Nova Cannabis : Prospectus Supplement

Prospectus Supplement

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

This prospectus supplement (this "Prospectus Supplement"), together with the accompanying short form base shelf prospectus dated June 27, 2022 to which it relates (the "Shelf Prospectus" and together with this Prospectus Supplement, the "Prospectus"), as amended or supplemented, and each document incorporated by reference into this Prospectus Supplement and the Shelf Prospectus, as amended or supplemented, constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. See "Plan of Distribution".

The securities offered hereby have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States of America, its territories, possessions or the District of Columbia (the "United States"), or to a U.S. person (as such term is defined in Regulation S under the U.S. Securities Act) (a "U.S. Person") unless exemptions from the registration requirements of the U.S. Securities Act and any applicable state securities laws are available. This Prospectus Supplement does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States or to, or for the account or benefit of, any U.S. Person. See "Plan of Distribution".

Information has been incorporated by reference in this Prospectus Supplement and the Shelf Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the corporate services office of Nova Cannabis Inc. at 101, 17220 Stony Plain Road NW Edmonton, Alberta T5S 1K6 or at 403-948-5227,and are also available electronically at www.sedar.com. See "Documents Incorporated by Reference".

PROSPECTUS SUPPLEMENT

TO THE SHORT FORM BASE SHELF PROSPECTUS DATED JUNE 27, 2022

New Issue

July 22, 2022

NOVA CANNABIS INC.

UP TO $20,000,000

COMMON SHARES

Nova Cannabis Inc. ("Nova", the "Corporation", "we", "us" or "our") is hereby qualifying the distribution of common shares in the capital of the Corporation ("Common Shares"), having an aggregate sale price of up to $20,000,000 (the "Offering"). The Corporation has entered into an equity distribution agreement dated July 22, 2022 (the "Distribution Agreement") with ATB Capital Markets Inc. (the "Agent") relating to the Common Shares offered under this Prospectus.

The issued and outstanding Common Shares are listed for trading on the Toronto Stock Exchange ("TSX") under the trading symbol "NOVC". On July 21, 2022, the last trading day prior to the date of this Prospectus Supplement, the closing price of the Common Shares on the TSX was $0.60 per Common Share. The TSX has conditionally approved the listing on the TSX of the Common Shares to be issued by the Corporation under the Offering. Listing will be subject to the Corporation fulfilling all of the listing requirements of the TSX on or before one business day subsequent to the filing of this Prospectus Supplement and no later than the first sale of Common Shares under this Offering.

In accordance with the terms of the Distribution Agreement, and except as noted below, the Corporation may distribute up to $20,000,000 of Common Shares from time to time through the Agent, as agent for the distribution of Common Shares pursuant to the Offering. Sales of the Common Shares, if any, under this Prospectus Supplement and the Shelf Prospectus will be made in transactions that are deemed to be "at- the-market distributions" as defined in National Instrument 44-102Shelf Distributions ("NI 44-102"), involving sales made directly on the TSX or any other recognized Canadian "marketplace" within the meaning of National Instrument 21-101Marketplace Operation upon which the Common Shares are listed, quoted or otherwise traded (a "Marketplace"). The Common Shares will be distributed at market prices prevailing at the time of the sale of such Common Shares. As a result, prices may vary as between purchasers and during the period of distribution. See "Plan of Distribution".

Investing in securities of the Corporation is speculative and involves a high degree of risk and should only be made by persons who can afford the total loss of their investment. A prospective purchaser should review this Prospectus Supplement and the accompanying Shelf Prospectus, as amended or supplemented, and the documents incorporated by reference herein and therein, as amended or supplemented, in their entirety and carefully consider the risk factors described or referenced under the heading "Risk Factors" herein, and in the 2021 Annual MD&A and the Q1 2022 Interim MD&A (as such terms are defined herein). See "Documents Incorporated by Reference".

There is no minimum amount of funds that must be raised under the Offering. This means that the Offering may terminate after only raising a small portion of the offering amount set out above, or none at all. An investor will not be entitled to a return of its investment if only a portion of the disclosed maximum offering amount set out above is in fact raised. See "Plan of Distribution".

