**
**Exhibit 4.3**

**UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE MARCH 22, 2019.**

**THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.SECURITIES ACT”) OR UNDER ANY STATE SECURITIES LAWS, AND THE SECURITIES REPRESENTED HEREBY MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OFREGULATION S UNDER THE U.S. SECURITIES ACT IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY (1) RULE 144 THEREUNDER, IF AVAILABLE, OR (2)144A THEREUNDER, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE U.S. STATE SECURITIES LAWS, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY, PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT ANDAPPLICABLE STATE SECURITIES LAWS, PROVIDED THAT, IN THE CASE OF (C)(1) AND (D) ABOVE, AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY IS PROVIDED TO THE EFFECT THAT SUCH TRANSFER DOESNOT REQUIRE REGISTRATION UNDER THE US. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.**

**CANNEX CAPITAL HOLDINGS, INC.**

**CANNEX HOLDINGS (NEVADA) INC.**

**SENIOR SECURED CONVERTIBLE NOTE**

**Date: November 21, 2018**

**ARTICLE 1**

**PRINCIPAL ANDINTEREST**

1.1 **Promise to Pay**

FOR VALUE RECEIVED, the undersigned, **CANNEX CAPITAL HOLDINGS, INC,** a corporation incorporated under the laws of the Province of BritishColumbia (the “**Company**”), and **CANNEX HOLDINGS (NEVADA) INC.**, a Nevada corporation (the “**US Borrower**” and, with the Company, collectively, the “**Borrowers**”, and each a“**Borrower**”), jointly and severally, each hereby acknowledges itself indebted to and promises to pay to the order of Gotham Green Fund1 (Q), L.P., a Delaware limited partnership, and its successors and assigns (the“**Holder**” or “**Lender**”) on the earlier of (i) November 21, 2021 and (ii) such earlier date as the Principal Amount (as hereinafter defined) may become payable (the “**Maturity Date**”) inaccordance with the provisions of this senior secured convertible note (this “**Note**”), the principal amount of five million two hundred thousand one hundred sixty-two dollars and fifty cents(USD $5,200,162.50) in lawful money of the United States (the “**Principal Amount**”) and to accrue interest (“**Interest**”) on the Principal Amount outstanding from time to time at the Applicable Interest Rate (ashereinafter defined) until the Principal Amount of the Note is repaid in full in accordance with its terms. 

The Borrowers shall payInterest in accordance with Section 3.1. Any Obligations (as defined in the Securities Purchase Agreement, defined below) arising out of this Note, including without limitation the Principal Amount and the Interest, shall be referred to hereinas the “**Obligations**”. The Holder acknowledges that this Note is one of a series of notes of substantially identical terms and conditions (collectively, the “**Notes**”) issued by the Borrowers to other holders (with theHolder, collectively, the “**Holders**”) under the terms of the Securities Purchase Agreement. The Holder and Borrowers acknowledge that on the Initial Funding Date (as defined in the Securities Purchase Agreement), the Holders havefunded an aggregate amount equal to $5,000,000 in payment for the Notes, and that the remaining aggregate principal amount of the Notes, equal to $27,000,000, shall be funded by the Holders on the Subsequent Funding Date(s) (as defined in theSecurities Purchase Agreement). 
**

**ARTICLE 2**

**INTERPRETATION AND GENERAL PROVISIONS**

2.1**Interpretation**

Capitalized terms used herein without definition shall have the meaning ascribed thereto in the secured SecuritiesPurchase Agreement (the “**Securities Purchase Agreement**”) dated of even date herewith among the Holders and the Borrowers providing for, *inter alia*, the purchase of this Note by the Holder. 

2.2 **Plurality and Gender**

Wordsimporting the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine gender and words importing Persons shall include firms and corporations and vice versa. 

2.3 **Headings, etc**. 

Thedivision of this Note into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Note. 

2.4 **Day Not a Business Day**

In the eventthat any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day. 

2.5 **Currency**

Any reference in this Noteto “**Dollars**”, “**dollars**” or the sign “**$**” shall be deemed to be a reference to lawful money of the United States. 

**ARTICLE 3**

**PAYMENT OFPRINCIPAL AND INTEREST**

3.1 The Obligations shall be due and payable without deduction or withholding for taxes of any kind or natureimmediately on the earlier of: 

 
 (a)
the Maturity Date; and 

 
 (b)
the occurrence and continuance of an Event of Default (defined below). 

 
2 

3.2 Interest shall accrue at the Applicable Interest Rate and shall be calculated on thebasis of the actual days elapsed in the period for which such Interest is to accrue and on the basis of a year of 360 days. The Borrowers shall pay Interest as follows: 

 
 (a)
Fifty percent (50%) of the Interest due on any Interest Payment Date shall be paid in cash in arrears to theHolder, by wire transfer of immediately available funds to the account designated by Holder from time to time; and 

 
 (b)
Fifty percent (50%) of the Interest due on any Interest Payment Date shall accrue and be added to thePrincipal Amount, and such Interest paid in kind shall be payable on the date that all remaining Principal Amount is due and payable pursuant hereto. 

3.3 For purposes of this Note, the following terms shall have the definitions set forth in this Section 3.3: 

 
 (a)
“**Applicable Funding Date**” means the date on which the Holder paid the applicable principalamount in accordance with the Securities Purchase Agreement, which shall be either the Initial Funding Date or the Subsequent Funding Date(s), as defined therein. 

 
 (b)
“**Applicable Interest Rate**” means, as of any date, the rate per annum applicable to suchdate as follows: 

 
 (i)
For the period beginning on the Applicable Funding Date and ending on November 21, 2019 (“**Year1**”), LIBOR plus eleven percent (11%); 

 
 (ii)
For the period beginning on November 22, 2019 and ending on November 21, 2020 (“**Year2**”), LIBOR plus ten percent (10%); 

 
 (iii)
For the period beginning on November 22, 2020 and continuing thereafter (“**Year****3**”), LIBOR plus nine and one half percent (9.5%). 

 
 (c)
“**Interest Payment Date**” means the last Business Day of each month, with the first InterestPayment Date occurring on December 31, 2018. 

 
 (d)
“**Interest Period**” means, with respect to periods in which clause (b) of the definitionof LIBOR applies, the period beginning on the day after the applicable Interest Payment Date and ending on the next Interest Payment Date. 

 
 (e)
“**LIBOR**” means the greater of (a) 2.5% and (b) for any Interest Period, the rate perannum equal to the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of such rate), as published by Reuters (or any other commercially available sourceproviding quotations of such rate as designated by the Lender from time to time) at approximately 11:00 a.m., London time, two (2) business days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on thefirst day of such Interest Period) with a term equivalent to such Interest Period; provided, that in no event shall such rate be less than zero or exceed five percent (5%); and provided further, that if a rate determined under clause (b) is notavailable at such time for such Interest Period, the parties will work in good faith to agree upon an alternative floating rate. 

 
3 

**ARTICLE 4**

**CONVERSION**

4.1 **Conversion Right**

The Holder has the right (the “**Conversion Right**”), from time to time and at any time on or prior to 5:00 p.m. (Torontotime) on the earlier of the Business Day immediately preceding (i) the Maturity Date and (ii) the date fixed for redemption of this Note in accordance with terms hereof, to convert all or any portion of the outstanding Principal Amountplus, at the Holder’s option, all accrued and unpaid Interest with respect to such Principal Amount and any unpaid fees, into Shares, at a price equal to $0.83 per Share (the “**Conversion Price**”). For purposes of this Note, ifthe Conversion Right is exercised on or prior to October 31, 2019, then “**Shares**” means Class A shares in the capital of the Company, and if the Conversion Right is exercised after October 31, 2019, then“**Shares**” means common shares in the capital of the Company. 

Notwithstanding any other provision of this Agreement, theConversion Right shall not be exercisable by the Holder or any person who does not deal at arm’s length with the Holder for purposes of the *Income Tax Act* (Canada) (collectively, “**Holder Related Parties**”) to the extentthat, after giving effect to such conversion, the Holder Related Parties would beneficially own or have a right to acquire shares of the Company that, in aggregate, represent: (i) 25% or more of the votes that could be cast at the annual meeting ofthe shareholders of the Company; or (ii) 25% or more of the fair market value of the issued and outstanding shares of the Company at such time. 

4.2**Exercise of Conversion Right**

The Conversion Right may be exercised by the Lender by completing and signing the notice ofconversion (the “**Conversion Notice**”) and delivering the Conversion Notice and this Note to the Borrower. The Conversion Notice shall provide that the Conversion Right is being exercised, shall specify the amount being converted, andshall set out the date (the “**Issue Date**”) on which Shares are to be issued upon the exercise of the Conversion Right (such date to be no earlier than three (3) Business Days and no later than seven (7) Business Days afterthe day on which the Conversion Notice is issued). The conversion shall be deemed to have been effected immediately prior to the close of business on the Issue Date and the Shares issuable upon conversion shall be deemed to be issued as fully paidand non-assessable at such time. Within seven (7) Business Days after the Issue Date, a certificate for the required number of Common Shares shall be issued to the Lender. If less than all of thePrincipal Amount of this Note is the subject of the Conversion Right, then within seven (7) Business Days after the Issue Date, the Borrowers shall deliver to the Lender a replacement Note in the form hereof in the principal amount of theunconverted principal balance hereof, plus the unconverted portion of any accrued and unpaid Interest and fees, and this Note shall be cancelled. If the Conversion Right is being exercised in respect of the entire Principal Amount of this Note (and,if applicable, all accrued and unpaid Interest and fees), this Note shall be cancelled. 

 
4 

4.3 **Adjustment of Conversion Price**

The Conversion Price in effect at any date shall be subject to adjustment from time to time as follows: 

 
 (a)
If and whenever at any time prior to the Maturity Date, the Company shall: 

 
 (i)
subdivide or redivide the outstanding Shares into a greater number of Shares; 

 
 (ii)
reduce, combine or consolidate the outstanding Shares into a smaller number of Shares;

 
 (iii)
issue Shares (or securities convertible into or exchangeable for Shares) to the holders of all orsubstantially all of the outstanding Shares by way of stock dividend; or 

 
 (iv)
make a distribution on its outstanding Shares payable in Shares or securities exchangeable for orconvertible into Shares, 

the Conversion Price in effect on the effective date of such subdivision,redivision, reduction, combination or consolidation or on the record date for such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend or other distribution, as the case may be, shall, in the caseof the events referred to in Sections 4.3(a)(i), (iii) and (iv) above, be decreased in proportion to the increase in the number of outstanding Shares resulting from such subdivision, redivision or dividend (including, in the case wheresecurities convertible into or exchangeable for Shares are issued, the number of Shares that would have been outstanding had such securities been converted into or exchanged for Shares on such effective or record date) or shall, in the case of theevents referred to in Section 4.3(a)(ii) above, be increased in proportion to the decrease in the number of outstanding Shares resulting from such reduction, combination or consolidation on such effective or record date. Such adjustment shallbe made successively whenever any event referred to in this Section 4.3(a) shall occur. Any such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend or other distribution shall be deemed to havebeen made on the record date for the stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under Sections 4.3(b) and (g); to the extent that any such securities are not converted into or exchanged forShares prior to the expiration of the conversion or exchange right, the Conversion Price shall be readjusted effective as at the date of such expiration to the Conversion Price which would then be in effect based upon the number of Shares actuallyissued on the exercise of such conversion or exchange right. 

 
 (b)
If and whenever at any time prior to the Maturity Date, the Company shall fix a record date for the issuanceof rights, options or warrants to all or substantially all the holders of its outstanding Shares entitling them, for a period expiring not more than forty-five (45) days after such date of issue (such period from the record date to the date ofexpiry being referred to in this Section 4.3(b) as the “**Rights Period**”), to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) (such subscription price per Common Share (inclusive ofany cost of acquisition of securities exchangeable for or convertible into Shares in addition to any direct cost of Shares) being referred to in this Section 4.3(b) as the “**Per Share Cost**”), the Borrowers shall give writtennotice to the Lender with respect thereto (any of such events herein referred to as a “**Rights Offering**”), and the Lender shall have fifteen (15) days after receipt of such notice to elect to convert any or all of the PrincipalAmount of this Note into Shares at the then applicable Conversion Price and otherwise on terms and conditions set out in this Note. If the Lender elects to convert any or all of the Principal Amount of this Note, such conversion shall occurimmediately prior to the record date for the issuance of such rights, options or warrants. If the Lender elects not to convert any of the Principal Amount of this Note, there shall continue to be an adjustment to the Conversion Price as a result ofthe issuance of such rights, options or warrants, in the manner hereinafter provided. The Conversion Price will be adjusted effective immediately after the end of the Rights Period to a price determined by multiplying the Conversion Price in effectimmediately prior to the end of the Rights Period by a fraction: 

 
5 

 (i)
the numerator of which is the aggregate of: 

 
 (A)
the number of Shares outstanding as of the record date for the Rights Offering; and 

 
 (B)
the number determined by dividing the product of the Per Share Cost and: 

 
 1.
where the event giving rise to the application of this Section 4.3(b) was the issue of rights, optionsor warrants to the holders of Shares under which such holders are entitled to subscribe for or purchase additional Shares, the number of Shares so subscribed for or purchased during the Rights Period, or 

 
 2.
where the event giving rise to the application of this Section 4.3(b) was the issue of rights, optionsor warrants to the holders of Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into Shares, the number of Shares for which those securities so subscribed for or purchased during theRights Period could have been exchanged or into which they could have been converted during the Rights Period, 

by the trading price of the Shares on the OTCQX Market (or such other recognized stock exchange or quotation on which theShares are listed for trading) (the “**Current Market Price**”) as of the record date for the Rights Offering; and 

 
 (ii)
the denominator of which is: 

 
 (A)
in the case described in subparagraph 4.3(b)(i)(B)(1), the number of Shares outstanding, or

 
 (B)
in the case described in subparagraph 4.3(b)(i)(B)(2), the number of Shares that would be outstanding if allthe Shares described in subparagraph 4.3(b)(i)(B)(2) had been issued, 

as at the end of the RightsPeriod. 

