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Digipath Establishes Joint Venture for CA Cannabis Testing Laboratory

September 25, 2017


LAS VEGAS, Sept. 25, 2017 /PRNewswire/ -- Digipath, Inc. (OTCQB: DIGP), an independent cannabis testing laboratory and media firm, is pleased to announce that it has entered into a joint venture with Mr. Don Ashley, an experienced real estate developer and cannabis entrepreneur, to establish and operate a cannabis testing laboratory in California. The joint venture, Humboldt Botanical, LLC, will conduct business under the name "Digipath Botanical Testing" and will launch Digipath's entry into the largest cannabis market in the United States.


Pursuant to the joint venture agreement, Mr. Ashley will contribute up to $2 million to fund the build-out and equipping of the testing laboratory, while Digipath will be responsible for managing and supervising the day-to-day operations of the laboratory. Digipath and Mr. Ashley will be entitled to receive 40% and 60%, respectively, of the joint venture's cash distributions, provided that until Mr. Ashley has received the return of his invested capital, distributions will made 75% to Mr. Ashley and 25% to Digipath. Digipath has also provided the joint venture with a non-exclusive license to use its intellectual property in connection with the operation of the laboratory. Digipath has also been granted a non-exclusive, royalty-free right to use all cannabis data generated by the joint venture, further adding to its growing portfolio of cannabis testing data and related intellectual property.


The joint venture will reimburse Digipath for its expenses incurred in connection with the joint venture and pay Digipath a monthly administrative fee equal to 10% of those expenses.


This new testing laboratory will be part of a larger, three-building cannabis industrial park that is expected to include an R&D facility, oils/concentrate manufacturing center, health and wellness center, distribution and processing facility, tissue culture nursery, hemp clothing outlet, and coffee bistro.


Todd Denkin, President of Digipath, commented, "The state of California is estimated to be the single largest cannabis market in the U.S. Adult-use cannabis legislation was approved by California residents last November, and we expect these new regulations to be implemented in 2018. The good news for the industry is that the requirements for cannabis testing will be significant, and we are excited to partner with Don and his team to pursue this opportunity in Humboldt County."


Don Ashley, Digipath's partner in the joint venture, added, "Digipath, as our laboratory testing partner, will bring significant value and experience to our larger cannabis complex. We expect to break ground on this project in the next few weeks and hope to be operational in early Q1 2018 just after the state-wide adult-use market is expected to launch, as we have already obtained approval from the local planning authorities for the entire complex."


About Mr. Don Ashley


Mr. Don Ashley is a cannabis industry veteran who owns and operates several successful businesses. As an experienced full-time cannabis and real estate entrepreneur and investor, his wealth of knowledge spans both the cannabis and commercial real estate markets. Mr. Ashley also brings to the cannabis industry an extensive 25 year career in radio, television, and film production.


About Digipath, Inc.


Digipath, Inc. is an independent cannabis testing and media firm that supports the cannabis industry's best practices for reliable testing and delivers cannabis news coverage and education about the cannabis industry. Digipath's two business units are Digipath Labs and TNM News Corp. Digipath Labs™ is working to set the industry standard for testing all forms of cannabis-based products using FDA-compliant laboratory equipment and proprietary standard operating procedures (SOP) to ensure product safety and efficacy. TNM News Corp. has pioneered a cannabis-focused news network, The National Marijuana News, which delivers news, interviews, and education on all things cannabis.


Information about Forward-Looking Statements


This press release contains "forward-looking statements" that include information relating to future events. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in, or suggested by, the forward-looking statements. Important factors that could cause these differences include, but are not limited to: the Company's need for additional funding, the demand for the Company's products, governmental regulation of the cannabis industry, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other risks that may be detailed from time-to-time in the Company's filings with the United States Securities and Exchange Commission. For a more detailed description of the risk factors and uncertainties affecting Digipath, please refer to the Company's recent Securities and Exchange Commission filings, which are available at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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