Most profitable pure play public cannabis company in Canada^1,2

CALGARY, AB, Aug. 17, 2023 /CNW/ – Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V: DB) (OTCQB: DBCCF), a market leader in premium cannabis and extract manufactured products, is pleased to announce its interim financial results for the three and six month periods ending June 30, 2023.

“Our strong second quarter sequential net revenue growth, driven by demand for our core products and international exports, continues to exceed our publicly-stated targets.” said Paul Wilson, CEO of Decibel. “We continue to highlight the success in our new, unique and innovative product strategy, demonstrated through clear consumer preference to our infused pre-roll strategy. In 2023, our industry leading brand, General Admission, has grown category share to 49%³ (+6% YTD³) in light of significant category competition through new competitive brands: +50 Brands³ (+56% YTD³) & New SKU’s: +156 SKU’s³ (+62% YTD³). Currently the infused pre-roll segment makes up ~34% of the Canadian pre-roll category³, in established US markets it makes up ~60% (California & Arizona YTD Sales ’23³). We continue to see tailwinds for our core business that will further reinforce our Canadian market position and international presence.”

Second Quarter Highlights

• Record National Market Share⁽⁴⁾ of 7.5% in Q2 2023 which placed Decibel as the 2^nd largest licensed producer in Canada by market share.
• Record Net Revenue of $30.9 million in the second quarter of 2023, with sequential growth of 14% over the prior quarter, and year over year growth of 66%. Net revenue improvement was driven by net Canadian recreational sales through growth in demand for vapes and infused products, increased manufacturing capacity, international sales, and the launch of the Company’s new brand Vox and General Admission Edibles near the end of the quarter.
• Gross Margin Before Fair Value Adjustments was 42% in the second quarter of 2023, compared to 49% in the prior quarter and 41% in the first quarter of 2022. The second quarter was impacted by a $754 thousand write off of aged product and increased temporary labour of $0.9 million to meet market demand as the Company is in the process of expanding manufacturing capacity.
• Record Adjusted EBITDA⁽²⁾ of $7.3 million in the second quarter of 2023, with sequential growth of 8% over the prior quarter and year over year growth of 126%.
• Positive Free Cash Flow⁽²⁾ of $0.5 million in the second quarter of 2023, with sequential decline of 75% over the prior quarter and a year over year decline of 51%. During the quarter, the Company reduced accounts payable by $4.2 from the prior quarter, which negatively impacted Free Cash Flow.
• Record Adjusted Net Income⁽²⁾ of $4.3 million in the second quarter of 2023, with sequential growth of 27% over the prior quarter and a year over year improvement of $4.2 million.
• Adjusted Earnings Per Share (“Adjusted EPS”)⁽⁵⁾: of $0.01 Adjusted EPS in the second quarter, consistent with the prior quarter and a year over year improvement of $0.01.

Year to Date Highlights

• Net Revenue of $58.0 million, an increase of 65% over 2022.
• Adjusted EBITDA⁽²⁾ of $14.1 million, an increase of 147% over 2022.
• Positive Free Cash Flow⁽²⁾ of $2.3 million, a decrease of 14% over 2022 driven by a $3.7 million reduction in accounts payable.
• Adjusted EPS⁽⁴⁾ of $0.02, an increase of $0.02 over 2022.

Link to Decibel’s Investor Presentation

Decibel’s interim financial statements for the three and six month periods ending June 30, 2023 (“Financial Statements”) and related Management’s Discussion & Analysis for three and six month periods ending June 30, 2023, are available under the Company’s profile at www.sedar.com.

As of June 30, 2023, Decibel was in compliance with all of its financial covenants under its credit facilities and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel 

Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements 

Non-GAAP Measures 

This press release contains certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. 

Non-GAAP Financial Measures 

Adjusted EBITDA is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Adjusted Net Income is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted EPS is a non-GAAP ratio that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding.  These measures intended to provide a proxy for the Company’s net income and comprehensive income and is used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.²

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations less cash used in investing activities. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Supplementary Financial Measures

Retail Sales is a supplementary financial measure that is intended to provide a more accurate depiction of the revenue earned by the Company’s retail operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is removed from Retail Revenue as presented in the Financial Statements.

International Sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company’s wholesale operations.

Gross Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is added to Gross Canadian Recreational Sales as found in the Financial Statements to arrive at Gross Canadian Recreational Sales.

Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is added to Net Canadian Recreational Sales as found in the Financial Statements to arrive at Net Canadian Recreational Sales.

Forward Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things: that the Company has strong momentum heading into 2023; expectations that demand for Decibel’s products will grow; the Company’s expectations for continued growth and momentum in the second half of 2023, the Company’s expectations for additional catalysts late summer and early fall and the timing and results of the same; the Company’s expectation that it will remain in compliance with all of its financial covenants under its credit facilities for the remainder of its twelve-month forecast period and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated, or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable.

