The Smith Group - Early Warning News Release

TORONTO, June 8, 2021 /CNW/ - William Smith, Can Endeavour LLC, Endeavour Holdings LLC and Sage Investing LLC  (collectively, the "Smith Group") announced that, pursuant to the terms of a proposed (but not delivered, originally or as to be reissued) amended and restated promissory note dated January 16, 2020 (the "Note") from Cansortium Inc. ("Cansortium") in the principal amount of US$12,933,290.02 that was owing to Can Endeavour LLC, on May 6, 2021 Can Endeavour LLC was permitted by Cansortium to convert the Note into 21,555,483 common shares ("Common Shares") of Cansortium at a price of US$0.60 per Common Share (the "Conversion").

As a result of the Conversion, the Smith Group's common share holdings increased by 6.86%.

Prior to the Conversion, the Smith Group held 222,222 warrants to purchase additional Common Shares at an exercise price of $0.45 per share, 1,421,538 proportionate voting shares (the "PVS"), representing 19.18% of the then outstanding PVS, and 14,102,608 Common Shares, representing 12.39% of the then outstanding Common Shares. Each PVS carries 10 votes per share and is also convertible into 10 Common Shares.

Following the Conversion, the Smith Group holds 222,222 warrants to purchase additional Common Shares, 1,421,538 PVS, representing 26.02% of the current outstanding PVS, and 35,658,091 Common Shares, representing 19.25% of the current outstanding Common Shares. The Common Shares and PVS held by the Smith Group represent approximately 14.87% and 5.93%, respectively, of all voting rights attached to the issued and outstanding voting securities of Cansortium.

In addition, pursuant to the terms of a letter agreement dated as of January 15 or 16, 2020, between Endeavour Holdings LLC and certain founding shareholders of Cansortium and to be delivered by Cansortium, the Smith Group is entitled to receive 425,355.30 PVS and 734,962 Common Shares, of which 356,366.20 PVS and 734,962 Common Shares remain owing to the Smith Group (the "Side Letter Entitlement"). The Side Letter Entitlement represents 1.78% of all voting rights attached to the issued and outstanding voting securities of Cansortium.

Upon the exercise of warrants, the conversion of the PVS, the receipt of the Side Letter Entitlement, and together with the Common Shares already held, the Smith Group would hold 54,394,227 Common Shares of Cansortium, representing 27.25% of the outstanding Common Shares and 22.67% of all voting rights attached to the issued and outstanding voting securities of Cansortium.

Pursuant to the terms of an agreement between Cansortium, William Smith, Can Endeavour and certain other related companies and entities, dated as of August 13, 2018, as subsequently amended, Can Endeavour has a contractual right to nominate two members to the board of directors of Cansortium, one of which must initially be William Smith. Separately, William Smith and Mark Eckenrode, who was recommended to management of Cansortium by William Smith, have been nominated by the management of Cansortium to be elected as directors of Cansortium at the annual general and special meeting of shareholders to be held on June 30, 2021, as disclosed in the management information circular filed May 26, 2021 and the supplement thereto filed June 4, 2021, both of which are available under Cansortium's profile on the system for electronic document analysis and retrieval at www.sedar.com.

The Smith Group acquired the securities for investment purposes and may, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over securities of Cansortium through market transactions, private agreements, treasury issuances, exercise of warrants or otherwise.

The Smith Group's address is 155 Middle Plantation Lane, Gulf Breeze, Florida 32561. A copy of the Early Warning Report will appear under the profile of Cansortium on the SEDAR website at www.sedar.com. Cansortium's head office is located at 82 NE 26th Street, Unit 110, Miami, Florida, 33137.

SOURCE The Smith Group