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April 21, 2016 Research #13 Hemp-based pet foods True Leaf conquers the US Pet Food Market Last month, True Leaf Medicine International Ltd. announced to enter the US pet food market thanks to a major contract with a US distributor sup- plying its hemp-based dog treats to more than 3,000 pet stores across 29 US states. Hereupon, True Leaf’s stock has appreciated confidently from $0.13 to $0.21. Today, the company announced to now have doubled the number of US pet stores to more than 6,300. This material news marks a major milestone for True Leaf in respect to growth through generation of significant sales revenues. Also of note: Yesterday, Canadian health min- ister Jane Philpott announced that federal legislation to legalize marijuana will be ready in a year. Health Canada may grant a number of new mari- juana production licenses to Canadian companies in the upcoming months. Company Details True Leaf Medicine Internaonal Ltd. 100 Kalamalka Lake Road, Unit 32 Vernon, BC V1T 9G1, Canada Phone: +1 778-389-9933 Email: [email protected] www.trueleaf.com Shares Issued & Outstanding: 42,090,281 Canadian Symbol (CSE): MJ Current Price: $0.21 CAD (April 20, 2016) Market Capitalizaon: $9 million CAD German Symbol / WKN: TLA / A14NM1 Current Price: €0.168 EUR (April 21, 2016) Market Capitalizaon: €7 million EUR Chart Canada (CSE) Chart Germany (XETRA)

True Leaf conquers the US Pet Food Market with Hemp

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Page 1: True Leaf conquers the US Pet Food Market with Hemp

April 21, 2016

Research #13Hemp-based pet foods

True Leaf conquers the US Pet Food Market

Last month, True Leaf Medicine International Ltd. announced to enter the US pet food market thanks to a major contract with a US distributor sup-plying its hemp-based dog treats to more than 3,000 pet stores across 29 US states. Hereupon, True Leaf’s stock has appreciated confidently from $0.13 to $0.21. Today, the company announced to now have doubled the number of US pet stores to more than 6,300. This material news marks a major milestone for True Leaf in respect to growth through generation of significant sales revenues. Also of note: Yesterday, Canadian health min-ister Jane Philpott announced that federal legislation to legalize marijuana will be ready in a year. Health Canada may grant a number of new mari-juana production licenses to Canadian companies in the upcoming months.

Company Details

True Leaf Medicine International Ltd.100 Kalamalka Lake Road, Unit 32Vernon, BC V1T 9G1, CanadaPhone: +1 778-389-9933 Email: [email protected] Issued & Outstanding: 42,090,281

Canadian Symbol (CSE): MJCurrent Price: $0.21 CAD (April 20, 2016)Market Capitalization: $9 million CAD

German Symbol / WKN: TLA / A14NM1Current Price: €0.168 EUR (April 21, 2016)Market Capitalization: €7 million EUR

Chart Canada (CSE)

Chart Germany (XETRA)

Page 2: True Leaf conquers the US Pet Food Market with Hemp

Research #13 | True Leaf Medicine International Ltd.2

hen True Leaf participated at the Global Pet Expo in Orlando (USA) in March, a

number of US distributors and retail chains moved to bring in True Leaf‘s product line and have agreed to offer the products to their customers.

In total, True Leaf has now secured distribution coverage to over 6,300 stores across the US and is looking to roll out more products in time for the upcoming SuperZoo expo in Las Vegas.

“We expect to secure distribution to 100% of the US specialty pet market by this fall and be in a great position to grow our brand,” confirmed CEO Darcy Bomford.

The hemp-focused product line is sold as a dietary supplement in a ‘soft chew’ format and appeals to consumers who are looking to substitute a daily ‘treat’ with something that supports their dog’s health.

Industry expert Kristen Levine, President of Fetching Communications, says consumers are looking for quality and transparency in brands they can trust.

Bomford commented today:

“We are extremely pleased with the response to our True Hemp™ line of functional chews during and after the show. We are confident that we will continue to secure more distribution and retail partners as we move into the summer months and get ready for the SuperZoo show in Las Vegas this August. At True Leaf, transparency and trust are our core values. The industry is changing as quality-conscious millennials and baby boomers look for these values.”

