Now is not the time to sell. CanniMed is poised to create real and significant value by acquiring Newstrike.

Transcription

1 Now is not the time to sell. CanniMed is poised to create real and significant value by acquiring Newstrike. TO REJECT AURORA S HOSTILE BID SIMPLY DO NOTHING. DO NOT TENDER YOUR CANNIMED SHARES. For information about rejecting Aurora s offer call Kingsdale Advisors at

2 Therapeutics Inc. ATTENTION CANNIMED SHAREHOLDERS Aurora is opportunistically trying to takeover CanniMed by offering its inflated shares in exchange for your CanniMed Shares just as CanniMed is poised to create real and significant value for its Shareholders. The Hostile Bid has been structured to deprive you of the upside in both CanniMed s business and Aurora s share price, while exposing you, as CanniMed Shareholders, to significant downside risks. The Hostile Bid also aims to deprive you of the significant benefits and synergies that can be unlocked through the acquisition of Newstrike. Aurora s CEO and other senior officers have been selling significant numbers of Aurora shares, showing that they do NOT believe in the longterm value of Aurora. The Hostile Bid significantly undervalues your CanniMed Shares and is NOT IN THE BEST INTERESTS OF CANNIMED OR ITS SHAREHOLDERS. CanniMed s Board of Directors unanimously recommends that you REJECT the unsolicited Hostile Bid NO ACTION IS REQUIRED to REJECT the Hostile Bid, which is currently open for acceptance until 11:59 P.M. Pacific Time on March 9, If you have already tendered your CanniMed Shares to the Hostile Bid, you can withdraw your CanniMed Shares by contacting your broker or Kingsdale v29

3 December 8, 2017 Dear fellow CanniMed shareholder, You have two paths before you. The first path, recommended by your board of directors, with the unanimous recommendation by the special committee of independent directors, presents an attractive and accretive acquisition that will make you an owner of a premier global cannabis company with the opportunity for significant financial returns. This is our proposed acquisition of Newstrike Resources Ltd. ( Newstrike ), and its Up Cannabis brand tied to the iconic Canadian band, The Tragically Hip (collectively, the Newstrike Acquisition ). The second undesirable path, attempts to entice you with phantom value for your CanniMed Shares. This is Aurora Cannabis Inc. s ( Aurora ) all-share hostile bid, that is based on an inflated and unsustainable Aurora share price, for CanniMed valued at a maximum capped value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share with no downside value protection (the Hostile Bid ). Not only is the Hostile Bid based on an inflated Aurora share price that creates the risk you will not receive the price promised if you tender, but the strategic rationale Aurora points to is already available to shareholders through CanniMed s existing business, the Newstrike Acquisition and other opportunities available to us. Together, by approving the Newstrike Acquisition, we can create a premier cannabis company that is positioned to offer innovative, high-quality products with two distinct top-tier brands that are each well-positioned to address key product trends and emerging drivers of growth in both the medical and adult use recreational cannabis markets. Taking this step will make CanniMed more valuable to you and to any future acquiror. It is important that you have the facts about the two paths before you make a decision with respect to your CanniMed Shares. After careful consideration, with the advice of external financial and legal advisors, your directors unanimously recommend that you REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition. If you have already tendered your CanniMed Shares to the Hostile Bid, you should withdraw them immediately. A urora is offering phantom value for your CanniMed Shares that is based on an inflated share price. You should be very concerned that 100% of the consideration being offered by Aurora is in the form of Aurora Shares Aurora Shares that were worth half as much just two weeks before the Hostile Bid was announced. The premium currently implied by the proposed exchange ratio is inflated and is based on the recent substantial and inexplicable run up in Aurora s share price 110% over the two weeks leading up to Aurora s announcement of its intention to launch the Hostile Bid ($3.05 to $6.41). This significant run up in share price is not based on substantive decisions or value created by Aurora s management. The premium is inadequate and Aurora knows your CanniMed Shares are worth more. Aurora s Executive Vice President, Cam Battley, recently told BNN that, it makes sense for us to grab assets in Canada at incredibly attractive valuations and they ll be worth two or three times those valuations in 12 months. This implies a minimum value of $30 for CanniMed. Aurora is trying to grab your CanniMed Shares without paying you fair value for them. Do not let them get away with this.

4 Aurora has capped your upside but left you with significant downside risk. The potential value offered has been capped at $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) offering you no exposure to market upside nor additional value which will be created by CanniMed or the industry prior to close. You have no downside protection at a time when Aurora has had significant cost overruns and delays at Aurora Sky, as well as numerous operational issues, including two product recalls this year. It is extremely telling that the shareholders who have entered into questionable off-market lock-up agreements have negotiated downside protection on the share price of CanniMed Shares at $16.00 and $18.00 (based on certain conditions) while no protection is offered to other CanniMed Shareholders. The Hostile Bid is tilted in favour of Aurora s shareholders, not you. First, the Hostile Bid only gives CanniMed Shareholders approximately15.3% ownership of the combined company (based on Aurora s current 20-day VWAP share price), even though CanniMed currently has greater production capacity, a similar number of patients, and an established and successful track record of quality in a strict government regulated environment. Second, if Aurora s share price continues to trade above $5.30, the consideration available to you does not increase but your ownership in the combined company is reduced. For example, if Aurora s current share price of $7.00 (as of December 6, 2017) persists, you would only receive 3.4 Aurora Shares for every CanniMed Share, not the 4.5 Aurora Shares that would imply a value for CanniMed in excess of $32.00 per CanniMed Share or approximately 14.3% of the combined company. CanniMed has a great story which is why Aurora wants us so why limit your ability to participate in that upside? As Aurora s management is extolling the virtues of Aurora and trying to convince you to tender to the Hostile Bid for Aurora Shares, the CEO and other directors and senior officers of Aurora are selling significant numbers of their own Aurora Shares. This raises serious questions about their belief in their own ability to execute the business plan they are selling to the market. For example, on November 28, 2017 alone, and just one day before Aurora s share price fell 14%, four Aurora insiders, including its CEO, sold over $17.8 million in Aurora Shares. Collectively, Aurora s management and directors have sold a total of over $42.9 million worth of Aurora Shares this year. This kind of selling is very unusual. The most logical inference from this is that Aurora s management believes Aurora cannot and will not remain at its current valuation. T he Newstrike Acquisition was carefully thought out and fully diligenced. In contrast to the Hostile Bid, which your board of directors will have no opportunity to diligence, the acquisition of Newstrike has been thoroughly diligenced by your board of directors and management. The Newstrike Acquisition will create a premier cannabis company, providing you with an opportunity to participate in the growth of both the medical and recreational markets and offering you a more compelling, risk-adjusted return (while preserving your ability to obtain a real premium at a later date should you choose).

5 Adding recreational products is expected to unlock significant value to the price of your CanniMed Shares. CanniMed will be more valuable as a company that offers both medical and recreational products. We believe that there is significant value in CanniMed s existing business that is not currently being recognized by the market, and that the Newstrike Acquisition will help unlock that value. Combining CanniMed s 16 years of pharmaceutical cannabis cultivation experience with zero product recalls or product shortages with Newstrike and Up Cannabis premier recreational brand (in partnership with The Tragically Hip) and expertise in key product trends, creates the opportunity for significant financial returns. You should carefully review the CanniMed Special Meeting Circular describing in detail all the benefits of the Newstrike Acquisition. By requiring major shareholders of CanniMed to block the Newstrike Acquisition and entering into lock-up agreements, Aurora is attempting to handcuff CanniMed s Board of Directors ability to improve shareholder value and railroading shareholders into tendering to an offer that is not in your best interests. Aurora has further misled CanniMed Shareholders by stating that the lock up agreements are irrevocable, which is not the case as they have many termination avenues including downside protection. By way of a highly coercive and off-market condition, the lockups signed do not allow the shareholders who have entered into them to tender to a superior offer. With 36% of the vote secured through lock-ups as of the date of this Directors circular, the possibility of a superior offer emerging is reduced. In fact, Aurora touts the fact that it has blocked your ability to see increased value by blatantly stating in its circular that it doubts CanniMed will be able to come up with a superior transaction. By refusing to tender your shares, you send an important message: You will not allow Aurora to block you from maximizing the value of your investment in CanniMed. While we encourage you to read the circular that follows in its entirety, one fact is clear: the only certainty for you as a CanniMed Shareholder is in the attractive and accretive Newstrike Acquisition and the future opportunities such acquisition will bring to you as a CanniMed Shareholder. Ask yourself do you want to own the shares of a well-considered, operationally sound company poised to capitalize on both the medical and recreational market with superior brands or do you want to be a minority shareholder in an over-hyped and inflated stock? To reject the Hostile Bid, simply take no action do not tender your shares and vote to approve the Newstrike Acquisition. If you have tendered your shares in error or now wish to withdraw them, simply ask your broker or Kingsdale Advisors at or contactus@kingsdaleadvisors.com to assist with that process. We look forward to sharing the bright future of a combined CanniMed and Newstrike with you. Yours truly, On behalf of the Board of Directors, Donald Ching Donald Ching, Chairman

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7 This document is important and requires your immediate attention. If you are in doubt as to how to respond to the unsolicited hostile bid made by Aurora Cannabis Inc., you should consult your investment dealer, stockbroker, lawyer or other professional advisor. Therapeutics Inc. DIRECTORS CIRCULAR RECOMMENDING REJECTION of the unsolicited hostile bid by AURORA CANNABIS INC. to acquire all of the common shares of CANNIMED THERAPEUTICS INC. on the basis of a share exchange of Aurora Shares for CanniMed Shares dependent on Aurora s share price and subject to a maximum value of $24.00 (based on a formula related to Aurora s share price) per CanniMed Share. The Board of Directors has unanimously concluded that the Hostile Bid significantly undervalues CanniMed Shares and is not in the best interests of either CanniMed or its Shareholders and recommends that you REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares. NO ACTION IS REQUIRED to REJECT the Hostile Bid, which is currently open for acceptance until 11:59 P.M. Pacific Time on March 9, If you have already tendered your CanniMed Shares to the Hostile Bid, you can withdraw them by contacting your broker or Kingsdale Advisors, North American Toll Free at or via at contactus@kingsdaleadvisors.com v29

8 SUMMARY The information set out below is intended to be a summary only and is qualified in its entirety by the more detailed information appearing elsewhere in this Directors Circular. This Directors Circular should be read carefully and in its entirety by CanniMed Shareholders as it provides important information regarding CanniMed, Aurora, the Hostile Bid, and the Newstrike Acquisition. All capitalized terms in this summary have the respective meanings ascribed to them in the Glossary attached as Schedule A to this Directors Circular or elsewhere in this Directors Circular. UNANIMOUS Recommendation of the CanniMed Board to REJECT the Hostile Bid The CanniMed Board has UNANIMOUSLY determined that the Aurora Hostile Bid significantly undervalues CanniMed Shares and is not in the best interests of either CanniMed or CanniMed Shareholders. The CanniMed Board UNANIMOUSLY recommends that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares. Any CanniMed Shareholder who has tendered its CanniMed Shares to the Hostile Bid should WITHDRAW those CanniMed Shares. See Compelling Reasons for Rejecting Aurora s Offer on page 14. UNANIMOUS Recommendation of the CanniMed Board to APPROVE the Newstrike Acquisition: The Hostile Bid: The CanniMed Board recommends that CanniMed Shareholders vote to APPROVE the Newstrike Acquisition. See the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. Aurora has made an unsolicited offer to purchase all of the outstanding CanniMed Shares, including CanniMed Shares that may be issued prior to the Expiry Time upon the exercise of Options. CanniMed Shareholders are capped at a maximum value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share. The CanniMed Shareholders are at risk for any decline in the price of Aurora Shares that may occur before the Expiry Time and do not participate in any Aurora Share appreciation above $5.30 per Aurora Share. Based on Aurora s share price of $7.00 on December 6, 2017, the number of Aurora Shares issuable for each CanniMed Share would only be 3.4 Aurora Shares. This number could further decrease but cannot exceed 4.5 Aurora Shares. The declining exchange ratio, which is currently triggered by Aurora Share appreciation above $5.30 per Aurora Share, deprives CanniMed Shareholders of such appreciation by decreasing the number of Aurora Shares they will receive, and provides no assurances that CanniMed Shareholders will be able to realize $24.00 worth of consideration immediately following closing. YOU DO NOT HAVE TO DO ANYTHING TO REJECT THE HOSTILE BID. SIMPLY DO NOT TENDER YOUR CANNIMED SHARES. Any CanniMed Shareholder who has tendered its CanniMed Shares to the Hostile Bid should WITHDRAW those CanniMed Shares. - vi -

9 The Hostile Bid is open for acceptance until the Expiry Time unless extended, accelerated or withdrawn by Aurora in accordance with its terms. Aurora has applied for relief from the applicable securities regulatory authorities in Canada to accelerate the Expiry Time to a date that is no less than 35 days from the date the Hostile Bid was made. CanniMed does not believe that such action is appropriate and is vigorously opposing Aurora s attempt to deprive CanniMed and CanniMed Shareholders of the time necessary to consider alternatives to the Hostile Bid. The CanniMed Board UNANIMOUSLY recommends that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition. Any CanniMed Shareholder who has tendered its CanniMed Shares to the Hostile Bid should WITHDRAW those CanniMed Shares. CanniMed Shareholders who have already tendered their CanniMed Shares to the Hostile Bid and who wish to obtain assistance in withdrawing them are urged to contact their broker or Kingsdale Advisors, the Strategic Shareholder Advisor and Information Agent retained by CanniMed, at or contactus@kingsdaleadvisors.com. Reasons for Rejection of the Hostile Bid: The CanniMed Board has carefully reviewed and considered the Hostile Bid, with the benefit of advice from their independent financial and legal advisors. The CanniMed Board, based on the unanimous recommendation of the Special Committee, has UNANIMOUSLY concluded that the Hostile Bid is inadequate and not in the best interests of CanniMed, CanniMed Shareholders or CanniMed s other stakeholders. The following is a summary of the principal reasons for the CanniMed Board s UNANIMOUS recommendation that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition: The Hostile Bid does not adequately value CanniMed Shares; Aurora s management recognizes that the Aurora Shares are inflated and are actively selling a significant number of their own Aurora Shares; The Hostile Bid is structured to deprive CanniMed Shareholders of any upside in Aurora s share price but fully exposes them to the downside; If the Hostile Bid is successful, the CanniMed Shareholders will own a small fraction of Aurora and that fraction will be even smaller if Aurora s share price goes up; There is a growing short position in the Aurora Shares, which is troubling; CanniMed s existing platform and the strategic Newstrike Acquisition represent a superior opportunity for real, sustainable and long term value creation; Management and certain directors of CanniMed and other certain CanniMed Shareholders will not tender to the Hostile Bid; - vii -

10 The strategic rationale for the Hostile Bid disproportionately benefits Aurora over CanniMed Shareholders; The coercive Hostile Bid Lock-Up Agreements and other deal conditions are unfair to CanniMed Shareholders and hamstring CanniMed s ability to maximize value; and The Hostile Bid is highly conditional. See Compelling Reasons for Rejecting Aurora s Offer on page 14. CanniMed s Regulatory Response to the Hostile Bid Newstrike Acquisition: Aurora has applied for relief from the applicable securities regulatory authorities in Canada to accelerate the Expiry Time to a date that is no less than 35 days from the date the Hostile Bid was made and to cease trade the Rights Plan. CanniMed is vigorously opposing Aurora s application and attempt to deprive CanniMed and CanniMed Shareholders of the time necessary to consider alternatives to the Hostile Bid. In addition, on the approval of the Special Committee, CanniMed intends to apply to the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission for, among other things, an order that the Hostile Bid is an insider bid on the basis that the Locked-Up CanniMed Shareholders have acted jointly and in concert with Aurora for purposes of the Hostile Bid and that consequently: (i) Aurora has not complied with Canadian securities law applicable to insider bids; and (ii) the CanniMed Shares held by the Locked-Up CanniMed Shareholders should be excluded from the 50% minimum tender condition required by applicable Canadian securities law. In addition, the application is expected to seek relief and/or action from the regulatory authorities in relation to various other breaches of applicable Canadian securities law by Aurora and the Locked-Up CanniMed Shareholders and to invoke the public interest with respect to the rights and reasonable expectations of CanniMed Shareholders. The CanniMed Board has carefully reviewed and considered the Newstrike Acquisition, with the benefit of advice from their financial and legal advisors. The CanniMed Board, based on the unanimous recommendation of the Special Committee, has UNANIMOUSLY concluded that CanniMed Shareholders should vote to APPROVE the Newstrike Acquisition as the Newstrike Acquisition is in the best interests of CanniMed, CanniMed Shareholders or CanniMed s other stakeholders. The Newstrike Acquisition was not in response to the Hostile Bid and has been under consideration and negotiation by CanniMed for a period of time. Please refer to the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR, for a complete analysis and description of the Newstrike Acquisition. If the Newstrike Acquisition is completed, Newstrike will become a direct wholly-owned subsidiary of CanniMed. For the Newstrike Acquisition to be completed, CanniMed Shareholders must pass a resolution by the affirmative vote of a majority of the votes cast by CanniMed Shareholders present in person or represented by proxy and entitled to vote at the CanniMed Special Meeting approving the issuance of CanniMed Shares pursuant to the Newstrike Acquisition. The Newstrike Acquisition is not expected to materially affect the control of CanniMed. If CanniMed Shareholders pass the - viii -

11 resolution at the CanniMed Special Meeting, and all of the other conditions and approvals are satisfied, CanniMed will acquire all of the issued and outstanding Newstrike common shares and will be able to continue to seek out superior transactions to the Hostile Bid. See The Newstrike Acquisition on page 12. Right to Withdraw CanniMed Shares tendered to the Hostile Bid: If you have already tendered your CanniMed Shares to the Hostile Bid, you can withdraw your CanniMed Shares. See How to Withdraw Your Deposited CanniMed Shares on page 28 of this Directors Circular for further instructions on how to withdraw CanniMed Shares tendered to the Hostile Bid. If you require assistance in withdrawing your CanniMed Shares you should contact your broker or Kingsdale Advisors, the Strategic Shareholder Advisor and Information Agent retained by CanniMed, at or - ix -

12 QUESTIONS AND ANSWERS ABOUT THE HOSTILE BID AND NEWSTRIKE ACQUISITION The information contained below is of a summary nature and therefore is not complete and is qualified in its entirety by the more detailed information contained elsewhere in this Directors Circular, including the appendices to this Directors Circular, all of which are important and should be reviewed carefully. Capitalized terms used in these questions and answers but not otherwise defined in this Question and Answer section have the respective meanings ascribed thereto in the Glossary set forth in Schedule A to this Directors Circular and elsewhere in this Directors Circular. Q: Should I accept the Hostile Bid? A: NO. The CanniMed Board, on the UNANIMOUS recommendation of the Special Committee, has determined that the Hostile Bid significantly undervalues the CanniMed Shares and is not in the best interests of CanniMed or CanniMed Shareholders. The Hostile Bid is an attempt by Aurora to acquire all of the CanniMed Shares without offering adequate consideration to CanniMed Shareholders. A summary of all of the reasons for the recommendation of the CanniMed Board that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition is included on pages 14 to 26 of this Directors Circular under Compelling Reasons for Rejecting Aurora s Offer. You are strongly encouraged to carefully review the full reasons for the CanniMed Board s unanimous recommendation. Q: Why should I not tender my CanniMed Shares and why is the CanniMed Board recommending that I reject the Hostile Bid? A: The CanniMed Board, on the unanimous recommendation of the Special Committee and its independent financial and legal advisors, reached this conclusion for a number of reasons, including: The Hostile Bid provides an inadequate value for CanniMed Shareholders; CanniMed Shareholders are exposed to significant downside risk if they tender their CanniMed Shares to the Hostile Bid; Aurora s management recognizes that the Aurora Shares are overvalued and are aggressively selling their own Aurora Shares; The Hostile Bid is structured to deprive CanniMed Shareholders of any possible upside in Aurora s share price; If the Hostile Bid is successful, CanniMed Shareholders will only own a small fraction of Aurora and if Aurora s share price rises that position will only become smaller; There is a growing short position in Aurora Shares, which is troubling and suggests that a significate price reduction is anticipated by the investment community; CanniMed s existing platform and the strategic Newstrike Acquisition represent a superior opportunity for real, sustainable and long term value creation; Management and certain directors of CanniMed and other certain CanniMed Shareholders will not tender to the Hostile Bid; The strategic rationale for the Hostile Bid disproportionately benefits Aurora over CanniMed Shareholders; and The coercive Hostile Bid Lock-Up Agreements and other deal conditions are unfair to CanniMed Shareholders and hamstring CanniMed s ability to maximize value; and The Hostile Bid is highly conditional

