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EX-99.1
2
ex991.htm
SHAREHOLDER RIGHTS PLAN AGREEMENT

 

  Exhibit
99.1

 

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

BETWEEN

HIGH TIDE INC.

AND

OLYMPIA TRUST COMPANY

Made as of June 26, 2026

 

  

  

 

TABLE OF CONTENTS

Article 1
INTERPRETATION

 
 1.1
 Certain Definitions
 1

 
 1.2
 Currency
 17

 
 1.3
 Number and Gender
 17

 
 1.4
 Sections
 17

 
 1.5
 Statutory References
 17

 
 1.6
 Calculation of Voting Shares Beneficially Owned
 17

 
 1.7
 Acting Jointly or in Concert
 18

 
 1.8
 Generally Accepted Accounting Principles
 18

 
 

ARTICLE 2
THE RIGHTS

 
 2.1
 Issuance of Rights; Legend on Share Certificates
 18

 
 2.2
 Initial Exercise Price; Exercise of Rights; Detachment of Rights
 19

 
 2.3
 Adjustments to Exercise Price; Number of Rights
 22

 
 2.4
 Date on Which Exercise is Effective
 27

 
 2.5
 Execution, Authentication, Delivery and Dating of Rights Certificates
 27

 
 2.6
 Registration, Transfer and Exchange
 28

 
 2.7
 Mutilated, Lost, Stolen and Destroyed Rights Certificates
 29

 
 2.8
 Persons Deemed Owners
 29

 
 2.9
 Delivery and Cancellation of Certificates
 29

 
 2.10
 Agreement of Rights Holders
 30

 
 2.11
 Exclusion of Warranty by Rights Agent
 30

 
 

ARTICLE 3
ADJUSTMENTS TO THE RIGHTS

 
 3.1
 Flip-in Event
 31

 
 3.2
 Fiduciary Duties of the Board of Directors
 32

 
 

ARTICLE 4
THE RIGHTS AGENT

 
 4.1
 General
 32

 
 4.2
 Merger, Amalgamation, Consolidation or Change of Name of Rights Agent
 33

 
 4.3
 Duties of Rights Agent
 34

 
 4.4
 Liability
 35

 
 4.5
 Change of Rights Agent
 36

 
 4.6
 Compliance with Anti-Money Laundering Legislation
 36

 
 4.7
 Privacy Legislation
 36

 
 

ARTICLE 5
MISCELLANEOUS

 
 5.1
 Redemption, Waiver, Extension and Termination
 37

 
 5.2
 Expiration
 39

 
 5.3
 Issuance of New Rights Certificates
 39

 
 5.4
 Supplements and Amendments
 39

 

  

 -2- 

 

 

 
 5.5
 Fractional Rights and Fractional Shares
 41

 
 5.6
 Rights of Action
 41

 
 5.7
 Holder of Rights Not Deemed a Shareholder
 41

 
 5.8
 Notice of Proposed Actions
 42

 
 5.9
 Notices
 42

 
 5.10
 Costs of Enforcement
 43

 
 5.11
 Regulatory Approvals
 43

 
 5.12
 Declaration as to Non-Canadian and Non-United States Holders
 43

 
 5.13
 Successors
 43

 
 5.14
 Benefits of this Agreement
 43

 
 5.15
 Shareholder Reconfirmation
 43

 
 5.16
 Determinations and Actions by the Board of Directors
 44

 
 5.17
 Governing Law
 44

 
 5.18
 Language
 44

 
 5.19
 Severability
 44

 
 5.20
 Effective Date
 45

 
 5.21
 Force Majeure
 45

 
 5.22
 Time of the Essence
 45

 
 5.23
 Counterparts
 45

 

  

  

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS AGREEMENT is
made as of the 26th day of June, 2026 between:

HIGH TIDE INC., a corporation
subsisting under the laws of the Province of Alberta (the “Corporation”)

and

OLYMPIA TRUST COMPANY, a trust
company authorized to carry on the business of a trust company in each of the Provinces and Territories of Canada, as rights agent (the
“Rights Agent”).

WHEREAS the board
of directors of the Corporation has determined that it is in the best interests of the Corporation to adopt a shareholder rights plan
to continue to ensure, to the extent possible, that all shareholders of the Corporation are treated fairly in connection with any take-over
bid for the Corporation and ensure the Corporation is able to maintain their Cannabis Licenses (as defined herein) and maintain compliance
with Cannabis Laws;

AND WHEREAS the shareholder
rights plan will not replace the Corporation's existing shareholder rights plan between the Corporation and Olympia Trust Company dated
April 10, 2025, which was ratified, confirmed, and approved by shareholders on May 29, 2025, and which will remain in effect;

AND WHEREAS each
Right (as defined herein) issued pursuant to this Agreement entitles the holder thereof, from and after the Separation Time (as defined
herein), to purchase securities of the Corporation pursuant to the terms and subject to the conditions set forth herein;

AND WHEREAS the Corporation
desires to appoint the Rights Agent to act on behalf of the Corporation and the holders of Rights, and the Rights Agent is willing to
so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates (as defined herein), the exercise of
Rights and other matters referred to herein;

NOW THEREFORE, in
consideration of the premises and the respective covenants and agreements set forth herein, the Corporation and the Rights Agent hereby
agree as follows:

