Dear Fellow Shareholders,

This week we made an exciting and transformative announcement with HEXO Corp (“HEXO”) (TSX: HEXO; NYSE-A: HEXO) that brings together two successful companies to create one of the leading cannabis companies in Canada, with increased production and marketing scale, coast-to-coast distribution and greater market share.

Over the past year we have experienced tremendous growth in our organization, which is now more than 170 people, and this week’s announcement capitalizes on an opportunity to leverage the assets and platform we have built to create greater shareholder value at a faster pace. The pace of change in this industry is rapid, and we believe critical scale is important to quickly establish the fundamentals that will support long-term returns to shareholders. HEXO estimates that the combined companies will be able to generate over $400 million in net revenue in 2020. The combination will also deliver meaningful synergies and greater access to capital that positions us for next-step strategic moves. With key strategic partnerships in edibles, beverages and retail, increased coast to coast sales and marketing firepower, and best in class diversified cultivation sources we will not only develop better products together, but we will be better positioned to ensure Canadians across the country have greater access to our brands.

Under the terms of the Arrangement Agreement, common shareholders of Newstrike would receive 0.06332 shares of HEXO for each common share of Newstrike held. It’s important to note that option holders will participate at the same conversion ratio and the vesting and life of their options continue unchanged. Similarly, the treatment to warrant holders carries over to the combined entity. If warrants are exercised after the transaction close, they would be settled in 0.06332 shares of HEXO stock for each warrant held and the warrant expiry date remains unchanged.

As new shareholders of HEXO, former Newstrike shareholders will stand to benefit from greater returns generated through the benefits of the combined entity, in a shorter period of time. Our partners, The Tragically Hip, are excited about this new chapter and our organization is excited to become part of the HEXO family.

Thank you for your support, and we will continue to update you on our progress through this process.

Jay Wilgar
Chairman and CEO