With respect to forward-looking statements and FOFI contained in this press release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel‘s products; Decibel’s ability to enter new markets and industry verticals; Decibel’s ability to attract, develop and retain key personnel; Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: anticipated revenue growth and Decibel’s expectations that it will remain in compliance with its financial covenants for the remainder of its twelve-month forecast period, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements and FOFI contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and FOFI included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements and FOFI to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

Notes About Comparables

This news release outline’s the Company’s performance relative to third-party issuer metrics (the “Comparables“). The Comparables were considered to be an appropriate basis for comparison with Decibel as they are publicly provided by similar pure play issuers. The information relating to the Comparables has been obtained or derived from public sources, see “Market, Independent Third Party and Industry Data”. Comparables may be affected by, among other things, the size of the business, capital structure, principal market served, historical performance and growth expectations, which can vary significantly among Decibel and the issuers providing the Comparables. In addition certain Comparables may be calculated differently by other issuers, see “Non-GAAP Measures”. Accordingly, an investment decision should not be made in reliance on the Comparables.

Market, Independent Third Party and Industry Data

Certain market, independent third party and industry data contained in this news release is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but Decibel has not conducted its own independent verification of such information. This news release also includes certain data derived from independent third parties. While Decibel believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Decibel has not independently verified any of the data from independent third party sources referred to in this news release or ascertained the underlying assumptions relied upon by such sources.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

–Cash increased to $22.7 million from $16.4 million in Q1 2023, as operating cash flow reached a record $8.3 million

– Adjusted EBITDA¹ was $9.5 million versus a $0.1 million loss in Q1 2023

-Revenue was $44.7 million, up 54% sequentially and 171% year-over-year

-Gross margin was 55% versus 41% in Q1 2023, and 2% in the prior year period

-Q2 Biomass production² was up 311% year-on-year and biomass revenue increased 358% year-on-year

-Cost per Equivalent Dry Pound of Production³ was $139 per pound, down 12% versus Q2 2022

-Average selling price was $340 per pound, up 43% versus last year, and 17% versus Q1 2023

-Conference Call to be held today August 14, 2023 at 5:00 p.m. ET

LONG BEACH, CA and TORONTO, Aug. 14, 2023 /CNW/ – Glass House Brands Inc. (“Glass House” or the “Company”) (NEO: GLAS.A.U) (NEO: GLAS.WT.U) (OTCQX: GLASF) (OTCQX: GHBWF), one of the fastest-growing, vertically integrated cannabis companies in the U.S., today reported financial results for its second quarter ending June 30, 2023.

Second Quarter 2023 Highlights
(Unless otherwise stated, all results and dollar references are in U.S. dollars)

• Net Sales of $44.7 million increased 171% from $16.5 million in Q2 2022 and up 54% sequentially from $29.0 million in Q1 2023;
• Gross Profit was $24.4 million compared to $0.3 million in Q2 2022 and $12.0 million in Q1 2023;
• Gross Margin was 55%, compared to 2% in Q2 2022 and 41% in Q1 2023;
• Adjusted EBITDA¹ was $9.5 million, compared to $(9.8) million in Q2 2022 and $(0.1) million in Q1 2023;
• Cost per Equivalent Dry Pound of Production³ was $139 a decrease of 12% compared to the same period last year and down 29% sequentially versus Q1 2023;
• Equivalent Dry Pound Production² was 103,336 pounds, up 311% year-over-year and up 115% sequentially;
• Cash balance was $22.7 million at quarter-end, up 39% from Q1 2023 quarter end.

Management Commentary

“The second quarter of 2023 was the best in our history. We achieved record levels of operating cash flow, exceeded Q2 guidance across several operating metrics and marked our first quarter of positive adjusted EBITDA¹,” stated Kyle Kazan, Co-Founder, Chairman and CEO of Glass House.

“In Q2 2023, we saw our biomass revenues and pounds sold more than quadruple versus the previous year. Revenues from our retail dispensaries doubled to $10 million year-over-year, due to growth from acquisitions. Consolidated gross margin surpassed 50% and cultivation cost per pound³ fell by 12% versus last year. Finally, Adjusted EBITDA¹ flipped to a positive $9.5 million compared to negative $9.8 million a year ago.

“I believe that our position as a vertically-integrated California cannabis company with a competitive core competency in the cost-efficient cultivation of premium flower is the reason why we’ve been able to persevere in this difficult market environment. We value our retail and brand businesses for the revenues and market awareness they provide, and we see potential for our brands to create significant shareholder value over the long term.”

Kazan concluded, “We anticipate this momentum will continue through the remainder of 2023, and surpassing our second quarter guidance by significant margins only builds our confidence.”

Second Quarter 2023 Operational Highlights

Subsequent Events

Q2 2023 Financial Results Discussion

Net revenues for Q2 2023 were $44.7 million, 171% growth versus Q2 2022 and a 54% sequential increase versus Q1 2023. This result was 12% higher than the high end of our Q2 guidance range of $38 million to $40 million.