Article 1
INTERPRETATION

1.1Certain Definitions

For the purposes of this
Agreement, including the recitals hereto, the following terms have the meanings indicated:

(a)“ABCA” means the Business Corporations Act (Alberta), and the regulations made
thereunder, each as may be amended and in force from time to time, and any comparable successor laws or regulations thereto;

(b)“Acquiring Person” means any Person who is:

(i)the Beneficial Owner of 20% or more of the then outstanding Voting Shares;

  

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(ii)a cannabis retail operator licence holder in the Province of Ontario whom, as a result of the circumstances
stipulated in Section 2 of General, O. Reg. 468/18 made under the Cannabis Licence Act, 2018 (Ontario), (including the Beneficial
Ownership of the prescribed percentage of Voting Shares), the Corporation would be considered an “affiliate” for the purposes
of the Cannabis Licence Act, 2018 (Ontario) and, as a result, such retail operator licence holder, together with its affiliates,
would cause, or would reasonably be expected to cause, the Corporation to be non-compliant with Section 12 of General, O. Reg.
468/18; or

(iii)a cannabis retail store licence holder in the Province of British Columbia whom, as a result of the circumstances
stipulated in Sections 2.1 or 6(4) of Cannabis Licensing Regulation, BC Reg. 202/2018 made under the Cannabis Control and Licensing
Act (British Columbia) (including as a result of the Beneficial Ownership of the prescribed percentage of Voting Shares), the Corporation
would be considered part of a “group of related persons” or be in any of the situations set out in Section 6(4) of Cannabis
Licensing Regulation, BC Reg. 202/2018 and, as a result, would cause, or would reasonably be expected to cause, the Corporation to
be non-compliant with any requirement, term or condition applicable to a cannabis retail store licence relating to (i) holding or having
control over more than the prescribed number of cannabis retail store licences, (ii) having influence over licensees who hold more than
the prescribed number of cannabis retail store licences, or (iii) the requirements set out in Sections 6 and 7 of Cannabis Licensing
Regulation, BC Reg. 202/2018;

but does not include:

(A)the Corporation or any Subsidiary of the Corporation;

(B)any Person who becomes the Beneficial Owner of 20% or more of the then outstanding Voting Shares as a
result of one or any combination of:

(1)a Voting Share Reduction,

(2)a Permitted Bid Acquisition,

(3)an Exempt Acquisition,

(4)a Convertible Security Acquisition, or

(5)a Pro Rata Acquisition,

provided, however, that if a Person becomes
the Beneficial Owner of 20% or more of the then outstanding Voting Shares by reason of one or any combination of a Voting Share Reduction,
a Permitted Bid Acquisition, an Exempt Acquisition, a Convertible Security Acquisition or a Pro Rata Acquisition, and thereafter becomes
the Beneficial Owner of an additional 1% or more of the then outstanding Voting Shares (other than pursuant to a Voting Share Reduction,
a Permitted Bid Acquisition, an Exempt Acquisition, a Convertible Security Acquisition or a Pro Rata Acquisition or any combination thereof),
then, as of the date that such Person becomes the Beneficial Owner of such additional Voting Shares, such Person shall become an “Acquiring
Person”;

  

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(C)for the period of 10 days after the Disqualification Date, any Person who becomes the Beneficial Owner
of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on subsection 1.1(f)(ii)(B)
where such disqualification results solely because such Person is making or has announced a current intention to make a Take-over Bid,
either alone or by acting jointly or in concert with any other Person, unless such disqualified Person during such 10 day period acquires
an additional 1% or more of the then outstanding Voting Shares. For the purposes of this definition, “Disqualification Date”
means the first date of a public announcement that such Person is making or intends to make a Take-over Bid, either alone or by acting
jointly or in concert with another Person;

(D)an underwriter or a member of a banking or selling group that becomes the Beneficial Owner of 20% or more
of the Voting Shares in connection with a distribution of securities pursuant to an underwriting agreement with the Corporation; or

(E)a Person (a “Grandfathered Person”) who is the Beneficial Owner of more than 20% of
the outstanding Voting Shares determined as at the Record Time, provided, however, that this exception shall not be, and shall cease to
be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the Record Time: (1) cease to own more
than 20% of the outstanding Voting Shares, or (2) become the Beneficial Owner of any additional Voting Shares that increases its Beneficial
Ownership of Voting Shares by more than 1.0% of the number of Voting Shares outstanding as at the Record Time (other than pursuant to
one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition, a Convertible Security Acquisition
or a Pro Rata Acquisition).

(c)“Affiliate”, unless otherwise specified, when used to indicate a relationship with
a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is Controlled by, or
is under common control with, such specified Person.

(d)“Agreement” means this shareholder rights plan agreement between the Corporation and
the Rights Agent, as amended, supplemented or restated from time to time.

(e)“Associate”, when used to indicate a relationship with a specified Person, means any
relative of such specified Person who has the same home as such specified Person, or any person to whom such specified Person is married,
or any person with whom such specified Person is living in a conjugal relationship outside marriage, or any relative of such spouse or
other Person who has the same home as such specified Person.