 
6 

 (c)
Any Shares owned by or held for the account of the Company or any subsidiary or affiliate (as defined in the*Securities Act* (British Columbia)) of the Company will be deemed not to be outstanding for the purpose of any such computation. 

 
 (d)
If by the terms of the rights, options or warrants referred to in Section 4.3(b), there is more thanone purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible securities so offered,will be calculated for purposes of the adjustment on the basis of: 

(1) the lowest purchase, conversionor exchange price per Common Share, as the case may be, if such price is applicable to all Shares which are subject to the rights, options or warrants, and 

(2) the average purchase, conversion or exchange price per Common Share, as the case may be, if the applicable price isdetermined by reference to the number of Shares acquired. 

 
 (e)
To the extent that any adjustment in the Conversion Price occurs pursuant to this Section 4.3(b) as aresult of the fixing by the Company of a record date for the distribution of rights, options or warrants referred to in this Section 4.3(b), the Conversion Price will be readjusted immediately after the expiration of any relevant exchange,conversion or exercise right to the Conversion Price which would then be in effect based upon the number of Shares actually issued and remaining issuable after such expiration, and will be further readjusted in such manner upon expiration of anyfurther such right. 

 
 (f)
If the Lender has exercised its Conversion Right in accordance herewith during the Rights Period, the Lenderwill, in addition to the Shares to which it is otherwise entitled upon such exercise, be entitled to that number of additional Shares equal to the result obtained when the difference, if any, between the Conversion Price in effect immediately priorto, and the Conversion Price in effect immediately following the end of such Rights Offering pursuant to this Section 4.3(b), is multiplied by the number of Shares received upon the exercise of the Conversion Right during such period, and theresulting product is divided by the Conversion Price as adjusted for such Rights Offering pursuant to this Section 4.3(b); provided that no fractional Shares will be issued. Such additional Shares will be deemed to have been issued to theLender immediately following the end of the Rights Period and a certificate for such additional Shares will be delivered to the Lender within 10 Business Days following the end of the Rights Period. 

 
 (g)
If and whenever at any time prior to the Maturity Date, the Company shall fix a record date for the makingof a distribution to all or substantially all the holders of its outstanding Shares of (i) shares of any class other than Shares (or other than securities convertible into or exchangeable for Shares), or (ii) rights, options or warrants(other than rights, options or warrants referred to in Section 4.3(b)), or (iii) evidences of its indebtedness, or (iv) assets (in each case, other than dividends paid in the ordinary course) then, in each such case, the Borrowersshall give written notice to the Lender with respect thereto, and the Lender shall have fifteen (15) days after receipt of such notice to elect to convert any or all of the Principal Amount of this Note into Shares at the then applicableConversion Price and otherwise on terms and conditions set out in this Note. If the Lender elects to convert any or all of the Principal Amount of this Note, such conversion shall occur immediately prior to the record date for the making of suchdistribution. If the Lender elects not to convert any of the Principal Amount of this Note, there shall continue to be an adjustment to the Conversion Price as a result of the making of such distribution (herein referred to as a “**SpecialDistribution**”), determined in the manner hereafter set out in 4.3(h). In this Section 4.3(g) the term “**dividends paid in the ordinary course**” shall include the value of any securities or other property or assetsdistributed in lieu of cash dividends paid in the ordinary course at the option of shareholders. 

 
7 

 (h)
In circumstances described in Section 4.3(g), the Conversion Price will be adjusted effectiveimmediately after such record date to a price determined by multiplying the Conversion Price in effect on such record date by a fraction: 

 
 (1)
the numerator of which is: 

(A) the product of the number of Shares outstanding on such record date and the Current Market Price of the Shares on suchrecord date; less 

(B) the aggregate fair market value (as determined by action by the directors of the Company, actingreasonably) to the holders of the Shares of such securities or property or other assets so issued or distributed in the Special Distribution; and 

 
 (2)
the denominator of which is the number of Shares outstanding on such record date multiplied by the CurrentMarket Price of the Shares on such record date. 

Any Shares owned by or held for the account of theCompany or any subsidiary or affiliate (as defined in the *Securities Act* (British Columbia)) of the Company will be deemed not to be outstanding for the purpose of any such computation. 

 
 (i)
In the case of any reclassification of, or other change in, the outstanding Shares pursuant to a Change ofControl Transaction, if the Lender elects not to redeem this Note in accordance with Article 5, the Lender may elect, prior to the effective date of such Change of Control Transaction, to convert any or all of the Principal Amount of this Note intoShares at the then applicable Conversion Price and otherwise on terms and conditions set out in this Note. To exercise such right the Lender must provide a notice in writing to the Borrowers no later than seven days prior to the effective date ofsuch Change of Control Transaction, failing which the Lender’s right to convert this Note as a consequence of such Change of Control Transaction shall cease. If the Lender elects to convert any or all of the Principal Amount of this Note, suchconversion shall occur immediately prior to the effective date of such Change of Control Transaction. If the Lender elects not to convert any of the Principal Amount of this Note, the Conversion Price in effect after the effective date of suchChange of Control Transaction shall be increased or decreased, as the case may be, in proportion to any decrease or increase in the number of outstanding Shares resulting from such Change of Control Transaction so that the Lender, upon exercisingthe Conversion Right after the effective date of such Change of Control Transaction, will be entitled to receive the aggregate number of Shares or other securities, if any, which the Lender would have been entitled to receive as a result of suchChange of Control Transaction if, on the effective date thereof, the Lender had been the registered holder of the number of Shares to which the Lender was theretofore entitled upon exercise of the Conversion Right. 

 
8 

 (j)
In the case of any reclassification of, or other change in, the outstanding Shares (other than a changereferred to in Section 4.3(a), Section 4.3(b), Section 4.3(g) or 4.3(i) hereof), the Conversion Price shall be adjusted in such manner, if any, and at such time, as the Board of Directors of the Company determines to be appropriate ona basis consistent with the intent of this Section 4.3; provided that if at any time a dispute arises with respect to adjustments provided for in this Section 4.3(j), such dispute will be conclusively determined by the auditors of theBorrowers or if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the directors of the Company, acting reasonably, and any such determination will be binding on the Borrowersand the Lender. The Borrowers will provide such auditors or accountants with access to all necessary records of the Borrowers. If and whenever at any time after the date hereof there is a reclassification or redesignation of the Shares outstandingat any time or change of the Shares into other shares or into other securities (other than as set out in Section 4.3(a), (b), (g) or (i)), or a consolidation, amalgamation or merger of the Company with or into any other corporation or otherentity (other than a consolidation, amalgamation or merger which does not result in any reclassification or redesignation of the outstanding Shares or a change of the Shares into other shares and other than as set forth in 5.3(a)(i) or a transfer ofthe undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being called a “**Capital Reorganization**”), the Lender, upon the exercising theConversion Right, after the effective date of such Capital Reorganization, will be entitled to receive in lieu of the number of Shares to which the Lender was theretofore entitled upon such exercise, the aggregate number of shares, other securitiesor other property, if any, which the Lender would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, the Lender had been the registered holder of the number of Shares to which such Lender wastheretofore entitled upon exercise of the Conversion Right. If determined appropriate by action of the directors of the Company, appropriate adjustments will be made as a result of any such Capital Reorganization in the application of the provisionsset forth in this Section 4.3 with respect to the rights and interests thereafter of the Lender to the end that the provisions set forth in this Section 4.3 will thereafter correspondingly be made applicable as nearly as may reasonably bein relation to any shares, other securities or other property thereafter deliverable upon the exercise of the Conversion Right. Any such adjustment must be made by and set forth in an amendment to this Note approved by action by the directors of theCompany, acting reasonably, and will for all purposes be conclusively deemed to be an appropriate adjustment. 

 
9 

 (k)
In any case in which this Section 4.3 shall require that an adjustment shall become effectiveimmediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Lender before the occurrence of such event, the additional Shares issuable upon such conversion by reason ofthe adjustment required by such event before giving effect to such adjustment; provided, however, that the Borrowers shall deliver to the Lender an appropriate instrument evidencing the Lender’s right to receive such additional Shares upon theoccurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Shares declared in favour of holders of record of Shares on and after the Issue Date or such later date as the Lender would, but forthe provisions of this Section 4.3(k), have become the holder of such additional Shares pursuant to Section 4.3(b). 

 
 (l)
The adjustments provided for in this Section 4.3 are cumulative and shall apply to successivesubdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other event resulting in any adjustment under the provisions of this Section, provided that, notwithstanding any other provision of this Section, noadjustment of the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided, however, that any adjustments which by reason of thisSection 4.3(l) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. 

No Conversion Price adjustment will be made to the extent that the Company makes an equivalent distribution to holders of Notes in respect ofsuch Notes. No adjustment to the Conversion Price will be made for distributions or dividends on Shares issuable upon conversion of Notes that have been surrendered for conversion, provided that holders converting their Notes shall be entitled toreceive, in addition to the applicable number of Shares, accrued and unpaid interest payable in cash from, and including, the most recent interest payment date to, but excluding, the date of conversion. 

**ARTICLE 5**

**REDEMPTIONAND PREPAYMENT**

5.1 **No Early Redemption or Prepayment**

Except pursuant to Sections 5.3 and 5.4, the Borrowers shall not be permitted to redeem or repay the Note prior to the Maturity Date withoutthe prior written consent of the Lender. 

5.2 **Notice of Change of Control Transaction**

Upon the occurrence of any event constituting or reasonably likely to constitute a Change of Control Transaction, the Borrowers shall givewritten notice to the Lender of such Change of Control Transaction at least thirty (30) days or, with the prior written consent of the Lender, as soon as reasonably possible prior to the effective date of any such Change of Control Transactionand another written notice on or immediately after the effective date of such Change of Control Transaction (the “**Change of Control****Notice**”). 

 
10 

5.3 **Redemption if Change of Control Transaction**

Notwithstanding anything to the contrary herein, upon receipt of a Change of Control Notice with respect to a Change of Control Transaction,the Holder shall, in its sole discretion on or before the closing of the Change of Control Transaction, have the right to require the Borrowers purchase the Note at a price equal to 105% of the then outstanding Principal Amount thereof together, atHolder’s option, with accrued and unpaid Interest and fees (the “**Offer Price**”); provided that, if 90% or more of the Principal Amount outstanding on the date of the Change of Control Notice have been tendered for redemption,the Company will have the right, in its sole discretion, to redeem all of the outstanding Notes at the Offer Price. 

5.4 **Voluntary Prepayment**

Subject to the rest of this Section 5.4, beginning on the first day of Year 2, from time to time the Borrowers shall have the right torepay, in whole or in part, the then outstanding Principal Amount of this Note together with accrued and unpaid Interest and fees, plus the Applicable Premium. For purposes of this Note, “**Applicable Premium**” means, with respect toYear 2, 2% of the Principal Amount being repaid, and with respect to Year 3, 1% of the Principal Amount being repaid. The Borrowers shall notify the Lender in writing of their intent to make prepayment under this Section 5.4 at least thirty(30) days (or such shorter time as is acceptable to the Lender in its sole discretion) prior to the proposed prepayment date, and such notice shall include the Principal Amount, interest, fees and Applicable Premium to be paid on suchprepayment date. Such prepayment will be paid by wire transfer of immediately available funds to the account designated by the Lender. 

**ARTICLE 6**

**SECURITY**

6.1 As security for the Obligations under this Note, each Borrower shall grant to the Collateral Agent, for the benefit of theHolder, a first priority security interest over all of such Borrower’s present and after acquired personal property in which such Borrower has rights, of whatsoever nature or kind and wherever situate, save and except property specificallyexcluded in any general security agreement granted by such Borrower to the Collateral Agent, for the benefit of the Holder, which shall rank *pari passu* between and among the Holders (the “**Security Interest**”). The SecurityInterest shall be evidenced by one or more security agreements entered into between each Borrower and the Holder. 

6.2 This Note isentitled to and shall have the benefit of a cross guarantee by each Borrower and a guaranty by each Subsidiary (collectively, the “**Guarantors**”), of all of the Obligations of the Borrowers to the Lender under or in connection withthis Note in favour of the Lender dated as of the date of this Note (the “**Guarantees**”). As security for such Obligations under the Guarantees, each Guarantor shall grant in favour of the Collateral Agent, for the benefit of theHolder, a first priority security interest over all of such Guarantor’s present and after acquired personal property in which such Guarantor have rights, of whatsoever nature or kind and wherever situate which shall rank *pari passu*between and among the Holders. The security granted to the Collateral Agent, for the benefit of the Holder, by each of the Guarantors shall be evidenced by one or more security agreements entered into between the Guarantors and the Holder. 

 
11 

**ARTICLE 7**

**EVENTS OF DEFAULT**

7.1 Theoccurrence of an “Event of Default” under the Securities Purchase Agreement shall constitute an event of default (“**Event of Default**”) hereunder. 

7.2 Upon and during the continuation of an Event of Default, the Interest Rate shall increase by three 3% per annum, and the Holder shall beentitled to all of the rights and remedies set forth in the Securities Purchase Agreement and available to it under applicable law. 

**ARTICLE 8**

**COVENANTS**

8.1 **Positive Covenants of the Company**

So long as any Obligations remain unpaid, the Company shall perform the covenants and actions as set forth in, and in accordance with, theSecurities Purchase Agreement. 

8.2 **Tax Treatment**

For United States federal income tax purposes, the parties agree to treat the Notes as convertible debt instruments that are excepted from thecontingent payment debt instrument rules of Treas. Reg. § 1.1275-4. The parties shall file all federal income tax returns and reports in a consistent manner unless otherwise required pursuant to a final “determination” within themeaning of Section 1313 of the Internal Revenue Code of 1986, as amended. 

**ARTICLE 9**

**GENERAL MATTERS**

9.1 **Amalgamation**

The Borrowers acknowledge that if, to the extent permitted under the Securities Purchase Agreement, either Borrower amalgamates or mergerswith any other Person (a) the term “**Company**”, where used herein shall extend to and include the amalgamated or surviving Person, and (b) the term, “**Obligations**”, where used herein shall extend to andinclude the Obligations of the Borrowers and the amalgamated Person. 

9.2 **No Modification or Waiver**

No modification, variation or amendment of any provision of this Note shall be made without the prior written consent of all of the Holders.The Holder shall not, by any act, delay, omission or otherwise, be deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver shall be in writing and executed by an authorized officer of the Holder. Anysuch waiver shall be enforceable only to the extent specifically set forth therein. A waiver by the Holder of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedywhich the Holder would otherwise have on any future occasion, whether similar in kind or otherwise. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER THE LAWSOF THE STATE OF WASHINGTON. 

 
12 

9.3 **Entire Agreement**

This Note together with the Securities Purchase Agreement and Transaction Agreements defined therein constitute the entire agreement betweenthe parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. There are no other agreements between the parties in connection with the subject matter hereof except asspecifically set forth or referred to herein or therein. 

9.4 **Performance by Holder**

If either Borrower fails to perform any of its obligations hereunder, the Holder may, after notice to the Company, but shall not be obligatedto, perform any or all such obligations, and all reasonable costs, charges, expenses, fees, outlays and premiums incurred by the Holder in connection therewith shall be payable by the Borrowers, jointly and severally, forthwith upon demand by theHolder and shall bear interest from the date incurred by the Holder at the Interest Rate then in effect and shall form part of the Obligations. Any such performance by the Holder shall not constitute a waiver by the Holder of any right, power, orprivilege under this Note. 

9.5 **Notice to the Company and the Holder**

Any notice to be given to the Borrowers or the Holder shall be in writing and shall be deemed to be validly given if such notice is deliveredpersonally, by facsimile or electronic transmission or sent by prepaid registered mail, addressed as follows: 

 
 (a)
if to Borrowers, at: 

Cannex Capital Holdings Inc. 

1241 Alberni Street 

Vancouver, British Columbia V6E 4R4 

Canada 

                                         

With a copy to (which shall not constitute notice): 

McMillan LLP 

Suite 1500, 1055 West Georgia Street 

Vancouver, BC V6E 4N7 

Canada 

 
 (b)
if to the Holder, at: 

c/o Gotham Green Partners, LLC 

Suite 29A, 489 5th Avenue 

New York, NY 1008 

USA 

 
13 

                                         

With a copy to (which shall not constitute notice): 

Honigman Miller Schwarz and Cohn LLP 

2290 First National Building 

660 Woodward Avenue 

Detroit, MI 48226-3506 

USA 

                                         

Notice of change of address shall also be governed by this Section 9.5. Any notice given by personal delivery shall be deemed to havebeen given when received by either Borrower or the Holder, and by prepaid registered mail shall be deemed to have been received by either Borrower or the Holder on the third (3rd) Business Day after the day of such mailing and any notice so given byfacsimile or electronic transmission on a Business Day before 5:00 p.m. (local time of the recipient) shall be deemed to have been received by either Borrower or the Holder on such Business Day and otherwise shall be deemed to be received the nextBusiness Day. 

 
****9.6****
**Replacement of Note**

If this Note shall become mutilated or be lost, stolen or destroyed and in the absence of notice that the Note has been acquired by a *bonafide*purchaser, the Borrowers shall issue a new Note upon surrender and cancellation of the mutilated Note, or, in the event that a Note is lost, stolen or destroyed, in lieu of and in substitution for the same, and the substituted Note shall bein the form hereof and the Holder shall be entitled to benefits hereof. In case of loss, theft or destruction, the Holder shall furnish to the Borrowers such evidence of such loss, theft or destruction as shall be satisfactory to the Borrowers intheir discretion acting reasonably together with an indemnity in form and substance mutually acceptable to the Borrowers and the Holder, each acting reasonably. The applicant shall pay reasonable expenses incidental to the issuance of any such newNote. 

 
****9.7****
**Successors and Assigns**

This Note shall inure to the benefit of the Holder and its successors and its assigns and shall be binding upon the Borrowers and each of theirsuccessors. 

 
****9.8****
**Assignment**

No Party may assign its rights or benefits under this Note except that the Holder may assign all or any portion of its rights and benefitsunder this Note to any Person or Persons who may purchase all or part of this Note e, subject to compliance with applicable securities laws. 

 
14 

****9.9****
**Registered Obligations**

The Borrowers shall keep a “register” in which the Borrowers shall provide for the recordation of the name and address of, and theamount of outstanding principal and interest owing to, the Holder and its Assignees. The entries in the register shall be conclusive evidence of the amounts due and owing to the Holder or its Assignees in the absence of manifest error. TheBorrowers, the Holder, and its successors and assigns shall treat each Person whose name is recorded in the register pursuant to the terms hereof as the Holder for all purposes. Notwithstanding anything to the contrary contained in this Note, theNote is a registered obligations and the right, title and interest of the Holder and its Assignees in and to this Note shall be transferable only upon notation of such transfer in the register. This Section 9.9 shall be construed so that theNote is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the United States Internal Revenue Code of 1986, as amended (the “**Code**”), and any related regulations(and any other relevant or successor provisions of the Code or such regulations). The register shall be available for inspection by the Holder and its successors and assigns at from time to time upon reasonable prior notice. 

****9.10 **Invalidity of Provisions**

Each of the provisions contained in this Note is distinct and severable and a declaration of invalidity or unenforceability of any suchprovision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof or thereof. 

****9.11**Governing Law**

THIS NOTE AND EACH OTHER TRANSACTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONSLAW).     

****9.12**Maximum Rate of Interest**

Notwithstanding any other provisions of this Note, if the amount of any interest, premium, fees or other monies or any rate of interestrequired to be paid under this Note or any other document entered into in connection with this Note would, but for this provision, contravene any applicable Law, then such amount or rate of interest shall be reduced to such maximum amount as wouldnot contravene such provisions; and to the extent that any excess has been charged or received the Holder shall apply such excess against the outstanding Obligations and refund to the Borrowers any further excess amount. 

****9.13**Time of Essence**

Time shallbe of the essence of this Note and a forbearance by the Holder of the strict application of this provision shall not operate as a continuing or subsequent forbearance. 

****9.14**Waiver**

Each Borrower herebywaives presentment, notice of dishonor, protest and notice of protest. No failure or delay by the Holder in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right exclude other furtherexercise thereof or the exercise of any other right. 

 
15 

****9.15****
**Waiver of Trial by Jury**

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS NOTE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,ACTION OR CAUSE OF ACTION ARISING HEREUNDER OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY TRANSACTION AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASEWHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY TO THIS NOTE HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT AJURY, AND THAT ANY PARTY TO THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

 
****9.16****
**Obligations Joint and Several**

All obligations of the Borrowers under this Note are joint and several. 

**[Signature Page Follows]**

 
16 

**IN WITNESS WHEREOF**, each Borrower has caused this Note to be executed by its dulyauthorized officer as of the date first written above. 

 
**CANNEX CAPITAL HOLDINGS INC.**Per:                     Name: Anthony DuttonTitle: 
Chief Executive Officer

 
**CANNEX HOLDINGS (NEVADA) INC.**Per:                     Name: Anthony DuttonTitle: President
**ACCEPTED AND AGREED** as of the date first written above by: 

 

**GOTHAM GREEN FUND 1 (Q), L.P.**

**By Gotham Green GP 1, LLC, its General Partner**
Per:  Name: Jason AdlerTitle: Managing Member

**IN WITNESS WHEREOF**, each Borrower has caused this Note to be executed by its dulyauthorized officer as of the date first written above. 

 
**CANNEX CAPITAL HOLDINGS INC.**Per:  Name: Title: 
 
**CANNEX HOLDINGS (NEVADA) INC.**Per:  Name: Title: 
**ACCEPTED AND AGREED** as of the date first written above by: 

 

**GOTHAM GREEN FUND 1 (Q), L.P.**

**By Gotham Green GP 1, LLC its General Partner**
Per:                     Name: Jason AdlerTitle: Managing Member

**UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADETHE SECURITY BEFORE MARCH 22, 2019.**

**THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR UNDER ANY STATE SECURITIES LAWS, AND THE SECURITIES REPRESENTED HEREBY MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDETHE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY(1) RULE 144 THEREUNDER, IF AVAILABLE, OR (2) 144A THEREUNDER, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE U.S. STATE SECURITIES LAWS, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY, PURSUANT TO ANOTHER EXEMPTIONFROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT, IN THE CASE OF (C)(1) AND (D) ABOVE, AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANYIS PROVIDED TO THE EFFECT THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE US. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.**

**CANNEX CAPITAL HOLDINGS, INC.**

**CANNEX HOLDINGS (NEVADA) INC.**

**SENIOR SECURED CONVERTIBLE NOTE**

**Date: November 21, 2018**

**ARTICLE 1**

**PRINCIPAL ANDINTEREST**

 
****1.1****
**Promise to Pay**

FOR VALUE RECEIVED, the undersigned, **CANNEX CAPITAL HOLDINGS, INC,** a corporation incorporated under the laws of the Province of BritishColumbia (the “**Company**”), and **CANNEX HOLDINGS (NEVADA) INC.**, a Nevada corporation (the “**US Borrower**” and, with the Company, collectively, the “**Borrowers**”, and each a“**Borrower**”), jointly and severally, each hereby acknowledges itself indebted to and promises to pay to the order of Gotham Green Credit Partners SPV 2, L.P., a Delaware limited partnership, and its successors and assigns (the“**Holder**” or “**Lender**”) on the earlier of (i) November 21, 2021 and (ii) such earlier date as the Principal Amount (as hereinafter defined) may become payable (the “**Maturity Date**”) inaccordance with the provisions of this senior secured convertible note (this “**Note**”), the principal amount of twenty five million five hundred thousand dollars (USD $25,500,000.00) in lawful money of the United States (the“**Principal Amount**”) and to accrue interest 

(“**Interest**”) on the Principal Amount outstanding from time totime at the Applicable Interest Rate (as hereinafter defined) until the Principal Amount of the Note is repaid in full in accordance with its terms. 

The Borrowers shall pay Interest in accordance with Section 3.1. Any Obligations (as defined in the Securities Purchase Agreement,defined below) arising out of this Note, including without limitation the Principal Amount and the Interest, shall be referred to herein as the “**Obligations**”. The Holder acknowledges that this Note is one of a series of notes ofsubstantially identical terms and conditions (collectively, the “**Notes**”) issued by the Borrowers to other holders (with the Holder, collectively, the “**Holders**”) under the terms of the Securities Purchase Agreement.The Holder and Borrowers acknowledge that on the Initial Funding Date (as defined in the Securities Purchase Agreement), the Holders have funded an aggregate amount equal to $5,000,000 in payment for the Notes, and that the remaining aggregateprincipal amount of the Notes, equal to $27,000,000, shall be funded by the Holders on the Subsequent Funding Date(s) (as defined in the Securities Purchase Agreement). 

**ARTICLE 2**

**INTERPRETATION AND GENERAL PROVISIONS**

 
2.1
**Interpretation**

Capitalized terms used herein without definition shall have the meaning ascribed thereto in the secured Securities Purchase Agreement (the“**Securities Purchase Agreement**”) dated of even date herewith among the Holders and the Borrowers providing for, *inter alia*, the purchase of this Note by the Holder. 

 
2.2
**Plurality and Gender**

Words importing the singular number only shall include the plural and vice versa and words importing the masculine gender shall include thefeminine gender and words importing Persons shall include firms and corporations and vice versa. 

 
2.3
**Headings, etc**. 

The division of this Note into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of referenceonly and shall not affect the construction or interpretation of this Note. 

 
2.4
**Day Not a Business Day**

In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall berequired to be taken at or before the requisite time on the next succeeding day that is a Business Day. 

 
2.5
**Currency**

Any reference in this Note to “**Dollars**”, “**dollars**” or the sign “**$**” shall be deemed to be areference to lawful money of the United States. 

**ARTICLE 3**

**PAYMENT OF PRINCIPAL AND INTEREST**

3.1 The Obligations shall be due and payable without deduction or withholding for taxes of any kind or nature immediately on the earlier of:

 
 (a)
the Maturity Date; and 

 
 (b)
the occurrence and continuance of an Event of Default (defined below). 

