Aphria partners with Schroll Medical

Subsidiary Schroll Flowers to produce cannabis

Aphria Inc. today announced that it has entered into a strategic partnership with the Danish company Schroll Medical, a subsidiary of prominent European flower producer, Schroll Flowers. The Partnership will pursue the cultivation and worldwide distribution of organic, EU GMP-certified medical cannabis, and will be managed by the Company's wholly-owned subsidiary Aphria Deutschland GmbH ("Aphria Germany"). The deal accelerates Aphria's global expansion, in collaboration with an established and world-class partner, with first product expected to be available by early 2019.

"Aphria continues to execute on its strategy for international expansion, and we are pleased to have joined forces with a highly-regarded, experienced grower known around the world for its quality," said Vic Neufeld, Chief Executive Officer at Aphria. "Our co-founders come from the world of commercial agriculture, including commercial flower production, so we speak the same language as Schroll and we bring to this Partnership the best-in-class know-how to produce high-quality, clean and pure medical cannabis for the worldwide market. Partnerships such as this continue to build upon Aphria's foundation for long-term sustained growth in every market in which we operate."

In exchange for a 15% interest in the Partnership, Aphria is providing €100,000 to the Partnership, its leadership in cannabis greenhouse cultivation and experience in processing and worldwide distribution. This will include, but is not limited to, consulting on GMP certification, cannabis genetics and strains, and proprietary growing IP. Aphria will also handle the worldwide distribution of medical cannabis produced by the Partnership, which is anticipated to be made available to markets in Germany, Luxembourg, Switzerland and other developing medical cannabis markets. As part of the deal, Aphria maintains a path to increase its ownership interest to 50% and a path to realize full liquidity, each under certain conditions.

"This marks another important step in advancing the availability of high-quality medical cannabis for across Europe and around the world," said Hendrik Knopp, Managing Director of Aphria Germany. "We are pleased to take a leadership role and to bring our considerable experience in cultivation, along with our expanding distribution network, to ensure a successful and beneficial Partnership."

Schroll will hold an 85% interest in the Partnership and will be responsible for the EU GMP-certified cultivation of certified organic medical cannabis. The Danish Company has already received its license for the cultivation of medical cannabis from the Danish Medicines Agency, and currently owns property where the production has already started in a retrofit greenhouse. Construction on Phase 1 is underway and involves a modification of an existing facility of 9,000 square meters as well as building of a new processing facility of 1,000 square meters.

Said Carsten Schroll, founder of Schroll Flowers: "This initiative with Aphria, one of the world's leading cannabis companies, results in a number of important synergies for Schroll. We are pleased to share a background in cultivation, look forward to applying the expertise and knowledge from Aphria to produce the highest standard of organic medical cannabis to reach patients in need around the world."

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Aphria Inc

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