Cresco Labs to Acquire Origin House in Largest-Ever Public Company Acquisition in the U.S. Cannabis Sector

Cresco Labs Inc. (“Cresco Labs” or the “Company” – CSE:
CL, OTCQX: CRLBF) and CannaRoyalty Corp. d/b/a Origin House (“Origin
House” – CSE: OH, OTCQX: ORHOF) are pleased to announce today that
they have entered into a definitive agreement (the “Agreement”)
pursuant to which Cresco Labs will acquire all of the issued and
outstanding shares of Origin House (the “Origin House Shares”)
(the “Transaction”). Under the terms of the Agreement, holders of
common shares of Origin House will receive 0.8428 subordinate voting
shares of Cresco Labs (the “Cresco Labs Shares”) for each Origin
House Share (the “Exchange Ratio”).

The Transaction represents a total consideration of approximately C$1.1
billion on a fully-diluted basis, or C$12.68 per Origin House Share
(based on the Exchange Ratio and the closing price of Cresco Labs Shares
on March 29, 2019, the last trading day prior to the announcement of the
Transaction). The Transaction represents the largest public company
acquisition in the history of the U.S. cannabis industry. The combined
entity will be: one of the largest vertically-integrated multi-state
cannabis operators in the United States; a leading North American
cannabis company, by footprint; and one of the largest cannabis brand
distributors.

Origin House has become a leading distributor and provider of brand
support services in California, the world’s largest regulated cannabis
market. Origin House’s proven strategy has been to build relationships
with established dispensaries, build partnerships with established
market-leading brands, develop promising cannabis product companies, and
then leverage its full suite of support services to transform those
products into strong California consumer brands. Origin House delivers
over 50+ cannabis brands to more than 500 dispensaries in California,
representing approximately 60% market penetration¹.

KEY TRANSACTION HIGHLIGHTS & BENEFITS:

• Combination of Cresco Labs and Origin House will result in the
  premier distribution company serving California, the largest cannabis
  market in the world;
• Accelerates Cresco Labs’ entrance into the California market
  with the addition of Origin House’s vast distribution platform;
• Establishes the cannabis industry’s first national “house of brands”
  with a growing multi-state footprint that includes leading
  distribution market share in some of the largest states in the country
  including California, Pennsylvania and Illinois;
• Combines the expertise of two industry leaders in branded
  product development and distribution;
• Positions Cresco Labs as the preferred partner for additional
  premier cannabis brands seeking distribution on the industry’s most
  expansive platform;
• Enhances Cresco Labs’ capital markets presence by significantly
  increasing its scale and the liquidity in the Company’s stock,
  resulting in improved ability to attract institutional investment and
  lower its cost of capital;
• Continued participation by Origin House shareholders who will
  hold approximately 20% of the issued and outstanding Cresco Labs
  Shares on a pro forma, fully-diluted and as converted basis, enabling
  Origin House Shareholders the opportunity to participate in the
  expected value created through the Transaction; and
• Immediate premium to Origin House shareholders of approximately
  26% over the 30-day volume weighted average price (“VWAP”) of
  the Origin House Shares on the Canadian Stock Exchange (“CSE”)
  ending March 29, 2019 (based on the Exchange Ratio and the closing
  price of Cresco Labs Shares on March 29, 2019).

MANAGEMENT COMMENTARY

“The acquisition of Origin House is another example of our focused and
disciplined approach to creating a meaningful presence in key cannabis
markets through excellence in brand development and distribution,” said
Cresco Labs CEO and Co-founder Charlie Bachtell. “It establishes Cresco
Labs as the leading multi-state operator with one of the largest
distribution platforms in California, which is projected to be a $7.7
billion cannabis market in 2022 by Arcview Market Research/BDS
Analytics. Having a similar priority on consumers and consumer brands
with the expertise of executives from the largest wine and liquor
distribution company in the United States, the team at Origin House has
established the premier cannabis distribution company in the largest
cannabis market in the world. It’s an incredible platform for Cresco in
California and the distribution infrastructure will provide a valuable
framework to leverage as we scale our platforms in other states.
Congratulations to Marc and the team at Origin House – through strategic
M&A and purposeful investments, they’ve built something very special.”

Mr. Bachtell continued, “Following the closing of this acquisition,
Cresco brands will be in over 725 dispensaries across the country,
giving us the largest and most strategic distribution footprint of any
cannabis company in the United States. This significantly accelerates
our efforts to build the first national house of brands with broad and
deep positions in the largest cannabis markets in the country. Cresco
will have industry-leading brand development and distribution
capabilities, which we believe will result in significant value creation
for consumers and our shareholders alike as the market for medical-use
and regulated adult-use cannabis continues to grow at a rapid pace.”

