PART II AND PART III - PRELIMINARY OFFERING CIRCULAR DATED FEBRUARY 17, 2017

True Leaf Medicine International Ltd.

Head Office

100 Kalamalka Lake Road, Unit 32
Vernon, British Columbia V1T 9G1
778-389-9933

https://trueleafpet.com/

up to

12,000,000

COMMON SHARES

SEE "SECURITIES BEING OFFERED" AT PAGE 59

Sales of these securities will commence as soon as practicable after this offering circular has been qualified by the Securities and Exchange Commission.

This offer will terminate on the earlier of: (1) the sale of the maximum number of common shares offered hereby, (2) one year from the date this offering begins, or (3) a date prior to one year from the date this offering begins that is so determined by our board of directors. Since there is no minimum amount of securities that must be purchased,

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all investor funds will be available to us on commencement of this Offering on one or more closings, which may take place at our discretion at any time. Investor funds will not be returned even if an insufficient number of shares are sold to cover the expenses of this offering and provide net proceeds to us.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, THE COMPANY ENCOURAGES YOU TO REFER TO www.investor.gov.

This offering is inherently risky. See "Risk Factors" on page 3.

The company is following the "offering circular" format of disclosure under Regulation A.

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE COMPANY'S SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

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This offering circular contains forward-looking statements that involve risk and uncertainties. These statements relate to financial conditions and prospects, lending risks, plans for future business development and marketing activities, capital spending and financing sources, capital structure, the effects of regulation, and competition and the prospective business of the company. In some cases, these statements can be identified with forward looking words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "project," "plan," "will," "would". Investors should be aware that all forward-looking statements could differ materially from those anticipated in these forward-looking statements based on many factors. The company believes these factors include, but are not limited to, the "Risk Factors" found on page 3 of this offering circular. These factors should not be construed as exclusive and should be read in conjunction with other cautionary statements in this offering circular.

CURRENCY AND EXCHANGE RATES

All dollar amounts in this offering circular are expressed in Canadian dollars unless otherwise indicated. Our accounts are maintained in Canadian dollars and our financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.  All references to "U.S. dollars", "USD", or "US$" are in United States dollars.

The following table sets forth the rate of exchange for the Canadian dollar (expressed in United States dollars) in effect at the end of the periods indicated. The table also indicates the average of the exchange rates in effect during such periods and the high and low exchange rates during such periods based on the noon rate of exchange as reported by the Bank of Canada for conversion of Canadian dollars into United States dollars.

The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

The existence of material uncertainties may cast significant doubt on our ability to continue as a going concern. Our auditor has issued an opinion on our consolidated financial statements which states that the consolidated financial statements were prepared assuming we will continue as a going concern and further states that our recurring losses from operations, shareholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise may cast significant doubt on our ability to continue as a going concern.

Our success depends in part on our ability to attract and retain additional key skilled professionals which we may or may not be able to do. Our failure to do so could prevent us from achieving our goals or becoming profitable.  Our success will depend on the ability of our directors and officers to develop our business and manage our operations. It will also depend on our ability to attract and retain key quality assurance, scientific, sales, public relations, and marketing staff or consultants once operations begin. The loss of any key person or the inability to find and retain new key persons could have a material adverse effect on our business. Competition for sales and marketing staff as well as officers and directors - can be intense; therefore, no assurance can be provided that we will be able to attract or retain key personnel in the future. This may adversely impact our operations.

We will need significant amount of capital to carry out our proposed business plan. Unless we are able to raise sufficient funds, we may be forced to discontinue our operations.  We are in the development stage and will likely operate at a loss until our business becomes established. We will require additional financing in order to fund future operations. Our ability to secure any required financing in order to commence and sustain our operations will depend, in part, upon prevailing capital market conditions, as well as our business success.  There can be no assurance that we will be successful in our efforts to secure any additional financing or additional financing on terms satisfactory to our management. If additional financing is raised by issuing common shares, control may change and shareholders may suffer additional dilution. If adequate funds are not available or they are unavailable on acceptable terms, we may be required to scale back our business plan or cease operating.

We are a start-up company with limited revenues. There is no assurance that our future operations will result in revenues or profits. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease our operations.  We are a start-up company and we have limited revenues. Our proposed marijuana production business cannot move forward until we receive approval from Health Canada. Our success in the interim depends, in part, upon our ability to persuade customers to purchase our branded pet products which may be more expensive than other products available in the pet industry. If we are unable to attract and retain customers, or if we are not able to do so in a manner that results in profitability, we may have to suspend or cease operations.

We are subject to significant risks associated with introducing new products including the risk that our new product developments will not produce sufficient sales to recoup our investment. Our pet support supplements and chews include ingredients not traditionally found in such products. Our success will depend on our ability to build a following for our products. We cannot assure you that we will be successful in achieving market acceptance of our products. Our failure to successfully market and build a customer base for our products could harm our ability to grow our business and could have a material adverse effect on our business, results of operations and financial condition.

We may not be able to successfully implement our growth strategy on a timely basis or at all. Our future success depends, in large part, on our ability to implement our growth strategy, including expanding distribution in Canada, United States and Europe, attracting new consumers to our brand, introducing new products and product line extensions, and expanding into new markets. Our ability to implement this growth strategy depends, among other things, on our ability to:

• enter into distribution and other strategic arrangements with retailers and other potential distributors of our products;
• expand and maintain brand loyalty;
• effectively compete with specialty pet products;
• secure shelf space in stores;
• increase our brand recognition by effectively implementing our marketing strategy and advertising initiatives;
• develop new products and product line extensions that appeal to consumers;
• maintain sources for the required supply of quality raw ingredients to meet our growing demand; and
• identify and successfully enter and market our products in new geographic markets and market segments.

We may not be able to successfully implement our growth strategy and may need to change our strategy. If we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful, our business, financial condition and results of operations may be materially adversely affected.

We rely on co-packers to provide our supply of pet supplement and treat products. Any failure by co-packers to fulfill their obligations or any termination or renegotiation of our co-packing agreements could adversely affect our results of operations. We have supply agreements with co-packers that require them to provide us with specific finished products. We rely on co-packers as our sole-source for our products. The failure for any reason of a co-packer to fulfill its obligations under the applicable agreements with us or the termination or renegotiation of any such co-packing agreement could result in disruptions to our supply of finished goods and have an adverse effect on our results of operations. Additionally, from time to time, a co-packer may experience financial difficulties, bankruptcy, or other business disruptions which could disrupt our supply of finished goods. It may also require that we incur additional expenses from the need to provide financial accommodations to the co-packer or taking other steps to minimize or avoid supply disruption, such as establishing a new co-packing arrangement with another provider. During an economic downturn, our co-packers may be more susceptible to experiencing such financial difficulties, bankruptcies or other business disruptions. A new co-packing arrangement may not be available on terms as favorable to us as the existing co-packing arrangement, if at all.

If we do not manage our supply chain effectively, including inventory levels, our business, financial condition and results of operation may be adversely affected. The inability of any supplier, co-packer, third-party distributor or transportation provider to deliver or perform for us in a timely or cost-effective manner could cause our operating costs to increase and our profit margins to decrease. We must continuously monitor our inventory and product mix against forecasted demand or risk having inadequate supplies to meet consumer demand as well as having too much inventory on hand that may reach its expiration date and become unsaleable. If we are unable to manage our supply chain effectively and ensure that our products are available to meet consumer demand, our operating costs could increase and our profit margins could decrease.

Failure by our transportation providers to deliver our products on time or at all could result in lost sales. We use third-party transportation providers for our product shipments. We rely on a number of different providers for our shipments based on cost efficiency and availability at the time of shipping. Transportation services include scheduling and coordinating transportation of finished products to our customers, shipment tracking and freight dispatch services. Our use of transportation services for shipments is subject to various risks. One risk is that increases in fuel prices would raise our shipping costs. Another risk is that employee strikes or inclement weather may impact the ability of providers to provide delivery services that adequately meet our shipping needs including adequate refrigeration while in-transit. Any such change could cause us to incur costs and expend resources. Moreover, in the future we may not be able to obtain terms as favorable as those we receive from the third-party transportation providers that we currently use which, in turn, would increase our costs and thereby adversely affect our business, financial condition, and results of operations.

We may face difficulties as we expand in and into countries in which we have no prior operating experience. We have recently launched sales of our products in the United States and Europe. We intend to continue to expand in and into countries in which we have no prior operating experience. From time to time, we expect to encounter foreign economic, political, regulatory, personnel, technological, and language barriers and other risks that may increase our expenses or delay our ability to become profitable in such countries. These risks include:

• the risk that we must spend significant amounts of time and money to build brand recognition without certainty that we will be successful;
• currency fluctuations, including, without limitation, fluctuations in the foreign exchange rate of the Euro, British Pound, Canadian dollar, and the U.S. dollar;
• the difficulty of enforcing agreements and collecting receivables through some foreign legal systems;
• potentially longer payment cycles and greater difficulty in collecting accounts;
• changes in local tax laws, tax rates in some countries that may exceed those of the United States or Canada lower earnings due to withholding requirements or the imposition of tariffs, exchange controls or other restrictions;
• changes in economic conditions, consumer preferences, or demand for our products in these markets
• the credit risk of local customers and distributors;
• unexpected changes in legal, regulatory or tax requirements;
• differences in culture and trends in foreign countries with respect to pets and pet care;
• the risk that certain governments may adopt regulations or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including nationalization of private enterprise; and
• potential non-compliance with applicable currency exchange control regulations, transfer pricing regulations or other similar regulations;

In addition, our expansion into new countries may require significant resources and the efforts and attention of our management and other personnel, which will divert resources from our existing business operations. As we expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our operations outside of Canada.

