Press Release

The acquisitions of Healthy Pharms and Greens Goddess increase 4Front’s national footprint and position it well in the Massachusetts and Arizona markets

PHOENIX – Feb. 26, 2019 – 4Front Holdings, LLC (“4Front”), a leading retail and brand development company in the U.S. cannabis sector, has closed two recent acquisitions that expand its national reach and position it well in Massachusetts’ nascent adult-use market and in Arizona, where voters have a good chance of legalizing cannabis for adult use by ballot initiative in 2020.

Highlights:

• Acquired Massachusetts vertical license holder Healthy Pharms, owner of two dispensaries in Georgetown and Harvard Square, with plans to convert to adult use shortly and re-launch under 4Front’s Mission retail brand
• Healthy Pharms owns a production facility in Georgetown that, following an expansion, will serve as 4Front’s primary cultivation and processing hub in Massachusetts
• In conjunction with the planned merger of 4Front and Cannex Capital Holdings, Inc. (“Cannex”), the first of Cannex’s brands is set to hit the Massachusetts market by mid-2019
• Entered the Arizona market by acquiring the manager of the vertical license holder, Greens Goddess, which currently owns a Phoenix dispensary
• The Arizona license comes with the ability to operate a production facility and 4Front plans to build out that capacity to participate in what is anticipated to be a robust cannabis market, with a similar plan to introduce Cannex’s brands in Arizona

MASSACHUSETTS

In Massachusetts, 4Front has acquired Healthy Pharms, Inc. (“Healthy Pharms”), a vertically integrated cannabis company that operates dispensaries in Georgetown and Cambridge’s Harvard Square. The Georgetown property is also home to a cultivation and processing facility that has the space for significant expansion.

“This acquisition provides 4Front with an immediate platform to more aggressively participate in the early growth of the Massachusetts recreational market, providing significantly greater production capacity,” said Josh Rosen, 4Front’s CEO. “This opportunity is made all the more exciting because of 4Front’s planned merger with Cannex, whose team has developed deep expertise in scaled cannabis production and distribution in the competitive Washington adult-use market.”

The Georgetown dispensary, which is roughly 3,000 sq. ft., is currently medical only, but is anticipated to expand to include adult-use later this year. It has a prime retail location for adult-use, being adjacent to I-95, close to the New Hampshire border, with significant parking. Plans are already under way for a construction project that will expand the retail sales floor and add more point-of-sale systems.

The Cambridge store is the sole dispensary in Harvard Square with a premium central location. The dispensary currently serves the medical market and also is navigating the required processes to expand to serve adult-use guests.

Healthy Pharms’ cultivation and processing facility is co-located with its Georgetown dispensary in a 65,000-square-foot building. Healthy Pharms is currently operating with approximately 8,000 sq. ft. of flowering canopy, which could be quickly expanded to more than 10,000 sq. ft., but the broader expansion potential is significant and provides a blank slate for the Cannex team once 4Front’s expected merger with Cannex closes.

The current plan is to build out the facility to comfortably accommodate a flowering canopy of approximately 35,000 sq. ft. Once that buildout is complete, it should serve as 4Front’s production and cultivation hub for Massachusetts. 4Front has plans to quickly bring the established brands of Cannex, which currently represents 7 of the top 10 selling infused-product brands in Washington state, to the Massachusetts market.

“The Georgetown cultivation facility has so much potential to match in capacity and yield what the Cannex facility in Elma, Wash., has been able to do,” according to Leo Gontmahker, COO of Cannex. “I’m excited to design and build that space with the objective of capturing significant market share in the Massachusetts adult-use market. Expect to see some of Cannex’s most successful brands in the Massachusetts market by the second quarter of 2019.”

Healthy Pharms was originally a client of 4Front’s consulting business, 4Front Advisors, which had been hired to help secure its operating license, which it did in January 2014 during the initial medical cannabis licensing process in Massachusetts.

“I’ve known Kris Krane and 4Front since early 2013, while they diligently supported our efforts to start up,” noted Healthy Pharms’ co-founder Nat Averill. “When we needed help to fund the expansion of our successful launch in Massachusetts, we looked for partners with a similar philosophy. We are excited to expand our capacity and products, provide greater opportunity for the great team we put together, and to be building all this with the folks from 4Front.”

ARIZONA

In Arizona, 4Front has acquired PHX Interactive, LLC, which manages vertically integrated license holder Greens Goddess Products, Inc. (“Greens Goddess”). Greens Goddess currently owns the Herb’N dispensary in northern Phoenix. Along with the existing dispensary, the license allows for the operation of a cultivation and processing facility, but Greens Goddess has not developed that capacity yet.

4Front believes there’s a high probability that Arizona voters will legalize cannabis for adult use by a ballot initiative in 2020, an effort which just narrowly missed in 2016.

“Given the expected regulatory expansion, we are excited to enter the Arizona market at an opportune time. It should allow us to capitalize on Cannex’s capabilities in Arizona, with an ability to build cultivation and processing space to spec,” said Rosen. “We view this market as likely having ample supply to support a meaningful manufacturing and distribution business.”

Greens Goddess President and CEO Nick Couturier added: “We’re thrilled to partner with 4Front and look forward to expanding operations in Arizona and becoming one of the top brands in the state.”

The Healthy Pharms and Herb’N dispensaries continue to operate under their existing brand names, with plans to eventually re-brand as Mission, which is 4Front’s in-house brand of cannabis retail stores.

About 4Front

4Front Holdings, LLC (“4Front”), is a leading retail and brand development company in the U.S. cannabis sector. It has developed a national platform that consists of a multi-state footprint, including its Mission-branded retail operations, and a far-reaching network of partnership relationships. Led by a group of professionals with experience in finance, real estate, manufacturing, and multi-location retail and hospitality operations, 4Front has invested heavily in assembling a team with the management skills and hands-on operating expertise that can support the rapid operational growth opportunity being afforded by the increased legalization of cannabis across the United States, as well as internationally. For more information, visit the website.