Cultivation Facility Commissioning Completed

Cannasouth Limited (NZX:CBD) is pleased to announce a major milestone with its joint venture Cannasouth Cultivation Ltd. It has completed commissioning its new state-of-the-art (and unique to New Zealand), sealed Controlled Environment Agriculture (CEA) greenhouse and processing facility in the Waikato. Commissioning has involved an intensive program of testing and validations of the complex equipment and control systems, in a staged approach, to ensure that the high-tech cultivation facility operates at the level expected. The Company has today released a video with footage from the cultivation facility, presented by the CEO. The Video is available online at https://youtu.be/v26vG4EkMp4 Cultivation Facility CEO Mark Lucas says "This project has been over three years in the making and represents the next generation of cannabis cultivation facility design. By combining the precise controls of indoor growing with the energy saving benefits of sunlight in a greenhouse, we can produce premium, pharmaceutical quality, cannabis flower for local and global markets, at competitive production costs, and with a smaller environmental/carbon footprint than competing indoor growing operations. "During the construction and commissioning phases of this project, the project team faced significant challenges with Covid lockdowns, equipment shortages and shipping delays. Further delays caused by the most recent lockdowns have been minimised by the mitigation strategies developed by the team. "I would like to personally thank our JV partner, loyal contractors and our passionate employees who have all played such an important role in achieving this milestone. I am very proud of the team for their resilience and problem-solving skills as they navigated uncharted territory with such a complex build" Lucas says. Next steps for the Cannasouth Cultivation JV are: o Sealing off the facility and completing a deep clean o Transfer the mother and production plants from the research cultivation facility to this new facility for the first crop of medicinal cannabis, scheduled for late November 2021 o Complete export sales agreements which are currently under negotiation o Complete Good Agricultural and Collection Practices (GACP) and Good Manufacturing Practice (GMP) certification for the facility. The first audits are scheduled for Q1 2022 US Cultivation Partner In July 2020 Cannasouth signed a services agreement with Colorado-based Vera Cultivation to support the design and operation of this state-of-the-art facility. Vera successfully operates a similar facility in one of the most competitive cannabis flower markets in the US. The head of cultivation from Vera Cultivation is in New Zealand having recently completed his MIQ stay. Vera will provide valuable guidance and support as we transition to commercial cultivation operations in our unique facility which is largely based on the successful Vera design. Lucas says, "We are thrilled to have Vera on this project. Their experience in running this type of CEA facility is unparalleled and the technology and skills transferred has enabled us to build a world class cultivation facility and team" Patients and Revenue Mr Lucas says, "Cannasouth is committed to New Zealand patients, and we continue to progress our first three product assessments with the Medicinal Cannabis Agency. But as a business it is important that we also focus on key export revenue streams to support the growth of the company." Covid 19 The impact of Covid lockdowns on the Group are manageable at this time. Production at Midwest Pharmaceutics in the Hawkes Bay continues, and the majority of Hamilton-based administration staff are well equipped to work from home. Cannasouth has four employees located within the Auckland boundary, and the Company is doing what it can to support them and their families during their extended period of isolation. Further information will be shared with investors and patients as key milestones with the project are achieved. -ENDS- For further information visit www.cannasouth.co.nz or contact: Mark Lucas CEO / Managing Director Email: mark.lucas@cannasouth.co.nz Mobile: +64 (0)21 484 649 Colin Foster CFO, Cannasouth Limited Email: colin.foster@cannasouth.co.nz Mobile: 027 577 1498 End CA:00382397 For:CBD Type:MKTUPDTE Time:2021-11-08 10:30:00