Level Brands, Inc. (LEVB) completed the acquisition of Cure Based Development, LLC, (“Cure”) the owner of the consumer brand cbdMD in an all-stock transaction, valued at $48.9 million. The purchase is not justified based on replacement value. On a strictly all-cash basis, the true value of Cure’s underlying assets less liabilities and current brand recognition level are less than $11 million to duplicate. However, as an “all paper deal” the acquisition is real-cost neutral since no hard assets were used in the transaction.

It appears unlikely that Level Brands as a public entity will earn more than $0.09 per shares over three years on the 15+ million pay for the acquisition. Meanwhile, the shares received by the sellers can potentially "earn" $319 per share in the same three-year period by merely liquidation their position. The strategy of acquiring and developing brands has merit. The long-term potential of national cannabis/hemp specific product recognition will create valuable assets and generate enormous profits. But the timeframe for Level Brands' to garner meaningful gains would require at least ten years because it was an all-paper transaction, which dilutes the ability of Level Brands’ management to earn a significant profit on an earnings per share basis.

Level Brand’ management would have never made the Cure deal if the transaction was all in cash. Nor does Level Brands’ have the $11 million to duplicate Cure's business model.

NOW THE NOISE ON THE ALL PAPER DEAL Cure Based Development, LLC, (“Cure”) the owner of the brand cbdMD; a consumer products brand offering a large selection of cbdMD branded CBD products primarily through its e-commerce website, www.cbdMD.com, as well as through 700 current third-party retail locations. cbdMD manufactures its premium line of products at its Charlotte, NC facility using 100%, all-natural CBD extracted from organic, non-GMO, vegan, and gluten-free industrial hemp were grown in the USA. In consideration of the purchase price, Level Brands will issue 15,250,000 shares of its common stock, and it may issue up to an additional 15,250,000 shares during the first 60 months if revenue milestones aggregating $300 million are achieved. The revenue milestones are targeted at $20 million in the first 12 months, $40 million in the next twelve months, $80 million in the next 18 months and $160 million in the final 18 months. “With the acquisition of cbdMD, I believe Level Brands now becomes one of the leading CBD consumer companies in America. The cbdMD brand has shown consistent month-over-month double-digit growth rates and, with the capital we have available, we believe we can significantly accelerate the revenue growth and execute on an aggressive expansion and brand positioning plan which should yield continued significant growth rates. Now that the Farm Bill has been approved, and CBD will no longer be listed as a Schedule 1 controlled substance, we believe the CBD market should drastically expand. CBD products will now have access to retailers nationwide, as well as through online channels. Also, the passage of this legislation should help CBD gain mainstream consumer acceptance. We believe cbdMD will significantly gain market share in this growing industry,” said Martin Sumichrast, Chairman and CEO of Level Brands. “I was first introduced to CBD as a consumer, and it really worked for me. Since launching the company, our goal has been to bring a unique product to our loyal customers with the goal of enhancing their overall quality of life and providing education and awareness to the potential benefits of CBD. In the process, we expect to build cbdMD into the leading CBD brand. We have built a reputation as a premier manufacturer of high-quality products at a very affordable price, giving our customers a great value. Now with the passage of the Farm Bill, we expect not only that our business will expand as major retail chains start to carry CBD, but also this mass retail acceptance will encourage a larger customer base who will want to try our products. In addition, our access to athletes and the sporting world should enhance the marketability of our products,” said Scott Coffman, the Founder, and CEO of cbdMD. cbdMD’s founder is Scott Coffman, the founder of Blu-Ecig. Mr. Coffman started Blu and sold it to Lorillard Tobacco for $135 million. Mr. Coffman, who will join Level Brands’ Board and will continue as CEO of cbdMD, will be a significant shareholder of Level Brands. “While our products are currently in over 700 retail outlets in the U.S. and we are gearing up to expand our retail footprint, we also believe in growing our e-commerce channel. We believe we will separate ourselves from our competitors through our unique online marketing campaigns. Since CBD is generally recognized as being most effective when you take it regularly, our online re-order programs provide an easy, cost-effective way to get our products to our customers,” said Caryn Dunayer, President of cbdMD.

LEVEL BRANDS' BUSINESS MODEL Level Brands is a brand management and licensing company; owns and operates the consumer cannabidiol (CBD) brand cbdMD, whose current products include CBD gummies, CBD tinctures, CBD topical, CBD bath bombs, CBD oils, and CBD pet products. The Company's primary licensing and corporate brand management businesses target consumer products in the health and wellness space and other high-demand verticals, bringing innovative products to market under the kathyireland® Health & Wellness; Ireland Men One (I'M1), and Encore Endeavor One (EE1) brands.