Exhibit 4.2


 


NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH
THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


UNLESS PERMITTED UNDER SECURITIES LEGISLATION,
THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE1


 


 


PREFERRED INVESTMENT OPTION


 


INMED PHARMACEUTICALS INC.


 


	Preferred Investment Option Shares: _______	 	Initial Issuance Date: ______, 2022
	 	 	 
	 	 	Initial Exercise Date: ______, 2022


 


THIS PREFERRED INVESTMENT
OPTION (the “Preferred Investment Option”) certifies that, for value received, _____________ or its assigns (the
“Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date set forth above (the “Initial Exercise Date”) and on or prior to 5:00
p.m. (New York City time) ____________2 (the “Termination Date”) but not thereafter, to subscribe for
and purchase from InMed Pharmaceuticals Inc., a company incorporated under the laws of the Province of British Columbia (the
“Company”), up to ______ shares (as subject to adjustment hereunder, the “Preferred Investment Option
Shares”) of Common Shares. The purchase price of one Common Share under this Preferred Investment Option shall be equal to
the Exercise Price, as defined in Section 2(b).


 


Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated November ___, 2022, among the Company and the purchasers signatory
thereto.


 





 











	1	Insert the date that is four (4) months and a day after the
closing date



	2	Insert the date that is the seven (7) year anniversary of
the Initial Exercise Date, provided that, if such date is not a Trading Day, insert the immediately following Trading Day.




 






     


     


    

 


Section 2. Exercise.


 


a) Exercise
of Preferred Investment Option. Exercise of the purchase rights represented by this Preferred Investment Option may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to
the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in
the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period (as defined below) following the date of exercise as aforesaid, the
Holder shall deliver the aggregate Exercise Price for the Preferred Investment Option Shares specified in the applicable Notice of
Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in
Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor
shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Preferred Investment Option to the
Company until the Holder has purchased all of the Preferred Investment Option Shares available hereunder and the Preferred
Investment Option has been exercised in full, in which case, the Holder shall surrender this Preferred Investment Option to the
Company for cancellation within five (5) Business Days of the date on which the final Notice of Exercise is delivered to the
Company. Partial exercises of this Preferred Investment Option resulting in purchases of a portion of the total number of Preferred
Investment Option Shares available hereunder shall have the effect of lowering the outstanding number of Preferred Investment Option
Shares purchasable hereunder in an amount equal to the applicable number of Preferred Investment Option Shares purchased. The Holder
and the Company shall maintain records showing the number of Preferred Investment Option Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such
notice. The Holder and any assignee, by acceptance of this Preferred Investment Option, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion of the Preferred Investment Option Shares hereunder,
the number of Preferred Investment Option Shares available for purchase hereunder at any given time may be less than the amount
stated on the face hereof.


 


b) Exercise
Price. The exercise price per share of Common Shares under this Preferred Investment Option shall be $____, subject to
adjustment hereunder (the “Exercise Price”).


 






    2


     


    

 


c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the resale of the Preferred Investment Option Shares by the Holder, then this Preferred
Investment Option may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Preferred Investment Option Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:


 


(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of
Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP
on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Shares on the
principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the
applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading
Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of
Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of
“regular trading hours” on such Trading Day;


 


(B) = the Exercise
Price of this Preferred Investment Option, as adjusted hereunder; and


 


(X) = the number
of Preferred Investment Option Shares that would be issuable upon exercise of this Preferred Investment Option in accordance with the
terms of this Preferred Investment Option if such exercise were by means of a cash exercise rather than a cashless exercise.


 


“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on The Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d)
in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith
by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date)
on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are
not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on The Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Shares so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected
in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.


 






    3


     


    

 


If Preferred Investment
Option Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Preferred Investment Option Shares shall take on the characteristics of the Preferred Investment Option being exercised,
and the holding period of the Preferred Investment Option Shares being issued may be tacked
on to the holding period of this Preferred Investment Option. The Company agrees not to take any position contrary to this Section
2(c).


 


d) Mechanics
of Exercise.