 
2 

3.2 Interest shall accrue at the Applicable Interest Rate and shall be calculated on thebasis of the actual days elapsed in the period for which such Interest is to accrue and on the basis of a year of 360 days. The Borrowers shall pay Interest as follows: 

 
 (a)
Fifty percent (50%) of the Interest due on any Interest Payment Date shall be paid in cash in arrears to theHolder, by wire transfer of immediately available funds to the account designated by Holder from time to time; and 

 
 (b)
Fifty percent (50%) of the Interest due on any Interest Payment Date shall accrue and be added to thePrincipal Amount, and such Interest paid in kind shall be payable on the date that all remaining Principal Amount is due and payable pursuant hereto. 

3.3 For purposes of this Note, the following terms shall have the definitions set forth in this Section 3.3: 

 
 (a)
“**Applicable Funding Date**” means the date on which the Holder paid the applicable principalamount in accordance with the Securities Purchase Agreement, which shall be either the Initial Funding Date or the Subsequent Funding Date(s), as defined therein. 

 
 (b)
“**Applicable Interest Rate**” means, as of any date, the rate per annum applicable to suchdate as follows: 

 
 (i)
For the period beginning on the Applicable Funding Date and ending on November 21, 2019 (“**Year1**”), LIBOR plus eleven percent (11%); 

 
 (ii)
For the period beginning on November 22, 2019 and ending on November 21, 2020 (“**Year2**”), LIBOR plus ten percent (10%); 

 
 (iii)
For the period beginning on November 22, 2020 and continuing thereafter (“**Year****3**”), LIBOR plus nine and one half percent (9.5%). 

 
 (c)
“**Interest Payment Date**” means the last Business Day of each month, with the first InterestPayment Date occurring on December 31, 2018. 

 
 (d)
“**Interest Period**” means, with respect to periods in which clause (b) of the definitionof LIBOR applies, the period beginning on the day after the applicable Interest Payment Date and ending on the next Interest Payment Date. 

 
 (e)
“**LIBOR**” means the greater of (a) 2.5% and (b) for any Interest Period, the rate perannum equal to the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of such rate), as published by Reuters (or any other commercially available sourceproviding quotations of such rate as designated by the Lender from time to time) at approximately 11:00 a.m., London time, two (2) business days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on thefirst day of such Interest Period) with a term equivalent to such Interest Period; provided, that in no event shall such rate be less than zero or exceed five percent (5%); and provided further, that if a rate determined under clause (b) is notavailable at such time for such Interest Period, the parties will work in good faith to agree upon an alternative floating rate. 

 
3 

**ARTICLE 4**

**CONVERSION**

4.1**Conversion Right**

The Holder has the right (the “**Conversion Right**”), from time to time and at any time on or priorto 5:00 p.m. (Toronto time) on the earlier of the Business Day immediately preceding (i) the Maturity Date and (ii) the date fixed for redemption of this Note in accordance with terms hereof, to convert all or any portion of theoutstanding Principal Amount plus, at the Holder’s option, all accrued and unpaid Interest with respect to such Principal Amount and any unpaid fees, into Shares, at a price equal to $0.83 per Share (the “**Conversion Price**”).For purposes of this Note, if the Conversion Right is exercised on or prior to October 31, 2019, then “**Shares**” means Class A shares in the capital of the Company, and if the Conversion Right is exercised afterOctober 31, 2019, then “**Shares**” means common shares in the capital of the Company. 

Notwithstanding any otherprovision of this Agreement, the Conversion Right shall not be exercisable by the Holder or any person who does not deal at arm’s length with the Holder for purposes of the *Income Tax Act* (Canada) (collectively, “**Holder RelatedParties**”) to the extent that, after giving effect to such conversion, the Holder Related Parties would beneficially own or have a right to acquire shares of the Company that, in aggregate, represent: (i) 25% or more of the votes that couldbe cast at the annual meeting of the shareholders of the Company; or (ii) 25% or more of the fair market value of the issued and outstanding shares of the Company at such time. 

4.2 **Exercise of Conversion Right**

TheConversion Right may be exercised by the Lender by completing and signing the notice of conversion (the “**Conversion Notice**”) and delivering the Conversion Notice and this Note to the Borrower. The Conversion Notice shall providethat the Conversion Right is being exercised, shall specify the amount being converted, and shall set out the date (the “**Issue Date**”) on which Shares are to be issued upon the exercise of the Conversion Right (such date to be noearlier than three (3) Business Days and no later than seven (7) Business Days after the day on which the Conversion Notice is issued). The conversion shall be deemed to have been effected immediately prior to the close of business on theIssue Date and the Shares issuable upon conversion shall be deemed to be issued as fully paid and non-assessable at such time. Within seven (7) Business Days after the Issue Date, a certificate for therequired number of Common Shares shall be issued to the Lender. If less than all of the Principal Amount of this Note is the subject of the Conversion Right, then within seven (7) Business Days after the Issue Date, the Borrowers shall deliverto the Lender a replacement Note in the form hereof in the principal amount of the unconverted principal balance hereof, plus the unconverted portion of any accrued and unpaid Interest and fees, and this Note shall be cancelled. If the ConversionRight is being exercised in respect of the entire Principal Amount of this Note (and, if applicable, all accrued and unpaid Interest and fees), this Note shall be cancelled. 

 
4 

4.3 **Adjustment of Conversion Price**

The Conversion Price in effect at any date shall be subject to adjustment from time to time as follows: 

 
 (a)
If and whenever at any time prior to the Maturity Date, the Company shall: 

 
 (i)
subdivide or redivide the outstanding Shares into a greater number of Shares; 

 
 (ii)
reduce, combine or consolidate the outstanding Shares into a smaller number of Shares;

 
 (iii)
issue Shares (or securities convertible into or exchangeable for Shares) to the holders of all orsubstantially all of the outstanding Shares by way of stock dividend; or 

 
 (iv)
make a distribution on its outstanding Shares payable in Shares or securities exchangeable for orconvertible into Shares, 

the Conversion Price in effect on the effective date of such subdivision,redivision, reduction, combination or consolidation or on the record date for such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend or other distribution, as the case may be, shall, in the caseof the events referred to in Sections 4.3(a)(i), (iii) and (iv) above, be decreased in proportion to the increase in the number of outstanding Shares resulting from such subdivision, redivision or dividend (including, in the case wheresecurities convertible into or exchangeable for Shares are issued, the number of Shares that would have been outstanding had such securities been converted into or exchanged for Shares on such effective or record date) or shall, in the case of theevents referred to in Section 4.3(a)(ii) above, be increased in proportion to the decrease in the number of outstanding Shares resulting from such reduction, combination or consolidation on such effective or record date. Such adjustment shallbe made successively whenever any event referred to in this Section 4.3(a) shall occur. Any such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend or other distribution shall be deemed to havebeen made on the record date for the stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under Sections 4.3(b) and (g); to the extent that any such securities are not converted into or exchanged forShares prior to the expiration of the conversion or exchange right, the Conversion Price shall be readjusted effective as at the date of such expiration to the Conversion Price which would then be in effect based upon the number of Shares actuallyissued on the exercise of such conversion or exchange right. 

 
5 

 (b)
If and whenever at any time prior to the Maturity Date, the Company shall fix a record date for the issuanceof rights, options or warrants to all or substantially all the holders of its outstanding Shares entitling them, for a period expiring not more than forty-five (45) days after such date of issue (such period from the record date to the date ofexpiry being referred to in this Section 4.3(b) as the “**Rights Period**”), to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) (such subscription price per Common Share (inclusive ofany cost of acquisition of securities exchangeable for or convertible into Shares in addition to any direct cost of Shares) being referred to in this Section 4.3(b) as the “**Per Share Cost**”), the Borrowers shall give writtennotice to the Lender with respect thereto (any of such events herein referred to as a “**Rights Offering**”), and the Lender shall have fifteen (15) days after receipt of such notice to elect to convert any or all of the PrincipalAmount of this Note into Shares at the then applicable Conversion Price and otherwise on terms and conditions set out in this Note. If the Lender elects to convert any or all of the Principal Amount of this Note, such conversion shall occurimmediately prior to the record date for the issuance of such rights, options or warrants. If the Lender elects not to convert any of the Principal Amount of this Note, there shall continue to be an adjustment to the Conversion Price as a result ofthe issuance of such rights, options or warrants, in the manner hereinafter provided. The Conversion Price will be adjusted effective immediately after the end of the Rights Period to a price determined by multiplying the Conversion Price in effectimmediately prior to the end of the Rights Period by a fraction: 

 
 (i)
the numerator of which is the aggregate of: 

 
 (A)
the number of Shares outstanding as of the record date for the Rights Offering; and 

 
 (B)
the number determined by dividing the product of the Per Share Cost and: 

 
 1.
where the event giving rise to the application of this Section 4.3(b) was the issue of rights, optionsor warrants to the holders of Shares under which such holders are entitled to subscribe for or purchase additional Shares, the number of Shares so subscribed for or purchased during the Rights Period, or 

 
 2.
where the event giving rise to the application of this Section 4.3(b) was the issue of rights, optionsor warrants to the holders of Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into Shares, the number of Shares for which those securities so subscribed for or purchased during theRights Period could have been exchanged or into which they could have been converted during the Rights Period, 

by the trading price of the Shares on the OTCQX Market (or such other recognized stock exchange or quotation on which theShares are listed for trading) (the “**Current Market Price**”) as of the record date for the Rights Offering; and 

 
 (ii)
the denominator of which is: 

 
 (A)
in the case described in subparagraph 4.3(b)(i)(B)(1), the number of Shares outstanding, or

 
 (B)
in the case described in subparagraph 4.3(b)(i)(B)(2), the number of Shares that would be outstanding if allthe Shares described in subparagraph 4.3(b)(i)(B)(2) had been issued, 

as at the end of the RightsPeriod. 

 
6 

 (c)
Any Shares owned by or held for the account of the Company or any subsidiary or affiliate (as defined in the*Securities Act* (British Columbia)) of the Company will be deemed not to be outstanding for the purpose of any such computation. 

 
 (d)
If by the terms of the rights, options or warrants referred to in Section 4.3(b), there is more thanone purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible securities so offered,will be calculated for purposes of the adjustment on the basis of: 

(1) the lowest purchase, conversionor exchange price per Common Share, as the case may be, if such price is applicable to all Shares which are subject to the rights, options or warrants, and 

(2) the average purchase, conversion or exchange price per Common Share, as the case may be, if the applicable price isdetermined by reference to the number of Shares acquired. 

 
 (e)
To the extent that any adjustment in the Conversion Price occurs pursuant to this Section 4.3(b) as aresult of the fixing by the Company of a record date for the distribution of rights, options or warrants referred to in this Section 4.3(b), the Conversion Price will be readjusted immediately after the expiration of any relevant exchange,conversion or exercise right to the Conversion Price which would then be in effect based upon the number of Shares actually issued and remaining issuable after such expiration, and will be further readjusted in such manner upon expiration of anyfurther such right. 

 
 (f)
If the Lender has exercised its Conversion Right in accordance herewith during the Rights Period, the Lenderwill, in addition to the Shares to which it is otherwise entitled upon such exercise, be entitled to that number of additional Shares equal to the result obtained when the difference, if any, between the Conversion Price in effect immediately priorto, and the Conversion Price in effect immediately following the end of such Rights Offering pursuant to this Section 4.3(b), is multiplied by the number of Shares received upon the exercise of the Conversion Right during such period, and theresulting product is divided by the Conversion Price as adjusted for such Rights Offering pursuant to this Section 4.3(b); provided that no fractional Shares will be issued. Such additional Shares will be deemed to have been issued to theLender immediately following the end of the Rights Period and a certificate for such additional Shares will be delivered to the Lender within 10 Business Days following the end of the Rights Period. 

 
 (g)
If and whenever at any time prior to the Maturity Date, the Company shall fix a record date for the makingof a distribution to all or substantially all the holders of its outstanding Shares of (i) shares of any class other than Shares (or other than securities convertible into or exchangeable for Shares), or (ii) rights, options or warrants(other than rights, options or warrants referred to in Section 4.3(b)), or (iii) evidences of its indebtedness, or (iv) assets (in each case, other than dividends paid in the ordinary course) then, in each such case, the Borrowersshall give written notice to the Lender with respect thereto, and the Lender shall have fifteen (15) days after receipt of such notice to elect to convert any or all of the Principal Amount of this Note into Shares at the then applicableConversion Price and otherwise on terms and conditions set out in this Note. If the Lender elects to convert any or all of the Principal Amount of this Note, such conversion shall occur immediately prior to the record date for the making of suchdistribution. If the Lender elects not to convert any of the Principal Amount of this Note, there shall continue to be an adjustment to the Conversion Price as a result of the making of such distribution (herein referred to as a “Special**Distribution”),** determined in the manner hereafter set out in 4.3(h). In this Section 4.3(g) the term “dividends**paid in the ordinary course”** shall include the value of any securities or other property or assetsdistributed in lieu of cash dividends paid in the ordinary course at the option of shareholders. 

 
7 

 (h)
In circumstances described in Section 4.3(g), the Conversion Price will be adjusted effectiveimmediately after such record date to a price determined by multiplying the Conversion Price in effect on such record date by a fraction: 

(1) the numerator of which is: 

(A) the product of the number of Shares outstanding on such record date and the Current Market Price of the Shares on suchrecord date; less 

(B) the aggregate fair market value (as determined by action by the directors of the Company, actingreasonably) to the holders of the Shares of such securities or property or other assets so issued or distributed in the Special Distribution; and 

(2) the denominator of which is the number of Shares outstanding on such record date multiplied by the Current Market Price ofthe Shares on such record date. 

