MTL CANNABIS CORP. COMPLETES RTO TRANSACTION

MTL Cannabis (CNW Group/Canada House Wellness Group Inc.)

MONTRÉAL – MTL Cannabis Corp. (formerly Canada House Cannabis Group Inc.) (CSE: CHV) (“MTL Cannabis” or the “Company”), is pleased to announce, following a favorable vote by over 99% of those shares represented at its an annual general and special meeting held on July 28, 2023 (the “Shareholder Meeting”), the Company closed the second and final tranche (the “Tranche Two Closing”) of its previously announced acquisition of all of the issued and outstanding shares of Montréal Medical Cannabis Inc. (“Montréal Medical Cannabis”), a Montreal based “flower-first” licensed producer (the “Transaction”) effective as of July 28, 2023. For further information, please see the press release of the Company dated July 10, 2023 and the management information circular of the Company dated June 28, 2023 (the “MIC”).  In connection with the closing of the Transaction and following approval by the Company’s shareholders at the Shareholder Meeting, the Archerwill Amendments (as defined under the “Amendments to Investment Instruments with Archerwill Investments Inc.” section of the MIC) are also effective and the Company changed its name from Canada House Cannabis Group Inc. to MTL Cannabis Corp.

The Transaction

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The first stage of the Transaction closed on August 30, 2022, and resulted in the acquisition by the Company of approximately 24.99% of the issued and outstanding shares of Montréal Medical Cannabis in exchange for 49.99% of the issued and outstanding common shares (“Common Shares”) of the Company (the “Tranche One Consideration Shares”) (see the press release of the Company dated August 30, 2022).  In exchange for the remaining 75.01% of the issued and outstanding shares of Montréal Medical Cannabis, the Company issued 70,713,556 Common Shares to the shareholders of Montréal Medical Cannabis (the “Tranche Two Consideration Shares”) such that, the aggregate Tranche One Consideration Shares and Tranche Two Consideration Shares issued equals 80.0% of the total issued and outstanding shares of the Company on a post-issuance basis, subject to certain anti-dilution adjustments in favour of the former Montréal Medical Cannabis shareholders. Further details regarding the Transaction can be found in the MIC and the Company’s other materials filed on SEDAR+ at www.sedarplus.ca.

Following completion of the Transaction, there are 116,997,561 issued and outstanding Common Shares of the Company on a non-diluted basis.

“We are incredibly excited to complete the transaction. We want to acknowledge the incredible efforts of our collective team to get to this point, and we look forward to continuing to integrate the businesses and positioning the Company as a top performer in the Canadian cannabis industry. We want to thank all of our shareholders for their patience and continued support while we finalized the Transaction and are incredibly excited about the next steps for the Company.” – Michael Perron, CEO of MTL Cannabis.

“We look to continue building a company that our shareholders can be proud of. We will continue to be relentlessly focused on building a business based on strong fundamentals, best-in-class quality products, and a continued passion to deliver a great experience for our consumers in both the medical and recreational spaces.” – Richard Clement, CCO of Montréal Medical Cannabis and Director of MTL Cannabis.

Board Changes

Effective on the Tranche Two Closing, the terms of office of Norman Betts, Shawn Graham, and Gaetan Lussier as members of the Company’s board of directors (the “Board”) expired. The Company wishes to thank the former Board members for their time and service.

With approval by the Company’s shareholders at the Shareholder Meeting, Yves Metten and Tarek Ahmed have been named to the Board, joining current directors Erik Bertacchini, Richard Clément, and Dennis Moir.

Also, effective the Tranche Two Closing, Mr. Mike Perron was appointed Chief Executive Officer of the Company. Mr. Alex Kroon, who had been in the position of Interim Chief Executive Officer will revert the role of the Company’s President Medical.

Conditional Approval for CSE Listing

The Transaction constitutes a “fundamental change” within the meaning of the Canadian Securities Exchange (“CSE”) policies. In connection with the Transaction, the Company is required to file a CSE Form 2A Listing Statement (the “Listing Statement”) in order for trading to resume. More information about the Transaction, as well as additional disclosure about Montréal Medical Cannabis, can be obtained from the Company’s Listing Statement to be filed on SEDAR+ at www.sedarplus.ca.

The Company has obtained conditional approval to list its Common shares on the CSE, under the new name and ticker symbol “MTLC”. Subject to the Company fulfilling the CSE’s final listing requirements, it is expected that trading of the Common Shares will resume during the upcoming quarter.

