropriate. The Board believes future demand for medicinal cannabis medicines, and the existing health and well-being products market will remain positive, and remain confident about the outlook for the Group. The board is assessing the Group's position on an ongoing basis, and will continue to keep the market informed of any changes to the operations of the business in relation to Covid-19 that may have a material impact on our current business strategy. -ENDS- For further information visit www.cannasouth.co.nz or contact: Mark Lucas CEO, Cannasouth Limited Email: mark.lucas@cannasouth.co.nz Mobile: 021 484 649 Tony Ho Chairman, Cannasouth Limited Email: tony.ho@cannasouth.co.nz Mobile: +61 417 345 839 End CA:00350813 For:CBD Type:MKTUPDTE Time:2020-03-27 10:56:16