Competition in the markets in which we operate, including internet-based competition, is strong. If we are unable to compete effectively, our ability to generate sales may suffer and our operating income and net income could decline. We are one of many companies in the consumable pet products market with no measurable percentage of that market. Our competition in the healthy feeding systems and healthy consumable products markets are both domestic and foreign companies, many of whom manufacture their products in low cost areas such as India, East Asia, Southeast Asia, and Mexico. Many of these companies also have more brand awareness. We are still building our market presence. Any reputation that we may successfully gain with retailers for quality products does not necessarily translate into name recognition or increased market share with the end consumer.

We compete with a significant number of companies of varying sizes, including divisions or subsidiaries of larger companies who may have greater financial resources and larger customer bases than we have. As a result, these competitors may be able to identify and adapt to changes in consumer preferences more rapidly than we can due to their larger resource base and scale. They may also be more successful in marketing and selling their products, better able to increase prices to reflect cost pressures, and more capable in increasing their promotional activity, which may impact us and the entire pet food industry.

We also compete with other smaller niche market companies focused on the same area of the consumable pet food markets we have entered. These companies may be more innovative and/or able to bring products to market faster and move more quickly to exploit and serve niche markets than we are. If these competitive pressures cause our products to lose or unable to gain market share, our business, financial conditions and results of operations may be materially adversely affected.

The loss of any of our key suppliers, or distribution arrangements with key vendors, would negatively impact our business. We purchase significant amounts of products from vendors with differing supply capabilities. There can be no assurance that the vendors who currently supply us with the ingredients necessary to create our pet chews will be able to accommodate the anticipated growth and expansion of our locations and e-commerce. An inability of our existing vendors to provide products in a timely or cost-effective manner may impair our business, financial condition and results of operations.

We maintain no long-term supply contracts with any of our distributors. As a consequence, any distributor may discontinue selling our pet chews at any time which would result in the inability to sell our products in certain retail locations. The loss of any of our vendors would, therefore, have a negative impact on our business and financial condition

If we are unable to identify or enter into supply or distribution relationships with new vendors or to replace the loss of any of our existing vendors, we may experience a competitive disadvantage, our business may be disrupted, and our results of operations may be adversely affected.

We may be exposed to significant product liability claims which our insurance may not cover and which could harm our reputation. In the ordinary course of our business, we may be named as a defendant in lawsuits involving product liability claims. In any such proceeding, plaintiffs may seek to recover large and sometimes unspecified amounts of damages and the matters may remain unresolved for several years. Any such matters could have a material adverse effect on our business, results of operations and financial condition if we are unable to successfully defend against or settle these matters or if our insurance coverage is insufficient to satisfy any judgments against us or settlements relating to these matters. Although we have product liability insurance coverage and an excess umbrella policy, our insurance policies may not provide coverage for certain or any claims against us or may not be sufficient to cover all possible liabilities. Additionally, we do not maintain product recall insurance. We may not be able to maintain such insurance on acceptable terms, if at all, in the future. Moreover, any adverse publicity arising from claims made against us, even if the claims are not successful, could adversely affect the reputation and sales of our products. In particular, product recalls or product liability claims challenging the safety of our products may result in a decline in sales for a particular product and could damage the reputation or the value of the related brand. This could be true even if the claims themselves are ultimately settled for immaterial amounts. This type of adverse publicity could occur and product liability claims could be made in the future.

We face various risks as an ecommerce retailer, if we do not manage these risks effectively, our ability to generate sales may suffer and our operating income and net income may decline. Although ecommerce represents a growing segment of the pet industry, ecommerce operations are still in the early stages of development. We may require additional capital in the future to sustain or grow our ecommerce business. Business risks related to our ecommerce business include our ability to keep pace with rapid technological change, failure in our security procedures and operational controls, failure or inadequacy in our systems or ability to process customer orders, government regulation and legal uncertainties with respect to ecommerce, and collection of sales or other taxes by one or more states or foreign jurisdictions. If any of these risks materialize, it could have an adverse effect on our business.

Increased transactions through our website may result in a reduction in sales at store locations that sell our products. There is a risk that vendors who sell our products may decide to discontinue the sale of our products due to a reduction in sales. If vendors decide to discontinue the sale of our products, this could reduce our exposure to new or potential customers, therefore having an adverse effect on our business.

In addition, we face competition from established companies who sell their products online and have a large customer base. In the future, we may also face competition from internet retailers who enter the market. A failure to positively differentiate our product and services offerings from other internet retailers could have a materially- adverse effect on our business, results of operations, or financial condition.

If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology, products and services could be harmed significantly. We rely on trade secrets, know-how and other proprietary information in operating our business. If this information is not adequately protected, then it may be disclosed or used in an unauthorized manner. To the extent that consultants, key employees or other third parties apply technological information independently developed by them or by others to our proposed products, disputes may arise as to the proprietary rights to such information, which may not be resolved in our favor. The risk that other parties may breach confidentiality agreements or that our trade secrets may become known or independently discovered by competitors could harm us by enabling our competitors, who may have greater experience and financial resources, to copy or use our trade secrets and other proprietary information in the advancement of their products, methods or technologies. The disclosure of our trade secrets would impair our competitive position,

thereby weakening demand for our products or services and harming our ability to maintain or increase our customer base.

We have not commenced operations and are currently seeking to lay the foundation to commence our business. We have not received a marijuana production license from Health Canada and there can be no assurance that we will receive a production license.  Until we receive a production license, we cannot begin the production, sale and distribution of medical marijuana.  It is currently not known when or if we will be granted a production license.  The key milestones to obtaining a production license include filing an application, receiving a "Ready to Build" notice, completion of the upgrades as per the application, approval to produce upon inspection of the facility, and approval to distribute the product to patients. 

We are subject to all of the business risks and uncertainties associated with any new business enterprise, including the risks that we will be unable to acquire the necessary production license, successfully produce the product, or establish a market for our product. If we receive a production license, we anticipate at least 12 months from the date of grant of this production license to achieve positive cash flow from operations. There can be no assurance that consumer demand for our product will be as anticipated, or that we will become profitable. As a result, an investment in our common shares involves a high degree of risk and should only be acquired if you can afford to lose your entire investment.

Our proposed marijuana business is subject to significant regulation by the Canadian Federal Government. There is no assurance that we will be granted licensed producer status by Health Canada. Any continued failure or delay in obtaining such status would materially and adversely affect our operations. We depend heavily on the success of acquiring a production license from Health Canada to be able to grow, store and distribute medical marijuana in Canada. There is no assurance that we will be approved by Health Canada or will be granted licensed producer status. Should we be unable to obtain all required licenses, or if the regulations in Canada continue to change, our proposed marijuana production business would not be able to operate or there could be a significant cost to change our operations to remain compliant with the laws and regulations.

Once a production license is obtained, any failure to comply with the terms of the production license, or any failure to renew the production license after its expiry date would have a materially-adverse impact on the financial condition and operations of our business.

Our operations are subject to regulations promulgated by government regulatory agencies from time to time. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations. However, there can be no guarantee that we will be able to obtain and maintain, at all times, all necessary licenses and permits required to carry out our business.

There are many regulations and governmental agencies that regulate the medical marijuana industry, and there will likely be increased and/or changing regulations as the industry becomes more mainstream with more participants. Our proposed marijuana production operations are subject to a variety of laws, regulations and guidelines relating to the manufacture, management, transportation, storage and disposal of medical marijuana but also including laws and regulations relating to health and safety, the conduct of operations and the protection of the environment. While, to the knowledge of management, we are currently in compliance with all such laws, changes to such laws, regulations and guidelines due to matters beyond our control may cause adverse effects to our operations.

There are sales risks associated with the cannabis and medical marijuana industry because cannabis is a controlled substance. As cannabis is a controlled substance in Canada, direct consumer marketing is not allowed. All products can only be prescribed by a physician and, to be successful, companies will have to develop programs targeted to this group. Traditionally in this sector, growers have targeted users as opposed to the doctors. The new regulations will change this traditional approach and will require growers to target doctors. If we are unable to properly conduct sales in a regulated environment or target the appropriate audiences for our medical marijuana products, our results of operations and business prospects could be substantially impaired.

We may not be able to use the facilities as planned and will, therefore, not be able to commence operations on the timetable or the scale that we have planned. To date, our proposed marijuana production activities and resources have been primarily focused on our proposed facility in Lumby, BC and we will continue to be focused on this facility for the foreseeable future. Adverse changes or developments affecting the facility, including but not limited to a breach of security, could have a material and adverse effect on our business, financial condition and prospects. Any breach of the security measures and other facility requirements, including any failure to comply with recommendations or requirements arising from inspections by Health Canada, could also have an impact on our ability to continue to operate under any license we may receive.

We may not acquire market share or achieve profits due to competition in the medical marijuana industry. We will face intense competition from other companies, some of which can be expected to have longer operating histories, more financial resources, and greater manufacturing and marketing experience than us. Increased competition by larger and better financed competitors could materially and adversely affect our business, financial condition, and results of operations.

Because of the early stage of the industry in which we plan to operate, we expect to face additional competition from new entrants. If the number of users of medical marijuana in Canada increases, the demand for products will increase, and we expect that competition will become more intense as current and future competitors begin to offer an increasing number of diversified products. To remain competitive, we will require a continued high level of investment in research and development, marketing, sales, and client support. We may not have sufficient resources to maintain research and development, marketing, sales, and client support efforts on a competitive basis which could materially and adversely affect our proposed marijuana production business, financial condition and results of operations.

