Lexaria Nicotine LLC, (OTCQX: LXRP) (CSE: LXX) a wholly owned subsidiary of Lexaria Bioscience Corp. has entered into a definitive agreement with Altria Group Inc. (NYSE: MO) to fund the research & development of Lexaria’s patented DehydraTECH™ technology.

Lexaria’s DehydraTECH™ enhances the performance of beneficial compounds in ingestible products across four categories: taste & smell, speed of action, bio-absorption and bioavailability. The partnership will explore innovation in oral, reduced-risk nicotine consumer products and potentially commercialize DehydraTECH™ for oral nicotine delivery.

“This is an incredible milestone for Lexaria Bioscience and our shareholders. We are proud that Altria has chosen to invest in our DehydraTECH™ technology and look forward to reaping the benefits of working with a world-class partner,” states Chris Bunka, CEO of Lexaria Bioscience. “Together we have the opportunity to change nicotine delivery and make a difference in the lives of millions of consumers.”

In exchange for a minority equity interest Altria Ventures Inc., an indirect Altria Group subsidiary, will fund up to US$12 million for Lexaria Nicotine to conduct milestone-based clinical investigations utilizing DehydraTECH^TM.

Altria will pay Lexaria Nicotine a royalty on revenue generated from the sale of nicotine products containing DehydraTECH™ and holds the option to acquire 100% ownership in Lexaria Nicotine, at which time royalty payments would stop. Additionally, Altria has the right to initially appoint one of the seven directors on Lexaria Nicotine’s board of directors and, through further phased investments, may have the right to appoint up to three of the seven directors.

About Lexaria Bioscience

Lexaria Bioscience Corp. has developed and out-licenses its disruptive delivery technology that promotes healthier ingestion methods, lower overall dosing and quicker onset of lipophilic active molecules. Lexaria has ten patents granted in the USA and in Australia and has filed over 50 patent applications worldwide across ten patent families. Lexaria’s technology provides more rapid delivery to the bloodstream; and important taste-masking benefits, for orally administered bioactive molecules including cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), nicotine and other molecules.

Lexaria Nicotine LLC is a United States domiciled, majority-owned subsidiary of Lexaria Bioscience Corp., focused on reduced-risk nicotine solutions.

About Altria Group

Altria’s wholly-owned subsidiaries include Philip Morris USA Inc. (PM USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton), Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman), Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and Philip Morris Capital Corporation (PMCC). Altria holds an equity investment in Anheuser-Busch InBev SA/NV (AB InBev).

The brand portfolios of Altria’s tobacco operating companies include Marlboro^®, Black &Mild^®, Copenhagen^® and Skoal^®. Ste. Michelle produces and markets premium wines sold under various labels, including Chateau Ste. Michelle^®, Columbia Crest^®,14 Hands^® and Stag’s LeapWine Cellars^™, and it imports and markets Antinori^®, Champagne Nicolas Feuillatte^™,Torres^® and Villa MariaEstate^™ products in the United States. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission.