AusCann Group Holdings Limited has entered into an agreement to lease the Company's R&D facility in Western Australia to Source Certain International (`SCI'), an Australian scientific technology Company that is recognised internationally for pioneering and commercialising forensic provenance technology. Leasing the R&D facility is part of a revised growth strategy for AusCann to reduce the Company's operating expenses, maximise the value of its assets, and more clearly focus its resources on core R&D and commercialisation opportunities which are expected to provide the greatest return on investment. Key terms of the agreement: Term of lease: 5 years plus two extension options of 5 years and 5 years; Permitted use: Laboratory, chemistry, development, manufacture, supply and cultivation; Rent: $475,000 p.a. ex GST (subject to CPI increases and rent reviews); Incentive: First 6 months' rent free; Outgoings: SCI responsible for operating expenses related to the facility; Right of First refusal: SCI has first right to purchase the facility if AusCann proposes to sell; and Service agreement: AusCann has the right to negotiate a service level agreement allowing for SCI to provide AusCann with research and analytical services in the R&D facility.