Active Health Foods, Inc. announced the signing of a non-binding letter of intent to create a joint venture, that also includes an option to acquire a controlling interest in The Hub Craft, a licensed and permitted Massachusetts cannabis business operator is in the process of building extensive cannabis cultivation, manufacturing, and retail capabilities. Under the terms of the proposed joint venture, the Company, Hub Craft, and Cannabis Global, Inc. will form a California corporation to enter the California cannabis marketplace. In addition to being granted exclusive licenses on all Hub Craft products, branding, and associated technologies for the State of California, the join venture will be provided an option to purchase a 51% controlling position in Hub Craft anytime within nine months of the effective date of the joint venture for a price of $15 million.

Active Health and Cannabis Global are interested in The Hub Craft for additional reasons beyond its products and brands. While many states, such as California and Oregon, are seeing massive overproduction of cannabis, the Massachusetts market is only in its early stages. Generally speaking, while cannabis prices on the West Coast have dropped dramatically, prices in the Massachusetts markets have remained remarkably robust.

Cultivation licenses in the State of Massachusetts are limited to a maximum of 100,000 square feet, which the Company believes will prevent the much larger cannabis industry players from dominating the Massachusetts marketplace. Additionally, all three companies see a massive population in the Massachusetts area that is primed to become avid legal cannabis consumers. While the population of Massachusetts is only approximately seven million, there are an additional approximately 25 million in the neighboring states of New York, Connecticut, and Vermont who have no or limited access to legal recreational cannabis.

The Companies believe these approximately 32 million residents represent the second largest cannabis market in the United States outside of California. While the executives of all three companies have agreed to the proposed initial terms of the joint venture to address the California market as outlined in the non-binding letter of intent, no definitive agreement has been signed. Moreover, there are still a considerable number of details to be worked out before the companies would be able to finalize an agreement.

Thus, there can be no assurance a transaction as contemplated will ultimately take place.