Lexaria Signs Letter of Intent for Second Technology Out-Licensing Agreement including Plans to Enter Clinical Studies Kelowna, BC /

Lexaria Signs Letter of Intent for Second Technology

Out-Licensing Agreement

including Plans to Enter Clinical Studies

Kelowna, BC / August 10, 2016 / Lexaria Bioscience Corp.

(OTCQB:LXRP) (CSE:LXX) ( the Company or Lexaria ) has entered a letter of

intent (LOI) to license its proprietary technology to CBDM LLC for the

development and sale of a range of marijuana oil infused products in a

potentially national-scale roll-out to Indian reservations across America and

certain other U.S. territories.

Under the terms of the LOI, usage fees of $200,000 are

contemplated for each product line introduced, over a five-year operating term

per state. The Licensee can earn non-exclusive rights to sell up to five product

lines on Indian reservations, through licensed medical or adult use retailers

only. Currently, 35 states have federally recognized Indian reservations. The

Licensee may also earn non-exclusive rights to sell these product lines in all

areas of Massachusetts, Pennsylvania, Arizona and Nevada.

Technology license usage fees payable to Lexaria have the

potential to reach as much as $36,000,000 over the term of the seven-year

agreement, though the actual amount to be paid shall depend on the number of

product lines and states the Licensee ultimately effects.

The LOI further contemplates a $175,000 per-state payment by

the Licensee, to be paid in-kind to Lexaria by executing clinical testing in

patients receiving products with Lexaria s technology. This clinical testing

will be conducted and funded by researchers affiliated with the Licensee at a

major US University and Lexaria will have access to study data and results.

Lexaria s technologically enhanced products will be evaluated for their efficacy

in alleviating certain symptoms associated with chronic disease to be studied,

in concert with primary intervention treatment. Lexaria will begin

collaborations with the Licensee and its affiliated university researchers on

the basic design elements of the planned clinical testing. Lexaria will have no

funding responsibilities for the clinical testing and does not influence its

funding sources which are third-party to the Company.

Under this structure, total in-kind fees of $6,300,000 would

grant the Licensee access to valid sales territories in each of the 36 states

Additional information and details regarding these clinical

testing plans will be announced in due course. Readers are cautioned that the

clinical plans are currently in the preliminary design stages and will, like any

other clinical testing in patients with chronic disease, likely take an as yet

undetermined period of many months to complete and report.

We are extremely pleased to have effected this LOI with our

second prospective licensee in the medical and adult use marijuana edibles

sector, said John Docherty, President of Lexaria Bioscience Corp. Lexaria was

recently granted its first patent allowance by the US Patent and Trademark

Office, and is heartened to observe the response of the marketplace as it

acknowledges the value of the Lexaria technology in improving flavor and

performance of cannabinoids and other bioactive substances in consumer products.

Lexaria feels confident that it will succeed in being awarded additional new

patent allowances in 2016 and 2017 that will further strengthen its competitive

position in the marketplace and its ability to effect additional revenue

generating technology out-licensing agreements pursuant to its business plan

within the cannabis sector and beyond.

Lexaria itself is not selling any products through this

agreement. The LOI is expected to advance into a definitive agreement within 60

days though there is no assurance of this. Additional information will be

released regarding the completion of the definitive agreement, and progress with

the clinical testing, as they are confirmed and available. Readers are cautioned

that a definitive agreement has not yet been reached and, even if reached,

receipt of license usage fees is dependent upon the success of the Licensee in

launching and operating their business.

Lexaria Bioscience Corp. is a food sciences company focused on

the delivery of active compounds that can behave as superfoods through its

proprietary infusion technologies. Lexaria s technology enables higher

bioavailability rates for CBD; THC; NSAIDs; Nicotine and other molecules than is

possible without lipophilic enhancement technology. This can allow for lower

overall dosing requirements and/or higher effectiveness in active molecule

delivery. Lexaria hopes to reduce other common but less healthy ingestion

methods such as smoking as it embraces the benefits of public health.

FOR FURTHER INFORMATION PLEASE CONTACT:

Lexaria Bioscience Corp.

FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements. Statements

which are not historical facts are forward-looking statements. The Company makes

forward-looking public statements concerning its expected future financial

position, results of operations, cash flows, financing plans, business strategy,

products and services, competitive positions, growth opportunities, plans and

objectives of management for future operations, including statements that

include words such as "anticipate," "if," "believe," "plan," "estimate,"

"expect," "intend," "may," "could," "should," "will," and other similar

expressions are forward-looking statements, including but not limited to: that

any license arrangements may be entered into with other companies or partners,

that the Company s technology will prove to be beneficial to third parties or to

generate revenue for the Company. Forward-looking statements are estimates

reflecting the Company's best judgment based upon current information and

involve a number of risks and uncertainties, and there can be no assurance that

other factors will not affect the accuracy of such forward-looking statements.

Access to capital, or lack thereof, is a major risk and there is no assurance

that the Company will be able to raise required working capital. Factors which

could cause actual results to differ materially from those estimated by the

Company include, but are not limited to, government regulation, managing and

maintaining growth, the effect of adverse publicity, litigation, competition,

the patent application and approval process and other factors which may be

identified from time to time in the Company's public announcements and filings.

There is no assurance that the engagement of consultants or participation in the

hemp oil sector or alternative health businesses will provide any benefit to

Lexaria, or that the Company will experience any growth through participation in

these sectors. There is no assurance that any in-kind payment; that usage

payments of $200,000 per state; that $33,000,000 or any part thereof in cash

usage fees, or that royalties of any kind, will ever be received by the Company

from any Licensee. There is no assurance that clinical testing for chronic