Cannabis Science Files Preliminary 14c Information Statement, the Action is to Create a New Class of Common Stock and Issue Dividend

DENVER, Dec. 22, 2010 /PRNewswire-FirstCall/ -- Cannabis Science, Inc. (OTC Bulletin Board: CBIS), a pioneering US biotech company developing pharmaceutical cannabis products, is pleased to announce to its shareholders and the investment community that the Company has filed its action to approve the decision of our Board of Directors to amend the Articles of Incorporation to effect a recapitalization of the Company by establishing two classes of common stock, Class A and Class B and to issue a dividend to holders of our current common stock so they received 1 share of the new Class A common stock and 1 non-transferable share purchase warrant for each 10 shares of the former Class B common stock that they previously owned as of the record date, December 31, 2010. Each warrant will grant the holder to purchase an additional share of Class A common stock at a price of $1.00 per share. The warrant will be exercisable for 90 days from the date that the Class A common stock receives a trading symbol.

On December 20, 2010, our Board of Directors approved, subject to receiving the approval of the holder of a majority of our outstanding capital stock, an amendment to the Articles of Incorporation to effect a recapitalization of the Company by establishing two classes of common stock, Class A and Class B and to issue a dividend to holders of our current common stock so they received 1 share of the new Class A common stock and 1 non-transferable share purchase warrant for each 10 shares of the former Class B common stock that they previously owned as of the record date, December 31, 2010. Each whole share purchase warrant will be exercisable into one share of Class A common stock at a price of $1.00 per share. The share purchase warrants expire 90 days from the date Class A common stock commences trading under its own unique symbol. The Amended Articles effecting the new class and share dividend will become effective following filing with the Secretary of State of the State of Nevada, which will occur promptly following the 20th day after the mailing of this Information Statement to our stockholders as of the Record Date.

We are currently authorized by our Certificate of Incorporation to issue 250,000,000 shares of common stock, $0.001 par value per share and 1,000,000 shares of preferred stock, $0.001 par value per share. Pursuant to the Amendment we will reclassify our common stock so that we can issue 250,000,000 shares of Class B common stock (our current class), 100,000,000 shares of Class A common stock (our new class) and 1,000,000 shares of preferred stock.

As of the date the Amendment was approved by our Board and the Majority Stockholders, there were 107,170,574 shares of our common stock issued and outstanding.

Reasons for the New Class of Common Stock

Our Board believes it is in our best interests and the best interests of our stockholders to create a new class of common stock as it will allow for greater value for shareholders in having increased dividend participation in addition to enabling the issuance of shares of our common stock or other securities in connection with such potential issuances and such other purposes as the Board determines at a higher price. The Board believes that the new class will afford the Company greater flexibility in seeking capital and potential acquisition targets. The Board has no immediate plans, understandings, agreement or commitments to issue shares of the new common stock for any purposes other than the dividend. While there is no immediate benefit for the Company arising from this recapitalization, we believe the added capital proceeds from the exercise of share purchase warrants into Class A common shares will benefit the Company in its capital growth objective and the added value to shareholders will retain their loyalty and commitment towards the Company ' s longevity and profitability.

New Share Structure

Upon effectiveness of the Amendment, we will be authorized to issue 250,000,000 shares of Class B common stock (our current class) and 100,000,000 shares of Class A common stock (our new class) and 1,000,000 shares of preferred stock.

Class A Common Stock (New Class)

Each share of Class A Common stock will be entitled to thirty votes per share on all matters voted on by holders of the Company ' s common stock. In addition, each share of Class A Common Stock will be convertible into Class B Common Stock at a ratio of 30 for 1, that is, every one share of Class A Common Stock can be converted into 30 shares of Class B Common Stock, at the election of the holder. Each shares of Class A Common Stock will also be entitled to a ratio participation of 97/100 th (97%) on all declared dividends on the Company ' s common stock, e.g. for every dollar of declared dividend on the Company ' s common stock, Class A will be entitled to $0.97. Furthermore, the Company will, as soon as practicable, apply for a unique trading symbol for this newly created class of common stock.

Class B Common Stock (Former Class)

Each share of Class B Common stock is entitled to one vote per share on all matters voted on by holders of the Company ' s common stock. Shares of Class B Common Stock will not be convertible into other classes of the Company ' s common stock. Each shares of Class B Common Stock will also be entitled to a ratio participation of 3/100 th (3%) on all declared dividends on the Company ' s common stock, e.g. for every dollar of declared dividend on the Company ' s common stock, Class B will be entitled to $0.03. Class B Common Stock will continue to trade under the Company ' s current trading symbol CBIS.OB.

Series A Preferred Stock

Each shares of Series A Preferred Stock is entitled to 1,000 votes per share on all matters to be voted on by the holders of the Company ' s common stock and is not convertible into any shares of the Company's common stock.        With respect to rights on liquidation, dissolution or winding up, shares of Series A Preferred Stock rank on a parity with the Company's common stock.

Share Dividend

Upon the effectiveness of the Company ' s proposed corporate actions, the Company will issue a dividend to holders of our current common stock so they received 1 share of the new Class A common stock for each 10 shares of the former Class B common stock that they previously owned as of the record date. These shares will be mailed to the shareholders directly from our transfer agent without any action require on the part of our shareholders.

Warrants

Upon the effectiveness of the Company ' s proposed corporate actions, the Company will issue one non-transferable share purchase warrant for each 10 shares of the former Class B common stock that shareholders previously owned as of the record date, December 31, 2010. Each whole share purchase warrant will be exercisable into one share of Class A common stock at a price of $1.00 per share. The share purchase warrants expire 90 days from the date Class A common stock commences trading under its own unique symbol.

About Cannabis Science, Inc.

Cannabis Science, Inc. is at the forefront of pharmaceutical grade medical marijuana research and development. The Company works with world authorities on phytocannabinoid science targeting critical illnesses, and adheres to scientific methodologies to develop, produce and commercialize phytocannabinoid-based pharmaceutical products. In sum, we are dedicated to the creation of cannabis-based medicines, both with and without psychoactive properties, to treat disease and the symptoms of disease, as well as for general health maintenance.

Forward Looking Statements; This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement containing works such as "anticipate," "seek," intend," "believe," "plan," "estimate," "expect," "project," "plan," or similar phrases may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Some or all of the events or results anticipated by these forward-looking statements may not occur. Factors that could cause or contribute to such differences include the future U.S. and global economies, the impact of competition, and the Company's reliance on existing regulations regarding the use and development of cannabis-based drugs. Cannabis Science, Inc. does not undertake any duty nor does it intend to update the results of these forward-looking statements.

SOURCE Cannabis Science, Inc.