Pursuant to the terms of the Distribution Agreement, the Corporation will compensate the Agent for its services in acting as agent in the sale of the Common Shares pursuant to the Offering in an amount equal to 2.0% of the gross proceeds from sales of the Common Shares made on the TSX or another Marketplace (the "Placement Fee"). The Corporation estimates that the total expenses that it will incur for the Offering, excluding compensation payable to the Agent under the terms of the Distribution Agreement, will be approximately $350,000. The Agent, and no person or company acting jointly or in concert with the Agent, may, in connection with the Offering, enter into any transaction that is intended to stabilize or maintain the market price of the Common Shares or securities of the same class as the securities distributed under this Prospectus Supplement and the accompanying Shelf Prospectus, including selling an aggregate number or principal amount of securities that would result in the Agent creating an over-allocation position in the securities. See "Plan of Distribution".

Prospective investors should be aware that owning the Common Shares may subject investors to tax consequences. Investors should read the tax discussion in this Prospectus Supplement and consult their own tax advisors with respect to their own particular circumstances. See "Certain Canadian Federal Income Tax Considerations" and "Risk Factors".

Zachary George is a director of the Corporation who resides outside of Canada. This director has appointed Bennett Jones LLP, 4500 - 855 2nd Street S.W., Calgary, Alberta T2P 4K7, as his agent for service of process. Prospective investors are advised that it may not be possible for investors to enforce judgements obtained in Canada against any person that resides outside of Canada, even if the party has appointed an agent for service of process.

The Corporation's registered office is located at Suite 4000, 421 - 7th Avenue S.W., Calgary, Alberta, T2P 4K9. The Corporation's corporate services office is located at 101, 17220 Stony Plain Road NW Edmonton, Alberta T5S 1K6.

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TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

	Page
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING SHELF PROSPECTUS	... S-1
MARKET AND INDUSTRY DATA ............................................................................................................	S-2
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS...............................................	S-2
DOCUMENTS INCORPORATED BY REFERENCE................................................................................	S-4
RECENT DEVELOPMENTS.....................................................................................................................	S-6
SUMMARY OF THE OFFERING..............................................................................................................	S-7
DESCRIPTION OF COMMON SHARES..................................................................................................	S-8
CONSOLIDATED CAPITALIZATION .......................................................................................................	S-8
USE OF PROCEEDS................................................................................................................................	S-8
PLAN OF DISTRIBUTION ........................................................................................................................	S-9
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS..................................................	S-11
ELIGIBILITY FOR INVESTMENT ...........................................................................................................	S-14
PRIOR SALES ........................................................................................................................................	S-15
TRADING PRICE AND VOLUME ...........................................................................................................	S-15
RISK FACTORS......................................................................................................................................	S-16
LEGAL MATTERS ..................................................................................................................................	S-18
AUDITORS, TRANSFER AGENT AND REGISTRAR............................................................................	S-18
EXEMPTIONS.........................................................................................................................................	S-18
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ............................................................	S-18
CERTIFICATE OF THE CORPORATION ................................................................................................	C-1
CERTIFICATE OF THE AGENT...............................................................................................................	C-2