13 See Compelling Reasons for Rejecting Aurora s Offer on page 14. Q: How do I reject the Hostile Bid? A: Shareholders are recommended to TAKE NO ACTION DO NOT TENDER your CanniMed Shares to the Hostile Bid and vote to APPROVE the Newstrike Acquisition. If you are contacted by Aurora or its information or solicitation agent, do not complete any documents they may provide (letter of transmittal, notice of guaranteed delivery, etc.). See How to Withdraw Your Deposited CanniMed Shares on page 28. Q: What regulatory action is CanniMed taking to respond to the Hostile Bid and to protect CanniMed Shareholders? A: CanniMed is vigorously opposing Aurora s application and attempt to deprive CanniMed and CanniMed Shareholders of the time necessary to consider alternatives to the Hostile Bid. CanniMed also intends to apply to the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission for, among other things, an order that the Hostile Bid is an insider bid on the basis that the Locked-Up CanniMed Shareholders have acted jointly and in concert with Aurora for purposes of the Hostile Bid and that consequently: (i) Aurora has not complied with Canadian securities law applicable to insider bids; and (ii) the CanniMed Shares held by the Locked-Up CanniMed Shareholders should be excluded from the 50% minimum tender condition required by applicable Canadian securities law. In addition, the application is expected to seek relief and/or action from the regulatory authorities in relation to various other breaches of applicable Canadian securities law by Aurora and the Locked-Up CanniMed Shareholders and to invoke the public interest with respect to the rights and reasonable expectations of CanniMed Shareholders. Q: Should I approve the Newstrike Acquisition? A: YES. The CanniMed Board continues to UNANIMOUSLY recommend that CanniMed Shareholders APPROVE the Newstrike Acquisition. The CanniMed Board reached this conclusion for a number of reasons, including that the Newstrike Acquisition: Provides CanniMed Shareholders with accelerated access to the adult use recreational cannabis market, which is forecasted to represent a near term, addressable market opportunity in excess of $8 billion. Combines the leading medical brand and a high profile adult use recreational brand to create a premier global cannabis company with a sustainable competitive advantage and a clear pathway to significant growth in Canada and internationally. Positions CanniMed to offer a class-leading portfolio of innovative, high quality products that will be uniquely positioned to address key product trends and emerging drivers of growth in both the medical and adult use recreational cannabis markets. Provides CanniMed and Newstrike with the ability to leverage infrastructure and expertise across both platforms to drive strong synergistic value and leverage best-in-class production and marketing practices. Is expected to be accretive (before synergies) on key metrics. Improves capital markets presence with a consolidated pro-forma market capitalization of over $700 million, as of December 6,

14 Brings the Tragically Hip, iconic Canadian music artists, who are expected to remain intimately involved as shareholders and partners in the creation and support of the Up Cannabis brand by playing an active role in all major marketing and brand decisions. Will increase CanniMed s critical mass in production capabilities with a targeted 45,000 kg of production capacity by The increased scale is expected to provide operational flexibility to improve CanniMed s competitive positioning in Canada and enhance access to new international markets. Please review the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR, for a more detailed summary of the reasons for approving the Newstrike Acquisition. See The Newstrike Acquisition on page 12. Q: How do I vote IN FAVOUR of the Newstrike Acquisition? A: Details regarding the Newstrike Acquisition, including how to vote in favour of it, are set out in the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. Voting By Registered Shareholders Registered CanniMed Shareholders who attend the CanniMed Special Meeting may vote in person. Alternatively, you may complete and return the proxy form accompanying the CanniMed Special Meeting Circular, as instructed. Either you, or your duly authorized attorney (the authorization must be in writing), must sign the proxy form. If you vote by telephone or the Internet, please follow the instructions provided in the materials and do not complete and return the proxy form accompanying the CanniMed Special Meeting Circular. Voting by Canadian non-objecting beneficial owners and Canadian objecting beneficial owners of CanniMed Shares As a Canadian non-objecting beneficial owner or Canadian objecting beneficial owner CanniMed Shareholder, you can vote your shares in the following ways: Phone Fax Internet Call (English) or (French). Enter the 16-digit control number printed on the front of your voting instruction form and follow the instructions to submit your vote. (905) (English) or (514) (French) (toll-free within North America). Go to Enter the 16-digit control number printed on the front of your voting instruction form and follow the instructions on screen. If you have any questions or need help voting, we recommend that you contact Kingsdale Advisors, the Strategic Shareholder Advisor and Information Agent retained by CanniMed, at or contactus@kingsdaleadvisors.com. See How to Vote in Favour of the Newstrike Acquisition on page 28 of this Directors Circular

15 Q: Have other CanniMed Shareholders indicated an intention NOT to tender their CanniMed Shares? A: YES. Directors and officers of CanniMed and certain other CanniMed Shareholders, together with their respective associates and affiliates, who hold or exercise control or direction over an aggregate of over 19% of the CanniMed Shares, have advised CanniMed of their intention, as of the date of this Directors Circular, NOT to tender their CanniMed Shares to the Hostile Bid and to vote in FAVOUR of the Newstrike Acquisition. See Intention of Directors, Officers and other Shareholders with respect to the Hostile Bid and the Newstrike Acquisition on page 30. Q: Have other CanniMed Shareholders indicated an intention to tender their CanniMed Shares? A: The Locked-Up CanniMed Shareholders have entered into the Hostile Bid Lock-Up Agreements with Aurora in which they have agreed, subject to the terms of such agreements, to tender their CanniMed Shares to the Hostile Bid. Aurora has suggested that these Hostile Bid Lock-Up Agreements are irrevocable but in fact they may be terminated by the Locked-Up CanniMed Shareholders upon certain conditions. See Intention of Directors, Officers and other Shareholders with respect to the Hostile Bid and the Newstrike Acquisition under the subheading Hostile Bid Lock-Up Agreements on page 30. Q: Can I withdraw my CanniMed Shares if I have already tendered? A: YES. According to the Aurora Circular and in accordance with the Hostile Bid, among other circumstances, you can withdraw your CanniMed Shares at any time before your CanniMed Shares have been taken up by Aurora pursuant to the Hostile Bid, which cannot occur until the Expiry Time. If you need help withdrawing your CanniMed Shares call Kingsdale Advisors, the Strategic Shareholder Advisor and Information Agent retained by CanniMed, at or contactus@kingsdaleadvisors.com. See How to Withdraw Your Deposited CanniMed Shares on page 28. Q: How do I withdraw my CanniMed Shares? A: For information as to how to withdraw your CanniMed Shares, we recommend that you contact your broker as soon as possible or Kingsdale Advisors, the Strategic Shareholder Advisor and Information Agent retained by CanniMed, at or contactus@kingsdaleadvisors.com. See How to Withdraw Your Deposited CanniMed Shares on page 28. Q: My broker advised me to tender my CanniMed Shares. Should I? A: NO. The Aurora Circular states that, although Aurora has not agreed to pay any fees or commissions to any stockbroker, dealer or other Person for soliciting tenders of CanniMed Shares under the Hostile Bid, Aurora may, however, make other arrangements with soliciting dealers, dealer managers or information agents, either within Canada or outside Canada, for compensation during the Hostile Bid if it considers it appropriate to do so. As a result, their advice with respect to a decision to tender may not be impartial

16 Q: Is this a hostile take-over bid? A: YES. Aurora initiated the Hostile Bid without the support of the CanniMed Board. Given this, the Hostile Bid should be considered a hostile take-over bid. In a friendly take-over, the two companies would work together to come to an agreement that would enhance value for shareholders of both CanniMed and Aurora. Aurora may wish to purchase CanniMed Shares separate from the Hostile Bid to dilute CanniMed Shareholders voting power. See The Hostile Bid on page 11. Q: Will Aurora increase the Hostile Bid? A: CanniMed does not know if Aurora will increase the consideration provided for under the Hostile Bid. It is important to note that the Hostile Bid is an all stock offer and there is no cash component; therefore, it is filled with uncertainty. As currently structured, CanniMed Shareholders are limited to a maximum cap of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share. The number of Aurora Shares paid as consideration on the Hostile Bid may in fact continue to decrease or Aurora s share price may decline, and may decline substantially, providing CanniMed Shareholders with less value per CanniMed Share. See The Hostile Bid on page 11. Q: What impact does the Rights Plan have on the Hostile Bid and why did CanniMed put it in place? A: CanniMed put the Rights Plan in place to further protect CanniMed Shareholders from further coercive actions being taken by Aurora. The Rights Plan was designed to stop Aurora from securing additional lock-up agreements and from purchasing CanniMed Shares other than those tendered to the Hostile Bid. The Rights Plan is not intended to deter the Hostile Bid or any other potential bid that may be put forward, but to preserve the status quo. It is designed to ensure CanniMed Shareholders get a fair chance to consider the Newstrike Acquisition and other opportunities. See Shareholder Rights Plan in Response to Hostile Bid on page 38. Q: Are there opinions from the financial advisors? A: Cormark has delivered a written opinion to the Special Committee, and AltaCorp has delivered a written opinion to the CanniMed Board, each to the effect that, as of the date thereof and based upon and subject to the assumptions, limitations and qualifications set forth therein and such other matters as Cormark and AltaCorp considered relevant, the consideration offered pursuant to the Hostile Bid is inadequate, from a financial point of view, to CanniMed Shareholders. See Opinion of AltaCorp and Opinion of Cormark on page 36 and page 37 respectively. Q: Who do I ask if I have more questions? A: CanniMed has retained Kingsdale Advisors as its Strategic Shareholder Advisor and Information Agent. You should contact your professional advisor or Kingsdale Advisors if you have any questions about this Directors Circular or the matters described in this Directors Circular. CanniMed Shareholders who would like additional copies, without charge, of this Directors Circular or have additional questions should contact their broker or Kingsdale by or at the telephone number below

17 KINGSDALE Advisors North American Toll-Free Number: Collect outside of North America: By

18 TABLE OF CONTENTS SUMMARY... vi QUESTIONS AND ANSWERS ABOUT THE HOSTILE BID AND NEWSTRIKE ACQUISITION...1 FORWARD-LOOKING STATEMENTS...8 NON-IFRS MEASURES AND FINANCIAL INDICATORS...9 NOTICE TO NON-CANADIAN SHAREHOLDERS...9 NOTICE REGARDING CERTAIN OTHER INFORMATION DIRECTORS CIRCULAR THE HOSTILE BID THE NEWSTRIKE ACQUISITION CANNIMED BOARD S UNANIMOUS RECOMMENDATIONS COMPELLING REASONS FOR REJECTING AURORA S OFFER CONCLUSIONS AND RECOMMENDATIONS REGULATORY MATTERS RELATING TO THE HOSTILE BID HOW TO WITHDRAW YOUR DEPOSITED CANNIMED SHARES INTENTION OF DIRECTORS, OFFICERS AND OTHER SHAREHOLDERS WITH RESPECT TO THE HOSTILE BID AND THE NEWSTRIKE ACQUISITION BACKGROUND TO THE HOSTILE BID RESPONSE TO THE HOSTILE BID OPINION OF ALTACORP OPINION OF CORMARK ABOUT CANNIMED AND NEWSTRIKE CAPITAL STRUCTURE OF CANNIMED SHAREHOLDER RIGHTS PLAN IN RESPONSE TO HOSTILE BID OWNERSHIP OF SECURITIES OF CANNIMED PRINCIPAL HOLDERS OF CANNIMED SHARES TRADING IN SECURITIES OF CANNIMED ISSUANCES OF SECURITIES OF CANNIMED OWNERSHIP OF AURORA SECURITIES AGREEMENTS BETWEEN AURORA AND THE DIRECTORS, OFFICERS AND SHAREHOLDERS OF CANNIMED ARRANGEMENTS BETWEEN CANNIMED AND ITS DIRECTORS AND OFFICERS ADDITIONAL INFORMATION ERRORS OR MISLEADING STATEMENTS IN AURORA CIRCULAR MATERIAL CHANGES IN THE AFFAIRS OF CANNIMED OTHER MATERIAL INFORMATION STATUTORY RIGHTS APPROVAL OF THE DIRECTORS CIRCULAR CONSENT OF ALTACORP CAPITAL INC CONSENT OF CORMARK SECURITIES INC CERTIFICATE SCHEDULE A GLOSSARY... i SCHEDULE B OPINION OF ALTACORP...5 SCHEDULE C OPINION OF CORMARK

19 GENERAL INFORMATION Certain capitalized terms used in this Directors Circular have the respective meanings set out in the Glossary attached as Schedule A to this Directors Circular, unless such term is defined elsewhere in this Directors Circular. Unless otherwise indicated, information in this Directors Circular is given as at December 8, Calculations of percentage amounts or amounts per CanniMed Share set forth in this Directors Circular are based on 24,433,412 CanniMed Shares outstanding on a non-diluted basis and 25,277,244 CanniMed Share outstanding on a fully-diluted basis as of the close of business on December 8, Except as otherwise indicated in this Directors Circular all references to dollar amounts ( Canadian Dollars, $ and C$ ) are to the currency of Canada. FORWARD-LOOKING STATEMENTS Certain statements in this Directors Circular, including the discussion of the reasons for the CanniMed Board s recommendation that the holders of CanniMed Shares ( CanniMed Shareholders ) reject the Hostile Bid, contain forward-looking information and/or forward-looking statements within the meaning of applicable securities laws (collectively, forward-looking statements ). The words may, will, would, should, could, expects, forecasted, exposed, unlocks plans, intends, trends, indicates, anticipates, believes, estimates, predicts, likely or potential or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Examples of such forward-looking statements in this Directors Circular include, but are not limited to, expectations regarding CanniMed s, Newstrike s and Aurora s prospects for growth, market share, operational scope, operations, profitability, share price, the ability to realize expected value, market opportunities, accretion or synergies in connection with the Hostile Bid or Newstrike Acquisition; fluctuations in investor perceptions of Aurora, Newstrike and CanniMed; and shareholder value creation; statements regarding the execution of CanniMed s, Newstrike s or Aurora s strategic plans; the consequences of the Hostile Bid; the consequences of the Newstrike Acquisition; and expectations regarding the cannabis industry in general and in both medical and adult use recreational cannabis market segments. Forward-looking statements contained in this Directors Circular are based on a number of estimates and assumptions including, but not limited to assumptions as to: competitive conditions in the cannabis industry; general economic conditions; and changes in laws, rules and regulations applicable to CanniMed, Newstrike and Aurora and their respective businesses. Estimates and assumptions made by CanniMed are made as of the date of this Directors Circular or as of the date specifically stated in light of its experience and perceptions of historical trends, current conditions and expected future developments, as well as other factors that the management of CanniMed believes are appropriate and reasonable in the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. In addition to being subject to a number of estimates and assumptions, forward-looking statements in this Directors Circular involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to: the Hostile Bid and the Newstrike Acquisition including the results of CanniMed Shareholders decisions to vote and or tender, the failure of parties to satisfy conditions and the waiver of those conditions, as applicable; the ability of CanniMed or Aurora to realize expected value, market opportunities, accretion or synergies in connection with the Hostile Bid or Newstrike Acquisition; fluctuations and changes in Aurora s or CanniMed s operations, financial results and public disclosure; dependence on key products; fluctuations in market perception and share price of CanniMed, Aurora and Newstrike; reliance on CanniMed s key personnel and employees; competition; litigation costs and the outcome of litigation; general operating challenges; - 8 -

20 product recalls and quality; research and development; future cannabis pricing; cannabis yields; costs of inputs; CanniMed s ability to market products successfully to its anticipated patients; the application of federal and provincial environmental laws; the impact of increasing competition; unfavourable Canadian, U.S. and international economic conditions; no assurances with respect to further expansion; confidentiality of customer information and data protection; the impact of currency fluctuations; inability to manage expected growth; potential decline of product demand; foreign operations generally, differences between various jurisdictions; income taxes; insufficient insurance coverage; natural events; heavily regulated industry; legal and regulatory requirements and changes; modifications in local licensing regimes; the ability of CanniMed, Aurora and Newstrike to comply with regulations and licensing requirements to maintain their ability to grow and sell cannabis; exposure to local laws and regulations; significant barriers to entry; and such other risks and uncertainties identified in the filings by CanniMed with the applicable securities regulatory authorities in Canada, which are available under CanniMed s issuer profile on SEDAR at The CanniMed Board believes that the expectations reflected in the forward-looking statements contained in this Directors Circular are reasonable as at the date hereof, but no assurance can be given that these expectations will prove to be correct. In addition, although CanniMed and the CanniMed Board have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, you should not place undue reliance on any forward-looking statements contained in this Directors Circular. Except as required by law, neither the CanniMed Board nor CanniMed undertakes any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements contained in this Directors Circular are expressly qualified by this cautionary statement. NON-IFRS MEASURES AND FINANCIAL INDICATORS CanniMed s consolidated financial statements are prepared in accordance with IFRS. In this Directors Circular, CanniMed discloses and discusses certain non-ifrs financial measures including EBITDA and EV/EBITDA. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of CanniMed s results of operations from management s perspective. Non-IFRS measures should not be considered in isolation nor as a substitute for analysis of CanniMed s financial information reported under IFRS. CanniMed believes non-ifrs measures are important supplemental measures of operating performance because they eliminate items that have less bearing on its operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS measures. CanniMed also believes that securities analysts, investors and other interested parties frequently use non-ifrs measures in the evaluation of companies, many of which present similar metrics when reporting their results. See the Glossary attached as Schedule A to this Directors Circular for definitions of IFRS, EBITDA and EV/EBITDA. For a reconciliation of EBITDA to the most directly comparable measure calculated in accordance with IFRS, please refer to the Non-IFRS and Financial Indicators section in CanniMed s management s discussion and analysis of financial condition and results of operations for the three and nine months ended July 31, 2017, available under CanniMed s issuer profile on SEDAR at NOTICE TO NON-CANADIAN SHAREHOLDERS The Hostile Bid to which this Directors Circular relates is made for the securities of a Canadian issuer. This Directors Circular has been prepared by CanniMed in accordance with disclosure requirements under applicable Canadian law. CanniMed Shareholders in the United States and otherwise outside of Canada should be aware that these requirements may be different from those of the United States and other jurisdictions. CanniMed prepares its financial statements in accordance with IFRS. These financial statements may not be comparable to financial statements of United States companies and other non-canadian companies