Wholesale biomass revenue of $30.6 million increased 358% versus Q2 2022 and was up 112% sequentially versus Q1 2023. In the quarter, product sold increased 354% year-on-year to 90,174 pounds of equivalent dry weight. The increase in weight available for sale was driven by a 311% increase in production² versus last year to 103,336 pounds as a result of incremental production from the Company’s SoCal farm.

Retail revenue in Q2 2023 of $10.1 million increased 108% year-over-year and was up 7% on a sequential basis. The year-over-year increase was primarily a result of incremental revenues from four retail locations we acquired in Q3 2022, and from three new stores – Farmacy Isla Vista which opened in mid-December last year, Farmacy Santa Ynez which opened in January, as well as NHC Turlock which opened in late April.

Wholesale CPG revenues were $4.0 million, a decrease of 20% compared to the prior year and a 24% decline sequentially. We had expected negative sequential growth in our CPG wholesale sales due to the financial difficulties of HERBL, one of the state’s largest distributors, along with the challenges facing all brands in the current California marketplace. We are currently distributing our CPG product via our co-packer who is providing distribution service to our retail accounts. For our own stores, we now sell direct and treat this as an intercompany transaction instead of booking the sale through the distributor; and this reduced Q2 CPG revenue by $1.1 million – accounting for almost the entire sequential decline in CPG sales. Without the change, CPG sales would likely have been about flat.

Consolidated gross profit was $24.4 million, or 55% of net revenues, compared to $0.3 million, or 2%, in Q2 2022 and $12.0 million, or 41% in Q1 2023. This is the highest gross margin percent ever achieved by Glass House. The two key drivers were wholesale biomass average selling price reaching $340 per pound, well above $290 per pound in the first quarter, and cost of production³ falling to $139 per pound in Q2 from $196 per pound in Q1 2023.

General and administrative expenses were $13.1 million for the quarter compared to $11.4 million in Q1 2023. The $1.7 million increase was primarily attributable to bad debt expense of $1.1 million as a result of HERBL ceasing business operations and to increased wholesale biomass taxes paid to Ventura County due to the large sequential increase in wholesale biomass revenues.

Sales and marketing expenses were $1.0 million, up 11% year-on-year and 53% sequentially. Professional fees were $2.2 million, down 18% year-on-year and up 47% from Q1 2023. The sequential increase in professional fees was due to increased legal fees related to litigation, the Turlock acquisition and expenses related to our annual shareholders meeting. Our plan all along has been to limit growth in SG&A spending as we increased revenue to improve cash flow and profitability.

Depreciation and amortization in Q2 2023 was $3.6 million, down 7% from Q1 2023.

Adjusted EBITDA¹ was $9.5 million in Q2 2023, compared to adjusted EBITDA loss of $(0.1) million in Q1 2023. This was driven by top-line growth, higher gross margins, and disciplined management of operating expenses.

We generated $8.3 million of cash from operations in Q2 2023 versus cash generated from operations of $4.5 million in Q1 2023 and cash usage of $7.8 million in Q2 2022. In Q2, cash impact from net income turned positive for the first time, reaching $2.5 million from negative $4.1 million in Q1. Cash flow also benefited by $5.3 million because there was no income tax paid in the quarter.

Capital spending was $0.2 million in Q2, as there were no major spending projects in the quarter. Q1 capital spending was $1.1 million.

2023 Outlook

The Company is providing the following guidance for 2023 based on the strength of our second quarter results and current trends from the first half of 2023.

2023 Cash Flow and EBITDA
Based on our current wholesale average selling price, which we assume maintains for the balance of the year, we expect to have positive operating cash flow and positive adjusted EBITDA¹ in Q3 and Q4.

Q3 2023 Outlook
We expect Q3 2023 revenue to be between $45 million and $47 million. The increase vs. Q2 2023 is being driven by projected low-to-mid single digit percent growth in wholesale biomass revenue with pricing projected to increase slightly to above the Q2 2023 average selling price of $340 per pound as a seasonally favorable increase in the percentage of flowers and smalls relative to trim offsets a seasonal dip in prices due to increased summer output from outdoor and mixed light farms. We also assume that CPG and Retail revenue will collectively be flat relative to Q2 due to the continued difficult retail environment. Production² is expected at 100,000 to 103,000 pounds, roughly in line with Q2 levels. While the second half of the year is usually our highest in terms of production, we do not expect the typical seasonal uptick in Q3 compared to Q2 this year due to efficiency improvements in post-harvest processing that boosted Q2 production by approximately 10,000 pounds and because unusually low sunlight levels in May, June and the first half of July reduced the normal seasonal lift in biomass bulk harvests that we typically see in Q3. As a reminder, plants harvested today are the cumulative result of sunlight in the preceding 60-90 days.

We expect consolidated gross margin percent to be flat to up slightly versus Q2’s 55% as cost of production³ is projected to decline to $120 per pound, a 14% reduction from $139 per pound in Q2. Gross margin for CPG and Retail are projected to be flat to up slightly.

In addition, we expect adjusted EBITDA¹ to be similar to Q2 and expect operating cash flow to be about $4 million to $6 million, which is lower than the Q2 level of $8 million.

