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PharmaCielo Provides Update on Non-Brokered Private Placement of Debenture Units

May 11, 2022

TORONTO, Canada and RIONEGRO, Colombia (May 11, 2022) – PharmaCielo Ltd. (“PharmaCielo” or the“Company”) (TSXV: PCLO, OTCQX: PCLOF), the Canadian parent of Colombia’s premier cultivator and producer of medicinal-grade cannabis extracts, PharmaCielo Colombia Holdings S.A.S. (“Holdings”), announces today that, further to its previously announced non-brokered private placement of debenture units (“Units”), it is engaged in ongoing discussions with specific parties and expects to issue up to an additional $3,500,000 principal amount of Units in the coming weeks, in one or more closings, subject to the approval of the TSX Venture Exchange. Since its announcement of the offering, the Company has issued $6,500,000 principal amount of Units.

As disclosed in the Company’s news release dated December 22, 2021, the Company intends to use the proceeds from the sale of the Units for operations, working capital and the build-out of its international psychoactive dried flower sales program. Since February 2022, PharmaCielo has announced: a sales agreement with Greenstein Germany GmbH, an independent pharmaceutical wholesaler specializing in the distribution of cannabis-based phytopharmaceuticals in Germany, to commercialize THC final products through NOWEDA e.G., a pharmaceutical wholesaler to all pharmacies in Germany; and an agreement with Soteria Holdings Limited to license, import and wholesale its medical cannabis flower and extracts in the Polish market.

Each Unit consists of $1,000 principal amount of 11% secured debentures (“Debentures”) and 250 non-transferable common share purchase warrants (“Debenture Warrants”). Each Debenture Warrant entitles the holder to acquire one common share of the Company (each a “Common Share”) at an exercise price of $1.44 per Common Share until December 24, 2024 (subject to customary anti-dilution adjustments). The Debentures bear interest at a rate of 11% per annum, mature on December 24, 2024, and are guaranteed by Holdings. Holdings’ guarantee of the Debentures will be secured by mortgages on the real property of the Company and its subsidiaries. Interest payable on the Debentures may be paid by the Company in Common Shares at the Company’s option, subject to approval of the TSX Venture Exchange.

About PharmaCielo

PharmaCielo Ltd. (TSXV: PCLO, OTCQX: PCLOF) is a global company, headquartered in Canada, with a focus on ethical and sustainable processing and supplying of all natural, pharmaceutical-grade medical cannabis products to large channel distributors. PharmaCielo’s principal (and wholly owned) subsidiary is PharmaCielo Colombia Holdings S.A.S., headquartered at its cultivation and processing center located in Rionegro, Colombia.

The board of directors and executive team of PharmaCielo are comprised of a diversely talented group of international business executives and specialists with relevant and varied expertise. PharmaCielo recognized the significant role that Colombia’s ideal location plays in building a sustainable business in the medical cannabis industry, and the Company, together with its directors and executives, is executing on a business plan focused on supplying the international marketplace.

For further information:

Ian Atacan, Chief Financial Officer
+1 416-562-3220

Media and Investor Inquires:

Forward-Looking Statements

This news release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as “expects”, “is expected”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may” or “will” be taken, occur or be completed or achieved.

Forward-looking statements can be affected by known and unknown risks, uncertainties and other factors, including changes to PharmaCielo’s development plans, the failure to obtain and maintain all necessary regulatory approvals relating to the export ofcannabinoid products and the import of these products into other countries, TSX Venture Exchange approval, the inability to export or distribute commercial products through sales channels as anticipated due to economic or operational circumstances, risks associated with operating in Colombia, fluctuation of the market price for the Company’s products, risks associated with global economic instability relating to COVID- 19 or other developments, risks related to retention of key Company personnel, currency exchange risk, competition in PharmaCielo’s market and other risks discussed or referred to under the heading “Risk Factors” in PharmaCielo’s Annual Information Form for the financial yearended December 31, 2019, which is available at Accordingly, readers should not place undue reliance on forward-looking statements. Except as required by law, PharmaCieloundertakes no obligation to publicly update any forward-looking statements, whether as a result ofnew information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.