21 It may be difficult for CanniMed Shareholders in the United States and otherwise outside of Canada to enforce their rights and any claim they may have arising under United States federal securities laws or the securities laws of other non-canadian jurisdictions since CanniMed is a corporation existing under the laws of Canada, certain of the officers and directors of CanniMed reside in Canada, some of the experts named herein reside in Canada and a portion of the assets of CanniMed and the other above-mentioned Persons are located in Canada. CanniMed Shareholders in the United States and otherwise outside of Canada may not be able to sue CanniMed or its officers or directors in a foreign court for violation of United States federal securities laws or the securities laws of other non-canadian jurisdictions. It may be difficult to compel such parties to subject themselves to the jurisdiction of a foreign court or to enforce a judgment obtained from a court of the United States or other non-canadian court s judgment. This transaction and the accompanying Directors Circular have not been approved or disapproved by any United States or other securities regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the accompanying Directors Circular. NOTICE REGARDING CERTAIN OTHER INFORMATION CanniMed is a reporting issuer or equivalent in all provinces of Canada, other than Québec, and files its continuous disclosure documents and other documents with the applicable securities regulatory authorities in each such jurisdiction. Certain information in this Directors Circular has been taken from or is based on documents that are expressly referred to in this Directors Circular. All summaries of, and references to, documents that are specified in this Directors Circular as having been filed, or that are contained in documents specified as having been filed on SEDAR, are qualified in their entirety by reference to the complete text of those documents as filed, or as contained in documents filed, under CanniMed s issuer profile on SEDAR at CanniMed Shareholders are urged to read carefully the full text of those documents provided that, for greater certainty, any such documents are expressly not incorporated by reference into this Directors Circular. Certain information herein, including forward-looking statements, relating to Aurora and the Hostile Bid has been derived from, and the CanniMed Board and CanniMed have relied on, without independent verification, the information contained in the Aurora Circular and other public sources. Neither the CanniMed Board nor CanniMed has independently verified such information or assumes any responsibility for the accuracy or completeness of such information or for any failure by Aurora to disclose events that may have occurred or that may affect the significance or accuracy of any such information. CanniMed has quoted from publicly available analyst reports in this document. These analysts have not consented to the inclusion of all or any portion of their reports in this document. None of the firms employing such analysts were advisors to CanniMed as at the dates of such analysts reports. CanniMed has obtained the market and industry data presented in this Directors Circular from a combination of internal company surveys, its management s estimates and third-party information. There are limited sources that report on CanniMed s industries. As such, much of the industry and market data presented in this Directors Circular is based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which CanniMed competes. As such, CanniMed has not independently verified any market or industry data or forecast. While CanniMed believes its internal surveys, third-party information (including industry and market forecasts) and the estimates of its management are reliable, it has not verified them, nor have they been verified by any independent sources. Additionally, while CanniMed is not aware of any misstatements regarding the market and industry data presented in this Directors Circular, such data involves risks and uncertainties and is subject to change based on various factors, including those factors discussed under Forward- Looking Statements

22 DIRECTORS CIRCULAR This directors circular, including the letter to CanniMed Shareholders and the schedules attached hereto (the Directors Circular ), is issued by the directors of CanniMed (the CanniMed Board ) in connection with the unsolicited Hostile Bid made by Aurora to acquire all of the outstanding CanniMed Shares, including any CanniMed Shares that may be issued and outstanding after the date of the Hostile Bid but before the Expiry Time, and further subject to the terms and conditions of the Aurora Circular. Details on the Newstrike Acquisition, including how to vote in FAVOUR of issuing shares in connection with its completion, are included in the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. THE HOSTILE BID The offer made by Aurora Cannabis Inc., a corporation existing under the Business Corporations Act (British Columbia) ( Aurora ), to acquire all of the outstanding CanniMed Shares (the Hostile Bid ), including any CanniMed Shares that may become issued and outstanding after the date of the Hostile Bid but prior to the Expiry Time upon the exercise of Options, at a capped maximum value of $24.00 (based on a formula related to Aurora s share price in common shares in the capital of Aurora ( Aurora Shares ) and payable in Aurora Shares) per CanniMed Share, is described in the circular filed by Aurora, with the applicable securities regulatory authorities in Canada on November 24, 2017 (the Aurora Circular ) and available under CanniMed s issuer profile on SEDAR at The Hostile Bid is currently scheduled to expire at 11:59 p.m. (Pacific Time) on Friday, March 9, 2018 (the Expiry Time ), unless extended, accelerated or withdrawn by Aurora in accordance with its terms. Aurora has applied for relief from the applicable securities regulatory authorities in Canada to accelerate the Expiry Time to a date that is no less than 35 days from the date the Hostile Bid was made. CanniMed does not believe that it is appropriate to accelerate the Expiry Time, as it does not allow CanniMed Shareholders the opportunity to evaluate other strategic alternatives that may arise. CanniMed has responded, arguing, among other things, its position against shortening the deposit period and explaining why Aurora s request is without merit, to the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission. The Hostile Bid is subject to numerous conditions, which must be satisfied or, where permitted, waived at the Expiry Time by Aurora. The conditions are also described in the Aurora Circular and include the following: 1. That there shall have been properly and validly deposited under the Hostile Bid and not withdrawn at the Expiry Time that number of CanniMed Shares which represents as of the Expiry Time more than 50% of the outstanding CanniMed Shares, excluding any CanniMed Shares beneficially owned, or over which control or direction is exercised, by Aurora or by any Person acting jointly or in concert with Aurora; 2. That the Newstrike Acquisition shall have been terminated; 3. That more than 66 2/3% of the CanniMed Shares (calculated on a fully diluted basis) held by CanniMed Shareholders shall have been validly tendered under the Hostile Bid and not withdrawn; 4. Receipt of all governmental regulatory and third party approvals that Aurora considers necessary or desirable in connection with the Hostile Bid and on terms satisfactory to Aurora in its sole judgement; 5. That CanniMed shall not have adopted or implemented a shareholder rights plan, changes in its capital structure including the issuance of CanniMed Shares or securities convertible into CanniMed Shares; 6. That no material adverse change or event that could give rise to a material adverse change in respect of CanniMed shall have occurred (in the judgment of the Aurora);

23 7. That CanniMed shall not have taken certain actions that could (in the judgment of Aurora) impair the ability of Aurora to acquire the CanniMed Shares or materially diminish the economic value to Aurora of the acquisition of CanniMed or that would (as determined by Aurora in its sole discretion) make it inadvisable for Aurora to proceed with the Hostile Bid and/or take up and pay for the CanniMed Shares tendered to the Hostile Bid; 8. Aurora does not become aware of any misrepresentation in any document filed by CanniMed at any time with the applicable securities regulatory authorities in Canada or the equivalent in the United States; 9. That Aurora shall have determined, in its sole judgment, that no act, action, suit or proceeding shall have been taken, commenced or threatened before or by any governmental entity or by any elected or appointed public official or private person (including any individual, corporation, firm, group or other entity) in Canada or elsewhere, whether or not having the force of law (i) challenging the validity or completion of the Hostile Bid; (ii) enjoining, ceasing trade, or imposing material and adverse limitations or damages on the purchase of the CanniMed Shares; or (iii) seeking to prohibit or limit the ownership or operation of the business or assets of CanniMed or its subsidiaries; and 10. The receipt of the approval of the shareholders of Aurora to permit Aurora to issue the Aurora Shares to be distributed in connection with the Hostile Bid. Aurora has called a meeting of its shareholders to consider a resolution to approve the issuance of the Aurora Shares in connection with the Hostile Bid prior to the Expiry Time. THE NEWSTRIKE ACQUISITION Please refer to the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR, for a complete analysis and description of the proposed plan of arrangement (the Newstrike Acquisition ) and the arrangement agreement dated November 17, 2017 between Newstrike and CanniMed (the Newstrike Acquisition Agreement ). The Newstrike Acquisition was not in response to the Hostile Bid and has been under consideration and negotiation by CanniMed for a period of time. If the Newstrike Acquisition is completed, Newstrike will become a direct wholly-owned subsidiary of CanniMed. For the Newstrike Acquisition to be completed, pursuant to Section 611(c) of the TSX company manual, because the consideration in respect of the Newstrike Acquisition consists of CanniMed Shares that exceed 25% of the issued and outstanding CanniMed Shares, CanniMed must pass a resolution by the affirmative vote of a majority of the votes cast by CanniMed Shareholders present in person or represented by proxy and entitled to vote at the CanniMed Special Meeting. CanniMed expects that CanniMed Shares, constituting approximately 56.6% of the CanniMed Shares currently issued and outstanding on a non-diluted basis, will be issued or reserved for issuance in connection with the Newstrike Acquisition. The Newstrike Acquisition is not expected to materially affect the control of CanniMed. If CanniMed Shareholders pass the resolution at the CanniMed Special Meeting, approval by the TSX is obtained, the Newstrike Acquisition Agreement is approved by the court and all of the other conditions to closing of the Newstrike Acquisition are satisfied, CanniMed will acquire all of the issued and outstanding Newstrike common shares. Each shareholder of Newstrike (other than a dissenting Newstrike shareholder) will be entitled to receive of a CanniMed Share in exchange for each Newstrike common share they hold. The CanniMed Board unanimously recommends that CanniMed Shareholders approve the Newstrike Acquisition for a number of reasons, including that the Newstrike Acquisition: Provides CanniMed Shareholders with accelerated access to the adult use recreational cannabis market, which is forecasted to represent a near term, addressable market opportunity in excess of $8 billion

24 Combines the leading medical brand and a high profile adult use recreational brand to create a premier global cannabis company with a sustainable competitive advantage and a clear pathway to significant growth in Canada and internationally. Well positions CanniMed to offer a class-leading portfolio of innovative, high quality products that will be uniquely positioned to address key product trends and emerging drivers of growth in both the medical and adult use recreational cannabis markets. Provides CanniMed and Newstrike the ability to leverage infrastructure and expertise across both platforms to drive strong synergistic value and leverage best-in-class production and marketing practices. Is expected to be accretive (before synergies) on key metrics. Improves capital markets presence with a consolidated pro-forma market capitalization of over $700 million, as of December 6, Brings the Tragically Hip, iconic Canadian music artists, who are expected to remain intimately involved as shareholders and partners in the creation and support of the Up Cannabis brand by playing an active role in all major marketing and brand decisions. Will increase CanniMed s critical mass in production capabilities with a targeted 45,000 kg of production capacity by The increased scale is expected to provide operational flexibility to improve CanniMed s competitive positioning in Canada and enhance access to new international markets. The foregoing is a high-level summary of the Newstrike Acquisition and does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of the CanniMed Special Meeting Circular, the documents incorporated by reference in the CanniMed Special Meeting Circular, and the Newstrike Acquisition Agreement, which are available on CanniMed s issuer profile on SEDAR at CANNIMED BOARD S UNANIMOUS RECOMMENDATIONS The CanniMed Board believes that the Hostile Bid fails to recognize the full and fair value of CanniMed and its business and is an attempt by Aurora to acquire all of the CanniMed Shares without offering adequate consideration to the CanniMed Shareholders. The CanniMed Board UNANIMOUSLY recommends that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition. Any CanniMed Shareholder who has already tendered its CanniMed Shares to the Hostile Bid should WITHDRAW those CanniMed Shares. CanniMed Shareholders who have already tendered their CanniMed Shares to the Hostile Bid and who wish to obtain assistance in withdrawing them are urged to contact their broker or Kingsdale Advisors, at toll-free in North America or via at contactus@kingsdaleadvisors.com

25 COMPELLING REASONS FOR REJECTING AURORA S OFFER After thorough consideration of all aspects of the Hostile Bid, the Aurora Circular, the opinion from each of AltaCorp and Cormark, as independent financial advisors, as well as the factors included in this Directors' Circular, and after consulting with their respective financial and legal advisors, the CanniMed Board has UNANIMOUSLY concluded that the Hostile Bid is inadequate from a financial point of view and not in the best interests of CanniMed, CanniMed Shareholders or its other stakeholders. The following is a summary of the principal reasons for the CanniMed Board s UNANIMOUS recommendation that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition. 1. The Hostile Bid Does Not Provide Adequate Value for CanniMed Shareholders. Aurora is Offering a Speculative and Inadequate Premium Based on its Inflated and Volatile Share Price Aurora seeks to take advantage of a recent, inflated and unfounded increase in the market price of Aurora Shares. During the two weeks leading up to its announcement of its intention to launch the Hostile Bid, Aurora s share price ran up from $3.05 on October 31, 2017 to $6.41 on November 14, 2017, an increase of approximately 110%. Prior to November 2017, Aurora Shares typically traded well under $3.00, and had only increased 33% in value since the beginning of Since November 14, 2017, Aurora s share price has continued to experience a high degree of volatility, including moves of over 10% in a day. Aurora Monthly Volume Weighted Average Price (VWAP) January 2017 to November 2017 Note: November 1, November 14 and December 6, 2017 are calculated using a daily VWAP Source: S&P Capital IQ If Aurora had made the Hostile Bid at any time prior to November 1, 2017, the highest bid price, in Aurora Shares, for CanniMed Shareholders would only be $13.33 (based on a rolling 20 day VWAP), a premium of approximately 3% to CanniMed s October 31, 2017 closing price. This premium is one tenth of typical take-over premiums, which typically range from 30% to 40% on the same basis

26 Implied Historical Premium at the Proposed Exchange Ratio Note: Exchange ratio is based on spot prices for illustrative purposes Source: S&P Capital IQ The premium implied by the Hostile Bid is largely attributable to market speculation and trading during the two weeks leading up to Aurora s announcement on November 14, 2017 of its intention to launch the Hostile Bid. During that two week period, trading in Aurora Shares ran up by approximately 110%, based on market speculation as opposed to the fundamentals of Aurora s business or the cannabis industry. As such, any potential premium implied by Aurora s current share price must be considered highly speculative, volatile, risky, and likely to revert. Premium Aurora is Offering CanniMed on a Historical Basis Note: Premiums based on respective Aurora and CanniMed VWAP periods at the proposed exchange ratio (as applicable) Source: S&P Capital IQ

27 Historical Aurora Share Price and Volume Chart Source: S&P Capital IQ CanniMed Shareholders should be very concerned that 100% of the consideration being offered by Aurora is in the form of Aurora Shares at a highly inflated share price, based on a yet-to-be executed business plan and market speculation rather than a record of operational execution. The success of Aurora s business plan is highly dependent on their ability to deliver logistical precision and massive efficiencies in an untested market, and out of under construction facilities that are attempting to leverage a system that is unproven at the contemplated scale. Aurora s inflated trading premium, based on speculation and not business or industry fundamentals, can disappear as quickly as it appeared. Aurora Opportunistically Timed the Hostile Bid to Deprive CanniMed Shareholders of the Full and Fair Value of CanniMed. The Hostile Bid is currently depriving CanniMed Shareholders of being able to participate in the increase in valuations in the cannabis industry and will not compensate CanniMed Shareholders for any increase that occurs up until March 9, Aurora launched the Hostile Bid prior to the market being able to value the accretive and strategic Newstrike Acquisition, which provides CanniMed entry into the recreational market. The Hostile Bid offers CanniMed Shareholders no premium or consideration for any increase in the expected value of CanniMed Shares as a result of the Newstrike Acquisition. CanniMed expects that should the Newstrike Acquisition succeed, CanniMed will unlock its true value with its EV/EBITDA multiple converging with its larger peers that have a recreational market presence. The Hostile Bid cap of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share implies a premium of approximately 2% (based on CanniMed s competitors mean EV/EBITDA trading multiples), while relying on Aurora s currently higher than market EV/EBITDA multiple valuation

28 The Hostile Bid is opportunistic and has been timed to deprive CanniMed Shareholders of the full and fair value of their CanniMed Shares, using Aurora s inflated share price and ignoring CanniMed s intrinsic value. The exchange ratio between Aurora and CanniMed would imply a historic average premium of only 9.2% for the year-to-date period prior to October 31, Historical Exchange Ratio Note: Trading and exchange ratios based on Aurora s rolling 20 Day VWAP vs. historical CanniMed s close prices Source: S&P Capital IQ Cormark has delivered a written opinion to the Special Committee, and AltaCorp has delivered a written opinion to the CanniMed Board, each to the effect that, as of the date thereof and based upon and subject to the assumptions, limitations and qualifications set forth therein and such other matters as Cormark and AltaCorp considered relevant, the consideration offered pursuant to the Hostile Bid is inadequate, from a financial point of view, to CanniMed Shareholders. Copies of the written opinions delivered by AltaCorp and Cormark are attached as Schedules B and C, respectively, to this Directors Circular. The written opinions were provided for the information and assistance of the Special Committee and the CanniMed Board, respectively for their exclusive use only in connection with their respective consideration of the Hostile Bid. The description of each such written opinion in this Directors Circular and the written opinion itself do not constitute a recommendation to CanniMed Shareholders as to whether or not they should tender their CanniMed Shares to the Hostile Bid. The CanniMed Board strongly recommends that CanniMed Shareholders read the written opinions delivered by each of Cormark and AltaCorp carefully and in their entirety for a description of the procedures followed, matters considered, and limitations on the review undertaken. 2. CanniMed Shareholders are Exposed to Significant Downside Risk if they Tender their CanniMed Shares to the Hostile Bid. There is significant risk that Aurora s share price could retreat substantially and erode the consideration payable to CanniMed Shareholders, as Aurora s share price is based on market speculation as opposed to the fundamentals of Aurora s business or the cannabis industry. During the two weeks leading up to Aurora s announcement of its intention to launch the Hostile Bid on November 14, 2017, trading in Aurora Shares ran up by approximately 110%. Prior to the beginning of November, 2017, Aurora s share price was trading in approximately the $2.00-$3.00 range, which CanniMed management perceives to be more indicative of its true value. That share price range would imply consideration under the Hostile Bid at $ $13.58 (a discount of 30% - premium of 4.9%). Aurora has never sold shares, warrants or options for a valuation over $3.29 prior to the beginning of November, In addition, twelve

29 month target prices by certain analysts are only in the $ $6.50 range and these depend heavily on the timely completion and efficient execution of Aurora s facility under construction located in Leduc County, Alberta ( Aurora Sky ), which is already experiencing delays and budgetary issues. CanniMed is also concerned that Aurora s management has no experience managing a business of the size of Aurora Sky, may be stretching themselves thin with the volume of recent acquisitions and may not have the operational experience to create long-term synergies among its recent acquisitions. There is already evidence of operational issues at their facilities, including two product recalls, persistent sourcing of third-party product in the market, and falling capacity estimates. CanniMed Shareholders will lose their investment in CanniMed, a profit producing, proven management team with an accretive recreational market strategy, to become a shareholder of an untested, error-prone company with no track record. Even though Aurora is not offering any downside protection to CanniMed Shareholders, it has provided highly unusual downside protection to the Locked-Up CanniMed Shareholders at a CanniMed share price of $16.00 and $18.00 (based on certain conditions). This highly unusual condition shows that the Locked-Up CanniMed Shareholders clearly understand that they are exposed to downside risk and that the share price of Aurora may fall just as quickly as it rose. 3. Aurora s Management Recognizes that Aurora Shares are Overvalued and are Actively Selling a Significant Number of their Own Aurora Shares. Aurora s senior management and directors, who know the inner workings and value of their company, have sold substantial portions of their ownership in Aurora over the last year. Collectively, Aurora s management and directors have sold a total of over $42.9 million worth of Aurora Shares this year. On November 28, 2017 alone, only two trading days after launching the Hostile Bid and after Aurora s share price inflated over 110% in two weeks on speculation leading up to announcement of the proposed bid, Aurora s management and directors, including the Chief Executive Officer, sold off over $17.8 million worth of Aurora Shares. Details of recent sales of Aurora Shares by Aurora insiders are as follows:

30 Name and Position Date of Sale Aurora s Share Price Number of Aurora Shares Sold Total Sale Price Terry Booth November 28, 2017 $ ,000 $5,558,000 Chief Executive Officer June 6, 2017 $2.10 1,000,000 $2,100,000 May 4, 2017 $ ,000 $399,000 January 19, 2017 $2.55 1,019,250 $2,599,088 Jose Del Moral Director Stephen Dobler President Ronan Levy, Vice President of Business and Corporate Affairs Michael Singer Chairman Jason Dyck Director and Head of Research Adam Szweras Director Total: 2,869,250 $10,656,088 November 28, 2017 $ ,000 $4,240,000 June 5, 2017 $ ,800 $1,320,336 June 2, 2017 $ ,200 $1,991,700 May 31, 2017 $ ,000 $1,161,120 March 13, 2017 $2.41 1,009,800 $2,433,618 March 10, 2017 $ ,200 $919,680 March 9, 2017 $ ,700 $1,240,080 Total: 4,409,700 $13,306,534 November 28, 2017 $ ,000 $7,407,000 June 9, 2017 $2.22 1,000,000 $2,220,000 March 13, 2017 $ ,000 $482,000 March 9, 2017 $ ,000 $720,000 March 9, 2017 $ ,000 $1,200,000 March 9, 2017 $2.55 1,243,000 $3,169,650 Total: 4,143,000 $15,198,650 November 28, 2017 $ ,670 $608,478 Total: 71,670 $608,478 October 4, 2017 N/A 100,000 N/A September 28, 2017 N/A 25,000 N/A June 9, 2017 $ ,200 $85,186 June 7, 2017 $ ,800 $134,724 May 31, 2017 $ ,700 $35,427 March 20, 2017 $ ,300 $552,955 March 9, 2017 $ ,000 $238,000 Total: 575,000 $1,046,292 October 5, 2017 $ ,500 $652,500 March 14, 2017 $ ,000 $600,000 March 9, 2017 $ ,000 $602,500 Total: 717,500 $1,855,000 March 9, 2017 $ ,000 $144,000 March 8, 2017 $ ,000 $115,000 Total: 110,000 $259,000 AGGREGATE TOTAL: 12,896,120 $42,930,