“We are excited to welcome the Origin House team to the Cresco family,”
said Cresco Labs President and Co-founder Joe Caltabiano. “With the
addition of Origin House and its vast distribution network in
California, we will have access to incredibly valuable real-time market
data and insight into consumer buying patterns that will inform our
product development strategies and reinforce our brand strength. In
addition to their brand building and distribution expertise, Origin
House has a very experienced M&A, corporate development and capital
markets team that will be extremely valuable as we continue to expand
and add scale through additional transactions. With respect to the
capital markets impact, with the equity issued through this transaction,
we expect to have substantially more shares in our float, which we
believe will provide ample liquidity for larger institutional investors
looking to deploy capital into the cannabis space. We expect that our
larger scale and improved liquidity following this acquisition will
positively impact our ability to attract a larger universe of potential
investors and reduce our cost of capital in the future.”

Marc Lustig, Chairman and CEO of Origin House commented, “From an Origin
House perspective, this transaction is directly aligned with our
strategy to build a leading portfolio of cannabis brands in California
and to rapidly and accretively take those brands to the rest of the U.S.
market, as well as the Canadian market. By partnering with one of the
largest and most innovative U.S. multi-state operators in existence
today, Origin House will supercharge its growth and be in a position to
offer its brand partners access to 10 additional states, with licenses
and supporting infrastructure already in place. Cresco shares Origin
House’s resolute focus on the customer as the catalyst for all brand and
business development efforts. This Transaction is not the first
opportunity we have reviewed, but it has received the unanimous support
of our board and large shareholders because we are confident that
together we will be in a position to truly change the face of the global
cannabis industry while continuing to create significant value for the
shareholders of both companies.”

TERMS OF THE TRANSACTION

The Transaction will be effected by way of a plan of arrangement under
the laws of the Province of Ontario. Under the terms of the Agreement,
Cresco Labs will acquire all of the issued and outstanding Origin House
Shares, with each holder of Origin House common shares receiving 0.8428
Cresco Labs Shares for each Origin House Share (and each holder of an
Origin House proportionate voting share receiving 84.28 Cresco Labs
Shares for each proportionate voting share held), which implies a price
per Origin House Share of C$12.68 (on an as converted basis),
representing a total consideration of approximately C$1.1 billion (on a
fully-diluted). After giving effect to the Transaction, Origin House
Shareholders will hold approximately 20% ownership in the
pro forma entity (on a pro forma fully-diluted and as converted basis).

The Transaction has been unanimously approved by the Board of Directors
of each of Cresco Labs and Origin House. Certain Origin House directors,
officers and other significant shareholders have entered into
irrevocable voting and support agreements to vote in favor of the
Transaction, and have also agreed for their resulting Cresco Labs Shares
to be deposited into escrow and released over a period of nine months
following closing of the Transaction.

The Agreement contains customary representations, warranties and
covenants for transactions of this type, including a termination fee in
the amount of C$45 million payable by Origin House in the event that the
Transaction is terminated in certain circumstances.

The Transaction is subject to, among other things, CSE, Ontario court
and certain other regulatory approvals and requires the approval of
two-thirds of the votes cast by shareholders of Origin House at a
special meeting expected to be held in June 2019, as well as other
customary closing conditions. Approval of Cresco Labs Shareholders is
not required. Additional details of the Transaction will be provided to
Origin House Shareholders in an information circular expected to be
mailed to shareholders in the coming weeks. The Transaction is expected
to be completed by the end of June 2019, subject to the satisfaction or
waiver of applicable closing conditions.

The Board of Directors of Origin House unanimously recommends that
Origin House Shareholders vote in favor of the resolution to approve the
Transaction.

Upon the completion of the Transaction, Marc Lustig will be appointed to
the executive management team of Cresco Labs and will also serve as a
member of the Company’s Board of Directors. Mr. Lustig has 16 years of
healthcare and capital markets experience in North America and Europe.
Mr. Lustig founded CannaRoyalty Corp (d/b/a Origin House) in early 2015.

CRESCO LABS PRO FORMA FOOTPRINT

Upon completion of the Transaction, as well as the receipt of licensure
in Michigan and the closing of the Company’s pending acquisition in
Florida, Cresco Labs will have operations in 11 states, 23 facilities,
more than 1.5 million square feet of cultivation, and licenses to
operate up to 51 retail dispensaries. Cresco Labs brands will be sold in
over 725 dispensaries across the United States.

FINANCIAL AND LEGAL ADVISORS

Canaccord Genuity Corp. acted as financial advisor and Bennett Jones LLP
acted as legal counsel to Cresco Labs.

Cormark Securities Inc. acted as financial advisor and Norton Rose
Fulbright Canada LLP acted as legal counsel to Origin House.