 


i. Delivery
of Preferred Investment Option Shares Upon Exercise. The Company shall cause the Preferred Investment Option Shares purchased hereunder
to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account
with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Preferred
Investment Option Shares to or resale of the Preferred Investment Option Shares by the Holder or (B) the Preferred Investment Option Shares
are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of
the Preferred Investment Options), and otherwise by physical delivery of a certificate, registered in the Company’s share register
in the name of the Holder or its designee, for the number of Preferred Investment Option Shares to which the Holder is entitled pursuant
to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the later of (i) two (2) Trading
Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price
to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the
Notice of Exercise (such date, the “Preferred Investment Option Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Preferred Investment Option
Shares with respect to which this Preferred Investment Option has been exercised, irrespective of the date of delivery of the Preferred
Investment Option Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received
within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Preferred Investment Option Shares
subject to a Notice of Exercise by the Preferred Investment Option Share Delivery Date, the Company shall pay to the Holder, in cash,
as liquidated damages and not as a penalty, for each $1,000 of Preferred Investment Option Shares subject to such exercise (based on the
VWAP of the Common Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on
the third Trading Day after such Preferred Investment Option Share Delivery Date) for each Trading Day after such Preferred Investment
Option Share Delivery Date until such Preferred Investment Option Shares are delivered or Holder rescinds such exercise. The Company agrees
to maintain a transfer agent that is a participant in the FAST program so long as this Preferred Investment Option remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery
of the Notice of Exercise.


 


ii. Delivery
of New Preferred Investment Options Upon Exercise. If this Preferred Investment Option shall have been exercised in part, the
Company shall, at the request of a Holder and upon surrender of this Preferred Investment Option certificate, at the time of
delivery of the Preferred Investment Option Shares, deliver to the Holder a new Preferred Investment Option evidencing the rights of
the Holder to purchase the unpurchased Preferred Investment Option Shares called for by this Preferred Investment Option, which new
Preferred Investment Option shall in all other respects be identical with this Preferred Investment Option.


 


iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Preferred Investment Option Shares
pursuant to Section 2(d)(i) by the Preferred Investment Option Share Delivery Date, then the Holder will have the right to rescind
such exercise.


 






    4


     


    

 


iv. Compensation
for Buy-In on Failure to Timely Deliver Preferred Investment Option Shares Upon Exercise. In addition to any other rights
available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Preferred Investment Option
Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Preferred Investment
Option Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction
or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the
Holder of the Preferred Investment Option Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the
amount obtained by multiplying (1) the number of Preferred Investment Option Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) at the option of the Holder, either reinstate the portion of the Preferred Investment Option and equivalent
number of Preferred Investment Option Shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver Common Shares upon exercise of
the Preferred Investment Option as required pursuant to the terms hereof.


 


v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of
this Preferred Investment Option. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price or round up to the next whole share.


 


vi. Charges,
Taxes and Expenses. Issuance of Preferred Investment Option Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such Preferred Investment Option Shares, all of which taxes
and expenses shall be paid by the Company, and such Preferred Investment Option Shares shall be issued in the name of the Holder or
in such name or names as may be directed by the Holder; provided, however, that, in the event that Preferred
Investment Option Shares are to be issued in a name other than the name of the Holder, this Preferred Investment Option when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The
Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery
of the Preferred Investment Option Shares.


 






    5


     


    

 


vii. Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this
Preferred Investment Option, pursuant to the terms hereof.


 


e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Preferred Investment Option, and a Holder shall not have
the right to exercise any portion of this Preferred Investment Option, pursuant to Section 2 or otherwise, to the extent that after
giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below).  For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and
its Affiliates and Attribution Parties shall include the number of Common Shares issuable upon exercise of this Preferred Investment
Option with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Preferred Investment Option beneficially owned by the Holder or any
of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common Shares Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To
the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Preferred Investment Option
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of
which portion of this Preferred Investment Option is exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Preferred Investment Option is
exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Preferred Investment Option is exercisable, in each case subject to the Beneficial Ownership Limitation, and the
Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Common Shares, a
Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding.  Upon the written or
oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Common
Shares then outstanding.  In any case, the number of outstanding Common Shares shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Preferred Investment Option, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial
Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Preferred Investment
Options, 9.99%) of the number of shares of the Common Shares outstanding immediately after giving effect to the issuance of Common
Shares issuable upon exercise of this Preferred Investment Option. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Shares outstanding immediately after giving effect to the issuance of Common
Shares upon exercise of this Preferred Investment Option held by the Holder and the provisions of this Section 2(e) shall continue
to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder
of this Preferred Investment Option.


 






    6


     


    

 


Section 3. Certain
Adjustments.


 


a) Share
Dividends and Splits. If the Company, at any time while this Preferred Investment Option is outstanding: (i) pays a share dividend
or otherwise makes a distribution or distributions on shares of its Common Shares or any other equity or equity equivalent securities
payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this
Preferred Investment Option), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of the Common Shares
any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this
Preferred Investment Option shall be proportionately adjusted such that the aggregate Exercise Price of this Preferred Investment Option
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or re-classification.


 


b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any
class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common
Shares acquirable upon complete exercise of this Preferred Investment Option (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled
to participate in such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


c) Pro Rata Distributions.
During such time as this Preferred Investment Option is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Preferred Investment Option, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon
complete exercise of this Preferred Investment Option (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (provided,
however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any Common Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for
the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).


 






    7


     


    

 


d) Fundamental
Transaction. If, at any time while this Preferred Investment Option is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company
(and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and
has been accepted by the holders of 50% or more of the outstanding Common Shares or 50% or more of the voting power of the common
equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares is
effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires 50% or more of the outstanding Common Shares or 50% or more of the voting power of the
common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Preferred Investment Option, the Holder shall have the right to receive, for each Preferred Investment Option Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder
(without regard to any limitation in Section 2(e) on the exercise of this Preferred Investment Option), the number of Common Shares
of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of Common Shares for which this Preferred Investment Option is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Preferred Investment Option). For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on
the amount of Alternate Consideration issuable in respect of one share of Common Shares in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Preferred Investment Option following such Fundamental Transaction.
Notwithstanding anything to the contrary but subject to the rules and regulations of the Trading Market, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at
any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Preferred Investment Option from the Holder by paying
to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this
Preferred Investment Option on the date of the consummation of such Fundamental
Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s
control, including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company
or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the
unexercised portion of this Preferred Investment Option, that is being offered and paid to the holders of Common Shares of the
Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, shares or any combination
thereof, or whether the holders of Common Shares are given the choice to receive from among alternative forms of consideration in
connection with the Fundamental Transaction; provided, further, that if holders of Common Shares of the
Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Shares will be deemed to
have received Common Shares of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such
Fundamental Transaction. “Black Scholes Value” means the value of this Preferred Investment Option based on the
Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation
of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated
Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately
following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any
non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning
on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the
consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request
pursuant to this Section 3(d) and (D) a remaining option time equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black
Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election
(or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Preferred Investment Option in accordance with the provisions of this Section 3(d) pursuant to
written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this
Preferred Investment Option a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Preferred Investment Option which is exercisable for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of this Preferred
Investment Option (without regard to any limitations on the exercise of this Preferred Investment Option) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into
account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this
Preferred Investment Option immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Preferred Investment Option referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Preferred Investment Option
with the same effect as if such Successor Entity had been named as the Company herein. For the avoidance of doubt, the Holder shall
be entitled to the benefits of the provisions of this Section 3(d) regardless of (i) whether the Company has sufficient authorized
Common Shares for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise
Date.


 






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e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of
the number of Common Shares (excluding treasury shares, if any) issued and outstanding.


 


f) Notice
to Holder.


 


i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Preferred Investment Option Shares and setting forth a brief statement of the facts requiring such adjustment.


 


ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall
authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Shares, any consolidation or merger to which the Company (and all of its Subsidiaries, taken as a whole) is a party, any
sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares
is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its
last email address as it shall appear upon the Preferred Investment Option Register of the Company, at least five (5) calendar days prior
to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders
of the Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their shares
of the Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer
or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Preferred
Investment Option constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K or otherwise make public disclosure
of such information. The Holder shall remain entitled to exercise this Preferred Investment Option during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.


 


Section 4. Transfer
of Preferred Investment Option.


 


a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Preferred Investment Option and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender of this Preferred Investment Option at the principal
office of the Company or its designated agent, together with a written assignment of this Preferred Investment Option substantially
in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver
a new Preferred Investment Option or Preferred Investment Options in the name of the assignee or assignees, as applicable, and in
the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Preferred
Investment Option evidencing the portion of this Preferred Investment Option not so assigned, and this Preferred Investment Option
shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Preferred Investment Option to the Company unless the Holder has assigned this Preferred Investment Option in full,
in which case, the Holder shall surrender this Preferred Investment Option to the Company within three (3) Trading Days of the date
on which the Holder delivers an assignment form to the Company assigning this Preferred Investment Option in full. The Preferred
Investment Option, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Preferred
Investment Option Shares without having a new Preferred Investment Option issued.


 






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b) New
Preferred Investment Option. This Preferred Investment Option may be divided or combined with other Preferred Investment Options
upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and
denominations in which new Preferred Investment Options are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute
and deliver a new Preferred Investment Option or Preferred Investment Options in exchange for the Preferred Investment Option or
Preferred Investment Options to be divided or combined in accordance with such notice. All Preferred Investment Options issued on
transfers or exchanges shall be dated the Initial Issuance Date of this Preferred Investment Option and shall be identical with this
Preferred Investment Option except as to the number of Preferred Investment Option Shares issuable pursuant thereto.


 


c) Preferred
Investment Option Register. The Company shall register this Preferred Investment Option, upon records to be maintained by the
Company for that purpose (the “Preferred Investment Option Register”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the registered Holder of this Preferred Investment Option as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to
the contrary.


 


d) Transfer
Restrictions. If, at the time of the surrender of this Preferred Investment Option in connection with any transfer of this
Preferred Investment Option, the transfer of this Preferred Investment Option shall not be either (i) registered pursuant to an
effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible
for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the
Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Preferred Investment Option, as
the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.


 


e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Preferred Investment
Option and, upon any exercise hereof, will acquire the Preferred Investment Option Shares issuable upon such exercise, for its own
account and not with a view to or for distributing or reselling such Preferred Investment Option Shares or any part thereof in
violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the
Securities Act.


 


Section 5. Miscellaneous.


 


a) No
Rights as Shareholder Until Exercise; No Settlement in Cash. This Preferred Investment Option does not entitle the Holder to any
voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section
2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Preferred Investment Option
Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and
Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Preferred Investment
Option.


 


b) Loss,
Theft, Destruction or Mutilation of Preferred Investment Option. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Preferred Investment Option or any share certificate
relating to the Preferred Investment Option Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which, in the case of the Preferred Investment Option, shall not include the posting of any bond), and upon surrender and cancellation
of such Preferred Investment Option or share certificate, if mutilated, the Company will make and deliver a new Preferred Investment Option
or share certificate of like tenor and dated as of such cancellation, in lieu of such Preferred Investment Option or share certificate.


 


c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.


 


d) Authorized
Shares.


 


The Company covenants
that, during the period the Preferred Investment Option is outstanding, it will reserve from its authorized and unissued Common Shares
a sufficient number of shares to provide for the issuance of the Preferred Investment Option Shares upon the exercise of any purchase
rights under this Preferred Investment Option. The Company further covenants that its issuance of this Preferred Investment Option shall
constitute full authority to its officers who are charged with the duty of issuing the necessary Preferred Investment Option Shares upon
the exercise of the purchase rights under this Preferred Investment Option. The Company will take all such reasonable action as may be
necessary to assure that such Preferred Investment Option Shares may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that
all Preferred Investment Option Shares which may be issued upon the exercise of the purchase rights represented by this Preferred Investment
Option will, upon exercise of the purchase rights represented by this Preferred Investment Option and payment for such Preferred Investment
Option Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens
and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).


 






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Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Preferred Investment Option,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Preferred Investment Option against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value of any Preferred Investment Option Shares above the amount
payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable Preferred Investment Option Shares upon
the exercise of this Preferred Investment Option and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations
under this Preferred Investment Option.


 


Before taking any
action which would result in an adjustment in the number of Preferred Investment Option Shares for which this Preferred Investment Option
is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto,
as may be necessary from the Trading Market or any public regulatory body or bodies having jurisdiction thereof, as applicable.


 


e) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Preferred Investment Option
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Preferred Investment Option (whether brought against a party hereto or their
respective affiliates, directors, officers, stockholders, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Notwithstanding
the foregoing, the foregoing provisions will not apply to any claims arising under the Securities Act or the Exchange Act, or any
claim in which exclusive jurisdiction is vested in a court or forum other than the state or federal courts of the City of New York,
Borough of Manhattan or for which these courts do not have subject matter jurisdiction. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Preferred Investment Option and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Preferred
Investment Option, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.


 


f) Restrictions.
The Holder acknowledges that the Preferred Investment Option Shares acquired upon the exercise of this Preferred Investment Option,
if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and
federal securities laws.


 






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g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Preferred Investment Option, if the Company willfully and knowingly fails to comply with any provision of this Preferred
Investment Option, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.


 


h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized
overnight courier service, addressed to the Company, at 310-815 W Hastings St., Vancouver, BC, Canada V6C 1B4, Attention: Chief
Financial Officer, facsimile number: +1 (778) 945-6800, email address: warrants@inmedpharma.com, or such other facsimile number,
email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by or e-mail, or
sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder
appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number
or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or
via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.


 


i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Preferred Investment
Option to purchase Preferred Investment Option Shares, and no enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of any Common Shares or as a shareholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.


 


j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Preferred Investment Option. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Preferred Investment Option and
hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be
adequate.


 


k) Successors
and Assigns. Subject to applicable securities laws, this Preferred Investment Option and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this Preferred Investment Option are intended to be for the benefit of any Holder
from time to time of this Preferred Investment Option and shall be enforceable by the Holder or holder of Preferred Investment
Option Shares.


 






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l) Amendment.
This Preferred Investment Option may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder or the beneficial owner of this Preferred Investment Option, on the other hand.


 


m) Severability.
Wherever possible, each provision of this Preferred Investment Option shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Preferred Investment Option shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Preferred Investment Option.


 


n) Headings.
The headings used in this Preferred Investment Option are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Preferred Investment Option.


 


********************


 


(Signature Page Follows)


 



    13


     


    

 


IN WITNESS WHEREOF, the Company
has caused this Preferred Investment Option to be executed by its officer thereunto duly authorized as of the date first above indicated.


 


 


	 	INMED PHARMACEUTICALS INC.
	 	 	 
	 	By:	      
	 	 	Name:         
	 	 	Title:


 




    14


     


    

 


NOTICE OF EXERCISE


 


TO: INMED
PHARMACEUTICALS INC.


 


(1) The undersigned hereby elects
to purchase ________ Preferred Investment Option Shares of the Company pursuant to the terms of the attached Preferred Investment Option
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.


 


(2) Payment shall take the form
of (check applicable box):


 


☐ in lawful money of the
United States; or


 


☐ if permitted the
cancellation of such number of Preferred Investment Option Shares as is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Preferred Investment Option with respect to the maximum number of Preferred Investment Option
Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).


 


(3) Please issue said Preferred
Investment Option Shares in the name of the undersigned or in such other name as is specified below:


 


_______________________________


 


The Preferred Investment Option Shares shall be
delivered to the following DWAC Account Number:


_______________________________


 


_______________________________


 


_______________________________


 


(4) Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.


 





	[SIGNATURE OF HOLDER]
	 
	Name of Investing Entity:
	 	 
	 	 
	Signature of Authorized Signatory of Investing
Entity:
	 	 
	 
	Name of Authorized Signatory:
	 	 
	 
	Title of Authorized Signatory:
	 	 
	 
	Date:
	 	 


 







    15


     


    

 


ASSIGNMENT FORM


 


(To assign the foregoing
Preferred Investment Option, execute this form and supply required information. Do not use this form to purchase shares.)


 


FOR VALUE RECEIVED, the foregoing
Preferred Investment Option and all rights evidenced thereby are hereby assigned to


 


	Name:	 	
	 	 	(Please Print)
	Address:	 	 
	 	 	
	 	 	(Please Print)
	 	 	 
	Phone Number:	 	
	 	 	 
	Email Address:	 	
	 	 	 
	Dated:	 _______________ __, ______	 	 
	 	 	 
	Holder’s Signature:	      	 	 	 
	 	 	 
	Holder’s Address:		 	 	 


  


 


 


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