Dear Shareholders,

Pathway Health continues to be committed to improving the quality of life for patients suffering from chronic pain and related conditions. At Pathway, we believe medical cannabis will have a role to play in the management of chronic pain, harm reduction for opiate reliance, and will be important to Pathway’s future growth plans.

We wanted to provide an update on recent developments in the cannabis sector. As highlighted by some of the recent lobbying by patient advocate groups and industry stakeholders, we believe there is an urgent need to address affordability, greater access to medical cannabis products including in more suitable delivery formats for specific indications, as well as flexibility in THC limits.

Cannabis Health Products (CHPs) and Regulatory Update

Pathway’s growth has been impacted by the delay and the lack of clarity on timing of the anticipated CHP regulatory reforms. However, we are encouraged by recent developments, especially the creation of the Industry Sector of Innovation, Science and Economic Development Canada (ISED).

ISED, which is to be headed by Eric Costen, a very well-regarded federal regulator in the cannabis department, will lead a “cannabis strategy table” to support ongoing dialogue with business and stakeholders in the cannabis sector. Deepak Anand, a long-time cannabis industry consultant and expert (and others in the cannabis industry), share our view on the need for the elimination of taxes on medical cannabis, and pharmacy dispensing for medical cannabis, among other needed changes.[1] We believe grouping medical and recreational cannabis users under one regulatory umbrella is a disservice to the approximately 264,000 Health Canada registered individuals[2] and the many others who access cannabis for medical purposes under the Cannabis Act to help them manage a variety of issues, including chronic pain, anxiety, sleep, arthritis and mental health.

We are hopeful that the cannabis strategy table will be able to make the long over-due changes that are needed to address affordability and greater access for patients who use cannabis for medical purposes.

The Pathway Forward

So far, 2022 has been a challenging year for Pathway and its peers on a number of fronts. The current global outlook and general downturn in the capital markets has made it difficult to raise funds, especially for small caps. We recently announced the closing of a $1.0M line of credit which we anticipate will roll into a larger $3.5M revolving credit facility shortly after the Annual General Meeting in mid-July. With this additional capital secured, our focus for the second half of this year will continue looking at ways to control costs, streamlining and leveraging our existing business assets (including pharmacy and other partners), establish new partnerships/programs (involving unions and veterans) and exploring international opportunities where we can leverage our experience, know how and existing partnerships, especially in the medical cannabis space where Canada was early to legalize.

Pathway has applied for a non-possession sales license (Cannabis license Class – Federal sale for medical purposes without possession), which is currently under review with Health Canada. We believe this license will help us deliver patient care more efficiently, potentially assist in our international initiatives and provide insights to inform our future CHP strategy.

Thank you for your continued support. We look forward to providing more updates in the coming months as we execute on our plans.

Ken Yoon, CEO