The following distributors and retail chains have agreed to offer True Leaf’s product line in the US:

Southeast PetAn Atlanta/Georgia-based distributor celebrating 41 years as the leading wholesale pet product distributor in the southeastern US. This specialty pet distributor covers 6 southeastern states with warehouses in Austell (Georgia) and

Lakeland (Florida) totalling 15.794 m2 (170,000 sq.ft). The company has brought in the product line, including it in their recent customer trade show. Southeast Pet services more than 1,300 stores in Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee. At the close of 2015, the family owned and operated business was converted to an ESOP, making it the first and only 100% employee-owned wholesale pet product distributor in the US. Visit www.southeastpet.com for more information. Its President, Ryan Judge, commented today:

“At Southeast Pet, we are firmly committed to bringing new and innovative products to our independent pet specialty retailers and True Hemp has been a great addition to our lineup. This hemp-based functional chew was very well received by our retailers during our April 2016 Open House.”

United Pacific Pet (UPP)A southern California pet products distributor covering retailers, feed stores and veterinary clinics from San Diego to Bridgepor (California) and Las Vegas (Nevada) since 1918. UPP services over 1,500 stores from a 13,936 m2 (150,000 sq.ft) facility in Fontana (California) and signed up to distribute the True Hemp™ dog chews shortly after the Global Pet Expo. Visit www.uppet.com for more information.

In addition, a number of retail chains have come forward as new vendors, including:

Family Farm & Home®A 50-store chain headquartered in Michigan. According to the company:

“We are proud to announce that Family Farm and Home is a family owned and operated company based out of Michigan. Our first stores opened their doors in April 2002. Currently we operate 46 retail location (34 in Michigan, 3 in Indiana, 9 in Ohio). We cater to our customers’ needs by supplying a wide variety of products in departments such as tools, hardware, automotive, pet, work and casual clothing, footwear, farm supplies, horse and livestock feed, bird food, lawn and garden, and alternative heating. Here at Family Farm and Home, our outstanding team members are dedicated to providing incredible product values and exceptional customer service to all customers. Because of this commitment, Family Farm and Home has experienced rapid growth on all levels. Our continued growth in the future is limitless due to our devoted staff and constantly growing group of loyal customers. Have YOU joined the “FFH” family yet?”

Pet’s Barn™20 retail stores located in Texas. According to the company:

“Established in 1947 as Valley Feed and Supply, Inc., Pet’s Barn is an El Paso, Texas based pet supply factory and retailer. Locally owned and operated, Pet’s Barn is committed to providing Pet Supplies, Dog Food, and Pet Treats. We felt so strong about quality products and fair prices that we bought the factory and moved it to Texas.”

W

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Research #13 | True Leaf Medicine International Ltd.3

Dirty Dogs™A chain of 5 boutique pet stores located in San Diego, California. According to the company:

“Dirty Dogs is a one-stop-shop for all your pets’ needs. We provide healthy nutritional foods, cage-free grooming, self-serve washing facilities, and many accessory products. At Dirty Dogs, we have based our company values on what’s best for your four-legged friends. Our knowledgeable staff and fun atmosphere guarantee that you... Dirty Dogs is first and foremost a family business. As dog lovers and experienced dog owners, we take pride in fulfilling our communities’ need for local stores where each product and service is a reflection of overall pet health. We want every dog to live life to the fullest! Our mission is simple: Provide San Diegans with the healthiest pet foods and top-of-the-line, natural dog grooming services for their four-legged loved ones while supporting local, dog-friendly communities. Our pet grooming team

consists of handpicked dog and cat stylists each with in-depth knowledge of premium pet haircuts while maintaining a cage-free environment of animal compassion. We also have our premium, river rock U-Do-It tubs for customers who like to role their sleeves up and share in the dog bathing experience. The idea for Dirty Dogs was conceived by the Btesh family’s youngest son, Joel. In 2007 Joel wasn’t able to find premium dog foods and a fun dog washing facility for the family dogs, Revo and Moe. The family conceptualized Dirty Dogs as a place that not only provided premium services and foods, but also as a place where people could come to learn more about their pets and have positive experiences with them.”

True Leaf’s corporate office continues to field daily emails from retailers who want to carry the True Hemp™ Dog Chews.

