CanX CBD Q2 Update

Shareholder Update

Q2 – 2019

July 27, 2019

Dear Shareholder,

With a little delay I am finally able to sit down to compose the long awaited Q2 Shareholder update. Given the numerous enquiries and our busy schedule especially in the months of July, August and September we will now put together an email addressed to all shareholders where we will broadcast shorter updates via on a monthly basis supplemented by the longer update every quarter.

Q2 of 2019 was a very busy time in Romania and Canada on several fronts. CanX initiated the audit process for an IPO, ordered the required extraction, harvesting and drying equipment, secured the lease for our 33,000 square foot facility and conducted a first test harvest on 24 hectares which reassured us of the quality of cultivation and our defined processes.

We expect the leasehold improvements to be completed by the middle of August and are positioned to execute on our EUGMP and HCAPP 2200 compliant facility which will include specific finishing to the walls and flooring as well as a specific product, biomass and waste flow to meet stringent requirements. The extraction equipment is scheduled to arrive by the end of August and should be installed shortly thereafter with the help of our extraction equipment supplier who has agreed to dedicate two engineers to be on the ground in Romania during commissioning and install.

Our six farming partners have completed the installation of drying equipment on their respective farms. This serves to minimize product movement and will significantly reduce the volume of biomass. The equipment also avoids deterioration of product during the logistical process.

We are also excited to announce that we have now have a team of 12 people on the ground in Romania which consists off logistics managers, agricultural engineers, operations and plant managers. These experienced professionals will make sure that the equipment operates and runs smoothly and any issues can be handled quickly and seamlessly as they arise.

Recruitment was one of the major challenges we were able to tackle by setting up several open houses and inviting qualified personal to attend our informational seminars.

Further to the above-mentioned operational successes we have also successfully concluded our first test harvesting determining a variety of approaches to the challenge of biomass management. Due to very favourable weather conditions and to an extremely innovative approach to cultivation CanX was able to achieve a larger biomass yield per hectare as well as a very favourable flower to stem ratio which should result in a higher than expected CBD content.

CanX also entered into a letter of intent with a Canadian company to contract cultivate 100 hectares and to work on a contract extraction agreement of the expected biomass which will result in not only biomass but also CBD oil offtakes. The company CanX has partnered with on this joint venture brings strategic value to our operations in terms of having a good representation in Europe with access to 900+ pharmacies. This will be valuable from a potential distribution angle for our product. Further off take partnerships and discussions are being formalized at this time, and you may expect an announcement by the end of Q3 in line with the Q3, 2019 shareholder update.

We look forward to a very successful second half of 2019 and beyond as we continue to scale and evaluate opportunities in Eastern Europe. CanX is on track to be a fully established incumbent in the Romanian hemp market by 2020 and has its eyes set on becoming a dominant player in Romania and by extension Europe with regards to its farming partnership footprint, our extraction and distribution capabilities.

We appreciate the support received from our shareholders. Should you have any questions please never hesitate to reach out via email at hello@cbdprocessingcorp.com or via telephone at +1 778-896-7445.

Sincerely,

____________________________________

Philipp Fuhrmann