We expect non-expansion capex to be below $1 million.

2023 Fiscal Year
We are raising our revenue guidance to $165 to $170 million⁴ for 2023 due to higher than projected wholesale biomass production. We are increasing our wholesale revenue projection to a range of $105 to $110 million from $100 million. Projected average selling price per pound remains at approximately $330 per pound, while we are raising our biomass production² estimate to 350,000 to 355,000 pounds, an increase of 35,000 to 40,000 pounds over our previous guidance. We are maintaining our cost of production³ estimate at $140 per pound, with second half cost of production projected at $120 per pound or below. This is still an 8% decrease vs. the same period in 2022. This guidance represents an 84% increase for production at the mid-point of guidance and a 2% reduction in costs vs. FY 2022.

Revenue projections for our Retail and CPG businesses remain unchanged at $40 million and $20 million, respectively.

None of the above guidance includes any impact from the ongoing retrofit of Greenhouse 5, which began in early July. We expect to have plants in Greenhouse 5 by early 2024, with the first sale projected for Q2 2024. Once operational, we expect Greenhouse 5 will increase our cultivation capacity by roughly 250,000 pounds to a total of 600,000 pounds. At current pricing, Greenhouse 5 is capable of producing over $80 million of incremental revenue annually and over $30 million in incremental EBITDA¹.

Financial results and analyses will be available on the Company’s website on the ‘Investors’ and ‘News & Events’ drop down menus (www.glasshousebrands.com) and SEDAR+ (www.sedarplus.ca).

Unless otherwise stated, all results are in U.S. dollars.

Conference Call
The Company will host a conference call to discuss the results today, August 14, 2023 at 5:00 p.m. Eastern Time.

Webcast:             Register Here
Dial-In Number:  1-888-664-6392
Conference ID:   96853256
Replay:               1-888-390-0541
Replay Code:      853256#
(replay available until 12:00 midnight Eastern Time Monday, August 21, 2023)

Non-GAAP Financial Measures

Glass House defines EBITDA as Net Loss (GAAP) adjusted for interest and financing costs, income taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA excluding share-based compensation, stock appreciation rights expense, loss (income) on equity method investments, change in fair value of derivative liabilities, change in fair value of contingent liabilities, acquisition related professional fees, and non-operational start-up costs.

EBITDA and Adjusted EBITDA are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. Such supplemental non-GAAP financial measures are not standardized financial measures under U.S. GAAP used to prepare the Company’s financial statements and might not be comparable to similar financial measures disclosed by other companies and, thus, should only be considered in conjunction with the GAAP financial measures presented herein.

The Company has provided a table above that provides a reconciliation of the Company’s net loss to Adjusted EBITDA for the three months ended June 30, 2023 compared to three months ended June 30, 2022 and three months ended March 31, 2023.

Footnotes and Sources:

ABOUT GLASS HOUSE

Glass House is one of the fastest-growing, vertically integrated cannabis companies in the U.S., with a dedicated focus on the California market and building leading, lasting brands to serve consumers across all segments. From its greenhouse cultivation operations to its manufacturing practices, from brand-building to retailing, the company’s efforts are rooted in the respect for people, the environment, and the community that co-founders Kyle Kazan, Chairman and CEO, and Graham Farrar, Board Member and President, instilled at the outset. Through its portfolio of brands, which includes Glass House Farms, PLUS Products, Allswell, Forbidden Flowers, and Mama Sue Wellness, Glass House is committed to realizing its vision of excellence: outstanding cannabis products, produced sustainably, for the benefit of all. For more information and company updates, visit www.glasshousebrands.com and https://glasshousebrands.com/press-releases/.

Forward Looking Statements
This news release contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as “forward-looking statements”). Forward-looking statements reflect current expectations or beliefs regarding future events or the Company’s future performance or financial results. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates”, “targets” or “believes”, or variations of, or the negatives of, such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Forward-looking statements in this news release include, without limitation, the company’s: potential to create significant shareholder value from its brands over the long-term; projection that the current momentum in its operating business will continue through the remainder of 2023; projection of producing positive cashflow and positive Adjusted EBITDA in both Q3 and Q4 2023; guidance that revenues will be $45 to $47 million in Q3 2023; projection that Q3 pricing will increase slightly to above the Q2 23 average selling price of $340 per pound as a seasonally favorable increase in the percentage of flowers and smalls relative to trim offsets a seasonal dip in prices due to increased summer output from outdoor and mixed light farms; guidance that Q3 2023 CPG and Retail revenue will collectively be flat compared to Q2 2023; projection that Q3 2023 wholesale biomass production will be 100,000 to 103,000 pounds, roughly in line with Q2 levels; guidance that Q3 consolidated gross margin percent will be flat to up slightly versus Q2’s 55% with cost of production projected to decline to $120 per pound; guidance that Q3 2023 adjusted EBITDA will be similar to Q2 2023 and that Q3 2023 operating cash flow will be about $4 to $6 million; guidance that Q3 2023 non-expansion capex will be below $1 million; guidance that fiscal year 2023 revenues will reach $165 to $170 million due to higher than initially projected wholesale biomass production; guidance that fiscal year 2023 wholesale biomass revenue will be $105 to $110 million; projection that fiscal year 2023 average selling price per pound will be $330 per pound; estimate that fiscal year 2023 biomass production will reach 350,000 to 355,000 pounds; guidance that fiscal year 2023 cost of production will be $140 per pound, with second half 2023 cost of production at $120 per pound or below; guidance that fiscal year 2023 retail revenues will be $40 million and fiscal year 2023 CPG revenues will be $20 million; projection that Glass House will have plants in Greenhouse 5 by early 2024, with the first sale from Greenhouse 5 projected for Q2 2024; ability to fund its planned retrofit of Greenhouse 5; projection that once operational, Greenhouse 5 will increase cultivation capacity by roughly 250,000 pounds to a total of 600,000 pounds; projection that at current pricing, Greenhouse 5 is capable of producing over $80 million of incremental revenue annually and over $30 million in incremental EBITDA. All forward-looking statements, including those herein are qualified by this cautionary statement.