Investors in this offering will experience immediate and substantial dilution. Investors in this offering will suffer immediate and substantial dilution of $0.2033 per share or approximately 81.32% of the offering price of the common shares if the maximum offering is sold or $0.2318 per share or approximately 92.72% of the offering price if only 25% of the offering is sold. See "Dilution."

If we issue additional common shares, shareholders may experience further dilution in their ownership of us. We are authorized to issue an unlimited number of common shares without par value and an unlimited number of preferred shares without par value. We have the right to raise additional capital or incur borrowings from third parties to finance our business. Our board of directors has the authority, without the consent of any of our shareholders, to cause us to issue more common shares. Consequently, shareholders may experience more dilution in their ownership of us in the future. Our board of directors and majority shareholders have the power to amend our constating documents in order to affect forward and reverse stock splits, and recapitalizations of the company. The issuance of additional common shares by us would dilute all existing shareholders' ownership in us.

We cannot assure that we will ever pay dividends. We do not currently anticipate declaring and paying dividends to our shareholders in the near future. It is our current intention to apply net earnings, if any, in the foreseeable future to increase our capital base and marketing. Prospective investors seeking or needing dividend income or liquidity should therefore not purchase our common shares. We cannot assure that we will ever have sufficient earnings to declare and pay dividends to the holders of our common shares, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors.

We are controlled by our principal shareholder, Darcy Bomford, whose interests may differ from those of the other shareholders. Mr. Darcy Bomford is our C.E.O., director, founder, and principal shareholder. He currently owns directly and indirectly a total of 25,705,094 common shares or 44.25% of the total issued and outstanding common shares of our company. Mr. Bomford will own approximately 36.68% of the outstanding votes assuming the maximum 12,000,000 common shares are issued pursuant to this offering. 

Mr. Bomford, as our majority shareholder, is able to exercise significant control over all matters requiring shareholder approval including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common shares. This concentration of ownership may not be in the best interests of all of our shareholders.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us. Our articles provide that we will indemnify our directors and officers in each case to the fullest extent permitted by the Business Corporations Act (British Columbia)(the "BCA"). We must indemnify our officers and directors against all reasonable fees, expenses, charges and other costs of any type or nature whatsoever. This includes any and all expenses and obligations paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing to defend against any completed, actual, pending or threatened action, suit, claim or proceeding, whether civil, criminal, administrative or investigative, or establishing or enforcing a right to indemnification under the indemnification agreement. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Future sales of our common shares or the perception that such sales may occur could depress our common stock price. As of February 17, 2017, we had 58,087,383 common shares outstanding, and our notice of articles authorizes us to issue up to an unlimited number of common shares and an unlimited number of preferred shares. In the future, we may issue additional common shares or other securities if we need to raise additional capital. The number of new common shares issued in connection with raising additional capital could constitute a material portion of those current outstanding common shares. Any future sales of our common shares, or the perception that such sales may occur, could negatively impact the price of our common shares.

Our common shares are thinly traded and you may be unable to sell at or near asking price, or at all. We do not have a liquid market for our common shares, and we cannot predict the extent to which an active public market for trading our common shares will be achieved or sustained.

This situation is attributable to a number of factors including the fact that we are a small company that is relatively unknown to stock analysts, stockbrokers, institutional investors and others in the investment community who generate or influence sales volume. Even if we came to the attention of such persons, those persons tend to be risk-averse and may be reluctant to follow, purchase, or recommend the purchase of shares of an unproven company such as ours until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

The market price for our common shares may be volatile, which may result in a decline in value of your investment. The trading price of our common shares has been and may continue to be volatile. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions could reduce the market price of our common shares in spite of our operating performance. In addition, our results of operations could fail to meet the expectations of investors due to a number of potential factors, including variations in our quarterly results of operations, additions or departures of key management personnel, failure to meet our projected operational milestones, litigation and government investigations. Other factors which may affect the value of our common shares include: changes or proposed changes in laws, new regulations, or differing interpretations or enforcement of the law, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or investment community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about our industry or individual scandals. All of these events could result in a decrease of the market price of our common shares. As a result, you may be unable to resell your common shares at or above the price you acquired our securities.

Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline. Our shares are classified as penny stocks. The SEC has adopted regulations which generally define a "penny stock" to be any equity security that has a price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions including the issuer of the securities having net tangible assets (i.e., total assets less intangible assets and liabilities) in excess of $2,000,000 or an average revenue of at least $6,000,000 for the last three years. As a result, our common shares

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could be subject to these rules that impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors (generally persons with a net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a "penny stock," unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the "penny stock" market. The broker-dealer must also disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the "penny stock" held in the account and information on the limited market in "penny stocks." Consequently, these rules may restrict the ability of broker-dealers to sell our securities.

Risks Related to Being a Canadian Issuer

As a Canadian incorporated and resident company, our financial statements are prepared using International Financial Reporting Standards ("IFRS"), accounting principles, which are different than the accounting principles under U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). Our financial statements have been prepared in accordance with IFRS. IFRS is an internationally recognized body of accounting principles that are used by many companies outside of the United States to prepare their financial statements. Regulation A permits Canadian issuers such as True Leaf to prepare and file their financial statements in accordance with IFRS rather than U.S. GAAP. IFRS accounting principles are different from those of U.S. GAAP and SEC rules do not require us to provide a reconciliation of IFRS accounting principles to those of U.S. GAAP. Investors who are not familiar with IFRS may misunderstand certain information presented in our financial statements. Accordingly, we suggest that readers of our financial statements familiarize themselves with the provisions of IFRS accounting principles in order to better understand the differences between these two sets of principles.

Certain legislation in Canada contain provisions that may have the effect of delaying or preventing a change in control. Certain provisions oour constating documentsand governing legislatioin, together or separately, could discourage potential acquisition proposals, delay or prevent a change in control and limit the price that certain investors may be willing to pay for the our common shares.

For example, under the BCA:

• certain matters require the approval of holders of two-thirds of the votes cast at a meeting of the company's shareholders, including amendments to its articles of association. This may make it more difficult for us to complete certain types of corporate transactions deemed advisable by the board of directors; and
• a bidder seeking to acquire us would need, on a compulsory acquisition (tender offer), to receive shareholder acceptance in respect to 90% of our outstanding shares. If this 90% threshold is not achieved in the offer, under the BCA, the bidder would not be able to complete a "second step merger" to obtain 100% control of us. Accordingly, an offer (tender) of 90% of our outstanding shares will likely be a condition in a tender offer to acquire our shares rather than 50% as is more common in tender offers for corporations organized under U.S. law.

Additionally,The Investment Canada Act requires that a "non-Canadian," as defined therein, file an application for review with the Minister responsible for the Investment Canada Act and obtain approval of the Minister prior to acquiring control of a Canadian business, where prescribed financial thresholds are exceeded. Otherwise, there are no limitations either under the laws of Canada or in our articles on the rights of non-Canadians to vote or hold our common shares. (Given our current size and industry we do not believe these rules would apply to us.)

Any of these provisions may discourage a potential acquirer from proposing or completing a transaction that may have otherwise presented a premium to our shareholders.

Because we are a British Columbia incorporated company and the majority of our directors and officers are resident in Canada, it may be difficult for investors in the United States to enforce civil liabilities against us based solely upon the federal securities laws of the United States. We are incorporated in British Columbia and our

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principal place of business is in Canada. Our auditor and a majority of our directors and officers are residents of Canada. All or a substantial portion of our assets and those of such persons are located outside the United States. Consequently, it may be difficult for U.S. investors to affect service of process within the United States upon us or our directors, officers and auditors who are not residents of the United States or to realize in the United States upon judgments of U.S. courts predicated upon civil liabilities under the Securities Act of 1933, as amended. Investors should not assume that Canadian courts: (1) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or "blue sky" laws of any state within the United States or (2) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or any such state securities or blue sky laws.

There could be adverse tax consequence for our shareholders in the United States if we are deemed a passive foreign investment company. Under United States federal income tax laws, if a company is, or for any past period was, a passive foreign investment company or PFIC, it could have adverse United States federal income tax consequences to U.S. shareholders even if the company is no longer a PFIC. The determination of whether we are a PFIC is a factual determination made annually based on all the facts and circumstances and thus is subject to change. Furthermore, the principles and methodology used in determining whether a company is a PFIC are subject to interpretation. While the company does not believe that it currently is or has been a PFIC, it cannot make any assurances that it will not be a PFIC in the future. United States purchasers of the company's common shares are urged to consult their tax advisors concerning United States federal income tax consequences of holding our common shares if we are considered to be a PFIC. See the discussion in "Material United States Federal Income Tax Considerations for U.S. Holders."

If we are a PFIC, U.S. holders would be subject to adverse U.S. federal income tax consequences such as the ineligibility for any preferred tax rates on capital gains, the ineligibility for actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws or regulations. Whether or not U.S. holders make a timely qualified electing fund (or QEF) election or mark-to-market election may affect the U.S. federal income tax consequences to U.S. holders with respect to the acquisition, ownership, and disposition of our common shares and any distributions such U.S. holders may receive. Investors should consult their own tax advisors regarding all aspects of the application of the PFIC rules to our common shares.

DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate Dilution

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their "sweat equity" into the company. When the company seeks cash investments from outside investors, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means the cash value of the new investors' stake is diluted because all the shares are worth the same amount and new investors paid more than earlier investors for their shares.

If you invest in our common shares in this offering, your ownership interest will be diluted to the extent of the difference between the offering price per share and the pro forma net tangible book value per share of our common shares. Our historical net tangible book value as of September 30, 2016, was $468,241, or approximately $0.0086 per share. Historical net tangible book value per share is determined by dividing the actual number of outstanding common shares by our net tangible book value. Dilution in historical net tangible book value per share represents the difference between the amount per share paid by purchasers of common shares in this offering and the pro forma net tangible book value per common share immediately after the closing of this offering.

After giving effect to the sale of 100% of the common shares under this offering at an assumed offering price of $0.25, after deducting estimated offering expenses payable by us and assumed commissions ($370,000), our pro forma net tangible book value as of September 30, 2016, would have been approximately $3,098,241, or $0.0467 per common share. This would represent an immediate increase in pro forma net tangible book value of $0.0381 per

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share to existing shareholders and an immediate dilution of $0.2033 per share to new investors purchasing common shares in this offering at an assumed offering price of $0.25 per share.

The following table illustrates this per share dilution:

Notes:

(1)  Offering costs are estimated at $175,000, or $0.05833 per share of new shares issued. Pro forma net tangible book value of the common shares assuming 25% of the shares are sold in this offering as of September 30, 2016, minus offering costs, would have been approximately $1,043,241.

(2)  Offering costs are estimated at $240,000, or $0.04 per share of new shares issued. Pro forma net tangible book value of the common shares assuming 50% of the shares are sold in this offering as of September 30, 2016, minus offering costs, would have been approximately $1,728,241.

(3)  Offering costs are estimated at 305,000, or $0.03389 per share. Pro forma net tangible book value of the common shares assuming 75% of the shares are sold in this offering as of September 30, 2016, minus offering costs, would have been approximately $2,413,241.

(4)  Offering costs are estimated at $370,000, or $0.03083 per share of new shares issued. Pro forma net tangible book value of the common shares assuming 100% of the shares are sold in this offering as of September 30, 2016, minus offering costs, would have been approximately $3,098,241.

Future Dilution

Another important way of looking at dilution is the dilution that happens due to future actions by the company. The investor's stake in a company could be diluted due to the company issuing additional shares. In other words, when the company issues more shares, the percentage of the company that new investors own will go down, even though the value of the company may go up. Investors will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, angel investment), employees exercising stock options, or by conversion of certain instruments (e.g. convertible bonds, preferred shares or warrants) into stock.

If the company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the company offers dividends and most early-stage companies are unlikely to offer dividends, preferring to invest any earnings into the company).

The type of dilution that hurts early-stage investors most occurs when the company sells more shares in a "down round," meaning at a lower valuation than in earlier offerings.

Investors making an investment expecting to own a certain percentage of the company or expecting each share to hold a certain amount of value should understand that the value of those shares can decrease by actions taken by the company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control and earnings per share.

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MARKET FOR OUR COMMON SHARES

Trading Market

Our common shares are listed on the Canadian Securities Exchange ("CSE") under the symbol "MJ" and the Deutsche Borse Group on the Frankfurt Stock Exchange in Germany under the trading symbol "TLA". Our common shares began trading on the CSE on February 9, 2015. and on the Frankfurt Stock Exchange on March 16, 2015.

Shown below are the annual high and low sales prices of our common shares for our fiscal years since we began trading on the CSE in Canadian dollars.

Year Ended	High		Low
March 31, 2016	$	0.17	$	0.05
March 31, 2015	$	0.17	$	0.08

Shown below are the quarterly high and low sales prices of our common shares for each quarter of the two most recent fiscal years (since listing in February 9, 2015):

Quarter Ended	High		Low
December 31, 2016	$	0.32	$	0.18
September 30, 2016	$	0.30	$	0.17
June 30, 2016	$	0.33	$	018
March 31, 2016	$	0.16	$	0.12
December 31, 2015	$	0.15	$	0.10
September 30, 2015	$	0.17	$	0.05
June 30, 2015	$	0.10	$	0.06
March 31, 2015	$	0.17	$	0.08

Shown below are the monthly high and low sales prices of our common shares for the most recent six months:

Month	High		Low
January 31, 2017	$	0.23	$	0.19
December 31, 2016	$	0.24	$	0.18
November 30, 2016	$	0.29	$	0.20
October 30, 2016	$	0.32	$	0.21
September 30, 2016	$	0.27	$	0.17
August 31, 2016	$	0.30	$	0.26

As of the day before filing this offering circular, the closing price of our common shares on the CSE was $0.21.

PLAN OF DISTRIBUTION

General Plan of Distribution

We are offering a maximum of 12,000,000 common shares on a "best efforts" basis.

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Determination of Offering Price

The $0.25 per share offering price of our common shares was chosen as it reflects a mid-point of the high ($0.32) and low ($0.17) trading price of our common shares on the CSE over the last six-months prior to filing this offering circular. There is no relationship between this price and our assets, earnings, book value or any other objective criteria of value other than our CSE market trading price. The price of the shares may be required to be adjusted at the time of qualification.  The CSE allows issuers to apply for price protection of an offering. This price protection  will expire if the offering  has not closed within 45 days of the day on which notice is given to the CSE. As a result, the price of this offering may need to be adjusted at the time or post-qualification of this offering circular.

Sales

The shares are being offered by us on a best-efforts basis by our officers and directors, with the assistance of independent consultants and possibly through registered broker-dealers who are members of the FINRA and finders. We may pay selling commissions to participating broker-dealers who are members of FINRA for shares sold by them, equal to a percentage of the purchase price of the shares. We may pay finders' fees to persons who refer investors to us. We may also pay consulting fees to consultants who assist us with the offering, based on invoices submitted by them for advisory services rendered. Consulting compensation, finders' fees and brokerage commissions may be paid in cash, common shares and warrants. We may also issue shares and grant stock options or warrants to purchase our common shares to broker-dealers for sales of shares attributable to them and to finders and consultants and reimburse them for due diligence and marketing costs on an accountable or non-accountable basis. Participating broker-dealers, if any and others may be indemnified by us with respect to this offering and the disclosures made in this offering circular.

In conducting this offering, our officers and directors intend to rely on the exemption from registration contained in Rule 3a4-1 of the Securities Exchange Act of 1934, as amended.

There is no minimum amount of this offering before it becomes effective other than the minimum investment size of $1,000 required for each investor. The duration of the offering is until the earlier of (1) the sale of the maximum number of common shares offered hereby, (2) one year from the date this offering begins, or (3) a date prior to one year from the date this offering begins that is so determined by our board of directors. We will have immediate access to the proceeds of the offering as soon as the shares are issued.

Subscription

In order to subscribe to purchase the shares, a prospective investor must complete a subscription agreement and send payment by check, wire transfer or ACH. The subscription agreement requires investors to answer certain questions to determine compliance with the investment limitation set forth in the securities laws, disclose that the securities will not be listed on a registered national securities exchange upon qualification and that the aggregate purchase price to be paid by the investor for the securities cannot exceed 10% of the greater of the investor's annual income or net worth. In the case of an investor who is not a natural person, revenues or net assets for the investors most recently completed fiscal year are used instead. The investment limitation does not apply to accredited investors, as that term is defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended.

After the offering statement has been qualified by the Securities and Exchange Commission, we will accept tenders of funds to purchase the shares. We may close on investments on a "rolling" basis (so not all investors will receive their shares on the same date).

Our officers and directors, with assistance from legal counsel, will review each subscription agreement prior to acceptance.

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Investor Suitability Standards

Shares will be sold only to a person if the aggregate purchase price paid by such person is no more than 10% of the greater of such person's annual income or net worth, not including the value of his primary residence, as calculated under Rule 501 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended. See the Certificate of U.S. Accredited Investor Status in the Subscription Documents in Exhibit A to this offering circular. In the case of sales to fiduciary accounts (Keogh Plans, Individual Retirement Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or Trusts), the above suitability standards must be met by the fiduciary account, the beneficiary of the fiduciary account, or by the donor who directly or indirectly supplies the funds for the purchase of shares. Investor suitability standards in certain states may be higher than those described in this offering circular. These standards represent minimum suitability requirements for prospective investors and the satisfaction of such standards does not necessarily mean that an investment in the company is suitable for such persons.

Each investor must represent in writing that he/she meets the applicable requirements set forth above and in the Subscription Agreement, including, among other things, that (i) he/she is purchasing the shares for his/her own account and (ii) he/she has such knowledge and experience in financial and business matters that he/she is capable of evaluating without outside assistance the merits and risks of investing in the shares, or he/she and his/her purchaser representative together have such knowledge and experience that they are capable of evaluating the merits and risks of investing in the shares. Broker-dealers and other persons participating in the offering must make a reasonable inquiry in order to verify an investor's suitability for an investment in us. Transferees of shares will be required to meet the above suitability standards.

Sales to Affiliates

Shares may be purchased by the affiliates of True Leaf or other parties with a financial interest in the offering.

Shares may be purchased by the affiliates of True Leaf, or by other persons who will receive fees or other compensation or gain dependent upon the success of this offering. Such purchases may be made at any time.

Investors therefore should not expect that the sale shares have been made to investors who have no financial or other interest in the offering, or who otherwise are exercising independent investment discretion.

No Selling Security Holders

There are no selling security holders. No officer, director or employee of True Leaf will participate in the sale of securities pursuant to this offering.

Discretion to Terminate Offering

We may terminate the offering at any time for any reason at our sole discretion.

Transfer Agent and Registrar

Our transfer agent and registrar for our common stock is Computershare Investor Services Inc. who has offices located through-out Canada and the United States.