Change of Auditor

In connection with the closing of the Transaction, MNP LLP, the current auditor of Montréal Medical Cannabis, will become the Company’s auditor.

Early Warning Disclosure

The Richard Clément Family Trust (the “RC Trust”), a trust controlled by Mr. Richard Clément, and The Michel Clément Family Trust (the “MC Trust”), a trust controlled by Mr. Michel Clément, are providing the following additional information pursuant to the early warning requirements of applicable Canadian securities laws:

Prior to the Tranche Two Closing, the RC Trust beneficially owned 10,535,445 Common Shares representing approximately 22.83% of the issued and outstanding Common Shares on a non-diluted and partially diluted basis. Under the Tranche Two Closing, the RC Trust acquired an aggregate of 32,703,016 Common Shares at a deemed price of $1.05 per share in exchange for the RC Trust’s remaining 35% interest in Montréal Medical Cannabis. As of Tranche Two Closing, the RC Trust beneficially owns an aggregate of 43,240,463 Common Shares, representing approximately 37.00% of the issued and outstanding Common Shares on a non-diluted and partially diluted basis.

Prior to the Tranche Two Closing, the MC Trust beneficially owned 10,535,445 Common Shares representing approximately 22.83% of the issued and outstanding Common Shares on a non-diluted and partially diluted basis. Under the Tranche Two Closing, the MC Trust acquired an aggregate of 32,703,016 Common Shares at a deemed price of $1.05 per share in exchange for the MC Trust’s remaining 35% interest in Montréal Medical Cannabis. As of Tranche Two Closing, the MC Trust beneficially owns an aggregate of 43,240,463 Common Shares, representing approximately 37.00% of the issued and outstanding Common Shares on a non-diluted and partially diluted basis.

The securities above are held by the RC Trust and the MC Trust for investment purposes. The RC Trust and the MC Trust each have a long-term view of the investment and may acquire additional securities of the Company including on the open market or through private acquisitions or sell securities of the Company including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other factors that either the RC Trust or the MC Trust, as applicable, considers relevant from time to time.

A copy of the early warning report of each of the RC Trust and the MC Trust will appear on the Company’s SEDAR+ profile at www.sedarplus.ca.

About MTL Cannabis

MTL Cannabis is the parent company of  Montréal Medical Cannabis Inc., a licensed producer headquartered in Montréal, Québec and operating from a 57,000 sq ft licensed indoor grow facility in Pointe Claire, Québec; Abba Medix Corp., a licensed producer in Pickering, Ontario that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Québec growing best-in-class indoor cannabis, in its 64,000 sq. ft. production facility; and Canada House Clinics Inc., with clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions.

As a flower-first company built for the modern street, MTL Cannabis uses proprietary hydroponic growing methodologies supported by handcrafted techniques to produce products that are truly craft for the masses. MTL Cannabis focuses on craft quality cannabis products, including lines of dried flower, pre-rolls and hash marketed under the “MTL Cannabis”, “Low Key by MTL” and “R’belle” brands for the Canadian market through nine distribution arrangements with various provincial cannabis distributors. MTL Cannabis has also developed a number of export channels for bulk and unbranded GACP quality cannabis.

It is MTL Cannabis’ goal for Abba Medix Corp. to become the leading distributor of medical cannabis in Canada and for Canada House Clinics to be the leading Canadian provider of medical cannabis clinic services. Please visit www.mtlcannabis.ca, isocanmed.com, abbamedix.com, canadahouseclinics.ca, or the Company’s public filings at www.sedarplus.ca.

Cautionary Statement Regarding Forward-Looking Information.

This press release contains forward- looking statements, including statements that relate to, among other things, the Company’s clinic, production and technology businesses, its future plans, the Company’s markets, objectives, goals, strategies, intentions, beliefs, expectations and estimates, and can generally be identified by the use of  words such as “may”, “will”, “could”, “should”, “would”, “likely”, “possible”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective” and “continue” (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Material assumptions used to develop forward-looking information in this news release include, among other things, the receipt of all necessary regulatory and approvals, including of the CSE, associated with the Transaction and the listing of the Common Shares on the CSE, the regulations related to cannabis use under the Cannabis Act (Canada); Company liquidity and capital resources, including the availability of additional capital resources to fund its activities; level of competition; the ability to adapt products and services to the changing market; the ability to attract and retain key executives; and the ability to execute strategic plans. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the Company’s most recent annual and interim Management’s Discussion and Analysis under “Risk and Uncertainties” as well as in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.

Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

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