Although the Company believes that the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the statements. There are certain factors that could cause actual results to differ materially from those in the forward-looking information, including financial and operational results not proving to be as expected or on the timelines expected; the Company not completing certain proposed acquisition or financing transactions at all, or on the timelines expected; the Company not achieving the synergies expected; and other risks disclosed in the Company’s Annual Information Form and other public filings on SEDAR+ at www.sedarplus.ca. Accordingly, readers should not place undue reliance on forward-looking statements.

For more information on the Company, investors are encouraged to review the Company’s public filings on SEDAR+ at www.sedarplus.ca. The forward-looking statements and financial outlooks contained in this news release speak only as of the date of this news release or as of the date or dates specified in such statements. The Company disclaims any intention or obligation to update or revise any forward- looking information, whether as a result of new information, future events or otherwise, other than as required by law.

SOURCE Glass House Brands Inc.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Endexx Consolidated Q2 Year-over-Year Quarterly Sales Increased 865%

CAVE CREEK, AZ, May 22, 2023 (GLOBE NEWSWIRE) — via NewMediaWire – Endexx® Corporation (OTC: EDXC), a provider of innovative plant-based wellness and nutritional products, today announced the filing of its Form 10-Q for its second quarter ending March 31, 2023.  Endexx reported the consolidated second quarter unaudited revenue has grown 865% “Year-over-Year” (YOY) from USD $254,686 in the second quarter of last fiscal year to USD $2,457,354 in the second quarter of the current fiscal year, a $2,202,668 (865%) increase. The Q2 unaudited consolidated financial statement, including Hyla and CBD Unlimited, reports that revenue has grown nearly 9x. The strength of international and domestic sales of Hyla’s organically processed, plant-based, all-natural, zero-nicotine vape products is increasing as the market for nicotine-based vape products is under regulatory scrutiny, both internationally and in the USA. Over ten thousand points of distribution have been added to the distribution complex in the first six months of fiscal 2023. Endexx also reported USD $2,949,063 in consolidated revenues in its first six months of fiscal 2023 compared to USD $529,277 in the same period of fiscal 2022, a 557% increase. For the same comparative periods, gross profits increased from USD $175,530 to USD $586,512, an increase of USD $410,782 or (234%).

“Endexx’s acquisition of the controlling interest of Hyla has generated its greatest revenue increase in the company’s history,” stated CEO Todd Davis.  Davis added, “International distribution and expansion has set the stage for a massive revenue expansion for Endexx over the coming quarters and years ahead.”

Endexx is completing its audited consolidation of Hyla into Endexx.

www.endexx.com & www.cbdunlimited.com & www.tryhyla.com

About Endexx Corporation

Endexx® is a Consumer Products (CPG) company specializing in plant-based formulations and innovative delivery systems, focused on creating “Better Products for a Better You”©. Our focus is on developing the most innovative and effective products using all-natural plant-based ingredients. Our companies:  CBD Unlimited and Hyla harness the power of plants and deliver clean ingredient formulations with innovative technology systems.

Safe Harbor Notice

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future development activities and are thus prospective. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with the company’s business and finances in general, including the ability to continue and manage its growth, competition, global economic conditions and other factors discussed in detail in the Company’s periodic filings with the Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statements.

Contact:

For further investor and media information, contact:
Endexx Corporation
Todd Davis
Chairman & CEO
Endexx@endexx.com
480-595-6900

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

CALGARY, AB, April 24, 2023 /CNW/ – Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSXV: DB) (OTCQB: DBCCF), a market leader in premium cannabis and extract manufactured products, is pleased to announce its audited financial results for the three and twelve month periods ending December 31, 2022.

“Our fourth quarter results capped off a year of strong financial performance with record results including market share, net revenue, adjusted EBITDA, and adjusted net income. This creates momentum heading into 2023 with demand continuing to grow and assets well positioned to deliver on this demand”, said Paul Wilson, CEO of Decibel. “We have a number of 2023 catalysts that support an outlook where Decibel continues to build its market share and brand position in Canada and in turn leverage into international opportunities.”

Fiscal Year 2022 Financial Highlights

• Record Net Revenue of $79.3 million in 2022, an increase of 51% over 2021.
• Record Adjusted EBITDA⁽¹⁾ of $17.0 million in 2022, an increase of 129% over 2021.
• Record Adjusted Net Income⁽¹⁾ of $3.1 million in 2022, an increase of $11.7 million over 2021.
• Record Adjusted Earnings per Share⁽²⁾ of $0.01, an increase of $0.03 over 2021.
• First branded product sale to Israel as Decibel begins to expand internationally.

Fourth Quarter Highlights

• Record National Market Share⁽¹⁾ of 6.0% in Q4 2022 and 6.6% in December 2022 which placed Decibel as the 4^th and 3^rd largest licensed producer in Canada by market share for the respective periods.
• Record Net Revenue was $25.8 million in the fourth quarter of 2022, with strong sequential growth of 41% over the prior quarter and year over year growth of 84%. The net revenue growth was driven by increased demand for the Company’s derivative products and the Company’s first two sales of branded dried flower product in Israel. Net revenue growth year over year was driven by expanded distribution, new infused products and continued growth in demand for derivative products.
• Gross Margin Before Fair Value Adjustments was 43% in the fourth quarter of 2022, compared to 52% in the prior quarter and 26% in the fourth quarter of 2021. The fourth quarter was partially impacted by a provision and write off of cultivation and extraction inventory of approximately $3.2 million. The increase year over year was a result of significant cost savings realized in the third quarter of 2022 from initiatives including operational efficiencies, automation equipment commissioned, and sourcing of more cost-effective components related to the manufacturing of cannabis products. The Company anticipates that there may be future volatility in its gross margin related to price competition and continues to target the upper end of its previously stated target of 40 – 45% gross margin.
• Record Adjusted EBITDA⁽²⁾ of $7.1 million in the fourth quarter of 2022, with strong sequential growth of 66% over the prior quarter and year over year growth of 387% over the fourth quarter of 2021. This marks Decibel’s tenth quarter of consecutive quarterly positive adjusted EBITDA.
• Adjusted Net Income⁽²⁾ of $1.8 million in the fourth quarter of 2022, with a sequential decline of 40% over the prior quarter and a year over year improvement of $5.6 million over the fourth quarter of 2021. The fourth quarter was partially impacted by a write off of cultivation and extraction inventory of approximately $3.2 million. This marks Decibel’s third quarter of positive adjusted net income.
• Leverage: At the end of the fourth quarter of 2022, Decibel had a funded debt to trailing twelve month EBITDA of 2.57x and a funded debt to annualized EBITDA of 1.55x.

Operating Highlights

New Unique and Innovative Products

The Company launched a total of 13 new products in various provinces in the fourth quarter of 2022, including

• 5 General Admission SKU’s in vape and infused pre-rolls in distillate and live resin formats; and
• 8 Qwest SKU’s in dried flower, standard pre-rolls, and infused pre-rolls formats.

Summary Highlights

Link to Decibel’s Investor Presentation

Decibel’s audited financial statements for the year ending December 31, 2022 (“Financial Statements”) and related three and twelve month periods ending December 31, 2022 Management’s Discussion & Analysis (“MD&A”), are available under the Company’s profile at www.sedar.com. As of December 31, 2022, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, Saskatchewan. The Plant, Decibel’s extraction facility, in Calgary, Alberta, has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

Non-GAAP Measures

This press release contains certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Adjusted Net Income is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted Earnings per Share is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding. This non-GAAP financial measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Supplementary Financial Measures

Retail Sales is a supplementary financial measure that is intended to provide a more accurate depiction of the revenue earned by the Company’s retail operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is removed from Retail Revenue as presented in the Company’s Financial Statements.

Gross Sales of Flower is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale flower operations. Inventory transferred directly from the Company’s wholesale flower operations to the Company’s retail operations is added to Gross Wholesale Revenue of Flower as found in the Company’s Financial Statements to arrive at Gross Sales of Flower.

Net Sales of Flower is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale flower operations. Excise taxes associated with flower sales are subtracted from Gross Sales of Flower to arrive at Net Sales of Flower.

Gross Sales of Extracts is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale extracts operations. Inventory transferred directly from the Company’s wholesale extracts operations to the Company’s retail operations is added to Gross Wholesale Revenue of Extracts as found in the Company’s Financial Statements to arrive at Gross Sales of Extracts.

Net Sales of Extracts is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale extracts operations. Excise taxes associated with extracts sales are subtracted from Gross Sales of Extracts to arrive at Net Sales of Extracts.

