Ready, Set, Smoke! Taat Herb Co. Publishes Footage from Beyond Tobacco™ Production Run

Through production vendor Hempacco, Taat has completed a test production run of Beyond Tobacco™ cigarettes which has confirmed their suitability for full-scale production, matching initial capacity estimations of one million sticks per day. Taat has published footage of the test production run, which is available on its website and its social media channels. The output from this production run is to be used in a series of intensive focus groups in which current tobacco smokers will provide feedback about the similarity of Beyond Tobacco™ to legacy tobacco products. Additionally, the Company will be able to issue samples of Beyond Tobacco™ cigarettes to prospective distributors, which could encourage such potential distributors to carry Beyond Tobacco™ and promote the product to their respective distribution networks.

LAS VEGAS and VANCOUVER, British Columbia, July 20, 2020 (GLOBE NEWSWIRE) -- Taat Lifestyle & Wellness Ltd. (CSE:TAAT)(Frankfurt: 2TP2) (the “Company” or “Taat”) is pleased to announce that it has recently completed a successful full-scale test production run of Beyond Tobacco™ cigarettes with production vendor Hempacco, Co. Inc. (“Hempacco”). Following this test run, initial production capacity estimations of one million Beyond Tobacco™ sticks per day were confirmed, allowing for a reliable supply bandwidth for Beyond Tobacco™ upon its planned launch in Q4 2020. At this rate of production, Taat will be capable of manufacturing an annual supply of Beyond Tobacco™ cigarettes that is equivalent to 0.168% of the total amount of individual cigarettes sold domestically in 2018, according to data from the Federal Trade Commission1. Furthermore, the management of Hempacco expressed amazement regarding the quality of Taat’s proprietary blend and formulation of hemp, indicating that it was superior to any hemp material that they had ever used in rolling hemp cigarettes. The finished product from this test run is to be used in the Beyond Tobacco™ focus groups scheduled to be held in Nevada this summer, as announced in the Company’s July 13, 2020 press release.

Based in San Diego, California, Hempacco is a vertically-integrated manufacturer of hemp products with full-service supply chain offerings to include warehousing, logistics coordination, and co-packing. In its principal facility of 53,000 square feet, Hempacco offers both refrigerated and frozen storage of hemp to ensure optimal quality of all product that it handles. Hempacco is also introducing an automatic hemp vending concept for which it acquired a fleet of 600 vending machines earlier this year. The Company has coordinated with Hempacco to roll Beyond Tobacco™ cigarettes and package them in the “pack and carton” format that is standard for the tobacco industry. With an additional facility in western New York state, Hempacco is able to offer competitive lead times to meet demand from markets on both the west and east coasts of the United States.

More information about Hempacco can be found on its website: http://hempaccopackaging.com

The Company announced the planned launch of Beyond Tobacco™ cigarettes in its June 22, 2020 press release with a value proposition of offering a better-for-you alternative to traditional cigarettes by way of a user experience that is designed to closely emulate that of a legacy tobacco product, without nicotine or tobacco. With a “stick” format and cigarette-style packaging that is expected to be familiar to tobacco cigarette smokers, Beyond Tobacco™ is characterized by a proprietary blend of tobacco flavouring, as well as an enhanced volume of smoke exhaled. Each stick of Beyond Tobacco™ contains at least 50mg of cannabidiol (“CBD”, a non-psychoactive derivative of hemp), which has been shown effective in mitigating tobacco withdrawals and reducing tobacco dependency. Beyond Tobacco™ is to be offered in an “Original” tobacco variety, as well as a “Menthol” variety.

In July 2020, Taat secured distributorship with a Texas-based wholesaler of vaping products that can place Beyond Tobacco™ cigarettes in up to 10,000 retail stores across 38 U.S. states. In its June 29, 2020 press release, the Company announced that initial retail market testing of Beyond Tobacco™ cigarettes yielded excellent user feedback, as well as reorders from over 75% of NV and CA retailers that participated in the testing. The subsequent phase of market research for Beyond Tobacco™ is to consist of an intensive series of focus groups to be undertaken over the summer, conducted by Nevada’s largest consumer product testing firm. The Beyond Tobacco™ cigarettes produced in the recent test production run (shown below) are to be used in these focus groups, which are intended to elicit feedback that can be utilized for possible revisions to Beyond Tobacco™ cigarettes. The Company anticipates that the completion of these focus groups and the finalization of any product revisions are the only remaining milestones preceding the official launch of Beyond Tobacco™ cigarettes, which is planned to take place in Q4 2020.

For clarity, the “test” Beyond Tobacco™ cigarettes used in the Company’s initial retail market testing in spring 2020 were produced in-house on a small scale. The test production run of Beyond Tobacco™ cigarettes made by Hempacco differed materially from the in-house production as it was done using the same industrial machinery on which Beyond Tobacco™ cigarettes are ultimately to be produced upon their planned launch. This reflects the product’s suitability for full-scale production.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/b73c72aa-5c54-4334-b10f-b79b484b6af0

The Company has published footage of the recent test production run of Beyond Tobacco™ on its website and social media channels in the form of both still images and videos. The Beyond Tobacco™ test production run gallery can be accessed at the following link: https://taatusa.com/july-2020-production/. Additional media can also be viewed on the Company’s social media channels:

