Highlights -Cronos Australia is offering 40 million shares at AUD$0.50 per share with expectations to list on the ASX in November 2019 -Indicative market capitalisation of AUD$64.4m upon completion of Offer -Cronos Australia aims to generate early revenue by importing and distributing the in-market PEACE NATURALS(TM) medicinal cannabis brand whilst also developing its own branded products -Cronos Australia was established as a 50:50 joint venture with NASDAQ-listed global cannabinoid company Cronos Group Inc. ("Cronos Group") and NewSouthern Capital -Subject to the terms of an IP license agreement between Cronos Group and Cronos Australia, Cronos Australia has access to certain elements of Cronos Group's intellectual property Medicinal cannabis company Cronos Australia Limited ("Cronos Australia" or "the Company") has launched a AUD$20 million initial public offer (IPO) of shares ahead of a planned listing on the Australian Securities Exchange in November 2019. Cronos Australia intends to become a leading supplier of cannabis products in Australia's emerging medicinal cannabis industry and, as regulations change and markets open, a supplier and exporter to the Asia-Pacific region. Cronos Australia intends to offer approximately 40 million new shares at AUD$0.50 per share (the "Offer"). The Offer comprises the Broker Firm Offer, which is open to Australian resident investors who have received an allocation from their broker; the Chairman's List Offer, which is open to investors in Australia nominated by Cronos Australia; and the Institutional Offer, which is open to institutional investors. No general public offer of the shares will be made under the Offer. Upon completion of the Offer, Cronos Australia expects to have a market capitalisation of AUD$64.4 million. Cronos Australia has secured all of the licences necessary to import, export, cultivate, manufacture and research cannabis. "This offering provides an opportunity to become a shareholder in a medicinal cannabis company that has all the licences needed to operate, has strong links with a leading global cannabinoid company, Cronos Group, and has a focus on the increasingly growing Asia-Pacific market," Cronos Australia Chairman Shane Tanner said. Cronos Australia Chief Executive Officer Rodney Cocks said, "This offering is an exciting step for Cronos Australia as we work to develop Australian cannabis products and brands to respond to both the domestic and international demand as the local and regional markets continue to evolve." Cronos Australia was established as a 50:50 joint venture between Cronos Group Inc. of Canada and Melbourne-based NewSouthern Capital Pty Ltd. Cronos Group is dual-listed on the NASDAQ and Toronto Stock Exchange. At completion of the Offer, Cronos Group is expected to own approximately 31 percent of the issued capital of Cronos Australia. Two Directors of Cronos Group sit on the Board of Cronos Australia, including Jason Adler and Cronos Group Chairman, President and CEO Mike Gorenstein. The Cronos Australia Board also includes former Federal Parliamentary Speaker Anna Burke AO and former Superloop (ASX: SLC) CEO Daniel Abrahams. "Cronos Australia's Board and management team are experienced and commercially focused to deliver on Cronos Australia's phased growth strategy," Mr. Tanner said. Under the terms of an IP license agreement between Cronos Group and Cronos Australia, Cronos Australia has access to certain elements of Cronos Group's intellectual property via sole territorial licences granted by Cronos Group. Cronos Australia intends to import and sell Cronos Group's PEACE NATURALS(TM) medicinal cannabis products, which are sold in Canada and Germany. The Company is pursuing an asset-light business model under which the cultivation of medicinal cannabis and the manufacturing of medicinal cannabis products are intended to be outsourced to other companies both domestically and overseas. "Our asset-light model gives us the flexibility and agility to respond to a rapidly evolving market and allows the Company to focus on the development of a range of medicinal brands and products," Mr. Cocks said. The Australian market for medicinal cannabis is still in its early stages, reflecting complex legislation and regulation. However, patient access is growing as legislation evolves and markets open. The Offer is scheduled to open on 16 October 2019 and close on 25 October 2019. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Details of the IPO The Company will offer 40,000,000 shares at an issue price of AUD$0.50 cents per share, to raise AUD$20 million before expenses. To participate in the IPO The Offer is being made under a prospectus lodged with ASIC on 15 October 2019 ("Prospectus") and is available at www.cronosaustralia.com. No general public offer of the shares will be made under the Offer. Offers will be made in, or accompanied by, a copy of the Prospectus. A person should consider the Prospectus in deciding whether to acquire shares. Anyone who wants to acquire shares will need to complete the application form that will be in or will accompany the Prospectus. Underwriting The Offer has been fully underwritten by Bell Potter Securities Limited, the Lead Manager and Underwriter to the Offer. Proposed Key Dates* -Opening Date of Offer (16 October 2019) -Closing Date of Offer (25 October 2019) -Allotment of New Shares – under the Institutional Offer, Chairman's List Offer and Broker Firm Offer (7 November 2019) -Expected commencement of trading on ASX on a deferred settlement basis (7 November 2019) -Expected dispatch of Shareholder holding statements (8 November 2019) -Shares expected to commence trading on ASX on a normal settlement basis (11 November 2019) *subject to change About Cronos Australia Cronos Australia Limited was established as a 50:50 joint venture between global cannabinoid company Cronos Group Inc (dual-listed – NASDAQ: CRON, TSX: CRON) and NewSouthern Capital. The Company was formed to take advantage of opportunities relating to the emerging cannabis industry both domestically and internationally. The vision of Cronos Australia is to become a leading health and wellness company in the Asia Pacific region through the distribution of premium THC and CBD cannabis products. SOURCE: Cronos Australia