(f)(i) A Person shall be deemed the “Beneficial Owner” of, and to have “Beneficial
Ownership” of, and to “Beneficially Own”:

(A)any securities as to which such Person or any of such Person’s Affiliates or Associates is the owner
at law or in equity;

  

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(B)any securities as to which such Person or any of such Person’s Affiliates or Associates has the
right to become the owner at law or in equity, whether such right is exercisable immediately or within a period of 60 days thereafter
and whether or not on the condition or occurrence of a contingency or the making of one or more payments, upon the conversion, exchange
or exercise of any Convertible Security or pursuant to any agreement, arrangement, pledge or understanding, whether or not in writing,
other than:

(1)customary agreements with and between underwriters and banking group or selling group members with respect
to a distribution of securities;

(2)pledges of securities in the ordinary course of the pledgee’s business; or

(3)agreements between the Corporation and any Person pursuant to an amalgamation, merger, arrangement, business
combination or other similar transaction (statutory or otherwise, but for greater certainty not including a Take-over Bid) that is conditional
upon the approval of the shareholders of the Corporation to be obtained prior to such Person acquiring such securities; and

(C)any securities that are Beneficially Owned within the meaning of subsections 1.1(f)(i)(A) or 1.1(f)(i)(B)
by any other Person with which such Person is acting jointly or in concert.

(ii)Notwithstanding the provisions of subsection 1.1(f)(i) a Person shall not be deemed the “Beneficial
Owner” of, or to have “Beneficial Ownership” of, or to “Beneficially Own”, any security
solely by reason of any one or more of the following circumstances:

(A)(1) 
 the holder of such security having agreed to deposit or tender such security to a Take-over Bid made by such Person or any of such Person’s
Affiliates or Associates or any other Person with which such Person is acting jointly or in concert pursuant to a Permitted Lock-Up Agreement,
or

(2)such security having been deposited or tendered pursuant to a Take-over Bid made by such Person or any
of such Person’s Affiliates or Associates or made by any other Person acting jointly or in concert with such Person until such deposited
or tendered security has been taken up or paid for, whichever shall first occur;

(B)such Person, any Affiliate or Associate of such Person or any other Person acting jointly or in concert
with such Person holding such security; provided that:

(1)the ordinary business of such Person (the “Portfolio Manager”) includes the management
or administration of investment funds for other Persons (which, for greater certainty, may include or be limited to one or more employee
benefit plans or pension plans) and such security is held by the Portfolio Manager in the ordinary course of such business in the performance
of the Portfolio Manager’s duties for the account of any other Person (a “Client”), including non-discretionary
accounts held on behalf of a Client by a registered broker or dealer,

  

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(2)the ordinary business of such Person (the “Fund Manager”) is manager or trustee of
one or more mutual funds registered or qualified to issue its securities under the laws of Canada or the United States of America or any
province or state thereof (each, a “Mutual Fund”), or such Person is a Mutual Fund, and holds such security for the
purposes of its activity as such Fund Manager or Mutual Fund,

(3)such Person (the “Trust Company”) is licensed to carry on the business of a trust company
under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or
incompetent Persons (each, an “Estate Account”) or in relation to other accounts (each, an “Other Account”)
and holds such security in the ordinary course of such duties for such Estate Accounts or for such Other Accounts,

(4)such Person (the “Crown Agent”) is established by statute for purposes that include,
and the ordinary business or activity of such Person includes, the management of investment funds for employee benefit plans, pension
plans and insurance plans of various public bodies, or

(5)such Person (the “Plan Administrator”) is the administrator or the trustee of one or
more pension funds or plans registered under the laws of Canada, the United States of America, the European Union or any province, state
or other political subdivision thereof (each, a “Plan”), or is a Plan, and holds such security for the purposes of
its activity as such Plan Administrator or Plan,

provided; however, that in any of the
foregoing cases, the Portfolio Manager, the Fund Manager, the Mutual Fund, the Trust Company, the Crown Agent, the Plan Administrator
or the Plan, as the case may be, is not then making or has not then announced an intention to make, a Take-over Bid, other than an Offer
to Acquire Voting Shares or other securities pursuant to a distribution by the Corporation, a Permitted Bid or by means of ordinary market
transactions (including pre-arranged trades entered into in the ordinary course of business of such Person) executed through the facilities
of a stock exchange, securities quotation system or an organized over-the-counter market, alone or by acting jointly or in concert with
any other Person;

(C)such Person is a Client of the same Portfolio Manager as another Person on whose account the Portfolio
Manager holds such security, or because such Person is an Estate Account or an Other Account of the same Trust Company as another Person
on whose account the Trust Company holds such security or because such Person is a Plan with the same Plan Administrator as another Plan
on whose account the Plan Administrator holds such security;

  

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(D)such Person is a Client of a Portfolio Manager and such security is owned at law or in equity by the Portfolio
Manager or because such Person is an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity
by the Trust Company or such Person is a Plan and such security is owned at law or in equity by the Plan Administrator of such Plan; or

(E)such Person is the registered holder of securities as a result of carrying on the business, or acting
as a nominee, of a securities depositary.

(g)“Board of Directors” means the board of directors of the Corporation or any duly constituted
and empowered committee thereof.

(h)“Book Entry Form” means, in reference to securities, securities that have been issued
and registered in uncertificated form and includes securities evidenced by an advice or other statement and securities which are maintained
electronically on the records of the Corporation’s transfer agent but for which no certificate has been issued.

