Mr. Bob Blink reports

TRANSCANNA CLOSES PRIVATE PLACEMENT OF UNITS AND DEBT SETTLEMENT

Transcanna Holdings Inc. has closed its previously announced non-brokered private placement of units by issuing 10 million units at a price of 10 cents per unit for gross proceeds of $1-million and has settled a $1.5-million unsecured debt held by an insider into units.

Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share of the company, at an exercise price of 15 cents per share, for a period of two years from the date of issuance. A total of $28,350 in cash and 283,500 warrants were issued in connection with the private placement to certain persons as finders' fees.

The private placement and debt settlement are subject to the approval of the Canadian Securities Exchange, and the securities issued pursuant to each of the private placement and debt settlement will be subject to a hold period of four months and one day from the date of issue under applicable securities laws. The company intends to use the net proceeds from the private placement for working capital purposes.

Certain insiders of the company subscribed for an aggregate of 1.85 million units in the private placement. Each of the participation of insiders in the private placement and the debt settlement is considered a related-party transaction as such term is defined under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under MI 61-101 on the basis that the issuance of units pursuant to the insider transactions does not exceed 25 per cent of the fair market value of the company's market capitalization. Each of the insider transactions has been approved by the board of directors of the company, which considered the insiders' interests and the best interests of the company. The company did not file a material change report more than 21 days before the expected closing of the insider transactions as the details of the private placement and debt settlement and the participation therein by related parties of the company were not settled until shortly prior to closing and the company wished to close on an expedited basis for sound business reasons and in a time frame consistent with usual market practices for transactions of this nature.

Pursuant to a debt settlement agreement between the company and its chief executive officer Bob Blink, Mr. Blink agreed to settle $1.2-million (U.S.) (being the U.S.-dollar equivalent of $1.5-million) by the issuance of 15 million units at a deemed price of 10 cents per unit.

The company also wishes to announce the resignation of its chief operating officer Alan Applonie. Mr. Applonie played an instrumental role in providing stability for the company during the COVID-19 pandemic and in supporting the CEO through the licensure and phase 1 buildout of the Daly facility. Mr. Applonie will be missed, and the company wishes him success in his future endeavours.

As well, the company is pleased to announce that the promissory note in the principal amount of $7.02-million advanced by Cool Swang LLC upon acquisition of the Daly facility has been extended to May 31, 2022, with no additional extension fees.

"With many moving parts in the shifting sands of U.S. cannabis, we saw a positive move this morning with the More Act passing in the U.S. House of Representatives. There is a long way to go from here for full legalization but an encouraging first step. I want to publicly thank Alan Applonie for his time, dedication and efforts with Transcanna. As already stated, he'll be missed. I also want to acknowledge the extension with Cool Swang for our mortgage expiry. This extension is providing valuable time for the company to make some very positive moves and set the stage for postpandemic growth," stated Mr. Blink.

About Transcanna Holdings Inc.

Transcanna is a California-based, Canadian-listed company, building cannabis-focused brands for the California lifestyle, through its wholly owned California subsidiaries.