14 September 2021

Kanabo Group Plc

("Kanabo" or "the Company")

Materia Receives Commercial Production Licence for Malta Facility

Kanabo Group Plc (LSE:KNB), a medical cannabis R&D Company that focuses on the distribution of cannabis-derived products for medical patients, and non-THC products for CBD consumers, notes the recent announcement published by Materia. Kanabo are delighted that Materia's wholly-owned subsidiary, Materia Malta Operating Ltd. ("Materia Malta"), has received its Licence for the Production of Cannabis for Medicinal and Research Purposes (the "Licence") from the Malta Medicines Authority.

The receipt of the Licence is the final requirement for Materia Malta to begin commercial production and export of medical cannabis for commercial purposes. Materia Malta, which is already EU GMP certified, has an annual throughput capacity of 6,000kg, representing a potential sale value of €36M based on a blended average sales price across several key European markets.

Materia Malta has now begun the process of importing its first batch of raw material for commercial production and will begin fulfillment of its supply commitments across Europe imminently, starting with the initial target markets of Germany, Malta and the UK. The first product has already been successfully registered on the narcotics licence of Materia Deutschland GmbH ahead of its import into and across Germany.

Kanabo CEO, Avihu Tamir said; "Materia's progress is remarkable. Subject to completion of the merger, the facility in Malta will enable Kanabo's enlarged group to broaden its distribution across Europe and solidify our plan for a complete supply and distribution line."

Deepak Anand, CEO of Materia, said; "We are delighted to be fully licensed and to begin generating revenues from our Malta facility. I'd like to congratulate our entire team for helping realise our vision of a state-of-the-art processing facility, especially in working through the difficult circumstances presented by the pandemic over the last 18 months."

"As happy as we are to secure our licence, we immediately begin execution on the next phase of our plan," commented Nick Pateras, Managing Director, Europe, at Materia. "We now have a fully built and licensed pathway into the European market for cultivation partners all over the world. This encompasses our in-house processing expertise in Malta on top of our distribution capabilities into and across Germany, Europe's biggest market, through Materia Deutschland."

Kurt Farruga, CEO of Malta Enterprise (the government's economic development agency), also commented; "We are delighted to see Materia achieve this milestone. We have been working closely with Materia since the beginning and the caliber of the team exemplifies the type of company we are proud to support here in Malta. We fully expect Materia to be one of the industry's long-term leaders."

The full announcement can be found on Materia's website (http://www.materia.global).

Further Details

In an announcement published on 26 July 2021, Kanabo announced the signing of a non-binding term sheet with Materia, to acquire Materia's European businesses (the "Proposed Transaction"), which includes Materia Malta. The closing of the Proposed Transaction remains subject to (among other items) due diligence, the entering into of a definitive agreement, the receipt of all requisite third-party approvals and the drafting and approval of a prospectus, as per the Listing Rules. The Company and Materia are currently undertaking the due diligence process and are working on reaching a definitive agreement.

The Proposed Transaction, if completed, would constitute a Reverse Take-over under the Listing Rules ("RTO"). Upon the successful completion of the RTO and publication of a prospectus, Kanabo anticipates that it would subsequently re-apply for listing on the Standard Segment of the Official List.

About Kanabo Group Plc

Kanabo Group Plc is an R&D company currently selling a range of THC-Free Retail CBD Products in the Primary Markets and is in the process of developing further Medical Cannabis Products. The company's core strategy is to increase revenues from the sale of its Retail CBD Products in the wellness sector and to grow the Kanabo brand through its marketing initiatives.

Learn more here; https://www.voxmarkets.co.uk/listings/LON/KNB/