(i)“Book Entry Rights Exercise Procedures” has the meaning ascribed thereto in subsection
2.2(c).

(j)“Business Day” means any day, other than a Saturday or Sunday or a day on which banking
institutions in Calgary, Alberta are authorized or obligated by law to close.

(k)“Canadian Dollar Equivalent” of any amount which is expressed in United States dollars
means on any date the Canadian dollar equivalent of such amount determined by reference to the U.S. - Canadian Exchange Rate in effect
on such date.

(l)“Cannabis Laws” means the Cannabis Act (Canada), Cannabis License Act, 2018
(Ontario), the Gaming, Liquor and Cannabis Act (Alberta), Cannabis Control and Licensing Act (British Columbia), the Liquor,
Gaming and Cannabis Control Act (Manitoba), the Cannabis Control Act (Saskatchewan), and any other law, statute, rule or regulation
in Canada or any other applicable jurisdiction (including any province, territory or other sub-jurisdiction), in force or which may be
enacted from time to time, relating in any way to the production, cultivation, possession, storage, transportation, distribution, sale
or use of cannabis and related substances and products, and including all policies, regulations, official directives, orders, judgments
and decrees promulgated under any of the foregoing, including without limitation the Retail Cannabis Store Handbook (Alberta) and the
Cannabis Representative Handbook (Alberta).

(m)“Cannabis Licenses” means all authorizations, approvals, consents, exemptions, licenses,
grants, permits, franchises, rights, privileges or no-action letters the Corporation or any of its Subsidiaries or partnerships, from
any Governmental Body related to cannabis and issued by the Regulator.

(n)“Cannabis Regulator” means the any Government Body appointed to regulate the licensing
of cannabis in the respective jurisdiction.

  

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(o)“Close of Business” on any given date means the time on such date (or, if such date
is not a Business Day, the time on the next succeeding Business Day) at which the principal office of the transfer agent for the Common
Shares in Calgary, Alberta (or after the Separation Time, the principal office of the Rights Agent in Calgary, Alberta) is closed to the
public; provided, however, that for the purposes of the definitions of “Competing Permitted Bid” and “Permitted
Bid”, “Close of Business” on any date means 11:59 p.m. (local time at the place of deposit) on such date (or, if such
date is not a Business Day, 11:59 p.m. (local time at the place of deposit) on the next succeeding Business Day).

(p)“Closing Price” per security of any securities on any date of determination means:

(i)the closing board lot sale price or, if such price is not available, the average of the closing bid and
asked prices, for each of such securities as reported by the principal stock exchange or national securities quotation system on which
such securities are listed or admitted to trading (provided that, if at the date of determination such securities are listed or admitted
to trading on more than one stock exchange or national securities quotation system, then such price or prices shall be determined based
upon the stock exchange or quotation system on which such securities are then listed or admitted to trading on which the largest number
of such securities were traded during the most recently completed calendar year);

(ii)if for any reason none of such prices is available on such day or the securities are not listed or admitted
to trading on a stock exchange or a national securities quotation system, then the last sale price, or in case no sale takes place on
such date, the average of the high bid and low asked prices for each of such securities in the over-the-counter market, as quoted by any
reporting system then in use;

(iii)if for any reason none of such prices is available on such day or the securities are not listed or admitted
to trading on a stock exchange or a national securities quotation system or quoted by any such reporting system, then the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the securities selected in good faith by the
Board of Directors; or

(iv)if for any reason none of such prices are available on such date, then the “Closing Price”
per security of such securities on such date shall mean the fair value per security of the securities on such date as determined by a
nationally or internationally recognized investment dealer or investment banker with respect to the fair value per security of such securities
and, if the Closing Price so determined is expressed in United States dollars, then such amount shall be converted to the Canadian Dollar
Equivalent.

(q)“Common Shares” means the common shares in the share capital of the Corporation as
presently constituted, as such shares may be subdivided, consolidated, reclassified or otherwise changed from time to time.

(r)“Competing Permitted Bid” means a Take-over Bid that:

(i)is made after a Permitted Bid or another Competing Permitted Bid has been made and prior to the expiry,
termination or withdrawal of such Permitted Bid or Competing Permitted Bid;

  

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(ii)satisfies all components of the definition of a Permitted Bid other than the requirement set forth in
subsection 1.1(rr)(ii)(A) of the definition of a Permitted Bid; and

(iii)contains, and the take-up and payment for securities tendered or deposited thereunder is subject to, an
irrevocable and unqualified condition that no Voting Shares and/or Convertible Securities will be taken up or paid for pursuant to such
Take-over Bid prior to the Close of Business on the last day of the minimum initial deposit period that such Take-over Bid must remain
open for deposits of securities thereunder pursuant to NI 62-104 after the date of the Take-over Bid constituting the Competing Permitted
Bid;

provided, however, that
a Take-over Bid that qualified as a Competing Permitted Bid shall cease to be a Competing Permitted Bid at any time and as soon as such
time as when such Take-over Bid ceases to meet any or all of the provisions of this definition.

