SANTA ROSA, CALIFORNIA and CALGARY, ALBERTA – July, 25, 2019 – Gabriella’s Kitchen Inc.
(“GABY” or the “Company”) (CSE: GABY) (OTCQB: GABLF), a U.S.-focused CPG company
operating in the regulated cannabis sector in California as well as the mainstream grocery channel
nationally, today announced the signing of definitive documents to acquire all of the issued and outstanding
membership interests (the “KJM Shares”) of KJM Data and Research, LLC (“KJM”) (the “Transaction”).
The Transaction will enable GABY to: increase its manufacturing and co-packing footprint by more than
three times its current size; produce a portion of its own inputs for flower and biomass; establish a licensed
kitchen for the expansion of edibles production; and supply its internal brands and partner brands with
unique and high value cannabis genetics.

 

Highlights

• KJM currently has a 25,000 square foot leased facility (the “Facility”), located less than one mile from
GABY’s current Santa Rosa facility.
• The Facility is zoned for all cannabis-related activities other than retail and type 7 (volatile)
manufacturing. KJM currently has approval from Sonoma County for four licenses: manufacturing;
cultivation; nursery; and distribution. A Provisional State License for Type 6 (non-volatile)
manufacturing is also in place.
• With this new Facility, GABY expects to be able to supply 10% of its base needs for biomass. Thus
ensuring a steady access to high quality inputs to enable it to continue its strong expansion.
• Shawn Ripley has joined the Company as Consulting Chief Science Officer with a focus on accelerating
product development focused on the California market.

 

Margot Micallef, Founder & CEO of GABY commented, “Our team has a proven track record of
developing, marketing and selling branded consumer products at scale and in partnership with some of the
most recognizable retail banners in North America. The Transaction we announced today will enable our
organization to effectively and rapidly enter its next phase of growth in the most exciting adult-use cannabis
market in the world. Sonoma County is the ideal place to build a footprint to supply the U.S. as adult-use
legalization continues to gain traction across the country. Sonoma is both the gateway to the emerald
triangle, one of the most renowned cannabis production areas in the world and situated with quick access
to bay-area transit routes and large retail markets, enabling both near and long-term growth and scale”.
“With this Transaction, GABY is set to triple its manufacturing and co-packing footprint while ramping
edibles production and establishing high value cultivation both for our internal brands and third-party
partner brands.” she added.

 

Ms. Micallef concluded, “We are very excited to have Shawn Ripley join our team and expect his proven
track record of developing and commercializing adult-use cannabis products to meaningfully accelerate our
efforts in California.”

 

Transaction Details

GABY will immediately acquire 80% of the issued and outstanding KJM Shares for a purchase price of
USD$400,000, less any debt, contingent or otherwise outstanding at closing the (“Purchase Price”) and
has the right to purchase the remaining 20% of KJM Shares, subject to certain licensing milestones and
other conditions, in exchange for the grant of a two-year warrant for USD$200,000 worth of GABY
common shares at an exercise price to be established at the closing price of GABY common shares on the
Canadian Securities Exchange on the day prior to the closing date of the remaining 20% of the KJM Shares.
GABY has also agreed to enter a seven-year lease on the Facility upon closing of its acquisition of the KJM
Shares. The Company will also hold two five-year rights of renewal.

 

Shawn Ripley

Shawn Ripley is a proven scientific leader that has focused on both developing and commercializing
products for various consumer markets in the U.S. and Canada. Mr. Ripley has deep cannabis sector
experience. Most recently, he founded and was the CEO of EFX Laboratories (“EFX”), which was
focused on providing de non-smokable predictable dosage formats of cannabis for medical patients in
Canada. Under Mr. Ripley’s direction, EFX purchased 6% of Broken Coast Cannabis, one of Canada’s
first licensed producers and lead EFX teams to develop Super Critical Fluid extracts, two-piece capsules
and MCT based delivery systems. Aphria Inc., one of Canada’s largest LPs purchased Broken Coast in
2018.

 

About Gabriella’s Kitchen Inc.

GABY is a U.S.-focused, consumer packaged goods company operating a house of brands in the cannabis
industry and in the mainstream grocery channel. Through its subsidiaries GABY indirectly holds a number
of licenses and permits issued by the California Department of Health, the California Bureau of Cannabis
Control and the County of Sonoma respectively, including manufacturing, distribution, cultivation and
nursery licenses. With these licenses and permits to operate in the cannabis channel, and its existing
infrastructure of major retailers and an extensive broker and distribution network in the mainstream channel,
GABY has successfully brought a number of its proprietary, acquired and third-party brands to market in
both the licensed and mainstream market.

 

Margot and her sister Gabriella co-founded GABY after Gabriella received a dire cancer diagnosis which
spurred the sisters to prolong Gabriella’s life through a holistic approach to health. Today, GABY is a
wellness company with a diverse range of products that use cannabis and hemp derived CBD to address a
variety of dietary and health concerns. Although Gabriella ultimately passed away from her illness, she
lived exponentially longer than doctors predicted. Her memory and passion live on through GABY’s
mission: to empower people to live healthy lives without compromise.
GABY’s shares trade on the CSE under the symbol “GABY” and on the OTCQB under the symbol
“GABLF”. For more information, visit www.GABYInc.com

 

For further inquiries, please contact:

General
Margot Micallef, Founder & CEO or Investor Relations at IR@gabriellas-kitchen.com or 800-674-2239.

Investors
Jonathan Ross, CFA
LodeRock Advisors Inc.
jon.ross@loderockadvisors.com
416-283-0178

Media
Colin Trethewey, APR
colin@prmedianow.com
813-480-1354.

 

Disclaimer and Forward-Looking Information

The CSE does not accept responsibility for the adequacy or accuracy of this release. Certain information set forth in
this news release may contain forward-looking statements that involve substantial known and unknown risks and
uncertainties, certain of which are beyond the control of the Company. Forward-looking statements are frequently
characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”,
“may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may”
or “will” occur. These statements are only predictions. Readers are cautioned that the assumptions used in the
preparation of such information, although considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on forward-looking statements. Forward looking
statements include, but are not limited to, the anticipated closing of additional acquisitions by the Company, the
continued growth and expansion of the Company’s operations, and the receipt of regulatory approvals, including the
approval of the CSE. The Company assumes no obligation to update forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by applicable law.

Certain of GABY’s subsidiaries hold cannabis licenses in the State of California. Unlike in Canada which has Federal
legislation uniformly governing the cultivation, distribution, sale and possession of medical cannabis under the
Cannabis Act (Federal), readers are cautioned that in the United States (“U.S.”), cannabis is largely regulated at the
State level. Cannabis is legal in the State of California however cannabis remains illegal under U.S. federal laws.
Notwithstanding the permissive regulatory environment of cannabis at the State level, cannabis continues to be
categorized as a controlled substance under the Controlled Substances Act in the U.S. and as such, cannabis-related
practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of
cannabis are illegal under U.S. federal law. To the knowledge of the Company, thef business of each of GABY‘s
licensed subsidiaries are conducted in a manner consistent with the State law of California and are in compliance
with regulatory and licensing requirements applicable in the State of California. However, readers should be aware
that strict compliance with State laws with respect to cannabis will neither absolve GABY, or any of its subsidiaries
of liability under U.S. federal law, nor will it provide a defense to any federal proceeding in the U.S. which could be
brought against any of GABY, or any of its subsidiaries. Any such proceedings brought against GABY, or its
subsidiaries may materially adversely affect the Company’s operations and financial performance generally in the
U.S. market specifically.

Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the
adequacy or accuracy of this release.