31 The occurrence of these Aurora Share sales is disconcerting. However, what is perhaps even more troubling is that significant portions occurred while Aurora was in the middle of a major proposed transaction, the Hostile Bid and a fundraising of convertible debentures via special warrants. Public companies, such as Aurora, would normally impose blackout periods and restrict insider sales for these types of transactions, or shortly before the announced transactions, due to the serious risk that insiders would be in possession of undisclosed material information. CanniMed Shareholders should be concerned about Aurora s compliance procedures, practices and corporate governance. 4. Hostile Bid is Structured to Deprive CanniMed Shareholders of any Upside in Aurora s Share Price. There is significant risk that Aurora s share price will decline as it is at all-time highs with no valid market or business reason; however, in the event that Aurora s share price does not decline (or inexplicably continues to rise), CanniMed Shareholders will not enjoy the benefit of any such Aurora share price appreciation between now and the Expiry Time. The Hostile Bid caps the potential value to CanniMed Shareholders at $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares), equivalent of an Aurora share price of $5.30 but exposes CanniMed Shareholders to significant downside risk, as described above. From the Hostile Bid announcement until March 9, 2018, CanniMed Shareholders will be exposed to (i) receiving no upside if Aurora s share price trades past $5.30 (based on a 20 day VWAP) and (ii) the full downside risk if Aurora s share price declines below $5.30. This asymmetric Hostile Bid exposes CanniMed Shareholders to downside risk but offers no exposure to market upside or additional value created by CanniMed prior to the Expiry Time. The Hostile Bid freezes the upside value of CanniMed Shareholders for 105 days during a time when the Canadian cannabis industry is experiencing historic growth. The Hostile Bid will prevent CanniMed Shareholders from participating in any growth in the cannabis industry from the Hostile Bid announcement until March 9, 2018, including growth that would otherwise have been realized through CanniMed s recreational strategy and the Newstrike Acquisition. The cannabis industry value as a whole has increased 104.5% over the last 3 months (based on the top 23 publicly traded licensed producers, excluding Aurora, CanniMed and Newstrike for the period from September 6, 2017 to December 6, 2017). Recent Share Price Appreciation Source: S&P Capital IQ, Bloomberg

32 5. CanniMed Shareholders will Only Own a Small Fraction of Aurora. The $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share maximum in the Hostile Bid means that as Aurora s share price increases above $5.30, the consideration available to CanniMed Shareholders will not increase, and your ownership of the combined company will be reduced. The declining exchange ratio which is currently triggered by Aurora Share appreciation above $5.30 per Aurora Share, deprives CanniMed Shareholders of such appreciation by decreasing the number of Aurora Shares they will receive, and provides no assurances that CanniMed Shareholders will be able to realize $24.00 worth of consideration immediately following closing. Note: Based on in-the-money diluted share count for Aurora and CanniMed Source: S&P Capital IQ The Hostile Bid undervalues CanniMed and its business and does not adequately compensate CanniMed Shareholders for tendering their CanniMed Shares. The Hostile Bid gives CanniMed shareholders only 15.3% ownership of the combined company (based on Aurora s current 20-day VWAP share price) and only a maximum of 18.6% ownership of the combined company (based on the maximum exchange ratio achieved using an Aurora share price of $5.30 on a 20- day VWAP), even though CanniMed currently has greater production capacity and a similar number of patients, and an established and successful track record of quality in a strict government regulated environment. Aurora has publicly stated that it can foresee the value of CanniMed being 2x-3x greater than it currently is in the next year, which would mean a CanniMed share price of $ $

33 Aurora vs. CanniMed Historical Performance Note: Ownership is based on in-the-money diluted share count for Aurora and CanniMed and as of Aurora s December 6, Day VWAP Source: Company Filings, S&P Capital IQ At only 15.3% ownership of the combined company (based on Aurora s current 20-day VWAP share price), Aurora does not fairly compensate CanniMed Shareholders for: (i) CanniMed s improving financial and operational results, which have yet to be reflected in its share price; (ii) positive market changes; and (iii) future opportunities. 6. There is a Growing Short Position in Aurora Shares. On a number of occasions Aurora has referred to the market s verdict on its share price. Looking at the short position in Aurora and CanniMed is quite telling. Clearly savvy investors believe that Aurora Shares are overpriced as the equivalent of 6.9% of the Aurora investors are locking in short positions before Aurora s share price declines. Short Interest as a Percentage of Float Outstanding Source: Bloomberg

34 7. CanniMed s Existing Platform and the Strategic Newstrike Acquisition Represent a Superior Opportunity for Real, Sustainable and Long Term Value Creation. The Hostile Bid is conditional upon termination of the Newstrike Acquisition and provides no premium to CanniMed Shareholders for the significant value that Newstrike would bring to CanniMed. The Newstrike Acquisition is expected to: be highly accretive to CanniMed, using reasonable assumptions and without including any operational synergies that will likely be realized by CanniMed; provide a more compelling, risk-adjusted return to CanniMed Shareholders than the Hostile Bid; and preserve CanniMed s ability to obtain a substantial premium for CanniMed Shareholders at a later date as CanniMed is expected to be more valuable as a company that competes effectively in both the medical and recreational cannabis markets. The Canadian cannabis industry is forecasted to create in excess of an $8 billion market opportunity for CanniMed, CanniMed Shareholders, and CanniMed s competitors that are well positioned in the cannabis industry. After completion of the strategic Newstrike Acquisition, CanniMed will be positioned to provide real value for CanniMed Shareholders and is expected to have: (i) a clear pathway to sales volumes and EBITDA growth; (ii) near term opportunities for significant synergies; (iii) strong potential for share price adjustment from a multiple migration to peer level; and (iv) visibility on near and long term share price appreciation. The Newstrike Acquisition is expected to unlock significant value in CanniMed s existing business that is not currently recognized by the market. The CanniMed Board and CanniMed s management team conducted significant due diligence in reviewing the Canadian landscape for the right partner in the recreational space. For a complete analysis, please refer to the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. Newstrike was selected as the ideal partner because, among other things: it is a highly strategic acquisition of a premier recreational brand; it represents a highly accretive acquisition; it gives CanniMed two premier brands that are positioned to win market share and provide sustainable competitive advantage in a highly competitive market; it brings the Tragically Hip, iconic Canadian music artists, who are expected to remain intimately involved as shareholders and partners in the creation and support of the Up Cannabis brand by playing an active role in all major marketing and brand decisions; as the recreational market becomes legalized and the cannabis market grows, CanniMed will have the ability to reap the benefits of capital flowing into the cannabis space on both the recreational and medicinal fronts; it has manageable scale to capture market share and drive financial returns while protecting brand image and reputation for quality; and it may strategically position CanniMed for future investment by a large beverage or tobacco industry company wanting entry into the cannabis industry, truly maximizing shareholder value; and

35 the premium paid for Newstrike is below historic averages for comparable transactions and is attractively valued relative to peers, while having all of the significant upside potential in both the near and long term for future growth opportunities. In contrast to CanniMed s highly selective, diligenced and thoughtful acquisition, Aurora has pursued an aggressive acquisition strategy. Aurora s recent acquisitions will challenge Aurora s management to be able to integrate each business operation to create synergies in a fast paced and constantly evolving cannabis industry, as scale alone does not offer a sustainable competitive advantage. Pursuant to the Hostile Bid, CanniMed Shareholders will be gambling on Aurora s unproven integration and operational abilities, whereas CanniMed has a track record of operational excellence that will provide real value to CanniMed Shareholders upon the Newstrike Acquisition. Implied Newstrike Premiums Note: Premiums are calculated as of November 14, 2017 Source: S&P Capital IQ 8. Management, certain Directors and certain CanniMed Shareholders WILL NOT TENDER. Directors and officers of CanniMed and certain other CanniMed Shareholders holding an aggregate of over 19% of the currently outstanding CanniMed Shares have advised CanniMed that they WILL NOT TENDER their CanniMed Shares to the Hostile Bid

36 9. Strategic Rationale Disproportionately Benefits Aurora over CanniMed Shareholders. Aurora gets all the benefits of CanniMed, without paying a fair premium to CanniMed Shareholders. CanniMed does not need Aurora. Aurora needs CanniMed, and is NOT paying CanniMed Shareholders for it. The Hostile Bid does not fairly compensate CanniMed Shareholders for the synergies and strategic benefits that Aurora is expected to realize if it acquires CanniMed: CanniMed already enjoys a strong international presence with significant opportunities for growth; CanniMed already has the largest genetic portfolio of any Canadian licensed producer of cannabis, incremental additions from Aurora are unlikely to provide significant value; CanniMed has a proven track record of execution and competent management including ZERO recalls, product outages or incidents of diversion in 15 years. In contrast, Aurora has had two recent product recalls; CanniMed does not need access to the current Radient facility, which is not licensed or dedicated to cannabis. CanniMed already has industry leading capabilities and oils. Further, CanniMed has begun construction on a large scale oil facility which will service all of its oil requirements upon completion of the Newstrike Acquisition; CanniMed has already secured a large distribution network and customer market for its oils. As recently announced, CanniMed will be the exclusive oil and oil derivative cannabis product provider to Canada s second largest independent pharmacy banner, PharmaChoice, with over 750 pharmacy locations across Canada (subject to regulatory approval of pharmacy distribution); CanniMed does not need CanvasRX. CanniMed has over 21,000 active patients and over 4,500 doctors currently prescribing CanniMed products. It is also not clear how strategically relevant Aurora s CanvasRX currently is, or what role it will play in the recreational market environment; Aurora s claims regarding innovation, ecommerce, and same day delivery do not present any significant advantage to CanniMed. Despite public statements by Aurora, it is not clear that Aurora has developed a competitive advantage or a significant proprietary capacity as a result of its claimed focus on innovation, ecommerce and same day delivery. On the contrary, Aurora has had operational issues with growing, recalls, product outages, and the need to use a third party for oil production; and Aurora has yet to complete Aurora Sky and the completion date continues to be delayed. In addition, the project has escalating costs, and its capabilities are as of yet unknown and unproven. CanniMed has a proven ability to bring new facilities on time and on budget. CanniMed is currently building an 8th generation facility with a number of proprietary technologies and processes. Aurora currently has only one licensed facility and it is not clear that this facility is state-of-the-art or that it will be able to produce the original estimated production capacity

37 10. Coercive Lock-Ups and Deal Conditions are Unfair to CanniMed Shareholders and Hamstring CanniMed s Ability to Maximize Value. The Hostile Bid, the Hostile Bid Lock-Up Agreements and Aurora s actions seek to prevent CanniMed from fully maximizing shareholder value, for the following reasons: The Hostile Bid and the Hostile Bid Lock-Up Agreements specifically seek to deprive CanniMed and CanniMed Shareholders of the benefits of the strategic Newstrike Acquisition; The Hostile Bid Lock-Up Agreements are oppressive and do not allow the Locked-Up CanniMed Shareholders to tender to a superior offer, which is unfair to the remaining 64% of CanniMed Shareholders and is a highly unusual and coercive condition in lock-ups of this nature; The Hostile Bid Lock-Up Agreements allow the Locked-Up CanniMed Shareholders to terminate if CanniMed s share price falls below $16 or $18 (based on certain conditions). This is a highly unusual and concerning condition, as it shows even the Locked-Up CanniMed Shareholders are concerned about the value of Aurora s Shares, even in the near term; and Aurora is trying to coerce CanniMed Shareholders into making a quick decision with respect to the Hostile Bid by seeking to reduce the time CanniMed and CanniMed Shareholders have to source alternatives and consider which alternative is in the best interest of CanniMed and its stakeholders. 11. The Hostile Bid is Highly Conditional The CanniMed Board is concerned that the Hostile Bid is highly conditional to the benefit of Aurora. The Hostile Bid contains numerous conditions, which must be satisfied or waived before Aurora is obligated to take up and pay for any CanniMed Shares tendered to the Hostile Bid. Many of the conditions are not subject to materiality thresholds or reasonableness standards or any other objective criteria, but rather provide Aurora with broad latitude to decline to proceed with the Hostile Bid in its sole judgement. As a result, tendering CanniMed Shares to the Hostile Bid would, in effect, constitute the grant to Aurora of an option to acquire CanniMed Shares at a price that the CanniMed Board views as inadequate. It is anticipated that Aurora will be required to waive a number of their conditions, including its requirement that CanniMed not adopt a rights plan which has already occurred, for the Hostile Bid to proceed. In addition, if Aurora does not complete the acquisition of CanniMed Shares tendered to the Hostile Bid because one of the numerous discretionary conditions imposed is not fulfilled or waived, the failure of the Hostile Bid could adversely affect the public s perception of CanniMed and its business. In addition, if the Newstrike Acquisition is not approved due to the Hostile Bid and Aurora decides not to complete the Hostile Bid, CanniMed could be left in a vulnerable position whereby CanniMed Shareholders could face losing a substantial portion of their investment. For this and other reasons, it is the CanniMed Board s view that the preferred transaction for CanniMed and CanniMed Shareholders would be the approval of the Newstrike Acquisition, and other possible future transactions, and that CanniMed Shareholders not tender their CanniMed Shares to the Hostile Bid. Ultimately, CanniMed Shareholders face a high risk of non-completion pursuant to the Hostile Bid. For more information regarding the conditions to the Hostile Bid, please refer to the section of this Directors Circular entitled Directors Circular

38 CONCLUSIONS AND RECOMMENDATIONS For the reasons outlined above, the CanniMed Board unanimously (with one director, with a declared conflict of interest, abstaining from voting or participating in the review of the Hostile Bid and the related matters) believe that: (i) the Hostile Bid fails to recognize the full and fair value of CanniMed and its business and is an attempt by Aurora to acquire all of the CanniMed Shares without offering adequate consideration to CanniMed Shareholders; and (ii) the Newstrike Acquisition is in the best interests of CanniMed and CanniMed Shareholders. The CanniMed Board UNANIMOUSLY recommends that CanniMed Shareholders REJECT the Hostile Bid by taking no action DO NOT TENDER your CanniMed Shares and vote to APPROVE the Newstrike Acquisition Any CanniMed Shareholder who has tendered its CanniMed Shares to the Hostile Bid should WITHDRAW those CanniMed Shares. The foregoing summary of the information and factors considered by the CanniMed Board is not intended to be exhaustive of the information, factors and analysis considered by the CanniMed Board in reaching its conclusions and recommending that CanniMed Shareholders reject the Hostile Bid by taking no action do not tender your CanniMed Shares and vote to approve the Newstrike Acquisition, but includes the material information, factors and analysis considered by the CanniMed Board in reaching its conclusions and recommendations. The members of the CanniMed Board evaluated various factors summarized above in light of their own knowledge of the business, financial condition and prospects of CanniMed, and based upon the advice of CanniMed s financial and legal advisors and the recommendations of the Special Committee. Given the numerous factors considered in connection with its evaluation of the Hostile Bid, the CanniMed Board did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weight to specific factors in reaching its conclusion and recommendation. In addition, individual members of the CanniMed Board may have given different weight to different factors. The unanimous conclusion and recommendation of the CanniMed Board s members was made after the unconflicted members had considered all of the information and factors involved. Doug Banzet, Chief Financial Officer and a director of Golden Opportunities, had recused himself from the CanniMed Board meeting on November 17, 2017 and has not participated in any vote or recommendation of the CanniMed Board in relation to the Newstrike Acquisition or the Hostile Bid due to his declared conflict of interest with Golden Opportunities, which has entered into the Hostile Bid Lock-Up Agreements in support of the Hostile Bid. Accordingly, all references herein to unanimous decisions refer to these unconflicted directors who voted on the matter. CanniMed Shareholders should consider the terms of the Hostile Bid carefully and come to their own decision as to whether to accept or reject the Hostile Bid. REGULATORY MATTERS RELATING TO THE HOSTILE BID Aurora has applied for relief from the applicable securities regulatory authorities in Canada to accelerate the Expiry Time to a date that is no less than 35 days from the date the Hostile Bid was made and to cease trade the Rights Plan. CanniMed is vigorously opposing Aurora s application and attempt to deprive CanniMed and CanniMed Shareholders of the time necessary to consider alternatives to the Hostile Bid. Additionally, the Newstrike Acquisition is not an alternative transaction, as such term is defined in National Instrument Take Over Bids and Issuer Bids, despite the fact that Aurora has chosen to structure the Hostile Bid in a manner which seeks to frustrate the Newstrike Acquisition and to deprive CanniMed and CanniMed Shareholders of proceeding to complete the Newstrike Acquisition. In addition, on the approval of the Special Committee, CanniMed intends to apply to the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission for, among other things, an order that the

39 Hostile Bid is an insider bid on the basis that the Locked-Up CanniMed Shareholders have acted jointly and in concert with Aurora for purposes of the Hostile Bid and that consequently: (i) Aurora has not complied with Canadian securities law applicable to insider bids; and (ii) the CanniMed Shares held by the Locked-Up CanniMed Shareholders should be excluded from the 50% minimum tender condition required by applicable Canadian securities law. In addition, the application is expected to seek relief and/or action from the regulatory authorities in relation to various other breaches of applicable Canadian securities law by Aurora and the Locked-Up CanniMed Shareholders and to invoke the public interest with respect to the rights and reasonable expectations of CanniMed Shareholders. HOW TO WITHDRAW YOUR DEPOSITED CANNIMED SHARES To reject the Hostile Bid, TAKE NO ACTION DO NOT TENDER YOUR CANNIMED SHARES. CanniMed Shareholders who have already tendered their CanniMed Shares to the Hostile Bid can WITHDRAW them at any time before they have been taken up by Aurora pursuant to the Hostile Bid by calling Kingsdale Advisors at or via at CanniMed Shareholders who hold CanniMed Shares through a brokerage firm or other nominee should contact their broker or nominee to withdraw their CanniMed Shares on their behalf. If the CanniMed Shares have been deposited pursuant to the procedures for book-entry transfer, as set out on pages 10 to 11 of the Aurora Circular under the heading II) Procedure for Book-based Transfer (CDS), any notice of withdrawal must specify the name and number of the account at CDS or DTC, as applicable, to be credited with the withdrawn CanniMed Shares and otherwise comply with the procedures of CDS or DTC, as applicable. CanniMed Shareholders who would like assistance in withdrawing their CanniMed Shares should contact Kingsdale Advisors, the Strategic Shareholder Advisor and Information Agent retained by CanniMed, at or contactus@kingsdaleadvisors.com. HOW TO VOTE IN FAVOUR OF THE NEWSTRIKE ACQUISITION Details on the Newstrike Acquisition, including how to vote IN FAVOUR of issuing shares in connection with its completion, are included in the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. Please see below for further details. Once a CanniMed Shareholder votes IN FAVOUR of the Newstrike Acquisition they need not take any additional action, as their votes will be counted. If a CanniMed Shareholder votes AGAINST the Newstrike Acquisition they are encouraged to change their vote and vote IN FAVOUR of the Newstrike Acquisition. If you have any questions, please contact Kingsdale, the Strategic Shareholder Advisor and Information Agent retained by CanniMed at the number below. KINGSDALE Advisors North American Toll-Free Number: Collect outside of North America: By contactus@kingsdaleadvisors.com