(s)“Controlled” means as follows:

(i)a body corporate is “controlled” by another Person or two or more other Persons acting jointly
or in concert if:

(A)securities entitled to vote in the election of directors of such body corporate carrying more than 50%
of the votes for the election of directors are held, directly or indirectly, by or for the benefit of the other Person or Persons, and

(B)the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors
of such body corporate; and

(ii)a Person which is not a body corporate is “controlled” by another Person or two or more other
Persons acting jointly or in concert if more than 50% of the voting or equity interests of such Person are held, directly or indirectly,
by or for the benefit of the other Person or Persons;

and “controls”, “controlling”
and “under common control with” shall be interpreted accordingly.

(t)“Convertible Security” means a security issued by the Corporation from time to time
(other than the Rights) carrying any purchase, exercise, conversion or exchange right pursuant to which the holder thereof may acquire
Voting Shares or other securities carrying any purchase, exercise, conversion or exchange right pursuant to which the holder thereof may
acquire Voting Shares, directly or indirectly, (in each case, whether such right is exercisable immediately or within or after a specified
period and whether or not on condition or the happening of any contingency).

(u)“Convertible Security Acquisition” means the acquisition of Voting Shares by a Person
upon the purchase, exercise, conversion or exchange of Convertible Securities acquired or received by such Person pursuant to a Permitted
Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition.

(v)“Co-Rights Agent” has the meaning ascribed thereto in subsection 4.1(a).

  

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(w)“Disposition Date” has the meaning ascribed thereto in subsection 5.1(b).

(x)“Dividend Reinvestment Acquisition” means an acquisition of Voting Shares and/or Convertible
Securities of any class or series pursuant to a Dividend Reinvestment Plan.

(y)“Dividend Reinvestment Plan” means a regular dividend reinvestment or other plan of
the Corporation made available by the Corporation to holders of its securities where such plan permits the holder to direct that some
or all of:

(i)dividends paid in respect of shares of any class of the Corporation;

(ii)proceeds of redemption of shares of the Corporation;

(iii)interest paid on evidences of indebtedness of the Corporation; or

(iv)optional cash payments;

be applied to the purchase
from the Corporation of Voting Shares and/or Convertible Securities.

(z)“Effective Date” means the date hereof.

(aa)“Election to Exercise” has the meaning ascribed thereto in subsection 2.2(e)(ii).

(bb)“Exempt Acquisition” means an acquisition by a Person of Voting Shares and/or Convertible
Securities:

(i)in respect of which the Board of Directors has waived the application of Section 3.1 pursuant to
the provisions of Section 5.1;

(ii)made as an intermediate step in a series of related transactions in connection with an acquisition by
the Corporation or its Subsidiaries of a Person or assets, provided that the Person who acquires such Voting Shares distributes or is
deemed to distribute such Voting Shares to its securityholders within 10 Business Days of the completion of such acquisition, and following
such distribution no Person has become the Beneficial Owner of 20% or more of the Corporation's then outstanding Voting Shares; or

(iii)pursuant to an amalgamation, merger, arrangement, business combination or other similar transaction (statutory
or otherwise, but for greater certainty not including a Take-over Bid) which has been approved by the Board of Directors that is conditional
upon the approval of the shareholders of the Corporation to be obtained prior to such Person acquiring such securities.

(cc)“Exercise Price” means, as of any date, the price at which a holder of a Right may
purchase the securities issuable upon exercise of one whole Right in accordance with the terms hereof. Subject to adjustment in accordance
with the terms hereof, the Exercise Price shall be:

(i)until the Separation Time, an amount equal to three times the Market Price, from time to time, per Common
Share; and

  

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(ii)from and after the Separation Time, an amount equal to three times the Market Price, as at the Separation
Time, per Common Share.

(dd)“Expansion Factor” has the meaning ascribed thereto in subsection 2.3(b)(v)(A).

(ee)“Expiration Time” means the earlier of:

(i)the Termination Time; and

(ii)the Close of Business on that date on which a Reconfirmation Meeting occurs and at which this Agreement
is not reconfirmed or presented for reconfirmation as contemplated in Section 5.15.

(ff)“Fiduciary” means a trust company registered under the trust company legislation of
Canada or any province thereof, a trust company organized under the laws of any state of the United States, a portfolio manager registered
under the securities legislation of one or more provinces of Canada or an investment adviser registered under the United States Investment
Advisers Act of 1940, as amended, or any other securities legislation of the United States or any state of the United States.

(gg)“Flip-in Event” means a transaction or event in or pursuant to which any Person becomes
an Acquiring Person.

(hh)“Governmental Body” means the Cannabis Regulator and any domestic or foreign federal,
provincial, regional, state, municipal or other government, governmental department, agency, authority or body (whether administrative,
legislative, executive or otherwise), court, tribunal, commission or commissioner, bureau, minister or ministry, board or agency, or other
regulatory authority, including any securities regulatory authorities or stock exchange.

(ii)“holder” has the meaning ascribed thereto in Section 2.8.

(jj)“Independent Shareholders” means holders of outstanding Voting Shares, other than any:

(i)Acquiring Person;

(ii)Offeror other than a Person who at the relevant time is deemed not to Beneficially Own such Voting Shares
by reason of subsection 1.1(f)(ii)(B);

(iii)Affiliate or Associate of such Acquiring Person or Offeror;

(iv)Person acting jointly or in concert with such Acquiring Person or Offeror; or

(v)employee benefit plan, stock purchase plan, deferred profit sharing plan or any similar plan or trust
for the benefit of employees of the Corporation or a Subsidiary of the Corporation, unless the beneficiaries of such plan or trust direct
the manner in which the Voting Shares are to be voted or withheld from voting or direct whether or not the Voting Shares are to be deposited
or tendered to a Take-over Bid.