Origin House has retained Kingsdale Advisors as its strategic
shareholder and communications advisor. Shareholders with questions are
advised to contact Kingsdale Advisors at 1-888-302-5677 or [email protected]

CONFERENCE CALL AND INVESTOR PRESENTATION

Cresco Labs and Origin House will hold a conference call and webcast to
discuss the acquisition on Tuesday April 2^nd at 8:00 am ET.
The conference call may be accessed via Cresco Labs investor website at
investors.crescolabs.com or by dialing either (a) 1-866-688-4235
(Toll-Free) or (b) 1-409-216-0711 (International), in either case
entering conference ID 3274836. Archived access to the webcast will be
available for one year on Cresco’s investor website.

In addition, an investor presentation providing an overview of the
transaction will be made available on the Events and Presentations page
of the Cresco investor website.

ABOUT CRESCO LABS

Cresco Labs, based in Chicago, is a leading U.S. cannabis company with
experienced management, access to capital and a demonstrated growth
strategy. As a differentiated grower, processor and retailer of premium
cannabis operating across the United States, the company focuses on
entering highly regulated markets with outsized demand potential and
strong regulatory structures. Its impressive speed-to-market gives
Cresco a distinct competitive advantage as it replicates its model to
expand its national footprint. Cresco’s proven ability to execute is
complemented by a cutting-edge brand strategy spearheaded by several of
the brightest minds in consumer marketing in the nation. Cresco’s
products are tailored to all major consumer segments: everyday cannabis,
medicinally focused, connoisseur grade, and chef inspired edibles by
James Beard Award-winning pastry chef Mindy Segal. Learn more about
Cresco Labs at www.crescolabs.com.

ABOUT ORIGIN HOUSE

Origin House is a growing cannabis brands and distribution company
operating across key markets in the U.S. and Canada, with a strategic
focus on becoming a preeminent global house of cannabis brands. Origin
House’s foundation is in California, the world’s largest regulated
cannabis market, where it delivers over 130 branded cannabis products
from 50+ brands to the majority of licensed dispensaries. Origin House’s
brand development platform is operated out of five licensed facilities
located across California, and provides distribution, manufacturing,
cultivation and marketing services for its brand partners. Origin House
is actively developing infrastructure to support the proliferation of
its brands internationally, initially through its acquisition of
Canadian retailer 180 Smoke. Origin House’s shares trade on the CSE
under the symbol “OH” and on the OTCQX under the symbol “ORHOF”. Origin
House is the registered business name of CannaRoyalty Corp. For more
information, visit www.originhouse.com.

FORWARD LOOKING STATEMENTS

This press release contains “forward-looking information” within the
meaning of applicable Canadian securities legislation and may also
contain statements that may constitute "forward-looking statements"
within the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Such forward-looking
information and forward-looking statements are not representative of
historical facts or information or current condition, but instead
represent only Cresco Labs’ and/or Origin House's beliefs regarding
future events, plans or objectives, many of which, by their nature, are
inherently uncertain and outside of the Cresco Labs’ and/or Origin
House's control. Generally, such forward-looking information or
forward-looking statements can be identified by the use of
forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’
‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’
‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative of
those forms or other comparable terms.

Forward looking statements are based on certain assumptions regarding
the Company and Origin House, including but not limited to expected
growth, results of operations, performance, industry trends and growth
opportunities. While the Company considers these assumptions to be
reasonable based on currently available information, they may prove to
be incorrect. By their nature, forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements, including but not limited to:
(i) risks associated with general economic conditions; (ii) adverse
industry events; (iii) future legislative and regulatory developments;
(iv) inability to access sufficient capital and/or inability to access
sufficient capital on favourable terms; (v) the evolving cannabis
industry in North America generally; (vi) the ability of the Company to
implement its business strategies; (viii) risks associated with currency
and interest rate fluctuations; (ix) risks discussed in public filings
relating to the Transaction, as well as those risks discussed under
"Risk Factors" in the Company’s CSE Listing Statement filed with SEDAR
or Origin House’s management’s discussion and analysis filed with SEDAR;
(x) and other factors, many of which are beyond the control of Cresco
Labs’ and/or Origin House.

Readers are cautioned that the foregoing list of factors is not
exhaustive. Because of these uncertainties, readers should not place
undue reliance on the forward-looking statements. No assurances are
given as to the future trading price or trading volumes of Cresco Labs’
Shares, or Origin House Shares, nor as to the Cresco Labs’ and/or Origin
House's financial performance in future financial periods. Except to the
extent required by applicable laws, Cresco Labs’ and/or Origin House
does not intend to update any of these factors or any of the
forward-looking statements contained herein, whether as a result of new
information, future event or otherwise. Except as otherwise indicated,
this press release speaks as of the date hereof. The distribution of
this press release does not imply that there has been no change after
the date hereof or create any duty or commitment to update or supplement
any information provided in this press release or otherwise.

¹ Based on the percentage of licensed cannabis
micro-businesses and storefronts serviced over the past 9 months.

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