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TABLE OF CONTENTS
	Page
DEFINITIONS AND OTHER MATTERS.......................................................................................................	2
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS...................................................	2
DOCUMENTS INCORPORATED BY REFERENCE....................................................................................	4
WHERE YOU CAN FIND ADDITIONAL INFORMATION.............................................................................	6
NOVA CANNABIS INC. ................................................................................................................................	6
OUR BUSINESS ...........................................................................................................................................	6
CONSOLIDATED CAPITALIZATION ...........................................................................................................	9
USE OF PROCEEDS....................................................................................................................................	9
PLAN OF DISTRIBUTION ............................................................................................................................	9
EARNINGS COVERAGE ............................................................................................................................	11
DESCRIPTION OF COMMON SHARES....................................................................................................	11
DESCRIPTION OF FIRST PREFERRED SHARES...................................................................................	12
DESCRIPTION OF SUBSCRIPTION RECEIPTS ......................................................................................	12
DESCRIPTION OF WARRANTS................................................................................................................	13
DESCRIPTION OF DEBT SECURITIES ....................................................................................................	14
DESCRIPTION OF UNITS..........................................................................................................................	16
PRIOR SALES ............................................................................................................................................	17
MARKET FOR SECURITIES ......................................................................................................................	17
SELLING SECURITYHOLDERS ................................................................................................................	18
RISK FACTORS..........................................................................................................................................	18
CERTAIN INCOME TAX CONSIDERATIONS ...........................................................................................	18
EXEMPTIONS.............................................................................................................................................	18
LEGAL MATTERS ......................................................................................................................................	18
AGENT FOR SERVICE OF PROCESS......................................................................................................	19
AUDITORS..................................................................................................................................................	19
PURCHASERS' STATUTORY AND CONTRACTUAL RIGHTS ................................................................	19
CERTIFICATE OF THE CORPORATION…………………………………………………………………….. C-1

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ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING SHELF PROSPECTUS

This document is in two parts. The first part is this Prospectus Supplement, which describes the specific terms of the Offering and also adds to and updates certain information contained in the accompanying Shelf Prospectus and the documents incorporated by reference into the Prospectus. The second part is the Shelf Prospectus, which provides more general information. If the information varies between this Prospectus Supplement and the Shelf Prospectus, the information in this Prospectus Supplement supersedes the information in the Shelf Prospectus. The Shelf Prospectus and this Prospectus Supplement together comprise the Prospectus for the purposes of qualifying the securities offered pursuant to the Offering.

An investor should rely only on the information contained in this Prospectus Supplement and the Shelf Prospectus (including the documents incorporated by reference herein and therein) and is not entitled to rely on parts of the information contained in this Prospectus Supplement or the Shelf Prospectus (including the documents incorporated by reference herein or therein) to the exclusion of others. The Corporation and the Agent have not authorized anyone to provide investors with additional or different information. The Corporation and the Agent take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give readers of this Prospectus Supplement. Information contained on, or otherwise accessed through, the Corporation's website shall not be deemed to be a part of this Prospectus Supplement or the accompanying Shelf Prospectus and such information is not incorporated by reference herein, and the Corporation disclaims any such incorporation by reference.

The Corporation and the Agent are not offering to sell the Common Shares in any jurisdictions where the offer or sale of the Common Shares is not permitted. The information contained in this Prospectus Supplement (including the documents incorporated by reference herein) is accurate only as of the date of this Prospectus Supplement or as of the date as otherwise set out herein (or as of the date of the document incorporated by reference herein or as of the date as otherwise set out in the document incorporated by reference herein, as applicable), regardless of the time of delivery of this Prospectus Supplement or any sale of the Common Shares. The business, capital, financial condition, results of operations and prospects of the Corporation may have changed since those dates. The Corporation does not undertake to update the information contained or incorporated by reference herein, except as required by applicable Canadian securities laws.

This Prospectus Supplement shall not be used by anyone for any purpose other than in connection with the Offering.

The documents incorporated or deemed to be incorporated by reference herein or in the Prospectus contain meaningful and material information relating to the Corporation and readers of this Prospectus Supplement should review all information contained in this Prospectus Supplement, the Shelf Prospectus and the documents incorporated or deemed to be incorporated by reference herein and therein, as amended or supplemented.

DEFINITIONS AND OTHER MATTERS

In this Prospectus Supplement, unless otherwise indicated, references to "we", "us", "our", "Nova" or the "Corporation" are to Nova Cannabis Inc. and "Shareholders" refers to the holders of Common Shares. Unless the context otherwise requires, all references in this Prospectus Supplement to the "Corporation" and "The Corporation" refer to the Corporation and its subsidiary entities on a consolidated basis. All references to "dollars", "Cdn.$" or "$" are to Canadian dollars. Unless otherwise indicated, all financial information included and incorporated by reference into this Prospectus and any Prospectus Supplement is determined using International Financial Reporting Standards.

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