Forward Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things: that the Company has strong momentum heading into 2023; expectations that demand for Decibel’s products will grow; the Company’s ability to meet consumer demand; Decibel’s expectations that it will build its position in Canada and turn leverage into international opportunities; anticipated growth in Decibel’s net revenue, growth in demand for Decibel’s products, and improvements made to Decibel’s operational capacity in the first quarter of 2023; anticipated future volatility in gross margin related to price competition; Decibel’s targeted gross margin; Decibel’s expectations that it will remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; timing and completion of construction and expansion of the Company’s production facilities and retail locations; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated, or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable.

With respect to forward-looking statements and FOFI contained in this press release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel‘s products; Decibel’s ability to realize operational efficiencies and effect certain cost saving measures (including in the impact thereof); Decibel’s ability to enter new markets and industry verticals; Decibel’s ability to attract, develop and retain key personnel; Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: anticipated future volatility in gross margin; Decibel‘s targeted gross margin; and Decibel’s expectations that it will remain in compliance with its financial covenants for the remainder of its twelve-month forecast period, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements and FOFI contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and FOFI included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements and FOFI to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

Preliminary Financial Information

The Company’s expectations for its Q1 2023 results, including net revenue growth in the quarter, are based on, among other things, the Company’s anticipated financial results for the three month period ended March 31, 2023. The Company‘s anticipated financial results are unaudited and preliminary estimates that: (i) represent the most current information available to management as of the date of hereof; (ii) are subject to completion of interim review procedures that could result in significant changes to the estimated amounts; and (iii) do not present all information necessary for an understanding of the Company’s financial condition as of, and the Company’s results of operations for, such periods. The anticipated financial results are subject to the same limitations and risks as discussed under “Forward Looking Statements” above. Accordingly, the Company’s anticipated financial results for such periods may change upon the completion and approval of the financial statements for such periods and the changes could be material.

Market, Independent Third Party and Industry Data

Certain market, independent third party and industry data contained in this news release is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but Decibel has not conducted its own independent verification of such information. This news release also includes certain data derived from independent third parties. While Decibel believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Decibel has not independently verified any of the data from independent third party sources referred to in this news release or ascertained the underlying assumptions relied upon by such sources.

SOURCE Decibel Cannabis Company Inc.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Company Reports Net Income and Positive EBITDA in Q4 2022

SANTA ANA, Calif., April 10, 2023 (GLOBE NEWSWIRE) — Unrivaled Brands, Inc. (OTCQB: UNRV) (“Unrivaled” or the “Company”), a cannabis company with operations throughout California, today reported financial results for the fourth quarter and year ended December 31, 2022.

Fourth Quarter 2022 Highlights

• Unrivaled posted income from operations of $8.8 million for the quarter ended December 31, 2022 compared to a loss from operations of $13.3 million in the prior year, an increase of $22.1 million.

• Net income from continuing operations was $3.9 million for the fourth quarter of 2022 versus a net loss of $16.2 million in the same period last year.

• EBITDA income from continuing operations was $9.7 million for the fourth quarter of 2022 compared to an EBITDA loss of $10.4 million for the prior year’s fourth quarter.

• During the quarter ended December 31, 2022, the Company reduced total liabilities by $48.3 million to $77.0 million as of December 31, 2022, down from $125.3 million at the end of the prior year, a reduction of 39%. This decrease was the result of successful efforts to renegotiate debt, pay down creditors, dispose of non-performing assets, and improve working capital.

• During the fourth quarter of 2022, the Company commenced a $2.0 million capital raise from a Series V Preferred Share offering, which was subsequently closed in the first quarter of 2023.

Director of Marketing at Unrivaled, Danielle Sebastian stated, “The strategic thinking brought to the table from both the Unrivaled Brands and Adnant teams has been a gamechanger. It feels like we’ve moved mountains over the past several months together. We’re working with a group of people who care about the cannabis industry in a real way and whose work ethic is extremely strong. When I look around, I’m proud to see leaders from all walks of life that each have a unique point of view. Combined, we have the opportunity to develop a new meaning of cannabis culture and build something that no one else has ever created.”

Blake Powers, Vice President of Korova at Unrivaled, added, “I am excited to be part of a team leading the charge with our team’s interest at heart. Their focus on company culture and doing right by the people on our front lines has been as refreshing as it is motivating. In a sea of uncertainty that is the cannabis landscape in California, it’s nice to know you’re on a boat with people that know how to row.”

Full Year 2022 Highlights

• Fiscal 2022 revenues increased $9.9 million, or 23%, from fiscal 2021, to $52.0 million. Revenue growth was driven primarily by a 63% increase in revenue from retail operations.

• Gross profit for the year ended December 31, 2022 increased to $17.0 million, a 53% increase from the prior year.

• For the year ended December 31, 2022, loss from continuing operations was $193.8 million, which was primarily attributable to an impairment loss of $163.7 million, the majority of which was related to the acquisitions of UMBRLA, People’s, and SilverStreak, compared to loss from continuing operations of $38.3 million for the year ended December 31, 2021.

