CannaRoyalty and Aequus Pharmaceuticals Announce Joint Venture

Friday, Jan 12, 2018

CannaRoyalty Corp. and Aequus Pharmaceuticals Inc., announced a collaboration (the "JV") to advance a suite of cannabis-based therapies targeting neurological disorders into clinical trials in Canada, in collaboration with Canadian doctors and key opinion leaders.

CannaRoyalty and Aequus have formed this collaboration to clinically advance a number of cannabis-based therapies in partnership with Canadian clinicians to create truly differentiated products supported by clinical data focused on the medical community. The collaboration will leverage CannaRoyalty's deep expertise in identifying, funding and commercializing cannabis related products in California and Aequus' expertise in clinical development and drug delivery, and commercializing differentiated therapeutics in Canada.

CannaRoyalty intends to contribute its 10% equity stake in Bodhi Research & Development Inc. ("Bodhi") into the JV in exchange for an initial ownership position in the JV, subject to conditions and approvals. CannaRoyalty made a $250,000 investment in Bodhi in 2016 in exchange for 10% equity in the company. Bodhi has completed a research trial into the use of cannabis in the treatment of concussion and post-concussive syndrome. The JV has been identifying additional capital from third-party investors that will be invested directly into the collaboration and used to advance those clinical trial programs that the Partners agree to fund.

"We see a significant opportunity for validated, research-based data regarding cannabinoid-based treatments and commend the group at Bodhi for the progress they have made to date," said Marc Lustig, CEO of CannaRoyalty. "In the near-term, the JV will provide Bodhi with the drug development and commercial expertise to progress its research toward further validation and commercialization, while freeing-up our in-house team to continue building our leading platform of value-add cannabis businesses in California. I intend to commit significant personal capital as a lead third-party investor and I expect CannaRoyalty shareholders to benefit in several ways from the JV: continued progress at Bodhi; exposure to an expanded range of cannabis-based therapies targeted at neurological disorders; the potential for CannaRoyalty to introduce proven in-house and investee products to the JV over time; and the potential to introduce JV-developed products through CannaRoyalty's growing distribution network."

Doug Janzen, CEO of Aequus added, "Aequus and CannaRoyalty have complementary business models and geographic focuses, and we are excited about the potential for this collaboration to offer patients in Canada and California differentiated and clinically validated cannabis-based therapeutics targeting a number of neurological conditions. We have been in discussions with Canadian clinicians with extensive experience in treating patients with cannabis-based therapies for their neurological and pain-based conditions. We see the opportunity to collaborate with these clinicians to identify and advance the most efficacious formulations into clinical trials to validate safety and efficacy."

Mr. Janzen continued, "In a 2017 survey we completed with 400 specialists and general practitioners in Canada and the US, the lack of clinical safety and efficacy data and dosing data were the top reasons why clinicians were reluctant to recommend cannabis to their patients. We see a clear opportunity through this JV with CannaRoyalty to meet the requests of the clinical community by providing improved forms of dosing, clinical data showing safety and efficacy, and then working closely to commercialize these validated products in Canada through our existing sales infrastructure and relationships with Licensed Producers and potentially elsewhere, where Aequus and CannaRoyalty and our various partners operate."



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