40 VOTE ONLY YOUR GREEN PROXY OR GREEN VIF TODAY TO COUNT AT THE MEETING, YOUR GREEN FORM OF PROXY MUST BE SUBMITTED IN ACCORDANCE WITH THE INSTRUCTIONS PROVIDED PRIOR TO 10:00 AM. (EST) ON JANUARY 19, REGISTERED SHAREHOLDERS ( YOU HOLD A SHARE CERTIFICATE OR A DRS STATEMENT REGISTERED IN YOUR NAME) VOTING BY INTERNET Go to and follow the voting instructions. You will require a 15-digit Control Number (located on the front of your GREEN proxy) to identify yourself. VOTING BY PHONE To vote by phone, scan the QR code on your Form of Proxy or call toll-free at or (outside Canada and the United States). You will require a 15-digit Control Number (located on the front of your GREEN proxy) to identify yourself. VOTING BY FAX Complete, sign and date your GREEN form of proxy and return it by fax to toll-free (within Canada and the United States) or (outside Canada and the United States). On the fax please write: To the Toronto Office of Computershare, Attention: Proxy Department VOTING BY MAIL OR DELIVERY Complete, date and sign your GREEN form of proxy and return it to: Computershare Investor Services Inc. Attention: Proxy Department 8th Floor, 100 University Avenue, Toronto, ON M5J 2Y1 CANADIAN NON-REGISTERED (BENEFICIAL) SHAREHOLDERS VOTING BY INTERNET Go to and follow the voting instructions on the screen. You will require a 16-digit Control Number (located on the front of your GREEN VIF) to identify yourself. VOTING BY PHONE To vote by phone should call (English) or (French). You will require a 16-digit Control Number (located on the front of your GREEN VIF) to identify yourself. ( YOU HOLD SHARES THROUGH A CANADIAN BANK, BROKER OR OTHER INTERMEDIARY) VOTING BY FAX Complete, sign and date your GREEN VIF and return it by fax to or VOTING BY MAIL OR DELIVERY Complete, sign and date your GREEN VIF and return it in the postage prepaid envelope. UNITED STATES NON-REGISTERED (BENEFICIAL) SHAREHOLDERS ( YOU HOLD SHARES THROUGH A U.S. BANK, BROKER OR OTHER INTERMEDIARY) VOTING BY INTERNET Go to and follow the voting instructions on the screen. You will require a Control Number (located on the front of your GREEN VIF) to identify yourself. Complete, sign, and date your GREEN VIF and return it by fax VOTING BY PHONE To vote by phone should call then follow the voting instructions on your GREEN VIF. You will require a Control Number (located on the front of your GREEN VIF) to identify yourself. Complete, sign, and date your GREEN VIF and return it in the postage prepaid envelope provided to the address set

41 INTENTION OF DIRECTORS, OFFICERS AND OTHER SHAREHOLDERS WITH RESPECT TO THE HOSTILE BID AND THE NEWSTRIKE ACQUISITION Directors and officers of CanniMed and certain other CanniMed Shareholders, together with their respective associates and affiliates, who hold or exercise control or direction over an aggregate of over 19% of the CanniMed Shares have advised CanniMed of their intention, as of the date of this Directors Circular, NOT to tender their CanniMed Shares to the Hostile Bid. In addition, directors and officers of CanniMed and certain other CanniMed Shareholders who hold or exercise control over an aggregate of 19% of the CanniMed Shares have entered into a voting agreement with CanniMed to vote their CanniMed Shares in favour of the Newstrike Acquisition and such specific resolutions as necessary to accomplish the Newstrike Acquisition. To the knowledge of the directors and officers of CanniMed, after reasonable enquiry, no insider of CanniMed, no associate or affiliate of any director, officer or other insider of CanniMed, no associate or affiliate of CanniMed nor any Person acting jointly or in concert with CanniMed has accepted or indicated an intention to accept the Hostile Bid other than the Locked-Up CanniMed Shareholders, as disclosed in the Aurora Circular and as set out below. Hostile Bid Lock-Up Agreements Aurora entered into lock-up agreements on November 13, 2017 (the Hostile Bid Lock-Up Agreements ) with Saskworks Venture Fund Inc. ( SaskWorks ), Golden Opportunities Fund Inc. ( Golden Opportunities ), Vantage Asset Management Inc. ( Vantage ) and Apex Investment Limited Partnership ( Apex, and collectively with SaskWorks, Golden Opportunities and Vantage, the Locked-Up CanniMed Shareholders ). Each Hostile Bid Lock-Up Agreement sets out the terms and conditions pursuant to which each Locked-Up CanniMed Shareholder is prepared to support the Hostile Bid in respect of the aggregate 8,740,321 CanniMed Shares held by them, representing approximately 36% of the CanniMed Shares, as of the date of this Directors Circular. The following is a summary of certain provisions of the Hostile Bid Lock-Up Agreements and does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of the Hostile Bid Lock-Up Agreements, which have been filed by Aurora under CanniMed s profile with the applicable securities regulatory authorities in Canada and which are available on CanniMed s issuer profile on SEDAR at Agreement to Tender Under the Hostile Bid Lock-Up Agreements, the Locked-Up CanniMed Shareholders have agreed to, subject to the terms of such agreements, tender all of their CanniMed Shares under the Hostile Bid and not to withdraw such CanniMed Shares except as permitted under the terms of the Hostile Bid Lock-Up Agreements. Termination Rights Each of the Locked-Up CanniMed Shareholders and Aurora have certain rights to terminate the Hostile Bid Lock- Up Agreements, which include: 1. By either party, when not in material default of the performance of its obligations thereunder, if any of the representations and warranties of the other party is untrue or inaccurate in any material respect; 2. By the Locked-Up CanniMed Shareholder, when not in material default of the performance of its obligations under the Hostile Bid Lock-Up Agreement, at any time if the Hostile Bid is modified in a manner that is contrary to the terms of the Hostile Bid Lock-Up Agreement or contrary to the provisions of applicable securities legislation or if Aurora proposes a transaction (other than the Hostile Bid) that is not an alternative transaction;

42 3. By the Locked-Up CanniMed Shareholder if the value of the consideration for each of the CanniMed Shares is less than $16 per share at any time within ten (10) business days before the Expiry Time; 4. By the Locked-Up CanniMed Shareholder, if the offer price for each CanniMed Share is less than $18 per share, based on the 20-day VWAP of the Aurora Shares on the date of the Hostile Bid then notwithstanding any offer by the shareholder to increase the Hostile Bid price for each CanniMed Share to $18, the Locked- Up CanniMed Shareholder may choose to terminate the Hostile Bid Lock-up Agreement; One termination event that was not included despite being typical for such an agreement is the right of a Locked-Up CanniMed Shareholder to terminate the Hostile Bid Lock-Up Agreement in order to tender their CanniMed Shares to a competing or superior offer. Non-Solicitation Each Locked-Up CanniMed Shareholder agreed that, except as provided in the Hostile Bid Lock-Up Agreements, it will not, directly or indirectly, through any of its respective representatives: (i) sell, assign, transfer, alienate, gift, pledge, option, hedge or enter into any derivative transactions in respect of, or otherwise dispose of or encumber any CanniMed Shares; (ii) solicit, facilitate, initiate or knowingly encourage or take any action to solicit, facilitate or encourage any competing bid; (iii) enter into or participate in any negotiations or initiate any discussions regarding a discussions or negotiations regarding a competing bid; or (iv) grant or agree to grant any proxy or other right to the Locked-up CanniMed Shareholder s CanniMed Shares. The Hostile Bid Lock-Up Agreements, define competing bid as any inquiries, the submission of proposals or offers from any other person, corporate body, partnership or other business organization whatsoever regarding a potential competing or superior proposal for the acquisition of the CanniMed Shares (whether by way of take-over bid, asset sale, merger, amalgamation, arrangement, reorganization or other business combination). Covenants of the Locked-Up CanniMed Shareholders The Locked-Up CanniMed Shareholders agreed to, among other things: 1. take all actions necessary to validly deposit under the Hostile Bid, or cause to be validly deposited, all of the CanniMed Shares owned by such Locked-Up CanniMed Shareholder or over which the Locked-Up CanniMed Shareholder exercises control or direction (including any other CanniMed Shares directly or indirectly acquired by or issued to such Locked-Up CanniMed Shareholder after the date of the applicable Hostile Bid Lock-Up Agreement), in accordance with the terms of the Hostile Bid; 2. exercise the voting rights attaching to the Locked-Up CanniMed Shareholder s CanniMed Shares to oppose any proposed action by CanniMed, its directors, officers and/or shareholders, any of its subsidiaries or any other person: in respect of any amalgamation, merger, sale of CanniMed s or its affiliates or associates assets, takeover bid, issuer bid, plan of arrangement, reorganization, recapitalization, issuance of shares, equity or voting securities or convertible or exchangeable securities or other business combination, material acquisition or similar transaction involving CanniMed or any of its subsidiaries other than the Hostile Bid; which would reasonably be regarded as being directed towards or likely to prevent or delay the take-up and payment of the Locked-Up CanniMed Shareholder s CanniMed Shares deposited under the Hostile Bid or the successful completion of the Hostile Bid, including without limitation any amendment to the constating documents of CanniMed, its subsidiaries or its organizational structure;

43 in respect of any new shareholder rights plan or poison pill subsequent to the date of the Hostile Bid Lock-Up Agreements; or which would reasonably be expected to result in a material adverse effect in respect of CanniMed. BACKGROUND TO THE HOSTILE BID The CanniMed Board believes that it is important for CanniMed Shareholders to understand the context in which the Hostile Bid was made and the Newstrike Acquisition Agreement was entered into, in order to better understand the rationale for the CanniMed Board s response to the Hostile Bid and the decision to enter into the Newstrike Acquisition Agreement, and the recommendations set out in this Directors Circular. In June 2017, Jay Wilgar, Newstrike s Chief Executive Officer, and Brent Zettl, CanniMed s Chief Executive Officer, were introduced to each other and commenced discussions regarding, among other things, the possibility of collaborative ventures relating to supply and storage of cannabis and the potential for a future collaboration that would allow CanniMed strategic access to the adult use recreational market. In order to facilitate ongoing discussions, CanniMed and Newstrike entered into a mutual non-disclosure agreement (the Newstrike NDA ) on June 29, 2017 and discussions with respect to commercial arrangements continued throughout the month of July. The parties then agreed on July 31, 2017 to expand the scope of the Newstrike NDA to include a covenant to negotiate exclusively with each other until August 31, 2017, subsequently extended to September 29, 2017, October 31, 2017 and November 17, 2017 (the Newstrike Exclusivity Period ). Throughout August and in early September, the terms of a possible storage arrangement (whereby CanniMed would provide storage for Newstrike product), a supply arrangement (whereby Newstrike would supply product to CanniMed for distribution) and future collaboration were discussed. The parties also discussed a possible investment by CanniMed in Newstrike. AltaCorp was retained as financial advisor to CanniMed. On September 20, 2017, the CanniMed Board approved the terms of a convertible loan financing for Newstrike with a view to ensure the continued exclusivity of discussions beyond September 29, 2017, and on that day, the Newstrike Exclusivity Period was further extended to October 31, On September 29, 2017, a CanniMed subsidiary subscribed for a convertible debenture in the principal amount of $4,000,000 and 10,958,904 common share purchase warrants exercisable at $0.42 per common share (the Newstrike Debenture Financing ). On September 20, 2017, the CanniMed Board formed a committee of directors (the First Committee ) consisting of Robert Duguid, Donald Ching, Richard Hoyt and Dwayne Lashyn, with the mandate of the First Committee being to consider potential strategies and opportunities for merger and acquisition activities by CanniMed and to make recommendations to the CanniMed Board in relation to such strategies and opportunities. On September 27, 2017, the CanniMed Board clarified, with Doug Banzet, Robert Duguid and Dwayne Lashyn abstaining, that the mandate of the First Committee did not extend to the initiation by CanniMed of a strategic sale process, including potential change of control transactions. Following the completion of the Newstrike Debenture Financing, CanniMed and Newstrike continued discussions with respect to, among other things, the potential for business and commercial arrangements between the parties, including with respect to the supply and storage of cannabis and commercial discussions with respect to a possible business combination. On October 5, 2017, the CanniMed Board received a letter (the First Vantage Letter ) from Vantage, a shareholder of CanniMed that represented that it owned approximately 9% of the outstanding CanniMed Shares. In the First Vantage Letter, Vantage expressed its view that CanniMed should undertake a strategic sale process. CanniMed s management reviewed and provided the CanniMed Board with a detailed analysis of the matters set forth in the First Vantage Letter. On October 23, 2017, Vantage circulated a subsequent letter (the Second Vantage Letter ) addressed to members of the CanniMed Board reiterating its view that CanniMed should explore a sale process and that it would not be supportive of any potential acquisition transaction. AltaCorp was asked to review and provide its comments to the First Committee on the matters set forth in the First Vantage Letter and Second Vantage Letter. The First Committee

44 reported to the CanniMed Board, at its meeting on October 27, 2017, that it could not reach a consensus regarding whether or not to open discussions with Vantage. Later on in that meeting, representatives of Newstrike were invited to make a presentation to the CanniMed Board regarding the business and affairs of Newstrike. The CanniMed Board received a presentation from AltaCorp which analyzed the various transactions which Vantage had raised in their letters, together with other potential transactions. Following the discussion and the presentations at that meeting, the meeting was adjourned to October 30, At the reconvened meeting on October 30, 2017, the CanniMed Board further discussed whether CanniMed should consider initiating in a sale process and authorized management of CanniMed to continue negotiations with Newstrike. The CanniMed Board also instructed the Chair and a representative of AltaCorp to meet with representatives of Vantage to discuss the matters raised in their prior letters. On October 30, 2017, the CanniMed Board authorized management to enter into formal negotiations with Newstrike in respect of a potential acquisition of Newstrike, with Dwayne Lashyn abstaining and Robert Duguid voting against. On October 31, 2017, Newstrike and CanniMed agreed to extend the Newstrike Exclusivity Period to November 17, On November 1, 2017, the Chair and a representative of AltaCorp met by telephone with two representatives of Vantage and provided the opportunity to the Vantage representatives to express their views. The subject matter of those discussions was subsequently reported to the CanniMed Board. On November 2, 2017, Vantage circulated a third letter (the Third Vantage Letter ) to members of the CanniMed Board reiterating its views with respect to its support for a sale of CanniMed and strong opposition to any potential acquisition. AltaCorp was asked to review and provide to the CanniMed Board its comments on the matters outlined in the Third Vantage Letter, which it subsequently did. On November 2, 2017, CanniMed retained Cormark to provide a fairness opinion in respect of the proposed Newstrike Acquisition. Negotiations between CanniMed and Newstrike continued to November 12, 2017 during which time the parties and their respective legal counsel and financial advisors, negotiated the terms of the Newstrike Acquisition Agreement. On November 12, 2017, an exchange rate for purposes of the share exchange consideration under the proposed acquisition was agreed to in principle and a draft Newstrike Acquisition Agreement presented to the CanniMed Board for consideration at its meeting on November 13, At approximately 11:00 a.m. (Central Standard Time) on the morning of November 13, 2017, the Chair of the CanniMed Board received an unexpected call from the President and Chief Executive Officer of Golden Opportunities. During that call, the Chair was informed that Golden Opportunities had entered into an agreement with Aurora agreeing to support a proposal that Aurora intended to make to acquire all of the shares of CanniMed. At approximately 11:00 a.m. (Central Standard Time) on November 13, 2017, one hour prior to the CanniMed Board meeting called to vote on the Newstrike transaction, CanniMed received a letter from Aurora (the Aurora Proposal ) proposing an acquisition of CanniMed on the basis of a share exchange ratio of Aurora Shares for each CanniMed Share, subject to a maximum value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share. The Aurora Proposal states that any definitive agreement would be subject to conditions including support agreements from each director and officer of CanniMed and due diligence investigations. In the Aurora Proposal, Aurora indicated that it had entered into irrevocable lockup agreements with CanniMed Shareholders, representing 36%, as of the date of this Directors Circular, of the outstanding CanniMed Shares, pursuant to which such CanniMed Shareholders agreed to support the Aurora Proposal. In the Aurora Proposal, Aurora requested a response by 5:00 p.m. (Pacific Standard Time) on November 17, At a meeting of the CanniMed Board held on November 13, 2017 at 12:00 noon (Central Standard Time), at which all members of the CanniMed Board were present, AltaCorp provided its analysis of the Newstrike Acquisition and its fairness opinion in respect of that transaction from a financial point of view. Cormark also provided to the CanniMed Board its financial analysis and delivered its oral fairness opinion in respect of the Newstrike Acquisition. The CanniMed Board then discussed the Aurora Proposal and resolved to a form a special committee of

45 independent directors of the CanniMed Board consisting of Richard Hoyt, Bruce Mackler and Dwayne Lashyn (the Special Committee ), with a mandate to consider the Aurora Proposal and report to the CanniMed Board at a meeting scheduled for November 17, In the course of the meeting, two of CanniMed s directors, Mr. Doug Banzet, Chief Financial Officer and a director of Golden Opportunities and Mr. Robert Duguid, officer of PFM Capital Inc., the portfolio manager of SaskWorks and of Apex, confirmed that Golden Opportunities, SaskWorks and Apex, respectively, had entered into the Hostile Bid Lock-Up Agreements with Aurora in support of the Aurora Proposal. Messrs. Banzet and Duguid also indicated that neither had been involved in the negotiations of the Hostile Bid Lock-Up Agreements and that they were unaware of their terms. On November 14, 2017, Aurora issued a press release disclosing its proposal to CanniMed and confirming its intention to proceed with a formal offer for all of the issued CanniMed Shares if CanniMed did not respond by 5:00 p.m. (Pacific Standard Time) on November 17, On November 14, 2017, CanniMed issued a press release in response to Aurora s press release, advising CanniMed Shareholders that it was reviewing Aurora s press release in which it indicated its intention to proceed with a formal offer for all of the issued shares of CanniMed. The CanniMed press release also disclosed that CanniMed was in exclusive negotiations with Newstrike regarding the proposed Newstrike Acquisition and the proposed exchange ratio under the Newstrike Acquisition. On or about November 16, 2017, Newstrike advised CanniMed that, while it was willing to continue negotiation of the terms of the Newstrike Acquisition until the end of the Newstrike Exclusivity Period, it would not extend the Newstrike Exclusivity Period beyond November 17, The Special Committee met during the period between November 13, 2017 and November 17, 2017 and engaged independent legal counsel and Cormark as financial advisors. The CanniMed Board met on November 17, At that meeting, Mr. Banzet recused himself from that meeting and Mr. Duguid resigned from the CanniMed Board. The CanniMed Board received presentations and reports from both AltaCorp and Cormark. AltaCorp and Cormark were asked and confirmed that, notwithstanding the Aurora Proposal, they were not withdrawing their prior fairness opinions given as of November 13, 2017 regarding the Newstrike Acquisition, each of AltaCorp and Cormark also provided their respective views on the Aurora Proposal. At that meeting, the Special Committee also reported to the CanniMed Board that it was their unanimous view was that CanniMed should not engage in discussions with Aurora at this time in light of a number of factors, including (i) the recent sharp increase of the price of Aurora Shares, (ii) the risk to CanniMed Shareholders of a correction in the price of Aurora Shares, (iii) the conditionality of the Aurora Proposal, (iv) the uncertainty with respect to Aurora s projected production capacity, (v) the fact that CanniMed was in the Newstrike Exclusivity Period and that Newstrike would not agree to further extend the Newstrike Exclusivity Period, and (vi) that an accretive transaction was immediately available to CanniMed. The CanniMed Board then discussed the terms of the Newstrike Acquisition, the report from its financial advisor, the report from the financial advisor to the Special Committee, the report of the Special Committee and the advice of legal counsel and subsequently approved (with one director abstaining) the execution and delivery of the Newstrike Acquisition Agreement, as fully described in the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. CanniMed and Newstrike executed the Newstrike Acquisition Agreement late in the afternoon of November 17, 2017 and issued a press release announcing the terms of the Newstrike Acquisition shortly after. On November 20, 2017, at 7:00 a.m., prior to its investor call and as soon as was practicable, the CanniMed Board disclosed that Mr. Duguid had resigned from the CanniMed Board. On November 20, 2017, Aurora issued a press release disclosing its intention to make the Hostile Bid, subject to the maximum value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share. On November 22, 2017, the CanniMed Board issued a press release to disclose that it had formed