Any Shares owned by or held for the account of the Company or any subsidiary or affiliate(as defined in the *Securities Act* (British Columbia)) of the Company will be deemed not to be outstanding for the purpose of any such computation. 

 
 (i)
In the case of any reclassification of, or other change in, the outstanding Shares pursuant to a Change ofControl Transaction, if the Lender elects not to redeem this Note in accordance with Article 5, the Lender may elect, prior to the effective date of such Change of Control Transaction, to convert any or all of the Principal Amount of this Note intoShares at the then applicable Conversion Price and otherwise on terms and conditions set out in this Note. To exercise such right the Lender must provide a notice in writing to the Borrowers no later than seven days prior to the effective date ofsuch Change of Control Transaction, failing which the Lender’s right to convert this Note as a consequence of such Change of Control Transaction shall cease. If the Lender elects to convert any or all of the Principal Amount of this Note, suchconversion shall occur immediately prior to the effective date of such Change of Control Transaction. If the Lender elects not to convert any of the Principal Amount of this Note, the Conversion Price in effect after the effective date of suchChange of Control Transaction shall be increased or decreased, as the case may be, in proportion to any decrease or increase in the number of outstanding Shares resulting from such Change of Control Transaction so that the Lender, upon exercisingthe Conversion Right after the effective date of such Change of Control Transaction, will be entitled to receive the aggregate number of Shares or other securities, if any, which the Lender would have been entitled to receive as a result of suchChange of Control Transaction if, on the effective date thereof, the Lender had been the registered holder of the number of Shares to which the Lender was theretofore entitled upon exercise of the Conversion Right. 

 
8 

 (j)
In the case of any reclassification of, or other change in, the outstanding Shares (other than a changereferred to in Section 4.3(a), Section 4.3(b), Section 4.3(g) or 4.3(i) hereof), the Conversion Price shall be adjusted in such manner, if any, and at such time, as the Board of Directors of the Company determines to be appropriate ona basis consistent with the intent of this Section 4.3; provided that if at any time a dispute arises with respect to adjustments provided for in this Section 4.3(j), such dispute will be conclusively determined by the auditors of theBorrowers or if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the directors of the Company, acting reasonably, and any such determination will be binding on the Borrowersand the Lender. The Borrowers will provide such auditors or accountants with access to all necessary records of the Borrowers. If and whenever at any time after the date hereof there is a reclassification or redesignation of the Shares outstandingat any time or change of the Shares into other shares or into other securities (other than as set out in Section 4.3(a), (b), (g) or (i)), or a consolidation, amalgamation or merger of the Company with or into any other corporation or otherentity (other than a consolidation, amalgamation or merger which does not result in any reclassification or redesignation of the outstanding Shares or a change of the Shares into other shares and other than as set forth in 5.3(a)(i) or a transfer ofthe undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being called a “**Capital Reorganization**”), the Lender, upon the exercising theConversion Right, after the effective date of such Capital Reorganization, will be entitled to receive in lieu of the number of Shares to which the Lender was theretofore entitled upon such exercise, the aggregate number of shares, other securitiesor other property, if any, which the Lender would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, the Lender had been the registered holder of the number of Shares to which such Lender wastheretofore entitled upon exercise of the Conversion Right. If determined appropriate by action of the directors of the Company, appropriate adjustments will be made as a result of any such Capital Reorganization in the application of the provisionsset forth in this Section 4.3 with respect to the rights and interests thereafter of the Lender to the end that the provisions set forth in this Section 4.3 will thereafter correspondingly be made applicable as nearly as may reasonably bein relation to any shares, other securities or other property thereafter deliverable upon the exercise of the Conversion Right. Any such adjustment must be made by and set forth in an amendment to this Note approved by action by the directors of theCompany, acting reasonably, and will for all purposes be conclusively deemed to be an appropriate adjustment. 

 
9 

 (k)
In any case in which this Section 4.3 shall require that an adjustment shall become effectiveimmediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Lender before the occurrence of such event, the additional Shares issuable upon such conversion by reason ofthe adjustment required by such event before giving effect to such adjustment; provided, however, that the Borrowers shall deliver to the Lender an appropriate instrument evidencing the Lender’s right to receive such additional Shares upon theoccurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Shares declared in favour of holders of record of Shares on and after the Issue Date or such later date as the Lender would, but forthe provisions of this Section 4.3(k), have become the holder of such additional Shares pursuant to Section 4.3(b). 

 
 (l)
The adjustments provided for in this Section 4.3 are cumulative and shall apply to successivesubdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other event resulting in any adjustment under the provisions of this Section, provided that, notwithstanding any other provision of this Section, noadjustment of the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided, however, that any adjustments which by reason of thisSection 4.3(l) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. 

No Conversion Price adjustment will be made to the extent that the Company makes an equivalent distribution to holders of Notes in respect ofsuch Notes. No adjustment to the Conversion Price will be made for distributions or dividends on Shares issuable upon conversion of Notes that have been surrendered for conversion, provided that holders converting their Notes shall be entitled toreceive, in addition to the applicable number of Shares, accrued and unpaid interest payable in cash from, and including, the most recent interest payment date to, but excluding, the date of conversion. 

**ARTICLE 5**

**REDEMPTIONAND PREPAYMENT**

5.1 **No Early Redemption or Prepayment**

Except pursuant to Sections 5.3 and 5.4, the Borrowers shall not be permitted to redeem or repay the Note prior to the Maturity Date withoutthe prior written consent of the Lender.     

5.2 **Notice of Change of Control Transaction**

Upon the occurrence of any event constituting or reasonably likely to constitute a Change of Control Transaction, the Borrowers shall givewritten notice to the Lender of such Change of Control Transaction at least thirty (30) days or, with the prior written consent of the Lender, as soon as reasonably possible prior to the effective date of any such Change of Control Transactionand another written notice on or immediately after the effective date of such Change of Control Transaction (the “**Change of Control Notice**”). 

 
10 

5.3 **Redemption if Change of Control Transaction**

Notwithstanding anything to the contrary herein, upon receipt of a Change of Control Notice with respect to a Change of Control Transaction,the Holder shall, in its sole discretion on or before the closing of the Change of Control Transaction, have the right to require the Borrowers purchase the Note at a price equal to 105% of the then outstanding Principal Amount thereof together, atHolder’s option, with accrued and unpaid Interest and fees (the “**Offer Price**”); provided that, if 90% or more of the Principal Amount outstanding on the date of the Change of Control Notice have been tendered for redemption,the Company will have the right, in its sole discretion, to redeem all of the outstanding Notes at the Offer Price. 

5.4 **Voluntary Prepayment**

Subject to the rest of this Section 5.4, beginning on the first day of Year 2, from time to time the Borrowers shall have the right torepay, in whole or in part, the then outstanding Principal Amount of this Note together with accrued and unpaid Interest and fees, plus the Applicable Premium. For purposes of this Note, “**Applicable Premium**” means, with respect toYear 2, 2% of the Principal Amount being repaid, and with respect to Year 3, 1% of the Principal Amount being repaid. The Borrowers shall notify the Lender in writing of their intent to make prepayment under this Section 5.4 at least thirty(30) days (or such shorter time as is acceptable to the Lender in its sole discretion) prior to the proposed prepayment date, and such notice shall include the Principal Amount, interest, fees and Applicable Premium to be paid on suchprepayment date. Such prepayment will be paid by wire transfer of immediately available funds to the account designated by the Lender. 

**ARTICLE 6**

**SECURITY**

6.1 As security for the Obligations under this Note, each Borrower shall grant to the Collateral Agent, for the benefit of theHolder, a first priority security interest over all of such Borrower’s present and after acquired personal property in which such Borrower has rights, of whatsoever nature or kind and wherever situate, save and except property specificallyexcluded in any general security agreement granted by such Borrower to the Collateral Agent, for the benefit of the Holder, which shall rank *pari passu* between and among the Holders (the “**Security Interest**”). The SecurityInterest shall be evidenced by one or more security agreements entered into between each Borrower and the Holder. 

6.2 This Note isentitled to and shall have the benefit of a cross guarantee by each Borrower and a guaranty by each Subsidiary (collectively, the “**Guarantors**”), of all of the Obligations of the Borrowers to the Lender under or in connection withthis Note in favour of the Lender dated as of the date of this Note (the “**Guarantees**”). As security for such Obligations under the Guarantees, each Guarantor shall grant in favour of the Collateral Agent, for the benefit of theHolder, a first priority security interest over all of such Guarantor’s present and after acquired personal property in which such Guarantor have rights, of whatsoever nature or kind and wherever situate which shall rank *pari passu*between and among the Holders. The security granted to the Collateral Agent, for the benefit of the Holder, by each of the Guarantors shall be evidenced by one or more security agreements entered into between the Guarantors and the Holder. 

 
11 

**ARTICLE 7**

**EVENTS OF DEFAULT**

7.1 Theoccurrence of an “Event of Default” under the Securities Purchase Agreement shall constitute an event of default (“**Event of Default**”) hereunder. 

7.2 Upon and during the continuation of an Event of Default, the Interest Rate shall increase by three 3% per annum, and the Holder shall beentitled to all of the rights and remedies set forth in the Securities Purchase Agreement and available to it under applicable law. 

**ARTICLE 8**

**COVENANTS**

8.1 **Positive Covenants of the Company**

So long as any Obligations remain unpaid, the Company shall perform the covenants and actions as set forth in, and in accordance with, theSecurities Purchase Agreement. 

8.2 **Tax Treatment**

For United States federal income tax purposes, the parties agree to treat the Notes as convertible debt instruments that are excepted from thecontingent payment debt instrument rules of Treas. Reg. § 1.1275-4. The parties shall file all federal income tax returns and reports in a consistent manner unless otherwise required pursuant to a final “determination” within themeaning of Section 1313 of the Internal Revenue Code of 1986, as amended. 

**ARTICLE 9**

**GENERAL MATTERS**

9.1 **Amalgamation**

The Borrowers acknowledge that if, to the extent permitted under the Securities Purchase Agreement, either Borrower amalgamates or mergerswith any other Person (a) the term “**Company**”, where used herein shall extend to and include the amalgamated or surviving Person, and (b) the term, “**Obligations**”, where used herein shall extend to andinclude the Obligations of the Borrowers and the amalgamated Person. 

9.2 **No Modification or Waiver**

No modification, variation or amendment of any provision of this Note shall be made without the prior written consent of all of the Holders.The Holder shall not, by any act, delay, omission or otherwise, be deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver shall be in writing and executed by an authorized officer of the Holder. Anysuch waiver shall be enforceable only to the extent specifically set forth therein. A waiver by the Holder of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedywhich the Holder would otherwise have on any future occasion, whether similar in kind or otherwise. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER THE LAWSOF THE STATE OF WASHINGTON. 

 
12 

9.3 **Entire Agreement**

This Note together with the Securities Purchase Agreement and Transaction Agreements defined therein constitute the entire agreement betweenthe parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. There are no other agreements between the parties in connection with the subject matter hereof except asspecifically set forth or referred to herein or therein. 

9.4 **Performance by Holder**

If either Borrower fails to perform any of its obligations hereunder, the Holder may, after notice to the Company, but shall not be obligatedto, perform any or all such obligations, and all reasonable costs, charges, expenses, fees, outlays and premiums incurred by the Holder in connection therewith shall be payable by the Borrowers, jointly and severally, forthwith upon demand by theHolder and shall bear interest from the date incurred by the Holder at the Interest Rate then in effect and shall form part of the Obligations. Any such performance by the Holder shall not constitute a waiver by the Holder of any right, power, orprivilege under this Note. 

9.5 **Notice to the Company and the Holder**

Any notice to be given to the Borrowers or the Holder shall be in writing and shall be deemed to be validly given if such notice is deliveredpersonally, by facsimile or electronic transmission or sent by prepaid registered mail, addressed as follows: 

 
 (a)
if to Borrowers, at: 

Cannex Capital Holdings Inc. 

1241 Alberni Street 

Vancouver, British Columbia V6E 4R4 

Canada 

                                         

With a copy to (which shall not constitute notice): 

McMillan LLP 

Suite 1500, 1055 West Georgia Street 

Vancouver, BC V6E 4N7 

Canada 

 
 (b)
if to the Holder, at: 

c/o Gotham Green Partners, LLC 

Suite 29A, 489 5th Avenue 

New York, NY 1008 

USA 

 
13 

                                         

With a copy to (which shall not constitute notice): 

Honigman Miller Schwarz and Cohn LLP 

2290 First National Building 

660 Woodward Avenue 

Detroit, MI 48226-3506 

USA 

                                         

Notice of change of address shall also be governed by this Section 9.5. Any notice given by personal delivery shall be deemed to havebeen given when received by either Borrower or the Holder, and by prepaid registered mail shall be deemed to have been received by either Borrower or the Holder on the third (3rd) Business Dayafter the day of such mailing and any notice so given by facsimile or electronic transmission on a Business Day before 5:00 p.m. (local time of the recipient) shall be deemed to have been received by either Borrower or the Holder on such BusinessDay and otherwise shall be deemed to be received the next Business Day. 