Yesterday, Canada‘s Health Minister, Jane Philpott, told the UN that federal legislation to legalize marijuana will be

ready in a year. Bill Blair, the parliamen-tary secretary to the justice minister who serves as Canada‘s point man on the le-galization legislation, said: “It‘s a great deal of work. It‘s important to do it right. And so, we‘re looking at regulations with respect to production, distribution, the retail and consumption of marijuana and we want to make sure that it‘s based on the best advice from experts.“

Rockstone sees this governmental le-gislation announcement as the start for Health Canada to licence multiple new marijuana producers in the upco-ming months. Besides its hemp-based dog chews business, True Leaf has filed an application under Health Canada´s Marihuana for Medicinal Purposes Re-gulations (MMPR) to become a licensed producer with a facility located in the Village of Lumby, BC. The company has passed through the preliminary and en-hanced screening process of Health Ca-nada´s review and is currently awaiting a ´ready-to-build´ approval.

Federal marijuana legislation to be introduced in spring 2017, Philpott says

By CBC News on April 20, 2016

Health minister in New York for UN talks to review global drug treaties

Federal legislation to legalize marijuana will be ready in a year, Canada’s health minister told the UN at a special session of the General Assembly in New York today.

“We will introduce legislation in spring 2017 that ensures we keep marijuana out of the hands of children and profits out of the hands of criminals,” Jane Phil-pott said in her prepared speech to dele-gates. “We will work with law enforce-ment partners to encourage appropriate and proportionate criminal justice meas-ures. We know it is impossible to arrest our way out of this problem,” she said.

Philpott, Blair in New York to attend UN talks on war on drugs

Delegates are reviewing the progress and implementation of the UN’s 2009 action plan on drugs to assess ongoing challen-ges in combating the world’s drug prob-lems. Three days of meetings will con-clude Thursday.

Bill Blair, the parliamentary secretary to the justice minister who serves as Can-ada’s point man on the legalization legis-lation, is with Philpott in New York.

“It’s a great deal of work. It’s important to do it right. And so, we’re looking at regulations with respect to production, distribution, the retail and consumption of marijuana and we want to make sure that it’s based on the best advice from experts.” Blair told reporters on his way to the meetings on Tuesday.

The health minister said the govern-ment’s proposed marijuana policy chal-

lenges the status quo, but will enhance the safety of youth. The federal Liberal Party’s election pledge on pot would breach three global treaties on illicit drug use signed by previous Canadian govern-ments.

Canada’s plans are contentious for some other UN members. Philpott said that she is aware states will take different ap-proaches on the matter, but is hopeful they can find common ground to create a comprehensive, collaborative and com-passionate drug policy.

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Research #13 | True Leaf Medicine International Ltd.4

About True Leaf

True Leaf Medicine International Ltd., through its wholly-owned subsidiary ‘True Leaf Pet’, is entering the $60 billion pet industry with a line of hemp-focused chews and supplements mar-keted through natural pet health and veterinary channels in Canada and USA. The company has also filed an application under Health Canada’s Marihuana for Medicinal Purposes Regula-tions (MMPR) to become a licensed producer through its ‘True Leaf Medicine’ subsidiary.

Analyst Coverage:

Research #12 “True Leaf To Sell Hemp-Based Products in 3500 Stores in the US”

Research #11 “True Leaf‘s Product Line Now Available in 47 Canadian Retail Stores”

Research #10 “True Leaf‘s Selling Fast”

Research #9 “True Leaf Expands to Europe”

Research #8 “True Leaf Unveils New Product Line”

Research #7 “Another Key Piece for the True Leaf Puzzle”

Research #6 “True Leaf Pet’s Hemp Chew Product Line to be Distributed Across Canada”

Research #5 “Interview with True Leaf‘s CEO Darcy Bomford“

Research #4 “One Step Closer Becoming A Licenced Medical Marijuana Producer“

Research #3 “True Leaf on its way to production“

Research #2 “True Leaf To Enter The Pet Food Market With Hemp Products In Fall of 2015“

Research #1 “True Leaf Medicine Interna-tional Ltd. Goes Public“

Immediate decriminalization?

NDP Leader Tom Mulcair told reporters he believes the legalization policy proposed by the Liberals is just another broken promise. He says the only thing the Lib-erals have done so far is appoint Bill Blair.