Facebook: http://facebook.com/taatglobal
Instagram: http://instagram.com/taatglobal (@taatglobal)
Twitter: http://twitter.com/taatglobal (@taatglobal)

Hempacco Chief Executive Officer Sandro Piancone commented, "I have to say that I am overwhelmingly impressed by the Beyond Tobacco™ proprietary blend of hemp when it comes to how well it ran through our commercial-grade cigarette rolling machines. I do not exaggerate when I say that it ran absolutely flawlessly, and better than any hemp material that we have ever worked with in the entire time that we have been in business. Our production capacity estimation of approximately one million sticks per day was on par with the production rate of this run, which is the maximum capacity of our machines. Being very familiar with hemp cigarettes, it is my opinion that Beyond Tobacco™ will be very well-received upon its planned Q4 2020 launch. We are honoured to be working with Taat during these exciting times."
“Elevating Beyond Tobacco™ from an early-stage prototype to a near-final product that is proven suitable for commercial production is the moment we have all been waiting for,” said Joe Deighan, Founder of Taat. “Aside from proving that Beyond Tobacco™ has withstood tests that many new products are challenged by, completing this full-scale production run enabled us to do many things. Aside from using these Beyond Tobacco™ cigarettes for the focus groups that are to be carried out this summer, we now have a sufficient supply of Beyond Tobacco™ cigarettes that we can give to potential distributors as a way of boosting their confidence in the product, so that they can promote it to their retailer networks more enthusiastically. Once we make any potential finishing touches to the product from the focus group feedback, we believe this represents the final hurdle that precedes Beyond Tobacco™ hitting the market.”

References

1 - Table 1B (Page 13) of the FTC’s Cigarette Report for 2018 indicates that 216.9 billion cigarette units were sold domestically in 2018. Based on a projected production capacity of one million Beyond Tobacco™ sticks per day (365 million sticks per year), it is concluded that this annualized capacity equates to 0.168% of cigarette units sold domestically in the year 2018. https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-cigarette-report-2018-smokeless-tobacco-report-2018/p114508cigarettereport2018.pdf

About Taat Lifestyle & Wellness Ltd.

Taat Herb Co., the flagship brand of Taat Lifestyle & Wellness Ltd. (CSE:TAAT)(Frankfurt: 2TP2) , is an early-stage life sciences company based in Las Vegas, Nevada innovating nicotine-free and tobacco-free alternatives to traditional cigarettes. With a unique proprietary blend of all-natural ingredients and meticulous engineering of the user experience, Taat Beyond Tobacco™ cigarettes are designed to emulate every aspect of legacy tobacco products with no significant difference to the user. Taat Beyond Tobacco™ cigarettes provide benefits that include mitigation of tobacco withdrawals, and reduction of tobacco dependency. With an expert-led go-to-market strategy, the Company's objective is to position itself in the US $814 billion (2018)1 global tobacco industry to capitalize on the growing worldwide demand for better-for-you alternatives to traditional cigarettes.

For more information, please visit http://taatusa.com.

References

1 British American Tobacco - The Global Market

Statement Regarding Effects of CBD on Smoking Cessation

The Beckley/Exeter research program (University of Exeter) carried out a pilot study that found after several weeks following cannabidiol ("CBD") treatment, CBD helped tobacco smokers to reduce the amount of cigarettes smoked by as much as 40%. A follow-on study is planned, which will include a brain imaging component to examine the brain activity patterns underlying the probable therapeutic effects of CBD.

Source: https://beckleyfoundation.org/cbd-for-smoking-cessation/
Link to Study: https://www.sciencedirect.com/science/article/abs/pii/S030646031300083X

Forward Looking Statements

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking information and information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur, or be achieved. Forward-looking information in this news release includes statements regarding the potential launch of Taat hemp cigarettes, in addition to the following: Continued availability of Hempacco’s production facilities to the Company, and continued suitability of the same for Beyond Tobacco™ cigarettes. The forward-looking information reflects management’s current expectations based on information currently available and are subject to a number of risks and uncertainties that may cause outcomes to differ materially from those discussed in the forward-looking information. Although the Company believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed timeframes or at all. Factors that could cause actual results or events to differ materially from current expectations include: (i) adverse market conditions; (ii) changes to the growth and size of the tobacco and CBD markets; and (iii) other factors beyond the control of the Company. The Company operates in a rapidly evolving environment. New risk factors emerge from time to time, and it is impossible for the Company’s management to predict all risk factors, nor can the Company assess the impact of all factors on Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking information. The forward-looking information included in this news release are made as of the date of this news release and the Company expressly disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable law.

The statements in this news release have not been evaluated by Health Canada or the U.S. Food and Drug Administration. As each individual is different, the benefits, if any, of taking the Company’s products will vary from person to person. No claims or guarantees can be made as to the effects of the Company’s products on an individual’s health and well-being. The Company’s products are not intended to diagnose, treat, cure, or prevent any disease.

This news release may contain trademarked names of third-party entities (or their respective offerings with trademarked names) typically in reference to (i) relationships had by the Company with such third-party entities as referred to in this release and/or (ii) client/vendor/service provider parties whose relationship with the Company is/are referred to in this release. All rights to such trademarks are reserved by their respective owners or licensees.

Statement Regarding Third-Party Investor Relations Firms

Disclosures relating to investor relations firms retained by Taat Lifestyle & Wellness Ltd. can be found under the Company's profile on http://sedar.com.

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