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PERKS

We want all of our investors to share our chews with their favorite dog or cat.  Letting your dog or cat try our products will turn you into a believer and a proud investor. In addition to receiving shares, investors under this offering will be entitled to receive the following additional benefits:

Invest Between	Special Benefits for Bracket of Investor	Benefits Shared by all Investors
$1,000 and $2,500	A trio of our most popular dog chews.	reports on TL Pet developments; an invitation to all meetings of our shareholders; an advance notice on when new products will be available for sale; an advance notice of where we will be in-person and an invitation to meet us; and an opportunity to be considered as one of our future testing families.
$2,500 and $5,000	A trio of our most popular dog chews; and A TL Pet T-Shirt.
$2,500 and $5,000	A trio of our most popular dog chews; A sample pack of two of our OregaPetTM products; A TL Pet T-Shirt; and A special treat for your best friend.

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Invest Between	Special Benefits for Bracket of Investor	Benefits Shared by all Investors
$7,500 and $10,000	A six-pack of our most popular dog chews; A sample pack of four of our OregaPetTM products; A TL Pet T-Shirt; Our guide to training your dog; and A special treat for your best friend
$10,000 and Above	A six-pack of our most popular dog chews; A sample pack of four of our OregaPetTM products; A TL Pet Sweatshirt; A TL Ball-Cap; Our guide to training your dog; A personal email from our C.E.O. Darcy; and A special treat for your best friend

 

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The value of these benefits, if any, is indeterminable and is not associated with the number of shares you own. We have not attempted to establish a value for these benefits, and we do not consider them material to the determination of the price or value of our shares.

USE OF PROCEEDS TO COMPANY

The net proceeds of this offering to the issuer, assuming the maximum amount of securities offered are sold, will be approximately $2,630,000 after deducting offering expenses. In the discussion below, the company has assumed that, if the maximum amount of securities are sold, it will pay $370,000 in offering expenses. A significant portion of this offering's non-transactional expenses (e.g., accounting fees, legal fees, payment for printing or video production, marketing, consulting and advertising fees) will be funded from previous capitalization raised in prior offerings conducted by us. Transactional costs related to the number of transactions processed or the amount of money raised will be funded from proceeds of the offering.

Use of Proceeds

The net proceeds of this offering will be used primarily to advance our pet supplement and chews business.

The estimated use of the net proceeds of this offering is as follows:

USE OF PROCEEDS	25% of Offering Raised			50% of Offering Raised			75% of Offering Raised			100% of Offering Raised
Offering Expenses
Marketing and Other Expenses (1)	$	62,500		$	75,000		$	87,500		$	100,000

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USE OF PROCEEDS	25% of Offering Raised			50% of Offering Raised			75% of Offering Raised			100% of Offering Raised
Commissions Related to Offering (2)	$	52,500		$	105,000		$	157,500		$	210,000
Legal and Accounting	$	60,000		$	60,000		$	60,000		$	60,000
Pet Supplement Business
Increase marketing, advertising and consumer acquisition (3)	$	112,500		$	350,000		$	500,000		$	600,000
European production run	$	20,000		$	40,000		$	60,000		$	80,000
Launch True Hemp Calming, Hip + Joint and Health Support Dental Stick	$	50,000		$	125,000		$	100,000		$	125,000
Launch True Hemp Lifestyle Support Oil	$	50,000		$	150,000		$	150,000		$	150,000
Further develop True Leaf Pet Europe sales and distribution	$	25,000		$	50,000		$	75,000		$	100,000
Perform analysis of future markets in the Asia and Pacific regions	$	0		$	0		$	30,000		$	30,000
Perform feasibility study on direct-to-consumer hemp-based pet products	$	0		$	0		$	83,000		$	83,000
Increase North American production & distribution	$	100,000		$	300,000		$	500,000		$	540,000
Launch TL Pet branded product based on the OregaPetTM formulations	$	100,000		$	100,000		$	100,000		$	100,000
Research and Development
New Product Development	$	0		$	40,000		$	50,000		$	80,000
Formulation Development	$	0		$	0		$	0		$	100,000
Pilot Trials	$	0		$	0		$	25,000		$	70,000
Contract Research	$	0		$	0		$	37,000		$	152,000
General
Government Permits	$	0		$	0		$	0		$	50,000
Sales and Marketing (3)	$	0		$	0		$	10,000		$	50,000
Office Employees and Other Consultants (4)	$	100,000		$	100,000		$	150,000		$	200,000
Legal and Accounting	$	10,000		$	10,000		$	10,000		$	10,000
Leases	$	30,000		$	30,000		$	30,000		$	30,000
Working Capital	$	40,000		$	40,000		$	60,000		$	80,000
Contingency Capital	$	0		$	0		$	62,500		$	100,000
Total	$	750,000		$	1,500,000		$	2,250,000		$	3,000,000

Notes:

(1)  Marketing and other expenses include: (a) blue sky compliance and filing fees, and (b) fees to any third-party marketing or advertising firm(s) we may engage in the future.

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(5)    A portion of the funds allocated to "Office Employees and Other Consultants" will be used for officers' salaries.The following information is an estimate based on our current business plan. We may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and we will have broad discretion in doing so. Pending these uses, we intend to invest the net proceeds of this offering in short-term, interest-bearing securities.

Payments to Officers and Directors

True Leaf will use a portion of the offering proceeds to make certain payments to officers and directors such as salaries, consulting fees or pursuant to other normal course contractual obligations. We believe these obligations reflect market rates for the services provided and are described in more detail elsewhere in this offering circular. See "Compensation of Directors and Officers" and "Interest of Management and Others in Certain Transactions".

Interim Investments

Company funds not needed on an immediate basis to fund our operations may be invested in government securities, money market accounts, deposits or certificates of deposit in commercial banks or savings and loan associations. Company funds may also be invested in bank repurchase agreements, funds backed by government securities, short-term commercial paper, or other similar interim investments.

Alternative Use of Proceeds

We may reallocate the estimated use of proceeds among the various categories or for other uses if management deems such a reallocation to be appropriate.

We cannot assure that the capital budget will be sufficient to satisfy our operational needs or that we will have sufficient capital to fund our business. See "Description of Business" and "Risk Factors".

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DESCRIPTION OF BUSINESS

This discussion should be read in conjunction with the other sections of this offering circular. These include "Risk Factors," "Use of Proceeds," and the Financial Statements attached with its related exhibits. The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this offering circular (see "Forward Looking Statements").

Overview

We are involved in two segments: (1) pet support supplements and chews; and (2) medical marijuana. We launched our pet supplement business in the fall of 2015. Our medical marijuana business was launched in 2013 but is currently on hold until we obtain regulatory approval from the Canadian government.

Pet Support Supplements and Chews. In the fall of 2015, through TL Pet we launched our hemp based pet supplement products. On December 30, 2016, we acquired the assets and intellectual property of OregaPet^TM , a Canadian brand of natural supplement products for pets. We share the commitment of our customers to improve the overall health of their pets with natural ingredients. Our products are primarily sold through a combination of direct sales and brokers to veterinarians, food retailers, food wholesalers, drug stores, club stores, mass merchandisers, discount and dollar stores, natural foods stores and distributors, and pet specialty stores.

Medical Marijuana. In 2013, through TL Medicine we applied to become a licensed producer of medical marijuana under Canada's Marihuana for Medical Purposes Regulations ("MMPR") program administered by Health Canada. As of February 17, 2017, we do not have a license with the MMPR and no products are in commercial production or use. We have not been granted an MMPR license and will be required to satisfy additional obligations in order to qualify including the completion of a compliant facility on a parcel of leased land in Lumby, British Columbia. There is a significant risk that we will not receive an MMPR license, thus rendering us unable to proceed with this sector of our business model. We continue to work diligently to comply with all of the requirements of Health Canada.

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Corporate Structure

True Leaf Medicine International Ltd. (the "True Leaf" or the "company") is a British Columbia corporation formed on June 9, 2014.

We have four subsidiaries: True Leaf Investments Corp. ("TL Investments"), True Leaf Medicine Inc. ("TL Medicine"), True Leaf Pet Inc. ("TL Pet") and True Leaf Pet Europe LLC Sàrl ("TL Europe"). TL Investments, TL Medicine and TL Pet were formed in British Columbia on March 26, 2014, July 4, 2013 and November 18, 2015 respectively. TL Europe was formed in Luxemburg on July 18, 2016. (0.4% of TL Europe is owned by our operations manager in Luxembourg.)

Our Corporate Structure

We are a reporting issuer in Canada. Our common shares trade on the Canadian Securities Exchange under the trading symbol: "MJ" and on the Frankfurt stock exchange under the trading symbol: "TLA".

Pet Support Supplements and Chews

Our products are developed and marketed for the purpose of improving the health, comfort, enjoyment and safety of our customers' pets. We love animals and believe they deserve quality food and care.

In the fall of 2015, TL Pet entered the natural pet product sector with a product line consisting of innovative hemp-based functional pet chews sold to the specialty pet and veterinary markets in Canada. We have since expanded sales into the United States and Europe and have recently acquired the assets of another natural pet brand.

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It is our belief that consumers are looking for higher quality products that address nutritional needs common to their pets, without having to worry about food safety or harmful side effects. Products containing hemp including hemp seed oil, hemp protein and hemp extracts are gaining significant acceptance as evidence of their nutritional effectiveness becomes recognized.  

Industry

Euromonitor, Pet Care Global Overview 2015 and the Future Ahead, 2015

We compete in the North American dog and cat food market with 2014 retail sales of over $22 billion and growing at an average compounded annual growth rate of 3% from 2007 to 2014, according to Euromonitor.