“There are thousands and thousands of mostly young people who will have criminal records for the rest of their lives because (Prime Minister) Justin Trudeau did not respect his promise to legalize marijuana as soon as he took office,” he said.

Mulcair said if the Liberal government found the issue too complicated they should immediately decriminalize ma-rijuana and address complex issues like supply later.

“It’s a massive waste of time, effort and energy of our entire criminal justice sys-tem,” he said.

Later, during question period in the House of Commons, Mulcair asked whether Tru-deau would at least promise legislation to remove criminal records of Canadians charged before a new law is in place.

In response, Trudeau said simply decrim-inalizing marijuana does not help the government meet its goal of keeping pot out of the hands of children, but would offer a legal stream of income to crimin-als selling it.

“The fact of the matter is we’ve been clear. We believe in legalization and regulation of marijuana because it protects our kids and keeps money out of the pockets of criminal organizations and street gangs,” Trudeau told the Commons.

Conservative MP Colin Carrie told the CBC’s Susan Lunn that the announce-

ment from health minister Philpott has done nothing but create more chaos sur-rounding the issue.

“It’s in their hands whenever they want to bring it forward, It’s unfortunate though that they’re causing so much chaos with parents in communities and police forces. At the end of the day what is important to us is about the kids. Mr. Trudeau said he is keeping it out of the hands of kids ... let’s get him moving for-ward on that,” he said.

Carrie believes legalization is not neces-sary.

“If you look at the statistics that are out today, the status quo has been working. Marijuana smoking is down 23 per cent in the last few years. But he’s brought this up, he’s made it an issue let’s see what his plan is,” he said.

Cannabis culture demonstrations are underway across the country as pro-ma-rijuana advocates gather in support of legal use on a day known as “4/20.”

Philpott told CBC’s Rosemary Barton that the announcement was not purposely made on “4/20,” but the government capitalized on the opportunity to further the discussion.

“It’s a day that we know people are going to be talking about marijuana and when we were aware of that fact we thought it was a great day for us to talk to people around the world about Canada’s plans and our comprehensive approach to drug policy, including the legalization of and new regulations for marijuana,” said Philpott on CBC News Network’s Power & Politics.

Demonstrators, many of them smoking the drug, also gathered on Parliament Hill. Some members of the crowd were greeted and took photos with Mulcair.

Dominion carillonneur Andrea McCrady used her noon concert from the Peace Tower to play arrangements of tunes per-haps inspired by the gathering, including Puff, The Magic Dragon.

Read the full article here

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Research #13 | True Leaf Medicine International Ltd.5

Hemp is Not Marijuana: True Leaf’s pet product line contains hemp as one of the primary ingredients; providing the health benefits of hemp is what sets True Leaf apart from the competition. Hemp anCd marijuana are different varieties of the same plant species of ‘Can-nabis Sativa’. Marijuana plants contain high levels of THC. Hemp, on the other hand, is non-psychoactive and contains very little THC (less than .3% by law), but certain cultivars contain cannabidiol (CBD). Hemp seed oil, a major component of hemp seed itself – and of True Leaf Pet’s product line – has a variety of beneficial properties and is showing great promise on its own as a supplement. Becau-se hemp oil is extracted from the industrial hemp plant, it contains no psychoactive reactors. Hemp seed oil is extremely high in ome-ga-6 and omega-3 fatty acids in the ratio of 3:1, which is required by dogs for optimal health and well-being. Hemp contains known

antioxidants from tocopherols and hosts a variety of other beneficial properties including anti-inflammatory compounds from terpenes, plant sterols and methyl salicylate – a relative of acetylsalicylic acid or ‘aspirin’. Hemp oil helps to support the moisture level in a dog’s skin and fur, and supports the body‘s ability to heal skin disorders such as dry nose, dog acne, dog eczema, dog rash and dog dandruff. Further, hemp seed oil supports the body‘s ability to enhance blood circulation, stimulate a dog’s cognitive thinking and can help thicken fur texture and lessen shedding. Hemp is legally refined in industrial factories for textile and nutritional use: it is often consumed and mi-xed into other products including cereal, granola bars and hemp dog treats. Hemp chews for dogs are increasing in popularity because of its significant potential health benefits that may include joint pain reduction, skin and coat nourishment and antioxidant support.