(kk)“Market Price” per security of any securities on any date of determination means the
average of the daily Closing Prices per security of such securities on each of the 20 consecutive Trading Days through to and including
the Trading Day immediately preceding such date of determination; provided, however, that if an event of a type analogous to any of the
events described in Section 2.3 shall have caused any Closing Price used to determine the Market Price on any Trading Day not to
be fully comparable with the Closing Price on the Trading Day immediately preceding such date of determination, each such Closing Price
so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 in order to
make it fully comparable with the Closing Price on the Trading Day immediately preceding such date of determination.

  

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(ll)“Nasdaq” shall mean the Nasdaq Capital Market or any other US exchange on which the
Common Shares may, from time to time, be listed for trading.

(mm)“NI 62-104” means National Instrument 62-104 - Take-Over Bids and Issuer Bids
adopted by the Canadian securities regulatory authorities, as now in effect or as the same may from time to time be amended, re-enacted
or replaced.

(nn)“Nominee” has the meaning ascribed thereto in subsection 2.2(d).

(oo)“Offer to Acquire” shall include:

(i)an offer to purchase or a solicitation of an offer to sell Voting Shares, or a public announcement of
an intention to make such an offer or solicitation; and

(ii)an acceptance of an offer to sell Voting Shares, whether or not such offer to sell has been solicited,

or any combination thereof, and the Person
accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell.

(pp)“Offeror” means a Person who has made a public announcement of a current intention
to make, or who is making, a Take-over Bid (including a Permitted Bid or a Competing Permitted Bid).

(qq)“Offeror’s Securities” means the aggregate of the Voting Shares Beneficially
Owned by an Offeror on the date of an Offer to Acquire.

(rr)“Permitted Bid” means a Take-over Bid made by an Offeror by way of take-over bid circular
which also complies with the following additional provisions:

(i)the Take-over Bid is made to all holders of record of Voting Shares, other than the Offeror;

(ii)the Take-over Bid contains, and the take-up and payment for securities tendered or deposited is subject
to, an irrevocable and unqualified provision that no Voting Shares and/or Convertible Securities will be taken up or paid for pursuant
to the Take-over Bid:

(A)prior to the Close of Business on a date that is not less than 105 days following the date of the Take-over
Bid or such shorter minimum period that a take-over bid that is not exempt from any of the requirements of Division 5 (Bid Mechanics)
of NI 62-104 must remain open for deposits of securities thereunder, in the applicable circumstances at such time, pursuant to NI 62-104;
and

  

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(B)then only if, at the Close of Business on the date Voting Shares and/or Convertible Securities are first
taken up or paid for under such Take-over Bid, more than 50% of the then Voting Shares held by Independent Shareholders have been deposited
or tendered pursuant to the Take-over Bid and not withdrawn;

(iii)the Take-over Bid contains an irrevocable and unqualified provision that Voting Shares and/or Convertible
Securities may be deposited or tendered pursuant to such Take-over Bid, unless such Take-over Bid is withdrawn, at any time prior to the
Close of Business on the date Voting Shares and/or Convertible Securities are first taken up or paid for under the Take-over Bid;

(iv)the Take-over Bid contains an irrevocable and unqualified provision that any Voting Shares and/or Convertible
Securities deposited or tendered pursuant to the Take-over Bid may be withdrawn until taken up and paid for; and

(v)the Take-over Bid contains an irrevocable and unqualified provision that in the event that the deposit
condition set forth in subsection 1.1(rr)(ii)(B) is satisfied, the Offeror will make a public announcement of that fact and the Take-over
Bid will remain open for deposits and tenders of Voting Shares and/or Convertible Securities for not less than 10 days from the date of
such public announcement;

provided, however, that
a Take-over Bid that qualified as a Permitted Bid shall cease to be a Permitted Bid at any time and as soon as such time as when such
Take-over Bid ceases to meet any or all of the provisions of this definition.

(ss)“Permitted Bid Acquisition” means an acquisition of Voting Shares and/or Convertible
Securities made pursuant to a Permitted Bid or a Competing Permitted Bid; provided that for greater certainty, any acquisition
of Voting Shares and/or Convertible Securities made pursuant to a Competing Permitted Bid or a Permitted Bid that ceased to be a Competing
Permitted Bid or a Permitted Bid by reason of such acquisition ceasing to meet any or all of the provisions of the definition of “Competing
Permitted Bid” or “Permitted Bid”, as applicable, including before such acquisition ceased to be a Competing Permitted
Bid or Permitted Bid, as applicable, will not be a Permitted Bid Acquisition.