46 the Special Committee to review the Aurora Proposal and to remind CanniMed Shareholders of the attractive and accretive Newstrike Acquisition. Aurora officially launched the Hostile Bid on November 24, 2017 and CanniMed acknowledged receipt and advised CanniMed Shareholders to take no action while the Special Committee evaluated the Hostile Bid and the Hostile Bid Lock-Up Agreements that had previously been withheld from CanniMed. RESPONSE TO THE HOSTILE BID On November 28, 2017, the Special Committee met with its financial and legal advisors to review and evaluate the terms of the Hostile Bid and to discuss related matters. On the unanimous recommendation of the Special Committee, the CanniMed Board adopted the Rights Plan to ensure that all CanniMed Shareholders are fairly treated, well informed and not subject to the coercive Hostile Bid. The Rights Plan prevents Aurora from acquiring any CanniMed Shares other than those specifically tendered pursuant to its Hostile Bid or from entering into any additional lock-up agreements in respect of the Hostile Bid. CanniMed, in the best interests of all of CanniMed Shareholders, adopted the Rights Plan to ensure that: (i) CanniMed Shareholders have the opportunity to vote on the Newstrike Acquisition without being unfairly diluted by Aurora or the Locked-Up CanniMed Shareholders; (ii) that CanniMed Shareholders are not coerced into tendering to the Hostile Bid; (iii) only permitted lock-up agreements are entered into and the Hostile Bid Lock-Up Agreements are not amended or modified without the approval of the CanniMed Board; and (iv) CanniMed Shareholders receive fair treatment in connection with any potential transaction. The Special Committee and the CanniMed Board continue to focus on CanniMed s best interests and those of the CanniMed Shareholders. On December 8, 2017, the Special Committee met with its financial and legal advisors and, after a thorough and careful review and consideration of the best interests of CanniMed and the impact on, and consideration of, CanniMed s stakeholders and, following receipt of advice from its financial and legal advisors and the oral opinions of Cormark (whose opinion was subsequently confirmed in writing, a copy of which are attached as Schedule C to this Directors Circular) that as of December 8, 2017 and based upon and subject to certain assumptions, limitations and qualifications set forth therein and such other matters as Cormark considered relevant, the capped consideration of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share provided for under the Hostile Bid is inadequate from a financial point of view to the CanniMed Shareholders, the Special Committee concluded that the Hostile Bid is not in the best interests of CanniMed as it falls short of recognizing the full and fair value of CanniMed and its business and is an attempt by Aurora to acquire all of the CanniMed Shares without offering adequate consideration to CanniMed s Shareholders, and approved in principle the reasons for rejection of the Hostile Bid substantially as set out in this Directors Circular. On December 8, 2017, the CanniMed Board met with its financial and legal advisors and, after a thorough and careful review and consideration of the best interests of CanniMed and the impact on, and consideration of CanniMed s stakeholders, including a thorough review of the Hostile Bid and the Aurora Circular, and after receiving the unanimous recommendations of the Special Committee and a verbal opinion from AltaCorp (whose opinion was subsequently confirmed in writing, a copy of which are attached as Schedule B to this Directors Circular) that as of December 8, 2017 and based upon and subject to certain assumptions, limitations and qualifications set forth therein and such other matters as AltaCorp considered relevant, the capped consideration of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share provided for under the Hostile Bid is inadequate from a financial point of view to the CanniMed Shareholders, as well as a thorough review of other matters discussed elsewhere in this Directors Circular, the CanniMed Board, determined that the Hostile Bid is inadequate from a financial point of view and is not in the best interests of CanniMed, and decided to recommend that CanniMed Shareholders reject the Hostile Bid by taking no action do not tender your CanniMed Shares

47 OPINION OF ALTACORP AltaCorp Capital Inc. ( AltaCorp ) was formally engaged by CanniMed to act as financial advisor to the CanniMed Board on September 9, Pursuant to the engagement agreement it entered into with CanniMed, AltaCorp agreed to provide, if requested, a fairness opinion to the CanniMed Board in connection with the Newstrike Acquisition and to provide various financial advisory services to the CanniMed Board in connection with the Hostile Bid, the Newstrike Acquisition and other potential merger and acquisitions activity. On November 13, 2017, AltaCorp delivered a written opinion to the CanniMed Board to the effect that, as of the date thereof and based upon and subject to the assumptions, limitations and qualifications set forth therein and such other matters as AltaCorp considered relevant, the capped consideration of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share offered pursuant to the Hostile Bid is inadequate, from a financial point of view, to CanniMed Shareholders. A copy of the written opinion delivered by AltaCorp, including the assumptions made and the review undertaken in connection with its preparation, is attached as Schedule B to this Directors Circular. All summaries and references to the written opinion delivered by AltaCorp in this Directors Circular are qualified in their entirety by reference to the full text of such written opinion. The CanniMed Board strongly recommends that CanniMed Shareholders read the written opinion delivered by AltaCorp carefully and in its entirety for a description of the procedures followed, matters considered, and limitations on the review undertaken. AltaCorp s opinion addresses only the adequacy of the consideration offered pursuant to the Hostile Bid to the CanniMed Shareholders from a financial point of view. The written opinion delivered by AltaCorp was provided for the information and assistance of the CanniMed Board for its exclusive use only in connection with its consideration of the Hostile Bid. The description of such written opinion in this Directors Circular and the written opinion itself do not constitute a recommendation to the CanniMed Shareholders as to whether or not they should tender their CanniMed Shares to the Hostile Bid. The written opinion delivered by AltaCorp was only one of several factors taken into consideration by the CanniMed Board in its determination that the Hostile Bid falls short of recognizing the full and fair value of CanniMed and its business and is an attempt by Aurora to acquire all of the CanniMed Shares without offering adequate consideration to the CanniMed Shareholders. Pursuant to the terms of the engagement agreement entered into between CanniMed and AltaCorp, CanniMed has agreed to pay certain fees to AltaCorp, including fees that are contingent on the completion of a change of control transaction involving CanniMed. CanniMed has also agreed to reimburse AltaCorp for reasonable expenses and indemnify AltaCorp and its affiliates and their respective directors, officers, partners, employees, agents, advisors and shareholders against certain potential liabilities arising out of its engagement. AltaCorp is also entitled to compensation in respect of services provided to CanniMed in connection with the Newstrike Acquisition. For more details, see the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. As described in the CanniMed Special Meeting Circular, AltaCorp also provided an opinion to the CanniMed Board on November 13, 2017 regarding the Newstrike Acquisition to the effect that, as of the date thereof and based upon and subject to the assumptions, limitations and qualifications set forth therein and such other matters as AltaCorp considered relevant, the consideration to be paid to Newstrike shareholders in the Newstrike Acquisition is fair, from a financial perspective, to CanniMed. On November 17, 2017, AltaCorp was asked and confirmed that, notwithstanding the Aurora Proposal, it was not withdrawing its prior fairness opinion regarding the Newstrike Acquisition

48 OPINION OF CORMARK Cormark Securities Inc. ( Cormark ) was initially contacted by CanniMed on November 13, 2017 in respect of a potential advisory engagement in connection with the Hostile Bid. On November 16, 2017, Cormark was formally retained by the Special Committee to provide certain financial advisory services, including the preparation and provision of a fairness opinion as to the adequacy, from a financial point of view, of the consideration to be received by CanniMed Shareholders with respect to the Hostile Bid. Cormark has delivered a written opinion to the Special Committee to the effect that, as of the date thereof and based upon and subject to the assumptions, limitations and qualifications set forth therein and such other matters as Cormark considered relevant, the capped consideration of up to $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share offered pursuant to the Hostile Bid is inadequate, from a financial point of view, to CanniMed Shareholders. A copy of the written opinion delivered by Cormark, including the assumptions made and the review undertaken in connection with its preparation, is attached as Schedule C to this Directors Circular. All summaries and references to the written opinion delivered by Cormark in this Directors Circular are qualified in their entirety by reference to the full text of such written opinion. The CanniMed Board strongly recommends that CanniMed Shareholders read the written opinion delivered by Cormark carefully and in its entirety for a description of the procedures followed, matters considered, and limitations on the review undertaken. Cormark s opinion addresses only the adequacy of the consideration offered pursuant to the Hostile Bid to the CanniMed Shareholders from a financial point of view. The written opinion delivered by Cormark was provided for the information and assistance of the CanniMed Board for their exclusive use only in connection with their respective consideration of the Hostile Bid. The description of such written opinion in this Directors Circular and the written opinion itself do not constitute a recommendation to the CanniMed Shareholders as to whether or not they should tender their CanniMed Shares to the Hostile Bid. The written opinion delivered by Cormark was only one of several factors taken into consideration by the CanniMed Board in its determination that the Hostile Bid falls short of recognizing the full and fair value of CanniMed and its business and is an attempt by Aurora to acquire all of the CanniMed Shares without offering adequate consideration to CanniMed Shareholders. Pursuant to the terms of the engagement agreement entered into between the Special Committee and Cormark, Cormark is to be paid a fixed fee by CanniMed for delivering the fairness opinion, regardless of the conclusions reached in the fairness opinion or the outcome of the Hostile Bid. The engagement agreement also provides for the payment of a monthly work fee to Cormark and the payment of an additional transaction fee in specified circumstances. In addition, Cormark is to be reimbursed for its reasonable out-of-pocket expenses and is to be indemnified by CanniMed in certain circumstances, against certain expenses, losses, claims, actions, damages and liabilities which may arise, directly or indirectly, from services performed by Cormark under the engagement agreement. Cormark is also entitled to compensation in respect of services provided to CanniMed in connection with the Newstrike Acquisition. For more details, see the CanniMed Special Meeting Circular, a copy of which was mailed with this Directors Circular and has been filed and made available on SEDAR. As described in the CanniMed Special Meeting Circular, Cormark also provided an opinion to the CanniMed Board on November 13, 2017 and confirmed it was not withdrawn on November 17, 2017, regarding the Newstrike Acquisition to the effect that, as of the date thereof and based upon and subject to the assumptions, limitations and qualifications set forth therein and such other matters as Cormark considered relevant, the consideration to be paid to Newstrike shareholders in the Newstrike Acquisition is fair, from a financial perspective, to CanniMed

49 ABOUT CANNIMED AND NEWSTRIKE CanniMed is a Canadian-based, international plant biopharmaceutical company existing under the Canada Business Corporations Act and a leader in the Canadian medical cannabis industry, with 16 years of pharmaceutical cannabis cultivation experience, state-of-the-art, Good Manufacturing Practices-compliant production processes and world class research and development platforms with a wide range of pharmaceutical-grade cannabis products. In addition, CanniMed has an active plant biotechnology research and product development program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications. CanniMed, through its subsidiaries, was the first producer to be licensed under the Marihuana for Medical Purposes Regulations, the predecessor to the current Access to Cannabis for Medical Purposes Regulations. CanniMed was the sole supplier to Health Canada under the former medical marijuana system for 13 years, and has been producing safe and consistent medical marijuana for thousands of Canadian patients, with no incident of product diversion or recalls. Newstrike, a corporation existing under the Business Corporations Act (Ontario) is the parent company of Up Cannabis, a licensed producer of cannabis that received its cultivation license on December 19, Newstrike, together with its strategic partners, including the Tragically Hip, iconic Canadian music artists, participates in the market for cannabis and related products through its wholly-owned subsidiary Up Cannabis. Up Cannabis is executing a business strategy focused on the development of high-quality, distinct cannabis brands, each of which is designed to appeal and be marketed to key segments of the adult use recreational cannabis market. CAPITAL STRUCTURE OF CANNIMED The authorized share capital of CanniMed consists of an unlimited number of common shares ( CanniMed Shares ) and preferred shares. As at the date of this Directors Circular, 24,433,412 CanniMed Shares were issued and outstanding and no preferred shares were outstanding. Each CanniMed Share is entitled to one vote at a meeting of CanniMed Shareholders. There are no special rights or restrictions attached to the CanniMed Shares. The CanniMed Shares rank equally as to all benefits which might accrue to the holders of CanniMed Shares, including the right to receive dividends out of monies of CanniMed properly applicable to the payment of dividends if and when declared by the CanniMed Board and to participate ratably in the remaining assets of CanniMed in any distribution on a dissolution or winding-up. There are no provisions restricting the issuance of CanniMed Shares or any other material restrictions. SHAREHOLDER RIGHTS PLAN IN RESPONSE TO HOSTILE BID The following summary of the Rights Plan set out herein does not contain all of the material terms and conditions of the Rights Plan. The summary is qualified by and is subject to the full terms and conditions of the Rights Plan. The full text of the Rights Plan is contained in an agreement dated November 28, 2017 between CanniMed and Computershare Investor Services Inc., as rights agent, which is available on CanniMed s issuer profile on SEDAR at CanniMed adopted the shareholder rights plan on November 28, 2017, as effective (the Rights Plan ). The Rights Plan was adopted in response to the coercive Hostile Bid. In considering what, if any, steps should be taken to enable CanniMed Shareholders to adequately consider the Hostile Bid, alongside the Newstrike Acquisition and any potential alternatives, and whether the Rights Plan was necessary and appropriate, the CanniMed Board took into account, among other things, the context in which Aurora made its Hostile Bid. The Rights Plan was therefore adopted to ensure: (i) that CanniMed Shareholders have the opportunity to vote on the Newstrike Acquisition without being further affected by the actions of Aurora or the Locked-Up CanniMed Shareholders; (ii) that CanniMed Shareholders are not coerced into tendering to the Hostile Bid; (iii) only permitted lock-up agreements are entered into and the Hostile Bid Lock-Up Agreements are not amended or modified without the approval of the CanniMed Board; and (iv) fair treatment of the CanniMed Shareholders in connection with any potential transaction

50 Permitted Take-Over Bids and Permitted Lock-Up Agreements The Rights Plan allows for a take-over bid that, among other things: (i) is made to all CanniMed Shareholders; (ii) is made in compliance with applicable securities laws, including the requirement that it remain open for acceptance by CanniMed Shareholders for a minimum of 105 days; (iii) is supported by a majority of CanniMed Shareholders other than the bidder (and its affiliates, associates and joint actors); (iv) and in the event that the minimum tender condition is satisfied, the offeror must publicly announce such fact and keep the bid open for at least a further 10 business days and must allow CanniMed Shares to be deposited or withdrawn at any time until the offeror takes up and pays for CanniMed Shares under the bid. The Hostile Bid is deemed to be a permitted bid under the Rights Plan. The Rights Plan allows for lock-up agreements that, among other things, are approved by the CanniMed Board. The Hostile Bid Lock-Up Agreements are deemed to be permitted under the Rights Plan provided that, after the date the Rights Plan become effective, the Hostile Bid Lock-Up Agreements are not amended or modified without the approval of the CanniMed Board and provided that no additional CanniMed Shares are made subject to such Hostile Bid Lock-Up Agreements. Share Purchase Rights In connection with the Rights Plan, the CanniMed Board authorized the issuance of one share purchase right in respect of each CanniMed Share, as of the close of business on November 28, 2017 (and each CanniMed Share issued thereafter, subject to the limitations set out in the Rights Plan). Pursuant to the Rights Plan, the share purchase rights will become exercisable on the 10 th trading day following the earliest of, among other things: (i) the date that a person or CanniMed announced that a person become an acquiring person ; (ii) the date that a person commences or announces an intention to commence a take-over bid (other than a permitted bid); and (iii) the date that a competing bid or a permitted bid cease to qualify as such. The share purchase rights exercisability is being deferred in respect of the Hostile Bid. A person becomes an acquiring person when it, together with its affiliates, associates and joint actors, acquires beneficial ownership of 20% or more of the CanniMed Shares, subject to the ability of the CanniMed Board to waive the application of the Rights Plan. Aurora is not considered an acquiring person as Aurora is considered a grandfathered person under the Rights Plan; however, should Aurora purchase any CanniMed Shares, enter into any new lock-up agreements or if the Hostile Bid Lock-Up Agreements cease to be permitted under the Rights Plan, Aurora will become an acquiring person and the share purchase rights will become exercisable. Following the acquisition of 20% or more of the CanniMed Shares by any person, each share purchase right held by a person other than the acquiring person (and its affiliates, associates and joint actors) would, upon exercise, entitle the holder to purchase CanniMed Shares at a substantial discount to their then prevailing market price. The Rights Plan is subject to the jurisdiction of the TSX and will terminate on the earlier of: (i) the date that is six months after the Right Plan s effective date (with extensions in the event of litigation); and (ii) the date that share purchase rights are redeemed under the Rights Plan

51 OWNERSHIP OF SECURITIES OF CANNIMED The following table sets forth the names and positions of each director and officer of CanniMed and the number and percentage of CanniMed Shares and Options beneficially owned, or over which control or direction is exercised by each such Person, as well as, to the knowledge of CanniMed, each other insider of CanniMed, as of the date of this Directors Circular. Name and Position (1) Brent Zettl President and Chief Executive Office/director John Knowles Chief Financial Officer/director Gulwant Bajwa V.P., Business Development and Regulatory Affairs Allan Fowler V.P. Business Development and Investor Relations Larry Holbrook Chief Research Officer Doug Banzet (4) Director Donald Ching Director Marianne Greer Director Richard Hoyt Director Dwayne Lashyn Director Dr. Bruce Mackler Director Dr. Brandon Price Director Golden Opportunities Fund Inc. Insider Number of CanniMed Shares Beneficially Owned or Controlled (Percentage of Common Shares Outstanding) (2) 2,367,640 (9.7%) 39,384 (0.2%) ,000 (0.4%) 12,532 (0.1%) 304,000 (1.2%) 35,380 (0.1%) 8,748 (N/A) 611,500 (5) (2.5%) 10,368 (N/A) 20,000 (0.1%) 4,007,760 (16.4%) Number of Options (Percentage of Options Outstanding) (3) - 120,000 (16.2%) 80,000 (10.8%) 100,000 (13.5%) ,532 (1.7%) 12,532 (1.7%) 12,532 (1.7%) 12,532 (1.7%) - (1) The information as to securities beneficially owned, directly or indirectly, or over which control or direction is exercised, is provided to the best of CanniMed s knowledge based on publicly available information, as of the date of this Directors Circular. (2) As of the date of this Directors Circular, there were 24,433,412 CanniMed Shares outstanding. (3) As of the date of this Directors Circular, there were Options to acquire up to 700,193 CanniMed Shares outstanding. (4) Mr. Banzet is Chief Operating Officer of Westcap Mgt. Ltd., the investment manager of Golden Opportunities Fund Inc. (5) Includes 608,000 shares owned by Quantico Capital Corp., of which Mr. Lashyn is Managing Director and Vice President. CanniMed is not aware of any ownership of its securities by any of its, or its insiders, associates or affiliates, and no person is acting jointly and in concert with CanniMed, in connection with the Hostile Bid

52 PRINCIPAL HOLDERS OF CANNIMED SHARES To the knowledge of CanniMed and its directors and officers, after reasonable enquiry, as of the date of this Directors Circular, no person will beneficially own, directly or indirectly, or exercise control or direction over more than 10% of the outstanding CanniMed Shares and no person acting jointly or in concert with CanniMed owned any securities of CanniMed except as set forth below. Number of CanniMed Shares Name (Directly or Indirectly) Percentage of Class Golden Opportunities Fund Inc. 4,007, % TRADING IN SECURITIES OF CANNIMED Except as set out below, during the six months preceding the date of this Directors Circular neither CanniMed nor any director, officer of CanniMed and, to the knowledge of the directors and officers of CanniMed, after reasonable enquiry, no insider of CanniMed, no associate or affiliate of any director, officer or other insider of CanniMed, no associate or affiliate of CanniMed nor any Person acting jointly or in concert with CanniMed has traded any securities or rights to acquire securities of CanniMed: Name Date Number of CanniMed Shares Price per CanniMed Share Brent Zettl June 15, 2017 (1) June 27, 2017 (1) June 28, 2018 November 24, 2017 (2) November 24, 2017 (2) November 24, 2017 (2) November 28, 2017 (2) November 29, 2017 (2) 50,000 7,200 7, , ,000 40, ,000 40,000 $7.91 $8.00 $7.988 $ $ $ $ $ John Knowles November 28, 2017 (2) 7,200 $ Doug Banzet November 29, 2017 (2) November 29, 2017 (2) 7,200 5,532 $ $ Donald Ching November 28, 2017 (2) 5,332 $ Marianne Greer November 28, 2017 (2) November 28, 2017 (2) 7,200 5,532 $ $ Larry Holbrook July 18, 2017 (2) November 28, 2017 (2) 20, ,000 $ $ Golden Opportunities Fund November 29, 2017 (3) 29,092 $5.50 (1) Purchases in the open market. (2) Exercise of Options. (3) Exercise of warrants. In addition, CanniMed notes that Golden Opportunities has entered into a Hostile Bid Lock-Up Agreement, and CanniMed intends to apply to the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission for an order that, among other things, the Hostile Bid is an insider bid on the basis that the Locked-Up CanniMed Shareholders have acted jointly and in concert with Aurora for purposes of the Hostile Bid. See Regulatory Matters Relating to the Hostile Bid on page