US branding: US branding: US branding:

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Research #13 | True Leaf Medicine International Ltd.6

Disclaimer and Information on Forward Looking Statements:All statements in this report, other than statements of historical fact should be con-sidered forward-looking statements. Much of this report is comprised of statements of projection. Statements in this report that are forward looking include that True Leaf Medi-cine International Ltd. or any other company or market will perform as expected; that True Leaf will start producing saleable prod-ucts; that True Leaf or its partner(s) can and will start producing and selling any kinds of products; that the company can raise suffi-cient funds for product development and/or production; that any of the mentioned plans are valid or economic. Such statements in-volve known and unknown risks, uncertain-ties and other factors that may cause actual results or events to differ materially from those anticipated in these forward-look-ing statements. Risks and uncertainties re-specting medical marijuana and/or hemp-fo-cussed companies are generally disclosed in the annual financial or other filing docu-ments of True Leaf Medicine International Ltd. and similar companies as filed with the relevant securities commissions, and should be reviewed by any reader of this report. In addition, with respect to True Leaf Medicine International Ltd., a number of risks relate to any statement of projection or forward statements, including among other risks: the receipt of all necessary approvals and per-mits; the ability to conclude a transaction to start or continue product development and distribution; uncertainty of future market regulations, capital expenditures and other costs; financings and additional capital re-quirements for development, construction, and operating of a facility; the receipt in a timely fashion of further permitting for its legislative, political, social or economic de-velopments in the jurisdictions in which True Leaf Medicine International Ltd. carries on business; operating or technical difficulties in connection with production or development activities; the ability to keep key employees, joint-venture partner(s), and operations financed. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking in-formation. Rockstone and the author of this report do not undertake any obligation to update any statements made in this report.

Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Rockstone, its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including Rockstone’s report, especially if the investment involves a small, thinly-traded company that isn’t well known. The author of this report is paid by Zimtu Capital Corp., a TSX Venture Exchange listed investment company. Part of the author’s responsibilities at Zimtu is to research and report on companies in which Zimtu has an investment. So while the author of this report is not paid directly by True Leaf Medicine International Ltd., the author’s employer Zimtu will benefit from appreciation of True Leaf Medicine International Ltd.’s stock price. In addition, the author owns shares of True Leaf Medicine International Ltd. and would also benefit from volume and price appreciation of its stock. In this case, True Leaf Medicine International Ltd. has one or more common directors with Zimtu Capital Corp. Thus, multiple conflicts of interests exist. Therefore, the information provided herewithin should not be construed as a financial analysis or recommendation but strictly as an advertisment. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Rockstone and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect. Please read the entire Disclaimer carefully. If you do not agree to all of the Disclaimer, do not access this website or any of its pages including this report in form of a PDF. By using this website and/or report, and whether or not you actually read the Disclaimer, you are deemed to have accepted it. Information provided is educational and general in nature.

Analyst Profile and Contact

Stephan Bogner (Dipl. Kfm. FH)Mining Analyst Rockstone Research 8050 Zurich, [email protected]

Stephan Bogner studied at the International School of Management (Dortmund, Germany), the European Business School (London)

and the University of Queensland (Brisbane, Australia). Under supervision of Prof. Dr. Hans J. Bocker, Stephan completed his diploma thesis (“Gold In A Macroeconomic Context With Special Consideration Of The Price Formation Process”) in 2002. A year later, he marketed and translated into German Ferdinand Lips‘ bestseller („Gold Wars“). After working in Dubai for 5 years, he now lives in Switzerland and is the CEO of Elementum International AG specialized in duty-free storage of gold and silver bullion in a high-security vaulting facility within the St. Gotthard Mountain Massif in central Switzerland.

Rockstone is a research house specialized in the analysis and valuation of capital markets and publicly listed companies. The focus is set on exploration, development, and production of resource deposits. Through the publication of general geological basic knowledge, the individual research reports receive a background in order for the reader to be inspired to conduct further due diligence. All research from our house is being made accessible to private and institutional investors free of charge, whereas it is always to be construed as non-binding educational research and is addressed solely to a readership that is knowledgeable about the risks, experienced with stock markets, and acting on one’s own responsibility.

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