9.6 **Replacement of Note**

If this Note shall become mutilated or be lost, stolen or destroyed and in the absence of notice that the Note has been acquired by a *bonafide*purchaser, the Borrowers shall issue a new Note upon surrender and cancellation of the mutilated Note, or, in the event that a Note is lost, stolen or destroyed, in lieu of and in substitution for the same, and the substituted Note shall bein the form hereof and the Holder shall be entitled to benefits hereof. In case of loss, theft or destruction, the Holder shall furnish to the Borrowers such evidence of such loss, theft or destruction as shall be satisfactory to the Borrowers intheir discretion acting reasonably together with an indemnity in form and substance mutually acceptable to the Borrowers and the Holder, each acting reasonably. The applicant shall pay reasonable expenses incidental to the issuance of any such newNote. 

9.7 **Successors and Assigns**

This Note shall inure to the benefit of the Holder and its successors and its assigns and shall be binding upon the Borrowers and each of theirsuccessors. 

9.8 **Assignment**

NoParty may assign its rights or benefits under this Note except that the Holder may assign all or any portion of its rights and benefits under this Note to any Person or Persons who may purchase all or part of this Note e, subject to compliance withapplicable securities laws. 

 
14 

9.9 **Registered Obligations**

The Borrowers shall keep a “register” in which the Borrowers shall provide for the recordation of the name and address of, and theamount of outstanding principal and interest owing to, the Holder and its Assignees. The entries in the register shall be conclusive evidence of the amounts due and owing to the Holder or its Assignees in the absence of manifest error. TheBorrowers, the Holder, and its successors and assigns shall treat each Person whose name is recorded in the register pursuant to the terms hereof as the Holder for all purposes. Notwithstanding anything to the contrary contained in this Note, theNote is a registered obligations and the right, title and interest of the Holder and its Assignees in and to this Note shall be transferable only upon notation of such transfer in the register. This Section 9.9 shall be construed so that theNote is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the United States Internal Revenue Code of 1986, as amended (the “**Code**”), and any related regulations(and any other relevant or successor provisions of the Code or such regulations). The register shall be available for inspection by the Holder and its successors and assigns at from time to time upon reasonable prior notice. 

9.10 **Invalidity of Provisions**

Each ofthe provisions contained in this Note is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provisionhereof or thereof. 

9.11 **Governing Law**

THIS NOTE AND EACH OTHER TRANSACTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OFNEW YORK WITHOUT REFERENCE TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).     

9.12 **Maximum Rate of Interest**

Notwithstanding any other provisions of this Note, if the amount of any interest, premium, fees or other monies or any rate of interestrequired to be paid under this Note or any other document entered into in connection with this Note would, but for this provision, contravene any applicable Law, then such amount or rate of interest shall be reduced to such maximum amount as wouldnot contravene such provisions; and to the extent that any excess has been charged or received the Holder shall apply such excess against the outstanding Obligations and refund to the Borrowers any further excess amount. 

9.13 **Time of Essence**

Time shall be ofthe essence of this Note and a forbearance by the Holder of the strict application of this provision shall not operate as a continuing or subsequent forbearance. 

9.14 **Waiver**

Each Borrower hereby waivespresentment, notice of dishonor, protest and notice of protest. No failure or delay by the Holder in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right exclude other furtherexercise thereof or the exercise of any other right. 

 
15 

9.15 **Waiver of Trial by Jury**

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS NOTE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,ACTION OR CAUSE OF ACTION ARISING HEREUNDER OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY TRANSACTION AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASEWHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY TO THIS NOTE HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT AJURY, AND THAT ANY PARTY TO THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

9.16 **Obligations Joint and Several**

Allobligations of the Borrowers under this Note are joint and several. 

**[Signature Page Follows]**

 
16 

**IN WITNESS WHEREOF**, each Borrower has caused this Note to be executed by its dulyauthorized officer as of the date first written above. 

 

**CANNEX CAPlTAL HOLDINGS INC.**
Per:                     Name: Anthony DuttonTitle: Chief Executive Officer
 

**CANNEX HOLDINGS (NEVADA) INC.**
Per:                     Name: Anthony DuttonTitle: President
**ACCEPTED AND AGREED** as of the date first written above by: 

 

**GOTHAM GREEN CREDIT PARTNERS SPV 2, L.P.**

**By Gotham Green Credit Partners GP 2, LLC, its**

**GeneralPartner**
Per:  Name: Jason AdlerTitle: Managing Member

**IN WITNESS WHEREOF,** each Borrower has caused this Note to be executed by its dulyauthorized officer as of the date first written above. 

 
**CANNEX CAPITAL HOLDINGS INC.**Per:  Name: Title: 
 
**CANNEX HOLDINGS (NEVADA) INC.**Per:  Name: Title: 
**ACCEPTED AND AGREED** as of the date first written above by: 

 
**GOTHAM GREEN CREDIT PARTNERS SPV 2, L.P.****By Gotham Green Credit Partners GP 2, LLC**, **its****General Partner**Per:                     Name: Jason AdlerTitle: Managing Member

**UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADETHE SECURITY BEFORE MARCH 22, 2019.**

**THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR UNDER ANY STATE SECURITIES LAWS, AND THE SECURITIES REPRESENTED HEREBY MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDETHE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY(1) RULE 144 THEREUNDER, IF AVAILABLE, OR (2) 144A THEREUNDER, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE U.S. STATE SECURITIES LAWS, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY, PURSUANT TO ANOTHER EXEMPTIONFROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT, IN THE CASE OF (C)(1) AND (D) ABOVE, AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANYIS PROVIDED TO THE EFFECT THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE US. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.**

**CANNEX CAPITAL HOLDINGS, INC.**

**CANNEX HOLDINGS (NEVADA) INC.**

**SENIOR SECURED CONVERTIBLE NOTE**

**Date: November 21, 2018**

**ARTICLE 1**

**PRINCIPAL ANDINTEREST**

1.1 **Promise to Pay**

FOR VALUE RECEIVED, the undersigned, **CANNEX CAPITAL HOLDINGS, INC,** a corporation incorporated under the laws of the Province of BritishColumbia (the “**Company**”), and **CANNEX HOLDINGS (NEVADA) INC.**, a Nevada corporation (the “**US Borrower**” and, with the Company, collectively, the “**Borrowers**”, and each a“**Borrower**”), jointly and severally, each hereby acknowledges itself indebted to and promises to pay to the order of Gotham Green Fund 1, L.P., a Delaware limited partnership, and its successors and assigns (the“**Holder**” or “**Lender**”) on the earlier of (i) November 21, 2021 and (ii) such earlier date as the Principal Amount (as hereinafter defined) may become payable (the “**Maturity Date**”) inaccordance with the provisions of this senior secured convertible note (this “**Note**”), the principal amount of one million two hundred ninety-nine thousand eight hundred thirty-seven dollars and fifty cents (USD $1,299,837.50) inlawful money of the United States (the “**Principal Amount**”) and to accrue interest (“**Interest**”) on the Principal Amount outstanding from time to time at the Applicable Interest Rate (as hereinafter defined) until thePrincipal Amount of the Note is repaid in full in accordance with its terms. 

The Borrowers shall pay Interest in accordance with Section 3.1. Any Obligations (asdefined in the Securities Purchase Agreement, defined below) arising out of this Note, including without limitation the Principal Amount and the Interest, shall be referred to herein as the “**Obligations**”. The Holder acknowledgesthat this Note is one of a series of notes of substantially identical terms and conditions (collectively, the “**Notes**”) issued by the Borrowers to other holders (with the Holder, collectively, the “**Holders**”) underthe terms of the Securities Purchase Agreement. The Holder and Borrowers acknowledge that on the Initial Funding Date (as defined in the Securities Purchase Agreement), the Holders have funded an aggregate amount equal to $5,000,000 in payment forthe Notes, and that the remaining aggregate principal amount of the Notes, equal to $27,000,000, shall be funded by the Holders on the Subsequent Funding Date(s) (as defined in the Securities Purchase Agreement). 

**ARTICLE 2**

**INTERPRETATION AND GENERAL PROVISIONS**

2.1**Interpretation**

Capitalized terms used herein without definition shall have the meaning ascribed thereto in the secured SecuritiesPurchase Agreement (the “**Securities Purchase Agreement**”) dated of even date herewith among the Holders and the Borrowers providing for, *inter alia,* the purchase of this Note by the Holder. 

2.2 **Plurality and Gender**

Wordsimporting the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine gender and words importing Persons shall include firms and corporations and vice versa. 

2.3 **Headings, etc.**

Thedivision of this Note into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Note. 

2.4 **Day Not a Business Day**

In the eventthat any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day. 

2.5 **Currency**

Any reference in this Noteto “**Dollars**”, “**dollars**” or the sign “**$**” shall be deemed to be a reference to lawful money of the United States. 

**ARTICLE 3**

**PAYMENT OFPRINCIPAL AND INTEREST**

3.1 The Obligations shall be due and payable without deduction or withholding for taxes of any kind or natureimmediately on the earlier of: 

 
 (a)
the Maturity Date; and 

 
2 

 (b)
the occurrence and continuance of an Event of Default (defined below). 

3.2 Interest shall accrue at the Applicable Interest Rate and shall be calculated on the basis of the actual days elapsed in the period forwhich such Interest is to accrue and on the basis of a year of 360 days. The Borrowers shall pay Interest as follows: 

 
 (a)
Fifty percent (50%) of the Interest due on any Interest Payment Date shall be paid in cash in arrears to theHolder, by wire transfer of immediately available funds to the account designated by Holder from time to time; and 

 
 (b)
Fifty percent (50%) of the Interest due on any Interest Payment Date shall accrue and be added to thePrincipal Amount, and such Interest paid in kind shall be payable on the date that all remaining Principal Amount is due and payable pursuant hereto. 

3.3 For purposes of this Note, the following terms shall have the definitions set forth in this Section 3.3: 

 
 (a)
“**Applicable Funding Date**” means the date on which the Holder paid the applicable principalamount in accordance with the Securities Purchase Agreement, which shall be either the Initial Funding Date or the Subsequent Funding Date(s), as defined therein. 

 
 (b)
“**Applicable Interest Rate**” means, as of any date, the rate per annum applicable to suchdate as follows: 

 
 (i)
For the period beginning on the Applicable Funding Date and ending on November 21, 2019 (“**Year1**”), LIBOR plus eleven percent (11%); 

 
 (ii)
For the period beginning on November 22, 2019 and ending on November 21, 2020 (“**Year2**”), LIBOR plus ten percent (10%); 

 
 (iii)
For the period beginning on November 22, 2020 and continuing thereafter (“**Year 3**”),LIBOR plus nine and one half percent (9.5%). 

 
 (c)
“**Interest Payment Date**” means the last Business Day of each month, with the first InterestPayment Date occurring on December 31, 2018. 

 
 (d)
“**Interest Period**” means, with respect to periods in which clause (b) of the definitionof LIBOR applies, the period beginning on the day after the applicable Interest Payment Date and ending on the next Interest Payment Date. 

 
 (e)
“**LIBOR**” means the greater of (a) 2.5% and (b) for any Interest Period, the rate perannum equal to the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of such rate), as published by Reuters (or any other commercially available sourceproviding quotations of such rate as designated by the Lender from time to time) at approximately 11:00 a.m., London time, two (2) business days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on thefirst day of such Interest Period) with a term equivalent to such Interest Period; provided, that in no event shall such rate be less than zero or exceed five percent (5%); and provided further, that if a rate determined under clause (b) is notavailable at such time for such Interest Period, the parties will work in good faith to agree upon an alternative floating rate. 

 
3 

**ARTICLE 4**

**CONVERSION**

4.1 **Conversion Right**

The Holder has the right (the “**Conversion Right**”), from time to time and at any time on or prior to 5:00 p.m. (Torontotime) on the earlier of the Business Day immediately preceding (i) the Maturity Date and (ii) the date fixed for redemption of this Note in accordance with terms hereof, to convert all or any portion of the outstanding Principal Amountplus, at the Holder’s option, all accrued and unpaid Interest with respect to such Principal Amount and any unpaid fees, into Shares, at a price equal to $0.83 per Share (the “**Conversion Price**”). For purposes of this Note, ifthe Conversion Right is exercised on or prior to October 31, 2019, then “**Shares**” means Class A shares in the capital of the Company, and if the Conversion Right is exercised after October 31, 2019, then“**Shares**” means common shares in the capital of the Company. 

Notwithstanding any other provision of this Agreement, theConversion Right shall not be exercisable by the Holder or any person who does not deal at arm’s length with the Holder for purposes of the *Income Tax Act* (Canada) (collectively, “**Holder Related Parties**”) to the extentthat, after giving effect to such conversion, the Holder Related Parties would beneficially own or have a right to acquire shares of the Company that, in aggregate, represent: (i) 25% or more of the votes that could be cast at the annual meeting ofthe shareholders of the Company; or (ii) 25% or more of the fair market value of the issued and outstanding shares of the Company at such time. 

4.2**Exercise of Conversion Right**

The Conversion Right may be exercised by the Lender by completing and signing the notice ofconversion (the “**Conversion Notice**”) and delivering the Conversion Notice and this Note to the Borrower. The Conversion Notice shall provide that the Conversion Right is being exercised, shall specify the amount being converted, andshall set out the date (the “**Issue Date**”) on which Shares are to be issued upon the exercise of the Conversion Right (such date to be no earlier than three (3) Business Days and no later than seven (7) Business Days afterthe day on which the Conversion Notice is issued). The conversion shall be deemed to have been effected immediately prior to the close of business on the Issue Date and the Shares issuable upon conversion shall be deemed to be issued as fully paidand non-assessable at such time. Within seven (7) Business Days after the Issue Date, a certificate for the required number of Common Shares shall be issued to the Lender. If less than all of thePrincipal Amount of this Note is the subject of the Conversion Right, then within seven (7) Business Days after the Issue Date, the Borrowers shall deliver to the Lender a replacement Note in the form hereof in the principal amount of theunconverted principal balance hereof, plus the unconverted portion of any accrued and unpaid Interest and fees, and this Note shall be cancelled. If the Conversion Right is being exercised in respect of the entire Principal Amount of this Note (and,if applicable, all accrued and unpaid Interest and fees), this Note shall be cancelled. 

