Common use of Disclosure Controls and Procedures and Internal Control Over Financial Reporting Clause in Contracts

Disclosure Controls and Procedures and Internal Control Over Financial Reporting. (a) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability; (iii) access to monies and investments is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (b) The Company and each of the Subsidiaries has implemented, maintains, and complies in all material respects with internal compliance programs designed to detect and prevent violations of any applicable Laws specific to the Cannabis industry. (c) The auditors who reported on and certified the consolidated statement of financial position, statement of operations and comprehensive income, statement of changes in equity and statement of cash flows for the year ended December 31, 2017 set forth in the Disclosure Record were independent with respect to the Company within the meaning of the rules of professional conduct applicable to auditors in Canada at such time such auditors reported on and certified such financial statements and to the Knowledge of the Company, since the Applicable Date, there has not been a “reportable event” (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations) with any auditors of the Company. (d) The responsibilities and composition of the Company’s audit committee comply with National Instrument 52-110 – Audit Committees and Rule 10A-3 under the Exchange Act.