We believe the following trends are driving growth in our industry:

• Pet ownership. The Alberta Agriculture and Forestry department estimates that 7.5 million or 57% percent of Canadian households own pets. Higher income households ($100,000+) are 21% of the population in Canada but account for roughly 25% of pet owners. Consumers in the 45 to 54-year age group are well ahead of the average with a pet ownership level of 75%. The American Veterinary Medical Association 2015-2016 survey estimated that 163.6 million or 65% of American households owned a dog or a cat. More U.S. households today have pets than have children, which we believe to be a result of demographic shifts and changing attitudes toward pets.
• The personification of pets as they become members of our family. The Alberta Agriculture and Forestry department found that eighty-six percent of dog owners and 89% of cat owners in Canada consider their pets to be part of the family. Dog owners believe their pets offer them improved physical health while cat owners believe their pets offer them improved metal health. Pet owners are generally in line with national averages in terms of their health-related psychographics and behavior but are slightly more likely to gravitate toward products that offer natural formulations and enhanced health benefits.  These findings have also been supported in the United States. According to the American Veterinary Medical Association, 66.7% of pet owners view their pets as members of the family. (Packaged Facts believes this percentage is closer to 83%.) As pets are increasingly viewed as companions, friends and family members, pet owners are being transformed into "pet parents" who spare no expense for their loved ones, driving premiumization across pet categories. This trend is reflected in food purchasing decisions. Pet owners want to provide their pets with the same quality of food and care as they provide for themselves.
• Increasing consumer focus on health & wellness. The Alberta Agriculture and Forestry department's research found Canadian dog food purchasers between the age of 55 and 64 were most likely to purchase both wet foods and specialty nutritional formulas including wheat or grain-free products at an index of 123 and 165 respectively. Those with children aged 6 to 11 years are disproportionately more likely to purchase natural/organic foods. Those with a master's degree are more than twice as likely to purchase specialty nutritional formulas. Consumers with children under the age of twelve were even more likely to buy foods with special health benefits as are those with a master's degree. We believe this is an international trend and not specific to Canada. Consumers world-wide are more conscious about their health and the health of their pets.

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All of these factors, we believe, contribute to a growing marketplace for natural products such as TL Pet in the pet food industry.

Our Products

In 2015, we began manufacturing, marketing and selling three dog chew products containing hemp. Hemp and marijuana are different varieties of the same plant species of 'Cannabis Sativa'. Marijuana plants contain high levels of tetrahydrocannabinol ("THC"). Hemp, on the other hand, is non-psychoactive and contains very little THC (less than .3% by law), but certain cultivars contain cannabidiol ("CBD") located primarily in the hemp leaf and the hemp flower. True Leaf uses whole hemp seed and cold-pressed hemp seed oil in the True Hemp™ product line, which does not contain detectable levels of CBD. These are our hemp based dog chew products:

Each of these products is natural, grain-free, non-GMO Hemp with no artificial colors or flavors. The inactive ingredients in all our chews includes: salmon, buckwheat flour, yellow pea flour, coconut flour, sunflower seed oil, blackstrap molasses, vegetable glycerin, natural fish flavor, citric acid, and mixed tocopherols.

Hemp seed oil - a major component of hemp seed itself and of True Leaf Pet's product line - has a variety of beneficial properties and is showing great promise on its own as a supplement. Because hemp oil is extracted from the industrial hemp plant, it contains no psychoactive reactors. Hemp contains known antioxidants from tocopherols and hosts a variety of other beneficial properties including anti-inflammatory compounds from terpenes, plant sterols and methyl salicylate - a relative of acetylsalicylic acid or 'aspirin'. Hemp oil helps to support the moisture level in a dog's skin and fur. Furthermore, hemp seed oil supports the body's ability to enhance blood circulation, stimulate cognitive thinking, and can help improve fur texture and lessen shedding.

Hemp is rich in essential fatty acids and other polyunsaturated fatty acids. It has almost as much protein as soybean and is also rich in Vitamin E and minerals such as phosphorus, potassium, sodium, magnesium, sulfur, calcium, iron

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and zinc.^[1] Dietary hempseed is also particularly rich in the omega-6 fatty acid, linoleic acid and also contains high concentrations of the omega-3 fatty acid, alpha-linolenic acid. The linoleic acid: alpha-linolenic acid ratio normally exists in hempseed at between 2:1 and 3:1 levels. This proportion is ideal for a healthy diet.^[2] We believe that our pets should have a healthy diet and therefore we include hemp in all of our pet chews.

Hemp is also legally refined in industrial factories for textile and nutritional use. It is often consumed and mixed into other products including cereal and granola bars. Hemp for dogs is increasing in popularity because of its significant potential health benefits that may include joint support, skin and coat nourishment, and antioxidant support.

We enrich our hemp-based pet products by adding additional quality ingredients such as green lipped mussel, curcuminoids from turmeric, L-theanine, lemon balm, chamomile, polyphenols from pomegranate, and DHA (an omega fatty acid) to create a high-value product that aligns with current consumer demands.

We are currently developing other hemp based pet products which we intend to test and - if suitable - add to our product line. In particular, we intend to launch liquid hip and joint supplements for dogs and cats, as well as functional cat chews and supplements.  The launch of these products is dependent upon favorable market conditions, successful research and development and raising additional capital.

On December 30, 2016, we acquired the assets and intellectual property of OregaPet^TM , a Canadian brand of natural supplement products for pets. The OregaPet^TM , product line includes: oregano first aid drops, oregano first aid gel, dental health mini treats, dental health treats, dental spray, pet toothpaste, ear drops, bed and body spray, shampoo therapy and oil of oregano for pets.

OregaPet^TM's product line has attracted industry recognition for its quality and innovation. OregaPet^TM Bed and Body Spray has received the 2016 NationalNutrition.ca award for 'Best Pet Product' and OregaPet^TM ; Oil of Oregano received the 2013 Alive® Consumer's Choice Silver Award for 'Best New Product'.

We intend to launch a TL Pet branded product line later in 2017 based on the OregaPet^TM formulations we have acquired.

Manufacturing

We outsource the manufacturing of our products to third parties whose facilities are cGMP compliant. We have a oral contractual relationship with Okanagan Naturals in British Columbia to manufacture our products and expect to add an additional manufacturer located in the United States in 2017. We believe that there are numerous cGMP compliant third party manufacturers who can be secured on a short or long term basis at commercially reasonable costs who are capable of manufacturing our products for us.

[1] Callaway,  J.C.  "Hempseed  as  a  nutritional  resource:  An  overview"  Euphytica  (2004)  140:  65. doi:10.1007/s10681-004-4811-6

[2] Holub, B. J. (2002). Clinical nutrition: 4. Omega-3 fatty acids in cardiovascular care. CMAJ: Canadian Medical Association Journal, 166(5), 608-615.

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We provide our contract manufacturer with our formula and manufacturing specifications for each of our products. The manufacturer then sources and purchases raw ingredients and manufactures the products to our specifications. We believe that the raw materials used in our formulations are readily available from various sources.

Our Business Objectives

TL Pet wants to become known in the natural pet product sector as the company whose product line makes a difference in pets' lives. We want to create brand awareness and loyalty around our innovative hemp-based functional pet products. This will be followed by hemp extract supplements for pets in the USA and European markets. This will lay a profitable foundation for the company's long-term strategy to obtain global market share and build a lucrative brand with a comprehensive product line in the fast-growing natural pet and supplement category. 

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Our long - term objectives are:

• Carve a niche in the global pet industry with a hemp-focused family of products that are sold in the pet specialty, mass-pet, veterinary and food/mass/drug market segments.
• Review and assess the feasibility of a new animal drug application for a cannabis-based pet medication sold via veterinary prescription in the pet medication market.

The following disclosure is based upon our ability to raise additional funds which may not be possible if market conditions are not favorable. We may reallocate funds for sound business reasons.

We aim to accomplish the following business objectives in the forthcoming twelve-month period if we raise the full amount we are looking for under this offering:

Marketing and Sales

Our products are primarily sold through a combination of direct sales and a network of independent distributors who market our products to veterinarians, food retailers, food wholesalers, drug stores, club stores, mass merchandisers, discount and dollar stores, natural foods stores and distributors, and pet specialty stores

We have entered into written and oral agreements with distributors in Canada, the United States, the United Kingdom and Europe. These distributors cover over 9,150 retail points.

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We plan to support these sales efforts through marketing campaigns in both traditional broadcast and online media. This includes radio and television commercials, infomercials, print advertisements, social media, and other online marketing campaigns. The extent to which we will be able to market our products will depend, in large part, on our capital resources.

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Marketing Strategy

We intend to generate traffic to our website and interest in our products through the following marketing channels:

(a) content marketing: includes marketing videos, blogs, and white papers;

(b) social marketing: includes the sharing of content on social media and generating more followers on Twitter;

(c) email marketing: includes sending emails to the 1,400 verified subscribers who have opted to receive our marketing emails;

(d) blogger outreach: includes contacting bloggers who have a large social media presence to assess their interest in reviewing our products;

(e) online publications: includes engaging in a variety of digital based advertising campaigns through identified publications to help to create awareness of our brand;

(f)  ecommerce: includes developing our ecommerce website and generating awareness through our newsletters; and

(g) utilizing search engine optimization and pay-per-click marketing.

We also intend to engage in a variety of offline marketing tactics to increase product awareness. Ourprimary marketing channels will be the following:

(a) coordinating a street team who will target dog parks in large urban centers in the USA and Canada to connect with dog owners and give away product samples;

(b) engaging in trade marketing to promote new products and connect with distributors and retailers in the natural pet product sector;

(c) offering retail promotions to retail teams and sales representatives based upon performance; and

(d) engaging the press and media by disseminating press releases at least once per month.