4.3 **Adjustment of Conversion Price**

The Conversion Price in effect at any date shall be subject to adjustment from time to time as follows: 

 
 (a)
If and whenever at any time prior to the Maturity Date, the Company shall: 

 
 (i)
subdivide or redivide the outstanding Shares into a greater number of Shares; 

 
4 

 (ii)
reduce, combine or consolidate the outstanding Shares into a smaller number of Shares;

 
 (iii)
issue Shares (or securities convertible into or exchangeable for Shares) to the holders of all orsubstantially all of the outstanding Shares by way of stock dividend; or 

 
 (iv)
make a distribution on its outstanding Shares payable in Shares or securities exchangeable for orconvertible into Shares, 

the Conversion Price in effect on the effective date of such subdivision,redivision, reduction, combination or consolidation or on the record date for such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend or other distribution, as the case may be, shall, in the caseof the events referred to in Sections 4.3(a)(i), (iii) and (iv) above, be decreased in proportion to the increase in the number of outstanding Shares resulting from such subdivision, redivision or dividend (including, in the case wheresecurities convertible into or exchangeable for Shares are issued, the number of Shares that would have been outstanding had such securities been converted into or exchanged for Shares on such effective or record date) or shall, in the case of theevents referred to in Section 4.3(a)(ii) above, be increased in proportion to the decrease in the number of outstanding Shares resulting from such reduction, combination or consolidation on such effective or record date. Such adjustment shallbe made successively whenever any event referred to in this Section 4.3(a) shall occur. Any such issue of Shares (or securities convertible into or exchangeable for Shares) by way of a stock dividend or other distribution shall be deemed tohave been made on the record date for the stock dividend or other distribution for the purpose of calculating the number of outstanding Shares under Sections 4.3(b) and (g); to the extent that any such securities are not converted into or exchangedfor Shares prior to the expiration of the conversion or exchange right, the Conversion Price shall be readjusted effective as at the date of such expiration to the Conversion Price which would then be in effect based upon the number of Sharesactually issued on the exercise of such conversion or exchange right. 

 
 (b)
If and whenever at any time prior to the Maturity Date, the Company shall fix a record date for the issuanceof rights, options or warrants to all or substantially all the holders of its outstanding Shares entitling them, for a period expiring not more than forty-five (45) days after such date of issue (such period from the record date to the date ofexpiry being referred to in this Section 4.3(b) as the “**Rights Period**”), to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) (such subscription price per Common Share (inclusive ofany cost of acquisition of securities exchangeable for or convertible into Shares in addition to any direct cost of Shares) being referred to in this Section 4.3(b) as the “**Per Share Cost**”), the Borrowers shall give writtennotice to the Lender with respect thereto (any of such events herein referred to as a “**Rights Offering**”), and the Lender shall have fifteen (15) days after receipt of such notice to elect to convert any or all of the PrincipalAmount of this Note into Shares at the then applicable Conversion Price and otherwise on terms and conditions set out in this Note. If the Lender elects to convert any or all of the Principal Amount of this Note, such conversion shall occurimmediately prior to the record date for the issuance of such rights, options or warrants. If the Lender elects not to convert any of the Principal Amount of this Note, there shall continue to be an adjustment to the Conversion Price as a result ofthe issuance of such rights, options or warrants, in the manner hereinafter provided. The Conversion Price will be adjusted effective immediately after the end of the Rights Period to a price determined by multiplying the Conversion Price in effectimmediately prior to the end of the Rights Period by a fraction: 

 
5 

 (i)
the numerator of which is the aggregate of: 

 
 (A)
the number of Shares outstanding as of the record date for the Rights Offering; and 

 
 (B)
the number determined by dividing the product of the Per Share Cost and: 

 
 1.
where the event giving rise to the application of this Section 4.3(b) was the issue of rights, optionsor warrants to the holders of Shares under which such holders are entitled to subscribe for or purchase additional Shares, the number of Shares so subscribed for or purchased during the Rights Period, or 

 
 2.
where the event giving rise to the application of this Section 4.3(b) was the issue of rights, optionsor warrants to the holders of Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into Shares, the number of Shares for which those securities so subscribed for or purchased during theRights Period could have been exchanged or into which they could have been converted during the Rights Period, 

by the trading price of the Shares on the OTCQX Market (or such other recognized stock exchange or quotation on which theShares are listed for trading) (the “Current**Market Price”)** as of the record date for the Rights Offering; and 

 
 (ii)
the denominator of which is: 

 
 (A)
in the case described in subparagraph 4.3(b)(i)(B)(1), the number of Shares outstanding, or

 
 (B)
in the case described in subparagraph 4.3(b)(i)(B)(2), the number of Shares that would be outstanding if allthe Shares described in subparagraph 4.3(b)(i)(B)(2) had been issued, 

as at the end of the RightsPeriod. 

 
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 (c)
Any Shares owned by or held for the account of the Company or any subsidiary or affiliate (as defined in the*Securities Act* (British Columbia)) of the Company will be deemed not to be outstanding for the purpose of any such computation. 

 
 (d)
If by the terms of the rights, options or warrants referred to in Section 4.3(b), there is more thanone purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible securities so offered,will be calculated for purposes of the adjustment on the basis of: 

(1) the lowest purchase, conversionor exchange price per Common Share, as the case may be, if such price is applicable to all Shares which are subject to the rights, options or warrants, and 

(2) the average purchase, conversion or exchange price per Common Share, as the case may be, if the applicable price isdetermined by reference to the number of Shares acquired. 

 
 (e)
To the extent that any adjustment in the Conversion Price occurs pursuant to this Section 4.3(b) as aresult of the fixing by the Company of a record date for the distribution of rights, options or warrants referred to in this Section 4.3(b), the Conversion Price will be readjusted immediately after the expiration of any relevant exchange,conversion or exercise right to the Conversion Price which would then be in effect based upon the number of Shares actually issued and remaining issuable after such expiration, and will be further readjusted in such manner upon expiration of anyfurther such right. 

 
 (f)
If the Lender has exercised its Conversion Right in accordance herewith during the Rights Period, the Lenderwill, in addition to the Shares to which it is otherwise entitled upon such exercise, be entitled to that number of additional Shares equal to the result obtained when the difference, if any, between the Conversion Price in effect immediately priorto, and the Conversion Price in effect immediately following the end of such Rights Offering pursuant to this Section 4.3(b), is multiplied by the number of Shares received upon the exercise of the Conversion Right during such period, and theresulting product is divided by the Conversion Price as adjusted for such Rights Offering pursuant to this Section 4.3(b); provided that no fractional Shares will be issued. Such additional Shares will be deemed to have been issued to theLender immediately following the end of the Rights Period and a certificate for such additional Shares will be delivered to the Lender within 10 Business Days following the end of the Rights Period. 

 
 (g)
If and whenever at any time prior to the Maturity Date, the Company shall fix a record date for the makingof a distribution to all or substantially all the holders of its outstanding Shares of (i) shares of any class other than Shares (or other than securities convertible into or exchangeable for Shares), or (ii) rights, options or warrants(other than rights, options or warrants referred to in Section 4.3(b)), or (iii) evidences of its indebtedness, or (iv) assets (in each case, other than dividends paid in the ordinary course) then, in each such case, the Borrowersshall give written notice to the Lender with respect thereto, and the Lender shall have fifteen (15) days after receipt of such notice to elect to convert any or all of the Principal Amount of this Note into Shares at the then applicableConversion Price and otherwise on terms and conditions set out in this Note. If the Lender elects to convert any or all of the Principal Amount of this Note, such conversion shall occur immediately prior to the record date for the making of suchdistribution. If the Lender elects not to convert any of the Principal Amount of this Note, there shall continue to be an adjustment to the Conversion Price as a result of the making of such distribution (herein referred to as a “**SpecialDistribution**”), determined in the manner hereafter set out in 4.3(h). In this Section 4.3(g) the term “**dividends paid in the ordinary course**” shall include the value of any securities or other property or assetsdistributed in lieu of cash dividends paid in the ordinary course at the option of shareholders. 

 
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 (h)
In circumstances described in Section 4.3(g), the Conversion Price will be adjusted effectiveimmediately after such record date to a price determined by multiplying the Conversion Price in effect on such record date by a fraction: 

 
 (1)
the numerator of which is: 

(A) the product of the number of Shares outstanding on such record date and the Current Market Price of the Shares on suchrecord date; less 

(B) the aggregate fair market value (as determined by action by the directors of the Company, actingreasonably) to the holders of the Shares of such securities or property or other assets so issued or distributed in the Special Distribution; and 

 
 (2)
the denominator of which is the number of Shares outstanding on such record date multiplied by the CurrentMarket Price of the Shares on such record date. 

Any Shares owned by or held for the account of theCompany or any subsidiary or affiliate (as defined in the *Securities Act* (British Columbia)) of the Company will be deemed not to be outstanding for the purpose of any such computation. 

 
 (i)
In the case of any reclassification of, or other change in, the outstanding Shares pursuant to a Change ofControl Transaction, if the Lender elects not to redeem this Note in accordance with Article 5, the Lender may elect, prior to the effective date of such Change of Control Transaction, to convert any or all of the Principal Amount of this Note intoShares at the then applicable Conversion Price and otherwise on terms and conditions set out in this Note. To exercise such right the Lender must provide a notice in writing to the Borrowers no later than seven days prior to the effective date ofsuch Change of Control Transaction, failing which the Lender’s right to convert this Note as a consequence of such Change of Control Transaction shall cease. If the Lender elects to convert any or all of the Principal Amount of this Note, suchconversion shall occur immediately prior to the effective date of such Change of Control Transaction. If the Lender elects not to convert any of the Principal Amount of this Note, the Conversion Price in effect after the effective date of suchChange of Control Transaction shall be increased or decreased, as the case may be, in proportion to any decrease or increase in the number of outstanding Shares resulting from such Change of Control Transaction so that the Lender, upon exercisingthe Conversion Right after the effective date of such Change of Control Transaction, will be entitled to receive the aggregate number of Shares or other securities, if any, which the Lender would have been entitled to receive as a result of suchChange of Control Transaction if, on the effective date thereof, the Lender had been the registered holder of the number of Shares to which the Lender was theretofore entitled upon exercise of the Conversion Right. 

 
8 

 (j)
In the case of any reclassification of, or other change in, the outstanding Shares (other than a changereferred to in Section 4.3(a), Section 4.3(b), Section 4.3(g) or 4.3(i) hereof), the Conversion Price shall be adjusted in such manner, if any, and at such time, as the Board of Directors of the Company determines to be appropriate ona basis consistent with the intent of this Section 4.3; provided that if at any time a dispute arises with respect to adjustments provided for in this Section 4.3(j), such dispute will be conclusively determined by the auditors of theBorrowers or if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the directors of the Company, acting reasonably, and any such determination will be binding on the Borrowersand the Lender. The Borrowers will provide such auditors or accountants with access to all necessary records of the Borrowers. If and whenever at any time after the date hereof there is a reclassification or redesignation of the Shares outstandingat any time or change of the Shares into other shares or into other securities (other than as set out in Section 4.3(a), (b), (g) or (i)), or a consolidation, amalgamation or merger of the Company with or into any other corporation or otherentity (other than a consolidation, amalgamation or merger which does not result in any reclassification or redesignation of the outstanding Shares or a change of the Shares into other shares and other than as set forth in 5.3(a)(i) or a transfer ofthe undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being called a “**Capital Reorganization**”), the Lender, upon the exercising theConversion Right, after the effective date of such Capital Reorganization, will be entitled to receive in lieu of the number of Shares to which the Lender was theretofore entitled upon such exercise, the aggregate number of shares, other securitiesor other property, if any, which the Lender would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, the Lender had been the registered holder of the number of Shares to which such Lender wastheretofore entitled upon exercise of the Conversion Right. If determined appropriate by action of the directors of the Company, appropriate adjustments will be made as a result of any such Capital Reorganization in the application of the provisionsset forth in this Section 4.3 with respect to the rights and interests thereafter of the Lender to the end that the provisions set forth in this Section 4.3 will thereafter correspondingly be made applicable as nearly as may reasonably bein relation to any shares, other securities or other property thereafter deliverable upon the exercise of the Conversion Right. Any such adjustment must be made by and set forth in an amendment to this Note approved by action by the directors of theCompany, acting reasonably, and will for all purposes be conclusively deemed to be an appropriate adjustment. 

 
9 

 (k)
In any case in which this Section 4.3 shall require that an adjustment shall become effectiveimmediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Lender before the occurrence of such event, the additional Shares issuable upon such conversion by reason ofthe adjustment required by such event before giving effect to such adjustment; provided, however, that the Borrowers shall deliver to the Lender an appropriate instrument evidencing the Lender’s right to receive such additional Shares upon theoccurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Shares declared in favour of holders of record of Shares on and after the Issue Date or such later date as the Lender would, but forthe provisions of this Section 4.3(k), have become the holder of such additional Shares pursuant to Section 4.3(b). 

 
 (l)
The adjustments provided for in this Section 4.3 are cumulative and shall apply to successivesubdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other event resulting in any adjustment under the provisions of this Section, provided that, notwithstanding any other provision of this Section, noadjustment of the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided, however, that any adjustments which by reason of thisSection 4.3(l) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. 

No Conversion Price adjustment will be made to the extent that the Company makes an equivalent distribution to holders of Notes in respect ofsuch Notes. No adjustment to the Conversion Price will be made for distributions or dividends on Shares issuable upon conversion of Notes that have been surrendered for conversion, provided that holders converting their Notes shall be entitled toreceive, in addition to the applicable number of Shares, accrued and unpaid interest payable in cash from, and including, the most recent interest payment date to, but excluding, the date of conversion. 

**ARTICLE 5**

**REDEMPTIONAND PREPAYMENT**

5.1 **No Early Redemption or Prepayment**

Except pursuant to Sections 5.3 and 5.4, the Borrowers shall not be permitted to redeem or repay the Note prior to the Maturity Date withoutthe prior written consent of the Lender. 

5.2 **Notice of Change of Control Transaction**

Upon the occurrence of any event constituting or reasonably likely to constitute a Change of Control Transaction, the Borrowers shall givewritten notice to the Lender of such Change of Control Transaction at least thirty (30) days or, with the prior written consent of the Lender, as soon as reasonably possible prior to the effective date of any such Change of Control Transactionand another written notice on or immediately after the effective date of such Change of Control Transaction (the “**Change of Control Notice**”). 

 
10 

5.3 **Redemption if Change of Control Transaction**

Notwithstanding anything to the contrary herein, upon receipt of a Change of Control Notice with respect to a Change of Control Transaction,the Holder shall, in its sole discretion on or before the closing of the Change of Control Transaction, have the right to require the Borrowers purchase the Note at a price equal to 105% of the then outstanding Principal Amount thereof together, atHolder’s option, with accrued and unpaid Interest and fees (the “**Offer Price**”); provided that, if 90% or more of the Principal Amount outstanding on the date of the Change of Control Notice have been tendered for redemption,the Company will have the right, in its sole discretion, to redeem all of the outstanding Notes at the Offer Price. 

5.4 **Voluntary Prepayment**

Subject to the rest of this Section 5.4, beginning on the first day of Year 2, from time to time the Borrowers shall have the right torepay, in whole or in part, the then outstanding Principal Amount of this Note together with accrued and unpaid Interest and fees, plus the Applicable Premium. For purposes of this Note, “**Applicable Premium**” means, with respect toYear 2, 2% of the Principal Amount being repaid, and with respect to Year 3, 1% of the Principal Amount being repaid. The Borrowers shall notify the Lender in writing of their intent to make prepayment under this Section 5.4 at least thirty(30) days (or such shorter time as is acceptable to the Lender in its sole discretion) prior to the proposed prepayment date, and such notice shall include the Principal Amount, interest, fees and Applicable Premium to be paid on suchprepayment date. Such prepayment will be paid by wire transfer of immediately available funds to the account designated by the Lender. 

**ARTICLE 6**

**SECURITY**

6.1 As security for the Obligations under this Note, each Borrower shall grant to the Collateral Agent, for the benefit of theHolder, a first priority security interest over all of such Borrower’s present and after acquired personal property in which such Borrower has rights, of whatsoever nature or kind and wherever situate, save and except property specificallyexcluded in any general security agreement granted by such Borrower to the Collateral Agent, for the benefit of the Holder, which shall rank *pari passu* between and among the Holders (the “**Security Interest**”). The SecurityInterest shall be evidenced by one or more security agreements entered into between each Borrower and the Holder. 

6.2 This Note isentitled to and shall have the benefit of a cross guarantee by each Borrower and a guaranty by each Subsidiary (collectively, the “**Guarantors**”), of all of the Obligations of the Borrowers to the Lender under or in connection withthis Note in favour of the Lender dated as of the date of this Note (the “**Guarantees**”). As security for such Obligations under the Guarantees, each Guarantor shall grant in favour of the Collateral Agent, for the benefit of theHolder, a first priority security interest over all of such Guarantor’s present and after acquired personal property in which such Guarantor have rights, of whatsoever nature or kind and wherever situate which shall rank *pari passu*between and among the Holders. The security granted to the Collateral Agent, for the benefit of the Holder, by each of the Guarantors shall be evidenced by one or more security agreements entered into between the Guarantors and the Holder. 

 
11 

**ARTICLE 7**

**EVENTS OF DEFAULT**

7.1 Theoccurrence of an “Event of Default” under the Securities Purchase Agreement shall constitute an event of default (“**Event of Default**”) hereunder. 

7.2 Upon and during the continuation of an Event of Default, the Interest Rate shall increase by three 3% per annum, and the Holder shall beentitled to all of the rights and remedies set forth in the Securities Purchase Agreement and available to it under applicable law. 

**ARTICLE 8**

**COVENANTS**

8.1 **Positive Covenants of the Company**

So long as any Obligations remain unpaid, the Company shall perform the covenants and actions as set forth in, and in accordance with, theSecurities Purchase Agreement. 

8.2 **Tax Treatment**

For United States federal income tax purposes, the parties agree to treat the Notes as convertible debt instruments that are excepted from thecontingent payment debt instrument rules of Treas. Reg. § 1.1275- 4. The parties shall file all federal income tax returns and reports in a consistent manner unless otherwise required pursuant to a final “determination” within themeaning of Section 1313 of the Internal Revenue Code of 1986, as amended. 

**ARTICLE 9**

**GENERAL MATTERS**

9.1 **Amalgamation**

The Borrowers acknowledge that if, to the extent permitted under the Securities Purchase Agreement, either Borrower amalgamates or mergerswith any other Person (a) the term “**Company**”, where used herein shall extend to and include the amalgamated or surviving Person, and (b) the term, “**Obligations**”, where used herein shall extend to andinclude the Obligations of the Borrowers and the amalgamated Person. 

9.2 **No Modification or Waiver**

No modification, variation or amendment of any provision of this Note shall be made without the prior written consent of all of the Holders.The Holder shall not, by any act, delay, omission or otherwise, be deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver shall be in writing and executed by an authorized officer of the Holder. Anysuch waiver shall be enforceable only to the extent specifically set forth therein. A waiver by the Holder of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedywhich the Holder would otherwise have on any future occasion, whether similar in kind or otherwise. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER THE LAWSOF THE STATE OF WASHINGTON. 

 
12 

9.3 **Entire Agreement**

This Note together with the Securities Purchase Agreement and Transaction Agreements defined therein constitute the entire agreement betweenthe parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. There are no other agreements between the parties in connection with the subject matter hereof except asspecifically set forth or referred to herein or therein. 

9.4 **Performance by Holder**

If either Borrower fails to perform any of its obligations hereunder, the Holder may, after notice to the Company, but shall not be obligatedto, perform any or all such obligations, and all reasonable costs, charges, expenses, fees, outlays and premiums incurred by the Holder in connection therewith shall be payable by the Borrowers, jointly and severally, forthwith upon demand by theHolder and shall bear interest from the date incurred by the Holder at the Interest Rate then in effect and shall form part of the Obligations. Any such performance by the Holder shall not constitute a waiver by the Holder of any right, power, orprivilege under this Note. 

9.5 **Notice to the Company and the Holder**

Any notice to be given to the Borrowers or the Holder shall be in writing and shall be deemed to be validly given if such notice is deliveredpersonally, by facsimile or electronic transmission or sent by prepaid registered mail, addressed as follows: 

 
 (a)
if to Borrowers, at: 

Cannex Capital Holdings Inc. 

1241 Alberni Street 

Vancouver, British Columbia V6E 4R4 

Canada 

 

                                         

With a copy to (which shall not constitute notice): 

McMillan LLP 

Suite 1500, 1055 West Georgia Street 

Vancouver, BC V6E 4N7 

Canada 

 
 (b)
if to the Holder, at: 

c/o Gotham Green Partners, LLC 

Suite 29A, 489 5th Avenue 

New York, NY 1008 

USA 

 
13 

                                         

With a copy to (which shall not constitute notice): 

Honigman Miller Schwarz and Cohn LLP 

2290 First National Building 

660 Woodward Avenue 

Detroit, MI 48226-3506 

USA 

 

                                         

Notice of change of address shall also be governed by this Section 9.5. Any notice given by personal delivery shall be deemed to havebeen given when received by either Borrower or the Holder, and by prepaid registered mail shall be deemed to have been received by either Borrower or the Holder on the third (3rd) Business Dayafter the day of such mailing and any notice so given by facsimile or electronic transmission on a Business Day before 5:00 p.m. (local time of the recipient) shall be deemed to have been received by either Borrower or the Holder on such BusinessDay and otherwise shall be deemed to be received the next Business Day. 

9.6 **Replacement of Note**

If this Note shall become mutilated or be lost, stolen or destroyed and in the absence of notice that the Note has been acquired by a *bonafide*purchaser, the Borrowers shall issue a new Note upon surrender and cancellation of the mutilated Note, or, in the event that a Note is lost, stolen or destroyed, in lieu of and in substitution for the same, and the substituted Note shall bein the form hereof and the Holder shall be entitled to benefits hereof. In case of loss, theft or destruction, the Holder shall furnish to the Borrowers such evidence of such loss, theft or destruction as shall be satisfactory to the Borrowers intheir discretion acting reasonably together with an indemnity in form and substance mutually acceptable to the Borrowers and the Holder, each acting reasonably. The applicant shall pay reasonable expenses incidental to the issuance of any such newNote. 

9.7 **Successors and Assigns**

This Note shall inure to the benefit of the Holder and its successors and its assigns and shall be binding upon the Borrowers and each of theirsuccessors. 

9.8 **Assignment**

NoParty may assign its rights or benefits under this Note except that the Holder may assign all or any portion of its rights and benefits under this Note to any Person or Persons who may purchase all or part of this Note e, subject to compliance withapplicable securities laws. 

 
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9.9 **Registered Obligations**

The Borrowers shall keep a “register” in which the Borrowers shall provide for the recordation of the name and address of, and theamount of outstanding principal and interest owing to, the Holder and its Assignees. The entries in the register shall be conclusive evidence of the amounts due and owing to the Holder or its Assignees in the absence of manifest error. TheBorrowers, the Holder, and its successors and assigns shall treat each Person whose name is recorded in the register pursuant to the terms hereof as the Holder for all purposes. Notwithstanding anything to the contrary contained in this Note, theNote is a registered obligations and the right, title and interest of the Holder and its Assignees in and to this Note shall be transferable only upon notation of such transfer in the register. This Section 9.9 shall be construed so that theNote is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the United States Internal Revenue Code of 1986, as amended (the “Code”), and any related regulations (and anyother relevant or successor provisions of the Code or such regulations). The register shall be available for inspection by the Holder and its successors and assigns at from time to time upon reasonable prior notice. 

9.10 **Invalidity of Provisions**

Each ofthe provisions contained in this Note is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provisionhereof or thereof. 

9.11 **Governing Law**

THIS NOTE AND EACH OTHER TRANSACTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OFNEW YORK WITHOUT REFERENCE TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 

9.12 **Maximum Rate of Interest**

Notwithstanding any other provisions of this Note, if the amount of any interest, premium, fees or other monies or any rate of interestrequired to be paid under this Note or any other document entered into in connection with this Note would, but for this provision, contravene any applicable Law, then such amount or rate of interest shall be reduced to such maximum amount as wouldnot contravene such provisions; and to the extent that any excess has been charged or received the Holder shall apply such excess against the outstanding Obligations and refund to the Borrowers any further excess amount. 

9.13 **Time of Essence**

Time shall be ofthe essence of this Note and a forbearance by the Holder of the strict application of this provision shall not operate as a continuing or subsequent forbearance. 

9.14 **Waiver**

Each Borrower hereby waivespresentment, notice of dishonor, protest and notice of protest. No failure or delay by the Holder in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right exclude other furtherexercise thereof or the exercise of any other right. 

 
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9.15 **Waiver of Trial by Jury**

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS NOTE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,ACTION OR CAUSE OF ACTION ARISING HEREUNDER OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY TRANSACTION AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASEWHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY TO THIS NOTE HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT AJURY, AND THAT ANY PARTY TO THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

9.16 **Obligations Joint and Several**

Allobligations of the Borrowers under this Note are joint and several. 

**[Signature Page Follows]**

 
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**IN WITNESS WHEREOF**, each Borrower has caused this Note to be executed by its dulyauthorized officer as of the date first written above. 

 
**CANNEX CAPITAL HOLDINGS INC.**Per:                     Name: Anthony DuttonTitle: 
Chief Executive Officer

 
**CANNEX HOLDINGS (NEVADA) INC.**Per:                     Name: Anthony DuttonTitle: President
**ACCEPTED AND AGREED** as of the date first written above by: 

 

**GOTHAM GREEN FUND 1, L.P.**

**By Gotham Green GP 1, LLC, its General Partner**
Per:  Name: Jason AdlerTitle: Managing Member

**IN WITNESS WHEREOF,** each Borrower has caused this Note to be executed by its dulyauthorized officer as of the date first written above. 

 
**CANNEX CAPITAL HOLDINGS INC.**Per:  Name: Title: 
 
**CANNEX HOLDINGS (NEVADA) INC.**Per:  Name: Title: 
**ACCEPTED AND AGREED** as of the date first written above by: 

 

**GOTHAM GREEN FUND 1, L.P.**

**By Gotham Green GP 1, LLC, its General Partner**
Per:                     Name: Jason AdlerTitle: Managing Member