(tt)“Permitted Lock-Up Agreement” means an agreement between a Person and one or more holders
of Voting Shares and/or Convertible Securities (each a “Locked-Up Person”) pursuant to which such Locked-Up Person
agrees to deposit or tender Voting Shares and/or Convertible Securities to a Take-over Bid (the “Lock-Up Bid”) made
or to be made by such Person, any of such Person's Affiliates or Associates or any other Person with which, and in respect of which security,
such Person is acting jointly or in concert; provided that:

(i)the terms of such agreement are publicly disclosed and a copy is made available to the public (including
the Corporation) not later than the date of the Lock-Up Bid or, if the Lock-Up Bid has been made prior to the date on which such agreement
is entered into, not later than the date of such agreement (or, if such date is not a Business Day, on the Business Day next following
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(ii)the agreement permits such Locked-Up Person to terminate its obligation to deposit or tender to or not
to withdraw Voting Shares and/or Convertible Securities from the Lock-Up Bid, and to terminate any obligation with respect to the voting
of such securities, in order to deposit or tender such securities to another Take-over Bid or to support another transaction:

(A)where the price or value of the consideration per Voting Share or Convertible Security offered under such
other Take-over Bid or transaction:

(1)exceeds the price or value of the consideration per Voting Share and/or Convertible Security offered under
the Lock-Up Bid; or

(2)exceeds by as much as or more than a specified amount (the “Specified Amount”) the
price or value of the consideration per Voting Share or Convertible Security at which the Locked-Up Person has agreed to deposit or tender
Voting Shares and/or Convertible Securities to the Lock-Up Bid, provided that such Specified Amount is not greater than 7% of the price
or value of the consideration per Voting Share or Convertible Security offered under the Lock-Up Bid; and

(B)if the number of Voting Shares or Convertible Securities offered to be purchased under the Lock-Up Bid
is less than 100% of the Voting Shares or Convertible Securities held by Independent Shareholders, where the price or value of the consideration
per Voting Share or Convertible Security offered under such other Take-over Bid or transaction is not less than the price or value of
the consideration per Voting Share or Convertible Security offered under the Lock-Up Bid and the number of Voting Shares and/or Convertible
Securities to be purchased under such other Take-over Bid or transaction:

(1)exceeds the number of Voting Shares and/or Convertible Securities that the Offeror has offered to purchase
under the Lock-Up Bid; or

(2)exceeds by as much as or more than a specified number (the “Specified Number”) the
number of Voting Shares or Convertible Securities that the Offeror has offered to purchase under the Lock-Up Bid, provided that the Specified
Number is not greater than 7% of the number of Voting Shares or Convertible Securities offered to be purchased under the Lock-Up Bid;

and for greater certainty,
such agreement may contain a right of first refusal or require a period of delay to give the Offeror under the Lock-Up Bid an opportunity
to match the higher price, value or number in such other Take-over Bid or transaction, or other similar limitation on a Locked-Up Person's
right to withdraw Voting Shares from the agreement, so long as the limitation does not preclude the exercise by the Locked-Up Person of
the right to withdraw Voting Shares and/or Convertible Securities in sufficient time to deposit or tender to the other Take-over Bid or
support the other transaction; and

  

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(iii)no “break-up” fees, “top-up” fees, penalties, expenses or other amounts that exceed
in the aggregate the greater of:

(A)the cash equivalent of 2.5% of the price or value of the consideration payable under the Lock-Up Bid to
a Locked-Up Person; and

(B)50% of the amount by which the price or value of the consideration payable under another Take-over Bid
or other transaction to a Locked-Up Person exceeds the price or value of the consideration that such Locked-Up Person would have received
under the Lock-Up Bid,

shall be payable by
a Locked-Up Person pursuant to the agreement in the event that the Locked-Up Bid is not successfully concluded or if any Locked-Up Person
fails to deposit or tender Voting Shares and/or Convertible Securities to the Lock-Up Bid or withdraws Voting Shares and/or Convertible
Securities previously deposited or tendered thereto in order to deposit or tender to another Take-over Bid or support another transaction.

(uu)“Person” includes any individual, firm, partnership, association, trust, trustee, executor,
administrator, legal personal representative, government, governmental body or authority, corporation, or other incorporated or unincorporated
organization, syndicate or other entity.

(vv)“Privacy Laws” has the meaning set forth in Section 4.7.

(ww)“Pro Rata Acquisition” means an acquisition by a Person of Voting Shares and/or Convertible
Securities pursuant to:

(i)a Dividend Reinvestment Acquisition;

(ii)a stock dividend, a stock split or other event pursuant to which such Person becomes the Beneficial Owner
of Voting Shares and/or Convertible Securities on the same pro rata basis as all other holders of Voting Shares of the same class or series;

(iii)the acquisition or exercise by the Person of only those rights to purchase Voting Shares and/or Convertible
Securities distributed directly by the Corporation to that Person (and not acquired from any other person) in the course of a distribution
to all holders of securities of the Corporation of one or more particular classes or series pursuant to a rights offering; or

(iv)a distribution of Voting Shares and/or Convertible Securities made pursuant to a prospectus or by way
of a private placement or a conversion or exchange of any Convertible Security,

provided, however, that such Person does
not thereby acquire a greater percentage of Voting Shares or of Convertible Securities so offered than such Person’s percentage
of Voting Shares Beneficially Owned immediately prior to such acquisition.

(xx)“Reconfirmation Meeting” has the meaning set forth in Section 5.15.

(yy)“Record Time” means 12:01 a.m. on the Effective Date.

  

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(zz)“Redemption Price” has the meaning set forth in subsection 5.1(a).

(aaa)“Regular Periodic Cash Dividend” means cash dividends paid on the Common Shares at
regular intervals in any fiscal year of the Corporation to the extent that such cash dividends do not exceed in the aggregate in any fiscal
year, on a per share basis, the greatest of:

(i)200% of the aggregate amount of cash dividends declared payable by the Corporation on its Common Shares
in its immediately preceding fiscal year divided by the number of Common Shares outstanding as at the end of such fiscal year;

(ii)250% of the arithmetic mean of the aggregate amounts of cash dividends declared payable by the Corporation
on its Common Shares in its three immediately preceding fiscal years divided by the arithmetic mean of the number of Common Shares outstanding
as at the end of each of such fiscal years; and

(iii)100% of the aggregate consolidated net income of the Corporation, before extraordinary items, for its
immediately preceding fiscal year divided by the number of Common Shares outstanding as at the end of such fiscal year.

(bbb)“Right” means a right to purchase securities upon the terms and subject to the conditions
set forth in this Agreement.

(ccc)“Rights Certificates” means the certificates representing the Rights after the Separation
Time, which shall be substantially in the form attached hereto as Schedule “A” or such other form as the Corporation and the
Rights Agent may agree.

(ddd)“Rights Register” and “Rights Registrar” have the respective meanings
ascribed thereto in subsection 2.6(a).

(eee)“Securities Act (Alberta)” means the Securities Act (Alberta), as amended,
and the rules and regulations made thereunder, as now in effect or as the same may from time to time be amended, re-enacted or replaced.

(fff)“Separation Time” means the Close of Business on the tenth Trading Day after the earlier
of:

(i)the Share Acquisition Date;

(ii)the date of the commencement of, or first public announcement or disclosure of the intent of any Person
(other than the Corporation or any Subsidiary of the Corporation) to commence, a Take-over Bid (other than a Permitted Bid or Competing
Permitted Bid, so long as such Take-over Bid continues to satisfy the requirements of a Permitted Bid or Competing Permitted Bid); and

(iii)the date on which a Permitted Bid or Competing Permitted Bid ceases to qualify as a Permitted Bid or Competing
Permitted Bid, as applicable,

or such later date as may be determined
by the Board of Directors in good faith, provided, however, that if any Take-over Bid referred to in subsection 1.1(fff)(ii) above expires,
is not made or is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the
purposes of this definition, never to have been commenced, made or announced and further provided that if the Board of Directors determines,
pursuant to Section 5.1, to waive the application of Section 3.1 to a Flip-In Event, then the Separation Time in respect of such Flip-In
Event shall be deemed never to have occurred.

  

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(ggg)“Share Acquisition Date” means the first date of public announcement or disclosure
by the Corporation or an Acquiring Person of facts indicating that a Person has become an Acquiring Person, which, for the purposes of
this definition, shall include, without limitation, a report filed pursuant to Section 5.2 of NI 62-104 or subsection 13(d)
of the U.S. Exchange Act, announcing or disclosing such information.

(hhh)“Subsidiary” of a Person means any other Person that is Controlled by such first Person.

(iii)“Take-over Bid” means an Offer to Acquire Voting Shares and/or Convertible Securities
if, assuming that the Voting Shares and/or Convertible Securities subject to the Offer to Acquire are acquired and assuming they are Beneficially
Owned at the date of such Offer to Acquire by the Person making such Offer to Acquire, such Voting Shares (including Voting Shares that
may be acquired upon conversion of the Convertible Securities), together with the Offeror's Securities, constitute in the aggregate 20%
or more of the then outstanding Voting Shares at the date of the Offer to Acquire.

(jjj)“Termination Time” means the time at which the right to exercise Rights shall terminate
pursuant to Section 5.1.

(kkk)“Trading Day”, when used with respect to any securities, means a day on which the principal
Canadian or United States securities exchange (as determined by the Board of Directors) on which such securities are listed or admitted
to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian or United
States securities exchange, a Business Day.

(lll)“TSXV” means the TSX Venture Exchange or any other Canadian exchange on which the Common
Shares may, from time to time, be listed for trading.

(mmm)“U.S. - Canadian Exchange Rate” on any date means:

(i)if on such date the Bank of Canada sets a daily average rate of exchange for the conversion of one United
States dollar into Canadian dollars, such rate; and

(ii)in any other case, the rate on such date for the conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall be determined by the Board of Directors from time to time acting in good faith.

(nnn)“U.S. Exchange Act” means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder as from time to time in effect, and any comparable or successor laws, rules or regulations
thereto.

(ooo)“U.S. Securities Act” means the United States Securities Act of 1933,
as amended, and the rules and regulations thereunder, and any comparable or successor laws, rules or regulations thereto.

(ppp)“Voting Share Reduction” means an acquisition or a redemption by the Corporation of
Voting Shares and/or Convertible Securities which, by reducing the number of then outstanding Voting Shares and/or Convertible Securities
of a class or series, increases the percentage of Voting Shares Beneficially Owned by any Person.

  

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(qqq)“Voting Shares” means, collectively, the Common Shares and any other securities in
the capital of the Corporation, the holders of which are entitled to vote generally in the election of directors of the Board of Directors
and “Voting Shares”, when used with reference to any Person other than the Corporation, means common shares (or equivalent)
of such other Person and any other securities the holders of which are entitled to vote generally in the election of the directors or
to otherwise affect control of such other Person.