Competition

We are one of many companies in the consumable pet products market with no measurable percentage of that market. Our competition in the healthy feeding systems and healthy consumable products markets are both domestic and foreign companies, many of whom manufacture their products in low cost areas such as India, East Asia, Southeast Asia and Mexico.

We also compete with other smaller niche market companies focused on the same area of the consumable pet product markets we have entered. The following companies offer similar products to our hemp based pet supplement and chews: Pet Naturals of Vermont, Cloud Star Dynamo Dog Functional Dog and Glycoflex II.

We believe that our products give us a competitive advantage as we only include hemp in our products and our price point is lower than some of our other competitors. Hemp is an unregulated food substance and, as such, we believe provides with a competitive advantage over our competitors who market products which contain cannabidiol extract from hemp or marijuana. Although marijuana can be grown and sold in certain states, its use, transport and sale in all its forms is heavily regulated.

Raw Materials and Suppliers

Research and Development

Our product formulations were developed in conjunction with Hannah Facey Belcher-Timme (Doctor of Veterinary Medicine, Candidate, 2016) of Cornell University who reviewed our base formulas and undertook a meta-analysis of

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existing research. She has published studies on hemp and the company's proposed active ingredients. The resulting formulations utilize a combination of hemp and other quality ingredients such as green lipped mussel, curcuminoids from turmeric, L-theanine, lemon balm, chamomile, polyphenols from pomegranate, and DHA (an omega fatty acid).

Governmental Regulations

Pet Food-Related Regulation - Canada

In Canada, the labelling and advertising of pet food is regulated by the Consumer Packaging and Labelling Act and the Competition Act, administered by Industry Canada. The Consumer Packaging and Labelling Act mandates that the following items be included on pet food labels: (1) common or generic name: e.g. "dog food" or "cat food"; and (2) net weight: amount of product within the package, measured in metric units; and the manufacturer's or importer's contact information.

The Pet Food Association of Canada ("PFAC") with input from members from the Competition Bureau has also established pet food labeling guidelines. These guidelines are voluntary. The PFAC guidelines recommends pet food labels should include the following items: (1) list of ingredients: listed in descending order by percentage of weight; (2) feeding instructions; and (3) guaranteed analysis: information on the minimum and maximum nutritional quantities. For example, the analysis will include the maximum or minimum percentage of protein, fat, fiber and moisture; and nutritional adequacy or intended life stage for which the food is suitable. They also recommend that ingredients be listed and identified by their common name. When an ingredient or combination of ingredients makes up 90% or more of the total weight of all ingredients, these ingredients should also form a part of the product name. For example, if the product contains 90% or more beef, it may be called "my brand beef dog food".

In Canada, products that pass the Canadian Veterinary Medical Association ("CVMA") Pet Food Certification Program, which involves a feeding trial, carries a CVMA label on their packaging. Participation in the program is voluntary.

Pet Supplement Regulation- Canada

Products sold and marketed as 'pet supplements' in Canada are currently administered by the Canadian Low Risk Veterinary Health Products ("LVRHP") Interim Notification Program. Health Canada considers the current INP (Interim Notification Program) structure to be a temporary measure pending the new veterinary drug framework to improve the regulation of LRVHPs (Low Risk Veterinary Health Products).

The INP allows for LRVHPs to obtain a notification number if certain conditions have been met, the significant ones being:

• The product is for use only in dogs, cats, or horses that are not intended for food.
• All ingredients are listed in and meet the conditions of admissible substances in the 'List of Substances' established by Health Canada.
• There is objective and credible evidence demonstrating that the product is safe and can support a reasonable expectation of effectiveness when the product is used as intended.
• Product labeling information and any other information supplied to the users will match the information provided on the notification form (e.g. health claims) and comply with the conditions of admissible substances (e.g. contraindications, cautions and warnings).

Participation in the INP is voluntary and industry members may instead prefer to obtain a Notice of Compliance (NOC) and Drug Identification Number (DIN) through the normal regulatory process.

The company is participating in the program, has submitted all product information for registration and is currently awaiting to be assigned its notification numbers for each product.

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Pet Food-Related Regulation- United States

In the United States, the Food and Drug Administration's ("FDA") Center for Veterinary Medicine ("CVM"), regulates animal feed - including pet food - under the Federal Food, Drug and Cosmetic Act ("FFDCA") and its implementing regulations. Although pet foods are not required to obtain premarket approval from the FDA, any substance that is added to or is expected to become a component of a pet food must be used in accordance with a food additive regulation unless it is generally recognized as safe ("GRAS") under the conditions of its intended use.

The labeling of pet foods is regulated by both the FDA and individual state regulatory authorities. FDA regulations require proper identification of the product, a net quantity statement, a statement of the name and place of business of the manufacturer or distributor and proper listing of all the ingredients in order of predominance by weight. The FDA also considers certain specific claims on pet food labels to be medical claims and therefore subject to prior review and approval by the FDA. In addition, the Food and Drug Administration Amendments Act of 2007 requires the FDA to establish ingredient standards and definitions for pet food, processing standards for pet food and updated labeling standards for pet food that include nutritional and ingredient information. The FDA is currently working to implement these requirements.

The FDA recently noted an increase in the number of dog and cat foods labeled as being intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease and noted that animal health may suffer when such products are not subject to pre-market FDA approval and are provided in the absence of a valid veterinarian-client-patient relationship. The FDA recently issued guidance containing a list of specific factors it will consider in determining whether to initiate enforcement action against products that satisfy the definitions of both an animal food and an animal drug, but which do not comply with the regulatory requirements applicable to animal drugs. These include, among other things, whether the product is only made available through or under the direction of a veterinarian and does not present a known safety risk when used as labeled. We believe that we market our products in compliance with the policy articulated in FDA's guidance and in other claim-specific guidance, but the FDA may disagree or may classify some of our products differently than we do and may impose more stringent regulations applicable to animal drugs, such as requirements for pre-market approval and compliance with GMPs for the manufacturing of pharmaceutical products.

Under Section 423 of the FFDCA, the FDA may require the recall of a pet food product if there is a reasonable probability that the product is adulterated or misbranded and the use of or exposure to the product will cause serious adverse health consequences or death. In addition, pet food manufacturers may voluntarily recall or withdraw their products from the market.

Most states also enforce their own labeling regulations, many of which are based on model definitions and guidelines developed by Association of American Feed Control Officials ("AAFCO"). AAFCO is a voluntary, non-governmental membership association of local, state and federal agencies that are charged with regulation of the sale and distribution of animal feed, including pet foods. The degree of oversight of the implementation of these regulations varies by state, but typically includes a state review and approval of each product label as a condition of sale in that state.

Most states require that pet foods distributed in the state be registered or licensed with the appropriate state regulatory agency.

Facilities that manufacture, process, pack, or hold foods, including pet foods, must register with the FDA and must renew their registration every two years. This includes most foreign facilities as well as domestic facilities. Registration must occur before the facility begins its pet food manufacturing, processing, packing, or holding operations.

We are also subject to the Food Safety Modernization Act ("FSMA"). Under the FSMA, the FDA implemented the Current Good Manufacturing Practice, Hazard Analysis and Risk-Based Preventive Controls for Food. Our manufacturing facilities must company with the Foreign Supplier Verification Program, FSVP, on or before July 2017.

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Pet Supplement Regulation-United States

Some of the company's product line are marketed as dietary supplements for animals, not feed or treats. According to the FDA: 'Dietary supplements for animals are not recognized as a class of products. Under the Federal Food, Drug, and Cosmetic Act, products marketed as dietary supplements for use in animals are classified as either foods or drugs, depending on their intended use.^[3]  

In order to find a pathway to market for its supplement products, the company is a member and complies with the product guidelines of the National Animal Supplement Council (NASC). NASC was formed in 2001 when the animal health supplement industry was threatened to be shut down from a complicated and erratic regulatory environment under the AAFCO and FDA regulatory bodies.

The NASC put together a framework under which companies could market and distribute products, as long as they were 'non-food' and didn't make nutritional claims or references anywhere on the label, website or promotional material. Product claims could only involve how the ingredients impacted the structure or function of the animal, 'joint support' or 'cardiovascular health' are common examples.

Since 2002, AAFCO, the FDA and the NASC have worked together and supported this product category, thus allowing the marketing and sale of animal supplements.

The company follows the NASC member requirements, including implementing standards for good manufacturing practices, participating in the NASC Adverse Event Reporting System and complying with all supplement labeling and claims guidelines.

Medical Marijuana

True Leaf Medicine Inc. ("TL Medicine") began as a "licensed producer" applicant in Canada's Marihuana for Medical Purposes Regulations (MMPR) program. Our original submission was sent in July of 2013. A "ready to build" approval was granted for the first application in January 2014, but issues arose regarding the facility location and local zoning. In March 2014, we secured a new location and submitted another application on April 8, 2014. 

In July 2015, we received a notice from Health Canada stating that our application had passed through the preliminary screening process and was undergoing enhanced screening. Enhanced screening is one of the necessary steps in the process of becoming a licensed producer of medical marijuana under the MMPR.  Shortly thereafter the federal government set the election date for October 19, 2015, the application process under the MMPR stalled.

On August 24, 2016, the federal government adopted the Access to Cannabis for Medical Purposes Regulations ("ACMPR") program to replace the MMPR program. Many applicants have either gone out of business or have declined to continue down the difficult road of obtaining license approval. The team at True Leaf continues to persevere. The company's application is in good standing and is in the security clearance stage.

Industry

Medical Marijuana

As of February 16, 2017, there are 38 licensed producers in Canada, all of which are either producing or intending to produce medical marijuana.