53 ISSUANCES OF SECURITIES OF CANNIMED Except as set out below and above under Trading in Securities of CanniMed, no CanniMed Shares or Options or other securities convertible into, or exercisable for, CanniMed Shares have been issued to the current directors, officers or other insiders of CanniMed during the two years preceding the date hereof. Grant or Issuance of Options Number of Securities Issued Issue/Exercise Price per Common Share Name Date of Issue or Grant Nature of Issuance Brent Zettl September 1, 2016 Grant of Options 40,000 $ John Knowles September 1, 2016 Grant of Options 120,000 $ Gulwant Bajwa September 1, 2016 Grant of Options 80,000 $ Doug Banzet October 28, 2016 Grant of Options 5,332 $ Donald Ching October 28, 2016 Grant of Options 5,332 $ Marianne Greer October 28, 2016 Grant of Options 5,332 $ Richard Hoyt October 28, 2016 Grant of Options 5,332 $ Dwayne Lashyn October 28, 2016 Grant of Options 5,332 $ Dr. Bruce Mackler October 28, 2016 Grant of Options 5,332 $ Dr. Brandon Price October 28, 2016 Grant of Options 5,332 $ Allan Fowler September 8, 2017 Grant of Options 100,000 $9.64 Convertible Debentures Principal Balance Number of CanniMed Name Date shares convertible into Brent Zettl June 30, 2016 $92,060 16,738 Dr. Bruce Mackler July 22, 2016 $15,300 2,781 Golden Opportunities Fund July 22, 2016 $1,300, ,363 Richard Hoyt August 31, 2016 $30,300 5,509 OWNERSHIP OF AURORA SECURITIES None of CanniMed, the directors and officers of CanniMed and, to the knowledge of the directors and officers of CanniMed, after reasonable enquiry, no insider of CanniMed, no associate or affiliate of any director, officer or other insider of CanniMed, no associate or affiliate of CanniMed nor any Person acting jointly or in concert with CanniMed beneficially owns, directly or indirectly, or exercises control or direction over, any securities of Aurora. AGREEMENTS BETWEEN AURORA AND THE DIRECTORS, OFFICERS AND SHAREHOLDERS OF CANNIMED There is no agreement, commitment or understanding (including pursuant to which any payment or other benefit is to be made or given by way of compensation for loss of office or remaining or retiring from office if the Hostile Bid is successful) which has been made or is proposed to be made between Aurora and any of the directors or officers of CanniMed. None of the directors or officers of CanniMed is a director or officer of Aurora or any subsidiary thereof. None of the directors or officers of CanniMed and, to the knowledge of the directors and officers of CanniMed after reasonable enquiry, none of their respective associates, has any interest in any material transaction to which Aurora is a party

54 To the knowledge of the directors and officers of CanniMed after reasonable inquiry, no agreement, commitment or understanding has been made or is proposed to be made between Aurora and any CanniMed Shareholder relating to the Hostile Bid except the Hostile Bid Lock-Up Agreements, as described in this Directors Circular and the Aurora Circular. ARRANGEMENTS BETWEEN CANNIMED AND ITS DIRECTORS AND OFFICERS Except as set forth below, no agreement, commitment or understanding (including pursuant to which any payment or other benefit is to be made or given by way of compensation for loss of office or remaining in or retiring from office if the Hostile Bid is successful) has been made or is proposed to be made between CanniMed and any of its directors or officers. In the case of each agreement, commitment or understanding discussed below, as applicable, in which the term change in control applies, the consummation of the Hostile Bid would constitute a change in control. If the directors and officers of CanniMed were to tender any CanniMed Shares to the Hostile Bid, they would receive capped consideration of a maximum value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share on the same terms and conditions as other CanniMed Shareholders. As of the date of this Directors Circular, the directors and officers of CanniMed owned, or exercised direction and control over, an aggregate of 2,899,052 CanniMed Shares and 350,128 Options. If the directors and officers of CanniMed were to tender all of their CanniMed Shares (excluding the CanniMed Shares underlying the Options) to the Hostile Bid, which they have indicated that they do not intend to do as of the date of this Directors Circular and such CanniMed Shares were accepted for purchase and taken up and paid for by Aurora, the directors and officers of CanniMed would receive a maximum aggregate consideration of $ $77,980,320 (based on the maximum capped value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share). For charts detailing the ownership of CanniMed Shares and other securities of CanniMed held by the directors and officers of CanniMed, see the section of this Directors Circular entitled Ownership of Securities of CanniMed. Existing Employment and Change of Control Agreements with Officers CanniMed has entered into employment agreements with each of its officers. Other than with respect to Messrs. Zettl, Knowles, Bajwa and Holbrook, none of the employment agreements entered into by the officers provides for change of control benefits. Upon a change of control of CanniMed, which would include the Hostile Bid if consummated in accordance with its terms, and either a termination of employment for a reason other than cause or a resignation from employment for good reason, each of Messrs. Zettl, Knowles, Bajwa and Holbrook would be entitled to receive the following benefits: (i) a lump sum equal to one year or two years for Mr. Zettl of base salary; (ii) a lump sum equal to the annual incentive bonus to be paid immediately preceding the termination, (iii) the continuation to participate in the employee pension and benefit plan for one year or two years for Mr. Zettl or the receipt of a lump sum equal to the premium contributions and DPSP entitlements during the respective periods; and (iv) having their Options immediately vest and be exercisable in accordance with the CanniMed Stock Option Plan. CanniMed Stock Option Plan CanniMed adopted a stock option plan (the CanniMed Stock Option Plan ) under which it is authorized to grant to directors, officers, employees and consultants of CanniMed and its affiliates, non-transferable options to purchase CanniMed Shares (the Options ). Unless the CanniMed Board determines otherwise and subject to any accelerated termination in accordance with the CanniMed Stock Option Plan, each Option granted under the CanniMed Stock Option Plan shall expire on the fifth anniversary of the date on which it was granted. In no event may an Option expire later than the 10th anniversary of the date on which it was granted. The number of CanniMed Shares reserved for issuance may not exceed 10% of the total issued and outstanding CanniMed Shares at the date of the Option grant. Subject to the discretion of the CanniMed Board, certain grants to citizens or residents of the United States will be considered incentive stock options and will qualify as such under U.S. federal income tax laws. Of the 10% of the total issued and outstanding CanniMed Shares that may be reserved for issuance under the CanniMed Stock Option Plan, a maximum of 6.5% may be granted as incentive stock options

55 Options granted under the CanniMed Stock Option Plan vest and become exercisable by an Option holder at such time or times as may be determined by the CanniMed Board. The CanniMed Board may, in its discretion, accelerate the date upon which any Option vests and becomes exercisable. No unvested Options may be exercised. As at the date of this Directors Circular, there are 700,192 Options outstanding to purchase CanniMed Shares. Interests of Directors, Officers and Others in Material Transactions Other than as disclosed in this Directors Circular, within the three years prior to the date of this Directors Circular, no informed person of CanniMed has or had any material interest, direct or indirect, in any transaction or proposed transaction which has materially affected or could materially affect CanniMed or any of its subsidiaries. For the purposes of this Directors Circular an informed person means a director or executive officer of CanniMed, a director or executive officer of a person or company that is itself an informed person or subsidiary of CanniMed and any person or company who beneficially owns, directly or indirectly, voting securities of CanniMed or who exercises control or direction over voting securities of CanniMed carrying more than 10% of the voting rights attached to all issued and outstanding voting securities of CanniMed. ADDITIONAL INFORMATION ERRORS OR MISLEADING STATEMENTS IN AURORA CIRCULAR The Aurora Circular is misleading and fails to clearly disclose: (i) the consideration available to CanniMed Shareholders under the Hostile Bid by oversimplifying and/or de-emphasizing important economic terms of the consideration offered; (ii) that the value of consideration in Aurora Shares is not equal to $24.00 in Aurora Shares in many scenarios, but that $24.00 is merely the cap in the formula used to calculate the exchange ratio under the Hostile Bid when the 20 day VWAP of the Aurora Shares is greater than $5.30 per Aurora Share on the earlier of the Expiry Time and the date on which all conditions of the Hostile Bid have been satisfied; (iii) that CanniMed Shareholders will only receive Aurora Shares when the value of the consideration that they are receiving in Aurora Shares is less than $24.00 in Aurora Shares with no floor to the value that they will receive; and (iv) the impact of the exchange ratio on CanniMed Shareholders including the significant risk that CanniMed Shareholders will not be able to realize $24.00 worth of consideration in Aurora Shares, or the premium implied thereby, on or immediately following closing of the Hostile Bid in light of, among other things, (a) the structure of exchange ratio, (b) the volatility in trading prices of Aurora Shares, (c) the significant risks related to Aurora s business, and/or (d) the significant risks related to the broader emergent cannabis industry. The Aurora Circular fails to properly disclose Aurora s exemptive relief granted by the Autorité des marchés financiers dated November 30, 2017, which requires that Aurora translate the documents it has incorporated by reference in the Aurora Circular into French and that, in order to comply with the conditions of the exemptive relief, Aurora must file all of the translated documents and leave the Hostile Bid open for 105 days from the date of filing the translated documents. As of the date of this Directors Circular, no such translated documents have been filed. As such, no CanniMed Shares can be taken up prior to March 23, 2018 at the earliest. MATERIAL CHANGES IN THE AFFAIRS OF CANNIMED Except as otherwise described or referred to in this Directors Circular or as otherwise publicly disclosed, no other information is known to the directors or officers of CanniMed that indicates any material change in the affairs or prospects of CanniMed since July 31, 2017, being the date of its last published financial statements. OTHER MATERIAL INFORMATION Except as disclosed in this Directors Circular or otherwise publicly disclosed, there is no information that is known to the directors and officers of CanniMed that would reasonably be expected to affect the decision of CanniMed Shareholders to accept or reject the Hostile Bid

56 STATUTORY RIGHTS Securities legislation in the provinces and territories of Canada provides securityholders of CanniMed with, in addition to any other rights they may have at law, one or more rights of rescission, price revision or to damages, if there is a misrepresentation in a circular or a notice that is required to be delivered to those securityholders. However, such rights must be exercised within prescribed time limits. Securityholders should refer to the applicable provisions of the securities legislation of their province or territory for particulars of those rights or consult with a lawyer. APPROVAL OF THE DIRECTORS CIRCULAR The contents of this Directors Circular have been approved by the CanniMed Board and the delivery of this Directors Circular has been authorized by the CanniMed Board

57 CONSENT OF ALTACORP CAPITAL INC. Dated: December 8, 2017 To the Board of Directors of CanniMed Therapeutics Inc. ( CanniMed ), We hereby consent to the references to our firm name and to our opinion dated December 8, 2017 contained in, and the inclusion of the text of such opinion as Schedule B to, the directors circular of CanniMed dated December 8, Our opinion was given as at December 8, 2017 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend that any person other than the directors of CanniMed shall be entitled to rely upon our opinion. (Signed) AltaCorp Capital Inc. Dated: December 8, 2017 CONSENT OF CORMARK SECURITIES INC. To the Board of Directors of CanniMed Therapeutics Inc. ( CanniMed ), We hereby consent to the references to our firm name and to our opinion dated December 8, 2017 contained in, and the inclusion of the text of such opinion as Schedule C to, the directors circular of CanniMed dated December 8, Our opinion was given as at December 8, 2017 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend that any person other than the directors of CanniMed shall be entitled to rely upon our opinion. (Signed) Cormark Securities Inc

58 CERTIFICATE DATED: December 8, 2017 The foregoing contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made. On behalf of the Board of Directors (Signed) Brent Zettl Brent Zettl Director (signed) Donald Ching Donald Ching Director

59 SCHEDULE A GLOSSARY Unless the context otherwise requires or where otherwise provided, the following words and terms shall have the meanings set forth below when used in this Directors Circular, including the Schedules thereto. Words importing the singular include the plural and vice versa and words importing any gender include all genders. acquiring person means a person, together with its affiliates, associates and joint actors, that acquires beneficial ownership of 20% or more of the CanniMed Shares, subject to the ability of the CanniMed Board to waive the application of the Rights Plan. affiliate has the meaning ascribed thereto in the Securities Act (Ontario) and includes any Person that constitutes an affiliate under the applicable rules of National Instrument Take-Over Bids and Issuer Bids. AltaCorp means AltaCorp Capital Inc., the financial advisor to the CanniMed Board. Apex means Apex Investment Limited Partnership. approve the Newstrike Acquisition means the approval by the CanniMed Shareholders at the CanniMed Special Meeting of the ordinary resolution regarding, among other things, the issuance by CanniMed of the CanniMed Shares necessary to give effect to the Newstrike Acquisition pursuant to the Newstrike Acquisition Agreement. associate has the meaning ascribed thereto in National Instrument Take-Over Bids and Issuer Bids. Aurora means Aurora Cannabis Inc., a corporation existing under the Business Corporations Act (British Columbia). Aurora Circular means the Hostile Bid and accompanying take-over bid circular of Aurora dated November 24, Aurora Proposal means the proposal made by Aurora in its letter on November 13, 2017 to CanniMed. Aurora Shares means the common shares in the capital of Aurora. Aurora Sky means Aurora s facility under construction located in Leduc County, Alberta. Bloomberg means Bloomberg L.P. CanniMed means CanniMed Therapeutics Inc., a corporation existing under the Canada Business Corporations Act. CanniMed Board means the board of directors of CanniMed. CanniMed Shares means the common shares in the capital of CanniMed. CanniMed Shareholders or Shareholders means the holders of the CanniMed Shares. CanniMed Special Meeting means the special meeting of CanniMed Shareholders scheduled to be held on or about January 23, 2018 in connection with the approval of the issuance of CanniMed Shares in connection with the Newstrike Acquisition. CanniMed Special Meeting Circular means the management information circular dated December 8, v29 i

60 CanniMed Stock Option Plan means the stock option plan of CanniMed adopted on December 21, 2016, as the same may be amended, restated supplemented or otherwise modified from time to time. CDS means CDS Clearing and Depository Services Inc., or its nominee, which at the date hereof is CDS & CO. Cormark means Cormark Securities Inc., the financial advisor to the Special Committee. directors means the members of the CanniMed Board being, as of the date of this Directors Circular, Donald Ching, Doug Banzet, Marianne Greer, Richard Hoyt, John L. Knowles, Dwanye L. Lashyn, Bruce F. Mackler, Brandon J. Price and Brent H. Zettl. Directors Circular means this directors circular, letter to CanniMed Shareholders and includes the schedules attached hereto. EBITDA means the earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, unrealized foreign exchange (gain) loss and non-controlling interests. Enterprise Value is calculated as market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EV/EBITDA means Enterprise Value dividend by EBITDA. Expiry Time means 11:59 p.m. (Pacific Time) on Friday, March 9, 2018 unless the Hostile Bid is extended, accelerated or withdrawn by Aurora in accordance with its terms. First Committee means the committee formed by the CanniMed Board with a mandate to review the First Vantage Letter and the Second Vantage Letter. First Vantage Letter means the letter the CanniMed Board received on October 5, 2017 from Vantage. forward-looking statements has the meaning ascribed to that term in the section of this Directors Circular entitled Forward-Looking Statements. fully diluted basis means, with respect to the number of outstanding CanniMed Shares, such number of outstanding CanniMed Shares calculated on the assumption that all existing or future rights, warrants or options or other rights to purchase, convert into, exchange into, exercise for or otherwise acquire CanniMed Shares are exercised in full. Golden Opportunities means Golden Opportunities Fund Inc. Hostile Bid means the offer made by Aurora to acquire all of the outstanding CanniMed Shares, including any CanniMed Shares that may become issued and outstanding after the date of the Hostile Bid but prior to the Expiry Time upon the exercise of Options at a capped maximum value of $24.00 (based on a formula related to Aurora s share price and payable in Aurora Shares) per CanniMed Share. Hostile Bid Lock-Up Agreements means the agreements entered into by the Locked-Up CanniMed Shareholders with Aurora, copies of which are available on CanniMed s issuer profile on SEDAR at whereby such CanniMed Shareholders have agreed to tender their CanniMed Shares to the Hostile Bid and to vote against certain other transactions. IFRS means International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the Chartered Professional Accountants of Canada in Part I of The CPA Canada Handbook v29 ii

61 informed person means a director or executive officer of CanniMed, a director or executive officer of a person or company that is itself an informed person or subsidiary of CanniMed and any person or company who beneficially owns, directly or indirectly, voting securities of CanniMed or who exercises control or direction over voting securities of CanniMed carrying more than 10% of the voting rights attached to all issued and outstanding voting securities of CanniMed. insider has the meaning ascribed thereto in the Securities Act (Ontario). Kingsdale Advisors means Kingsdale Advisors, the information agent and strategic shareholder advisor to the CanniMed Board. Locked-Up CanniMed Shareholders means SaskWorks, Golden Opportunities, Apex and Vantage. Newstrike means Newstrike Resources Ltd., a corporation existing under the Business Corporations Act (Ontario). Newstrike Acquisition means the proposed plan of arrangement in respect of Newstrike and CanniMed. Newstrike Acquisition Agreement means the arrangement agreement dated November 17, 2017 between Newstrike and CanniMed. Newstrike Debenture Financing means the subscription by CanniMed from Newstrike on September 29, 2017 for a convertible debenture in the principal amount of $4,000,000 and 10,958,904 common share purchase warrants exercisable at $0.42 per common share. Newstrike Exclusivity Period means the mutual non-disclosure agreement between CanniMed and Newstrike containing a covenant to negotiate exclusivity with each other, which was extended until November 17, Newstrike NDA means the mutual non-disclosure agreement entered into by CanniMed and Newstrike on June 29, officer has the meaning ascribed thereto in the Securities Act (Ontario). Options means any options or securities to purchase CanniMed Shares. Person includes an individual, a corporation, a partnership, trust, body corporate, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and an individual or other person in that person s capacity as a trustee, executor, administrator or personal or other legal representative. Rights Plan means the shareholder rights plan that was adopted by CanniMed effective November 28, S&P Capital IQ means S&P Global Market Intelligence, a part of S&P Global Inc. SaskWorks means Saskworks Venture Fund Inc. Second Vantage Letter means the letter the CanniMed Board received on October 23, 2017 from Vantage. SEDAR means the Systems for Electronic Document Analysis and Retrieval maintained by the Canadian Securities Administrators. Special Committee means the special committee of independent directors of the CanniMed Board consisting of Donald Ching, Marianne Greer, Richard Hoyt, Dwanye Lashyn, Bruce F. Mackler and Brandon Price v29 iii

62 Up Cannabis means Up Cannabis Inc. Vantage means Vantage Asset Management Inc. VWAP means the volume weighted average trading price of the listed securities, calculated by dividing the total value by the total volume of securities traded for the relevant period v29 iv

63 SCHEDULE B OPINION OF ALTACORP (please see attached) v29

64

65

66

67

68

69 SCHEDULE C OPINION OF CORMARK (please see attached)

70 December 8, 2017 CanniMed Therapeutics Inc. 1 Plant Technology Road Box 19A, RR #5 Saskatoon, Saskatchewan S7K 3J8 To the Board of Directors of CanniMed Therapeutics Inc.: Cormark Securities Inc. ( Cormark Securities or Cormark ) understands that Aurora Cannabis Inc. ( Aurora or the Offeror ) has made an unsolicited offer (the Unsolicited Offer ) to purchase all of the issued and outstanding common shares (the CanniMed Shares ) of CanniMed Therapeutics Inc. ( CanniMed or Company ), including any CanniMed Shares that may become issued and outstanding after the date of the Unsolicited Offer but prior to the expiry time of the Unsolicited Offer, for consideration equal to common shares of the Offeror for each CanniMed Share, subject to a maximum of $24.00 (based on a formula related to Aurora s share price) (the Cap Price ) in Aurora Shares (the Consideration ). The terms of the Unsolicited Offer are more fully described in an offer to purchase and take-over bid circular dated November 24, 2017 (collectively, the Offer Circular ) which was filed on the System for Electronic Document Analysis and Retrieval ( SEDAR ) and mailed to holders of CanniMed Shares ( CanniMed Shareholders ) in connection with the Unsolicited Offer. Cormark has been retained by the special committee (the Special Committee ) of the board of directors (the Board ) of the Company to prepare and deliver an opinion as to the fairness of the Consideration to be received by the CanniMed Shareholders under the Unsolicited Offer from a financial point of view (the Fairness Opinion ). CORMARK SECURITIES ENGAGEMENT Cormark Securities was initially contacted by the Company on November 13, 2017 in respect of a potential advisory engagement in connection with the Unsolicited Offer. On November 16, 2017, Cormark Securities was formally retained by the Special Committee (the Engagement Agreement ) to provide certain financial advisory services, including the preparation and provision of a Fairness Opinion as to the adequacy, from a financial point of view, of the Consideration to be received by CanniMed Shareholders with respect to the potential Unsolicited Offer that had not been made at that time but that at that time Aurora publicly indicated that they intended to make. The terms of the Engagement Agreement provide that Cormark Securities is to be paid a fixed fee by the Company for delivering the Fairness Opinion, regardless of the conclusions reached in the Fairness Opinion or the outcome of the Unsolicited Offer. The Engagement Agreement also provides for the payment of a monthly work fee to Cormark Securities and the payment of an additional transaction fee in specified circumstances. In addition, Cormark Securities is to be reimbursed for its reasonable out-of-pocket expenses and is to be indemnified by the Company in certain circumstances, against certain expenses, losses, claims, actions, damages and liabilities which may arise, directly or indirectly, from services performed by Cormark Securities under the Engagement Agreement. Pursuant to the Engagement Agreement, on December 8, 2017, at the request of the Special Committee, Cormark Securities orally delivered the Fairness Opinion to the Special Committee based upon and subject to the scope of review, analyses, assumptions, limitations, qualifications and other matters described herein. This Fairness Opinion provides the same opinion, in writing, as that given orally by Cormark Securities on December 8, 2017 (the Opinion Date ). Subject to the terms of the Engagement Agreement, Cormark Securities consents to the inclusion of the Fairness Opinion, in its entirety, in the Directors Circular (as defined below), along with a summary thereof, in a form acceptable to Cormark Securities, and to the filing thereof by the Company with the applicable Canadian securities regulatory authorities. Except as contemplated herein, the Fairness Opinion is not to be reproduced, disseminated, quoted from or referred to (in whole or in part) without the express prior written consent of Cormark

71 2 and will be one factor, among others, that the Special Committee will consider in determining whether to recommend that CanniMed Shareholders accept or reject the Unsolicited Offer. CREDENTIALS OF CORMARK SECURITIES Cormark Securities is an independent Canadian investment dealer providing investment research, equity sales and trading and investment banking services to a broad range of institutions and corporations. Cormark Securities has participated in a significant number of transactions involving public and private companies and has extensive experience in preparing fairness opinions. The Fairness Opinion expressed herein represents the opinion of Cormark Securities and its form and content have been approved for release by a committee of its directors and officers, each of whom is experienced in merger, acquisition, divestiture, fairness opinion and capital market matters. RELATIONSHIP WITH INTERESTED PARTIES Neither Cormark Securities, nor any of its affiliates, is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of the Company, the Offeror, or any of their respective associates or affiliates (collectively, the Interested Parties ). In the past twenty-four month period Cormark Securities has not been engaged by the Company, the Offeror or any of their respective associates or affiliates to provide financial advisory services nor has it participated in any financings, other than acting as a financial advisor to the Special Committee as described above and, in the last two years: Cormark acted as a fairness opinion provider to CanniMed and the Board on its acquisition of Newstrike Resources Ltd. ( Newstrike ) announced November 17, 2017 (the Newstrike Transaction ); was a co-manager in connection with a private placement of unsecured convertible debentures of Aurora, which closed on November 1, 2016; and was a co-manager in connection with a private placement offering of units of Aurora, comprised of common shares and common share purchase warrants which closed on February 28, There are no understandings, agreements or commitments between Cormark Securities and the Company, Aurora, or any other Interested Party, with respect to any future business dealings. Cormark Securities may, in the future, in the ordinary course of its business, perform financial advisory or investment banking services for the Company, Aurora, or any other Interested Party. Cormark Securities acts as a securities trader and dealer, both as principal and agent, in major financial markets and, as such, may have had, may have and may in the future have long or short positions in securities of the Company, Aurora or other Interested Parties and, from time to time, may have executed or may execute transactions on behalf of such companies or clients for which it may have received or may receive compensation. As an investment dealer, Cormark Securities conducts research on securities and may, in the ordinary course of business, provide research reports and investment advice to its clients on investment matters, including with respect to the Company, Aurora, or the Unsolicited Offer. SCOPE OF REVIEW In connection with rendering the Fairness Opinion, Cormark Securities has reviewed and relied upon (without verifying or attempting to verify independently the completeness or accuracy thereof) or carried out, among other things, the following: 1. The Offer Circular dated November 24, 2017; 2. The most recent draft of the Directors Circular to be dated December 8, 2017 (the Directors Circular ) to which this Fairness Opinion will be appended; 3. The lock-up agreements between Aurora and Apex Investment Limited Partnership Golden Opportunities

72 3 4. The final Arrangement Agreement between CanniMed and Newstrike Resources Ltd. ( Newstrike ) dated November 7, 2017; 5. Site visit to Newstrike s Brantford and Niagara facilities on November 7, 2017; 6. Site visit to CanniMed on April 27, 2017; 7. Public filings submitted by CanniMed, Aurora and Newstrike to securities commissions or similar regulatory authorities in Canada which are available on SEDAR, including annual reports, audited annual financial statements, management information circulars, annual information forms, prospectuses, material change reports and interim financial statements; 8. Press releases issued by CanniMed, Aurora and Newstrike through commercial newswires over the past three years; 9. Certain internal financial, operational, corporate and other information prepared or provided by the management of CanniMed, including internal operating and financial projections prepared by CanniMed s management; 10. Certain internal financial, operational, corporate and other information prepared or provided by the management CanniMed and Newstrike, including internal operating and financial projections prepared by Newstrike s management; 11. Discussions with senior management of CanniMed with respect to the information referred to herein and other issues considered by Cormark to be relevant; 12. Discussions with senior management of Newstrike with respect to the information referred to herein and other issues considered by Cormark to be relevant; 13. Representations contained in a certificate dated December 8, 2017, from certain senior officers of the Company (the Certificate ); 14. Due diligence meetings and calls to discuss the assumptions and rationale behind the preparation of the financial forecasts with the Company; 15. Certain public information relating to the business, financial and operating performance and financial position of CanniMed, Aurora, Newstrike and other selected public companies including corporate presentations, to the extent considered by Cormark to be relevant; 16. Public information with respect to other transactions of a comparable nature considered by Cormark to be relevant; 17. Selected investment research reports published by equity research analysts and industry sources regarding CanniMed, Aurora, Newstrike and other public companies in the medical marijuana sector to the extent considered by Cormark to be relevant; and 18. Such other economic, financial market, industry and corporate information, investigations and analyses as Cormark considered necessary or appropriate in the circumstances. Cormark Securities has not, to the best of its knowledge, been denied access by the Company to any information requested by Cormark Securities. Cormark Securities did not meet with the auditors of the Company, Aurora or Newstrike and has assumed the accuracy, completeness and fair presentation of, and has relied upon, without independent verification, the consolidated financial statements of the Company, Aurora and Newstrike and the reports of the auditors thereon. PRIOR VALUATIONS The Company has represented to Cormark Securities that there have not been any prior valuations (as defined in Canadian Securities Administrators Multilateral Instrument Protection of Minority Security Holders in Special Transactions) of the Company or its material assets or its securities in the past twenty-four month period

73 4 ASSUMPTIONS AND LIMITATIONS Cormark Securities has not been asked to prepare and has not prepared a formal valuation of the Company or Aurora or any of their respective securities or assets, and the Fairness Opinion should not be construed as such. Cormark Securities has, however, conducted such analyses as it considered necessary in the circumstances. In addition, the Fairness Opinion is not, and should not be construed as, advice as to the price at which the common shares of CanniMed or Aurora may trade at any future date. Cormark Securities was similarly not engaged to review any legal, tax or accounting aspects of the Unsolicited Offer. Cormark Securities has relied upon, without independent verification or investigation, the assessment by the Company and its legal, tax, regulatory and accounting advisors with respect to legal, tax, regulatory and accounting matters. In addition, the Fairness Opinion does not address the relative merits of the Unsolicited Offer as compared to any other transaction involving the Company (other than various considerations relating to the Newstrike Transaction) or the prospects or likelihood of any other alternative transaction or any other possible transaction involving the Company, its assets or its securities. In the exercise of its professional judgment, in assessing the fairness of the Consideration offered under the Unsolicited Offer, Cormark Securities has considered the anticipated contribution of Newstrike to the standalone CanniMed business, and financial and operating performance of CanniMed. The Fairness Opinion is limited to the fairness of the Consideration to be received by CanniMed Shareholders under the Unsolicited Offer, from a financial point of view, and not the strategic or legal merits of the Unsolicited Offer. The Fairness Opinion represents an impartial expert judgment, not a statement of fact. Nothing contained herein is to be construed as a legal interpretation, an opinion on any contract or document, or a recommendation to invest or divest. The Fairness Opinion has been provided for the exclusive use of the Special Committee and should not be construed as a recommendation to accept or reject the Unsolicited Offer. The Fairness Opinion may not be used by any other person or relied upon by any other person without the express prior written consent of Cormark Securities. Cormark Securities will not be held liable for any losses sustained by any person should the Fairness Opinion be circulated, distributed, published, reproduced or used contrary to the provisions of this paragraph. The Fairness Opinion is rendered as of the Opinion Date. It must be recognized that fair market value, and hence fairness from a financial point of view, changes from time to time, not only as a result of internal factors, but also because of external factors such as changes in the economy, competition and changes in consumer/investor preferences. Cormark Securities disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting the Fairness Opinion which may come or be brought to Cormark Securities attention after the Opinion Date. Without limiting the foregoing, in the event that there is any material change in any fact or matter affecting the Fairness Opinion after the Opinion Date, Cormark Securities reserves the right to change, modify or withdraw the Fairness Opinion. With the approval of the Board and as is provided for in the Engagement Agreement, Cormark Securities has relied upon the completeness, accuracy and fair presentation of all of the financial and other information, data, advice, opinions and representations obtained by it from public sources or provided to it by or on behalf of the Company and its directors, officers, agents and advisors or otherwise (collectively, the Information ) and Cormark Securities has assumed that this Information did not omit to state any material fact or any fact necessary to be stated to make that Information not misleading. The Fairness Opinion is conditional upon the completeness, accuracy and fair presentation of such Information including as to the absence of any undisclosed material change. Subject to the exercise of professional judgment and except as expressly described herein, Cormark Securities has not attempted to independently verify or investigate the completeness, accuracy or fair presentation of any of the Information. With respect to financial and operating forecasts, projections, estimates and/or budgets provided to Cormark Securities and used in the analyses supporting the Fairness Opinion, Cormark Securities has noted that projecting future results of any company is inherently subject to uncertainty. Cormark Securities has assumed that such forecasts, projections, estimates and/or budgets were reasonably prepared consistent with industry practice on a basis reflecting the best currently available assumptions, estimates and judgments of management of the Company as to the

74 5 reasonable in the circumstances. In rendering the Fairness Opinion, Cormark Securities expresses no view as to the reasonableness of such forecasts, projections, estimates and/or budgets or the assumptions on which they are based. Senior officers of the Company have made certain representations to Cormark Securities in the Certificate including that, to the best of their knowledge, information and belief after reasonable and diligent inquiry with the intention that Cormark Securities may rely thereon in connection with the preparation of the Fairness Opinion (a) the Information provided by, or on behalf, of the Company or any of its affiliates or its representatives and agents to Cormark Securities for the purpose of preparing the Fairness Opinion was, at the date such information was provided to Cormark Securities, and is now, complete, true and correct in all material respects, and did not and does not contain any untrue statement of a material fact in respect of the Company and its affiliates or the Unsolicited Offer and did not and does not omit to state a material fact in relation to the Company and its affiliates or the Unsolicited Offer necessary to make the Information not misleading in light of the circumstances under which it was provided; (b) since the dates on which the Information was provided to Cormark Securities, there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of the Company and its affiliates and no material change has occurred in the Information or any part thereof which would have or which would reasonably be expected to have a material effect on the Fairness Opinion; (c) to the best of the Company s knowledge, information and belief after due inquiry, there are no independent appraisals or valuations or material non-independent appraisals or valuations relating to the Company or any of its affiliates or any of their respective material assets or liabilities which have been prepared as of a date within the 24 months preceding the Opinion Date and which have not been provided to Cormark Securities; (d) there have been no verbal or written offers or serious negotiations for or transactions involving the Company or any material assets of the Company or any of its subsidiaries during the preceding 24 months which (i) have not been disclosed to Cormark Securities and (ii) would reasonably be expected to affect the Fairness Opinion in any material respect, and (e) since the dates on which the Information was provided to Cormark Securities by the Company, no material transaction has been entered into by the Company or any of its affiliates which has not been disclosed in complete detail to Cormark Securities. In its analyses and in preparing the Fairness Opinion, Cormark Securities has made numerous assumptions with respect to expected industry performance, general business and economic conditions and other matters, many of which are beyond the control of Cormark Securities or any party involved in the Unsolicited Offer. Cormark Securities has also assumed that the disclosure provided or incorporated by reference in Director s Circular to be filed on SEDAR and mailed to shareholders of CanniMed in connection with the Unsolicited Offer and any other documents in connection with the Unsolicited Offer will be accurate in all material respects and will comply with the requirements of all applicable laws, and that the Director s Circular will be distributed to shareholders of the Company in accordance with applicable laws. This Fairness Opinion is rendered on the basis of securities markets, economic, financial and general business conditions prevailing as at the Opinion Date and the condition and prospects, financial and otherwise, of the Company and its affiliates, as they were reflected in the Information and as they have been represented to Cormark Securities in discussions with management of the Company. Cormark Securities believes that the Fairness Opinion must be considered and reviewed as a whole and that selecting portions of the analyses or factors considered by Cormark Securities, without considering all the analyses and factors together, could create a misleading view of the process underlying the Fairness Opinion. The preparation of a fairness opinion is a complex process and is not necessarily amenable to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on any particular factor or analysis. OVERVIEW OF CANNIMED CanniMed is a Canadian-based, international plant biopharmaceutical company and a leader in the Canadian medical cannabis industry, with 16 years of pharmaceutical cannabis cultivation experience, state-of-the-art, GMP-compliant production process and world class research and development platforms with a wide range of pharmaceutical-grade cannabis products. In addition, the Company has an active plant biotechnology research and product development

75 6 program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications. The Company, through its subsidiaries, was the first producer to be licensed under the Marihuana for Medical Purposes Regulations, the predecessor to the current Access to Cannabis for Medical Purposes Regulations. It was the sole supplier to Health Canada under the former medical marijuana system for 13 years, and has been producing safe and consistent medical marijuana for thousands of Canadian patients, with no incident of product diversion or recalls. OVERVIEW OF AURORA Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada's Access to Cannabis for Medical Purposes Regulations ("ACMPR"). The Company operates a 55,200 square foot, production facility in Mountain View County, Alberta, known as "Aurora Mountain", a second 40,000 square foot production facility known as "Aurora Vie" in Pointe-Claire, Quebec on Montreal's West Island, and is currently constructing an 800,000 square foot production facility, known as "Aurora Sky", at the Edmonton International Airport. APPROACH TO FAIRNESS In support of this Fairness Opinion, Cormark has performed certain analyses on CanniMed and Aurora, based on those methodologies and assumptions that Cormark considered appropriate in the circumstances for the purposes of providing this Fairness Opinion. In the context of this Fairness Opinion, Cormark has considered, among others, the following methodologies: a) the Discounted Cash Flow ( DCF ) Approach (as defined below); b) the Comparable Trading Approach (as defined below); c) the Precedent Transactions Approach (as defined below); d) the Relative Contribution Approach (as defined below); and e) the Premium Paid Approach (as defined below) as a reference methodology; Discounted Cash Flow Approach Cormark utilized a DCF analysis for its fair market value assessment of CanniMed and Aurora common shares based on its business plan. Cormark discounted the projected, unlevered, after-tax, constant-dollar free cash flows at a prescribed discount rate to generate present values. A five-year projection of the free cash flows was utilized and included an assessment of a terminal value. All forecasts of free cash flow were based on operating estimates provided either by the Company or analyst estimates and Cormark s assessment thereof in the exercise of its professional judgment. Use of a DCF analysis requires that several assumptions be made in order to develop the projected free cash flows. Cormark performed sensitivity analysis on a variety of the assumptions including, but not limited to: production rate, cannabis product pricing, operating costs, discount rates and terminal multiples. Comparable Trading Approach Cormark Securities reviewed public market trading statistics of comparable Canadian cannabis licensed producers (the Comparable Trading Approach ). Cormark considered multiples based on Enterprise Value (as defined below) to EBITDA (earnings before interest, tax, depreciation and amortization) where available, with enterprise value calculated as equity value plus debt, less cash and cash equivalents ( Enterprise Value ) for each of the comparable companies. Estimated financial data for the selected comparable companies was based on publicly available equity

76 7 multiples to the corresponding data of CanniMed and Aurora to develop an implied equity value. Precedent Transactions Approach Cormark also reviewed publicly available information on merger and acquisition transactions for branded consumer product companies. Cormark considered these transactions based upon the implied multiples of Enterprise Value to revenue. Cormark then applied a range of selected multiples based upon these transactions to the corresponding data of CanniMed and Aurora. Cormark reviewed publicly available information on selected merger and acquisition transactions in the Canadian cannabis sector. Given the limited data and uncertainty surrounding the projections at the time of the transaction for the comparable precedent transactions, specific multiples were not applied and considered appropriate in the context the Unsolicited Offer. Relative Contribution Approach Cormark reviewed the relative contribution of CanniMed s key metrics, including patient count, capacity, grams sold and revenue generated in the last twelve months as well as forecasted EBITDA to the combined company versus the implied pro forma percentage ownership of the CanniMed Shareholders in the combined company. Premium Paid Approach Comparable Precedent Premium Analysis Cormark reviewed the implied transaction percentage premiums of selected Canadian cannabis merger and acquisition transactions. Specifically, Cormark considered the implied Unsolicited Offer percentage premiums to spot price, 5-day volume weighted average trading price ( VWAP ) and 20-day VWAP. Canadian M&A Premium Analysis In addition to the comparable precedent premium analysis, Cormark reviewed the implied transaction percentage premiums paid in general merger and acquisition transactions across Canada. Specifically, Cormark considered the implied Unsolicited Offer percentage premiums to spot price, 5-day volume weighted average trading price ( VWAP ) and 20-day VWAP. FAIRNESS CONSIDERATIONS The assessment of fairness of the Consideration, from a financial point of view, must be determined in the context of the particular transaction. Cormark Securities based its conclusion in this Fairness Opinion upon a number of quantitative and qualitative factors including, but not limited to: a) The Consideration to be received by CanniMed Shareholders is inadequate when compared to the estimated fair market value per Aurora share utilizing a DCF Approach; b) The Consideration to be received by CanniMed Shareholders is inadequate when compared to the estimated fair market value per Aurora share utilizing the Comparable Trading Approach; c) The Consideration to be received by CanniMed Shareholders is inadequate when compared to the estimated fair market value per Aurora share utilizing the Precedent Transactions Approach; d) CanniMed Shareholders would be receiving a percentage ownership in the combined company which is less than CanniMed s contribution to the combined company;

77 8 Offer are in-line with the observed premiums utilizing the Premium Paid Approach; f) other factors or analyses which Cormark judged, based on its experience in rendering such opinions, to be relevant. FAIRNESS OPINION Based upon and subject to the foregoing, Cormark Securities is of the opinion that, as at of the Opinion Date, the Consideration to be received by holders of CanniMed Shares pursuant to the Unsolicited Offer is inadequate, from a financial point of view, to CanniMed Shareholders. Yours very truly, CORMARK SECURITIES INC.

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