CBD Returning Wage Subsidy After Successful Capital Raise

On the 1st of April 2020, Cannasouth Plant Research New Zealand Limited (CSPRL) applied for and was subsequently granted, $85,726 through the New Zealand Government's Wage Subsidy Scheme. CSPRL, which is 100% owned by Cannasouth Limited (CBD), has been generating revenues, as noted in our annual report released to the market on 30th March 2020. When CSPRL ceased operations at the Waikato Innovation Park, Hamilton during the COVID19 level 4 lockdown, it was unable to continue with its revenue-generating activities. Some research activities were also negatively impacted. Other companies within the Cannasouth Group did not apply for the subsidy. CBD (parent company) and Cannasouth Cultivation Limited (50% owned) did not meet the criteria, and Midwest Pharmaceutics NZ Limited (60% owned) revenues have increased as recently reported to the market. CSPRL met the criteria for the Government's wage subsidy and applied for, and used it appropriately. On the 15th of April 2020, the Board of CBD announced it was opening a Share Purchase Plan, which was looking to raise $3 million from eligible existing shareholders based in New Zealand and Australia. On the 21st of April 2020, the Board announced it was varying the terms of the plan with an intention to increase the offer to $5 million. On the 4th of May 2020 CBD announced it had received excess acceptances of $690,014 under the SPP, and the Board had resolved to place those excess acceptances. In addition, CBD has also raised a further $334,839 from several wholesale investors. In aggregate, CBD raised $6,024,853 from its capital raising initiatives. While CSPRL still meets the criteria for the subsidy, following the overwhelming success of the capital raising the Board has resolved to withdraw the application for wage subsidy and repay the funds to the Ministry of Social Development and is currently investigating the process for doing this. -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 Colin Foster CFO, Cannasouth Limited Email: colin.foster@cannasouth.co.nz Mobile: 027 577 1498 End CA:00352760 For:CBD Type:GENERAL Time:2020-05-07 08:30:18