[3] http://www.fda.gov/AnimalVeterinary/Products/AnimalFoodFeeds/ucm050223.htm

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Health Canada estimates that - as of September 30, 2016 - approximately 94,460 patients in Canada used doctor-prescribed medical marijuana through the ACMPR. By 2024, Health Canada estimates that the number of patients using medical marijuana will grow to 450,000 - creating a market worth an estimated $1.3 billion.

Recreational Marijuana

The size of the 'black market' for marijuana is large and difficult to quantify. A report by the Fraser Institute in B.C. estimates the total marijuana market in British Columbia, alone, to be $7 billion.  The "blue sky" growth potential of the recreational market seems inevitable as polls in Canada (56%) and the United States (58%) continue to move toward favoring legalization.  A number of states have already legalized recreational marijuana.

Principal Product

As attitudes and legal treatment on the use of marijuana for medical purposes evolve, we have begun to see a paradigm shift on the issue.  Significant medical breakthroughs for the treatment of cancer, Crohn's disease, multiple sclerosis, glaucoma, chronic pain, arthritis, diabetes and many other possible ailments in the near future could be realized as efficacy is proven under a regulated environment and published scientific studies support the following benefits of medical marijuana: pain relief: studies have shown benefits for sufferers of chronic or neuropathic pain, the latter of which is caused by damage to the nervous system; increases appetite: helps cancer and AIDS sufferers to eat, thereby increasing their ability to combat illness; decreases nausea: enables chemotherapy patients to be more receptive to treatment; and relaxes muscles: in many cases, medical marijuana relieves seizures, muscle twitching, tightness, tension or muscular pain, which improves the patient's quality of life. We anticipate having two core revenue streams: Direct-to-consumer sales of True LeafTM medical marijuana via doctor's prescriptions; and Laboratory testing services to MMPR suppliers (such testing is now mandated by Health Canada).

As attitudes and legal treatment on the use of marijuana for medical purposes evolve, we have begun to see a paradigm shift on the issue.  Significant medical breakthroughs for the treatment of cancer, Crohn's disease, multiple sclerosis, glaucoma, chronic pain, arthritis, diabetes and many other possible ailments in the near future could be realized as efficacy is proven under a regulated environment and published scientific studies support the following benefits of medical marijuana:

• pain relief: studies have shown benefits for sufferers of chronic or neuropathic pain, the latter of which is caused by damage to the nervous system;
• increases appetite: helps cancer and AIDS sufferers to eat, thereby increasing their ability to combat illness; decreases nausea: enables chemotherapy patients to be more receptive to treatment; and
• relaxes muscles: in many cases, medical marijuana relieves seizures, muscle twitching, tightness, tension or muscular pain, which improves the patient's quality of life.

We anticipate having two core revenue streams:

1. Direct-to-consumer sales of True Leaf^TM medical marijuana via doctor's prescriptions; and
2. Laboratory testing services to MMPR suppliers (such testing is now mandated by Health Canada).

Operations

In the event that our application to become a licensed producer of medical marijuana (a "licensed producer") is approved, we have the option to lease a 0.61-hectare location with a 16,000-square foot building located in the Village of Lumby, British Columbia on which to carry out our operations. The building complies with building and fire codes and poses no risk to public health, safety or security.  The location has room to expand production to meet up to $72 million in annual sales.  

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Proposed Lumby Property

The proposed 16,000 square foot building contains 40' ceilings, creating the opportunity for a total of three interior floors and 48,000 square feet of useable space.  We also have a right of first refusal to lease an adjacent building with 30,000 square feet, 40' ceilings, and the opportunity for 90,000 square feet of usable space.  Under the MMPR, if a licensed producer wishes to expand to a second building at the same location, an amendment to the original application will need to be submitted to Health Canada for approval.

Interior Layout

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In the initial building, approximately 625 square feet will be assigned for the lab area, which will be incorporated within a 2,940-square foot space allocated for the Vault, Curing and Packaging areas. The building is of metal frame construction with exterior metal sheeting and cement floors.  An estimated budget of $1,600,000 will be required for leasehold improvements to the building, installation of security requirements, testing lab and growing equipment. The safety and building requirements encompassed within the MMPR will be complied with subsequent to the renovations that we intend to undertake on the proposed building.

Initial production will begin on the ground level with 8,000 square feet of growing area.  Growing areas will be divided into 544 square foot rooms, each containing 18 lights and the necessary irrigation, ventilation, cooling, CO2 and related equipment.  We have used an average of 1.5 lbs per light per growing cycle as our average when making production calculations with dirt as the growing medium and 6 grow cycles per year. 

Using the initial ground floor layout of 16,000 square feet of growing area, the facility will have a yearly production capacity of 734 kilograms.  Additional floors and more growing capacity can be added and financed from internal profits as demand increases and we secure more patients. 

The MMPR sets out physical security requirements that are necessary for securing sites where licensed producers conduct activities with marijuana other than storage. Health Canada's Directive on Physical Security Requirements for Controlled Substances provides technical detail as to how to meet these security requirements.  We will take sophisticated security measures to ensure the physical security of the premises and staff and abide by the regulatory requirements. 

Such measures will include:

• a chain link security fence around the perimeter of the property that will be no less than 1.2 meters from the outside of the building with a remote operated central gate as the only entrance to the facility;
• third-party 24-7 monitoring of the site and facility by an Underwriters Laboratories of Canada (ULC) certified security firm;
• motion and fire detection for all interior rooms;
• Access Control Readers for every room within the facility;
• internally segregated restricted areas with separate access control;
• ULC certified Vault with its own security system located within internally-restricted areas for inventory;
• a Level 3 ULC approved safe for storage of test material within the lab;
• all individuals working for the company will require a clean criminal record; and
• all directors, officers and 'Senior People in Charge' (as defined in the MMPR) require enhanced security clearance approval from Health Canada.

The building will have the following compartments:

• Growing Area of 12 x 544 sq. ft. rooms (restricted);
• Controlled Substance Waste Storage Area (restricted);
• Vault Area: Harvest Material (curing), Vault, Lab and Packaging Area (restricted and secured);
• Admin, Reception Area (restricted);
• Staff Welfare Area (restricted);
• Shipping Room (restricted and secured); and
• Nutrient Storage and Water Treatment Room (restricted).

The primary specialized skill and knowledge requirement for success as a licensed producer of medicinal marijuana is with respect to cultivating the product.  Currently, we have two full-time employees and nine marketing, finance and quality assurance consultants contracted as part of our team.  Once we receive funding and "ready to build" approval, a full-time quality assurance person and master grower will be secured to ensure the quality of the production process and that the finished product meets company specifications before it is made available for sale. 

In order to begin production of medical marijuana, we will need to obtain starting materials - namely, seeds - from appropriate sources. 

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The latest regulations outline only two approved sources of seed material as laid out in this text from Health Canada on May 12, 2014:

There are two potential legal sources of material that can be used for cultivation of marihuana:

• Importation from a legal foreign source;
• Marihuana plants or seeds obtained from a producer who holds a license under the MMPR.

The same requirements apply under the ACMPR.

All initial seed stock or "seedlings" will be purchased from approved sources and verified by our quality control team.

Our Business Objectives

We have an option to lease a 0.61hectare location with a 16,000-square foot building in the Village of Lumby, British Columbia for our operations, with room to expand production.  We project a 12-month period without revenue for Health Canada reviews, "ready to build" approval, building renovations, license approval and cultivation.  Pending Health Canada approval, we expect to be producing and selling product under an MMPR license by the spring of 2018.

The following table sets forth what we have achieved to date:

• To achieve commercial distribution of medical marijuana;
• To increase our patient customer base annually through our marketing campaign. We intend to allocate 10% of our sales to marketing;
• As demand for our product grows, we will seek to expand our production capacity by adding growing rooms through the addition of mezzanine floors and increasing the facility's footprint at an estimated cost of $4.68 million (financed from internal or external sources of capital over a six-year period);
• To engage in ongoing research and development at an initial cost of 10% of our sales.

Our short-term business objectives for the next 12 to 24 months are:

• Obtain a producer license;

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• Develop brand awareness;
• Pre-enroll 500 patients for our product;
• Cultivate and grow our product; and
• Complete our first harvest and begin sales.

The following table describes how we intend to meet those objectives over the next 12 to 24 months.

* We are unable to estimate certain costs at this date. Once we receive "ready to build" approval from Health Canada we will be in a better position to estimate these various amounts.

Expected Expenditures to Activate Business

As previously discussed, our medical marijuana production business is on hold pending application approval by Health Canada. Once we have confirmation that our application is once again moving forward, we intend to raise additional capital for this segment of our business.  Upon "ready to build" approval confirmation by Health Canada, we estimate $3,000,000 will be required for the full activation of our marijuana production business. The break-down of expenditures is as follows:

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Marketing Plans and Strategy

Licensed producers in Canada are not allowed to advertise their products to the public. On June 30, 2014 Health Canada circulated an advertising bulletin to all licensed producers outlining their concerns regarding the use of promotional materials and advertisements.

Licensed producers are allowed to promote their products to doctors directly and indirectly through various outreach programs and through the attendance at conferences. As a result, our marketing will be focused on aligning ourselves with physicians and family doctors to become the trusted source of medicinal cannabis to the medical community.

We plan to continue to reach out to the medical community and educate the user market in order to build brand awareness and engagement through our attendance at conferences and other outreach strategies.   Our goal is to have 500 physician-supported patients pre-enrolled in the True Leaf distribution system when we are finally able to launch our production products.

Competition

Marijuana Industry

The company has applied for a "licensed producer status" under the MMPR in Canada. As of February 17, 2017, there are 38 licensed producers in Canada each producing or intending to produce medical marijuana. They are as follows: