Kanabo Grp Plc Regulatory News (KNB)

24 May 2021

Kanabo Group Plc

("Kanabo" or "the Company")

£1 million Premium Placing,

Pre-IPO Investment and a Strategic MoU Partnership

 with Hellenic Dynamics S.A.

Highlights

· Placing to raise £1 million at an issue price of 22 pence per share (the "Placing Price")

· Placing Price represents a 10 per cent. premium to the closing mid-price of the Company's ordinary shares on 20 May 2021.

· Pre-IPO acquisition of interest over £750,000 worth of shares in Hellenic Dynamics S.A ("Hellenic" or "Hellenic Dynamics"), a medical cannabis cultivator seeking a near-term listing on the London Stock Exchange;

· The investment is part of a wider strategic partnership between the Company and Hellenic Dynamics S.A.

Details

Kanabo Group Plc (LSE:KNB) announces today that it has raised gross proceeds of £1million through the placing of 4,545,454 Ordinary Shares (the "Placing") at a price of 22 pence per share ("Placing Price") with a range of new and existing investors. The Placing Price represents a 10 per cent. premium to the closing mid-price of the Company's ordinary shares on 20 May 2021 and a 3.45 per cent discount to the 30-day volume weighted average price (VWAP) of 22.8 pence per Ordinary Share

Peterhouse Capital has acted as sole corporate broker to the Placing.

Additionally, Kanabo announces the signing of a Memorandum of Understanding with Hellenic Dynamics S.A. ("Hellenic Dynamics"), a medical cannabis cultivation company, in order to evaluate a potential off-take agreement. Hellenic Dynamics is a medical cannabis cultivation company with a substantial cultivation facility in Northern Greece, whose intention is to grow genetically unique strains of dried medical cannabis flowers. Under the terms of the MoU, it is envisaged that Kanabo will purchase up to 1000 kg per year EU GMP certified cannabis flowers with pre-defined THC or CBD contents, subject to certain regulatory approvals, for subsequent extraction of medical standard oils. The price for the goods will be negotiated between the buyer and the seller based on the specifications, products and quantities required at commercially attractive rates having regard to market prices at the time of sale.

In order to cement the relationship between Kanabo and Hellenic Dynamics, the Company announces that it has acquired an interest over £750,000 worth of shares in Hellenic Dynamics which the Company will receive as part of the proposed listing of Hellenic Dynamics.

Hellenic Dynamics has recently announced plans to list on the London Stock Exchange through a reverse take-over of an AIM-listed cash shell (the "Prospective RTO"). Kanabo understands that this Prospective RTO is well advanced with further announcements expected shortly.

The structure of Kanabo's acquisition of interest in Hellenic Dynamics is reflective of this near-term listing expectation and the desire of both parties to see this investment as part of a broader potential relationship between the two companies. The number of shares to be received by Kanabo will be calculated at the time of the Prospective RTO to ensure that the Kanabo investment will be de-facto made at a minimum 30% discount to the Prospective RTO listing price.

Avihu Tamir, CEO of Kanabo commented: "The MoU with Hellenic Dynamics and the subsequent investment is part of Kanabo's strategy to quickly grow its core business whilst pursuing complementary, synergistic, acquisitions and investments in the medical cannabis space, leveraging our position as a quoted company. We welcome the enthusiastic support of investors for our approach."

Davinder Rai, Vice President of Hellenic Dynamics, commented: "This agreement and investment in the business underscores the quality and scale of our specialist cultivation ambitions. We look forward to working closely with Kanabo and this deal highlights the demand and growth opportunity for Hellenic Dynamics in the European medical cannabis market."

For further information, please visit http://www.kanabogroup.com/ or contact the following:

Kanabo Group Plc

Tel: +(972)52-3173-633

press@kanabogroup.com

Meirav Horn

Peterhouse Capital Limited (Financial Adviser)

Tel: +44 (0)20 7469 0930

Eran Zucker / Guy Miller / Allie Feuerlein

Peterhouse Capital Limited (Corporate Broker)

Lucy Williams / Charles Goodfellow

About Kanabo

Kanabo aims to be an industry leader in product development and commercialisation of both cannabis-derived products for medical patients and THC-free products for CBD consumers. The company develops high-quality medical cannabis extract formulas, medical device vaporisers, and other innovative delivery methods. Validation activities are conducted at Kanabo's research lab at the Weizmann Science Park in Israel. With a primary focus on the German and UK Markets, Kanabo has already begun penetrating the European Market, and is positioned to scale up to meet growing market demand and projected sales. Currently, Kanabo is selling its line of CBD formulas for inhalation in the UK and Germany and has agreements with distributors in the pharmaceutical and OTC sectors already in place.

About Hellenic Dynamics

Hellenic Dynamics's main objective is to cultivate, produce, and extract tetrahydrocannabinol ("THC") dominant strains of dried medical cannabis flowers and flower extracts. These will be cultivated in its 200,000 square meter facility located near Kilkis in Northern Greece and are intended for export into the emerging medical cannabis market in Europe. The first medical cannabis flowers are expected to be cultivated in Q3 2021 with commercial sales expected to occur in Q4 2021. The Company's strategy is to then expand its total cultivation area in phases, in line with European demand. Additionally, the Board anticipates that further distribution lines into other European markets will begin in early 2022.