• As part of the Company’s strategic restructuring in fiscal year 2022, the Company terminated its third-party distribution operations in California and its retail and delivery operations at SilverStreak Sacramento. In November 2022, the Company received confirmation for the legal dissolution of SilverStreak and the entities related to its distribution operations in the state of California. As a result, all liabilities and existing obligations of the dissolved entities were extinguished and the Company recorded a gain of disposal of assets for $7.2 million during the year ended December 31, 2022.

Patty Chan, Unrivaled’s Interim Chief Financial Officer concluded, “Today, I am proud to say that we have overcome obstacles that seemed insurmountable, and we have emerged stronger than ever before. Our resilience and determination have paved the way for opportunities for a brighter future for Unrivaled. I am excited about the opportunities that lie ahead. But let me tell you, we’re not done yet. We can’t celebrate just yet, because there’s still much work to be done.”

Non-GAAP Financial Information:

This press release includes certain non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission (the “SEC”). Management believes that these non-GAAP financial measures assess the Company’s ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparing financial results across accounting periods and to those of peer companies. These non-GAAP financial measures exclude certain material non-cash items and certain other adjustments the Company believes are not reflective of its ongoing operations and performance. Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand operational decision-making, for planning and forecasting purposes, and to evaluate the Company’s financial performance. Management believes that these non-GAAP financial measures enhance investors’ understanding of the Company’s financial and operating performance and enable investors to evaluate the Company’s operating results and future prospects in the same manner as management. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.

About Unrivaled Brands

Unrivaled is a cannabis company focused on the cannabis sector with operations in California. Unrivaled operates four dispensaries and direct-to-consumer delivery, a cultivation facility, and several leading company-owned brands. Unrivaled is home to Korova, known for its high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma.

For more info, please visit: https://unrivaledbrands.com.

Cautionary Language Concerning Forward-Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management’s intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. The Company uses words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on the Company’s expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.

New factors emerge from time-to-time and it is not possible for the Company to predict all such factors, nor can the Company assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in the Company’s reports with the SEC. Additional risks and uncertainties are identified and discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to the Company as of the date of this release. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.

Contact:

Jason Assad
LR Advisors LLC.
jassad@unrivaledbrands.com
678-570-6791

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

• Achieved Adjusted EBITDA¹ of $1.9 million for the year ended December 31, 2022
• 57% net revenue growth to $35.5 million in 2022 compared to 2021
• Achieved operating cash flow of $2.0 million for the year ended December 31, 2022
• 6.3%² national market share of premium flower and pre-rolls in 2022

VANCOUVER, British Columbia, April 03, 2023 (GLOBE NEWSWIRE) — Rubicon Organics Inc. (TSXV: ROMJ) (OTCQX: ROMJF) (“Rubicon Organics”, “Rubicon”, or the “Company”), a licensed producer focused on cultivating and selling organic certified, premium cannabis, today reported its financial results for the fourth quarter and year ended December 31, 2022 (“Q4 2022”). All amounts are expressed in Canadian dollars.

“Rubicon Organics has achieved significant financial milestones in a fiercely competitive environment, delivering Adjusted EBITDA profitability and positive cash flow from operating activities for the 2022 year. These results are a testament to the unwavering commitment of our team to quality, which is now being acknowledged by our customers. Rubicon is at an inflection point, poised for continued growth and anticipating further financial strength in 2023 as we seek to meet the market’s demand for our products. Despite negative investor sentiment in the cannabis sector, I believe that the winners of the Canadian cannabis sector will emerge in 2023, and Rubicon is well-positioned to be among them,” said Margaret Brodie, Interim Chief Executive Officer and Chief Financial Officer.

Q4 2022 Highlights:

• Net revenue of $11.0 million was an increase of 61% from the same period in 2021
• Achieved Adjusted EBITDA¹ of $1.3 million
• Achieved positive operating cash flow of $2.8 million
• Achieved positive Free Cash Flow³ of $1.9 million
• 2.4%⁴ national market share of flower and pre-rolls¹
• 5.4%⁵ national market share of premium flower and pre-rolls

In the fourth quarter of 2022, the Company earned $11.0 million of net revenue, an increase of $0.5 million or 5% when compared to the third quarter of 2022 (September 30, 2022: $10.5 million). The fourth quarter net revenue was relatively flat from the third quarter as Rubicon had certain facility maintenance and downtime which impacted our crop yields and availability of supply in the autumn. This was offset by the positive momentum for Rubicon in the pre-roll category following the launch of infused pre-rolls under both Simply Bare Organic and 1964 Supply Co. During Q4 we also began selling through the OCS’s flow through program, which has proven useful for products where we do not yet have consistent supply or demand and in Quebec, we benefitted from additional flower and pre-roll listings.

Production costs in the fourth quarter 2022 decreased by $0.3 million or 10% when compared to the third quarter of 2022 (three months ended December 31, 2022: $2.6 million as compared to three months ended September 30, 2022: $2.9 million). We can see the efficiencies gained through process improvements in our cultivation system and cost savings as a result of completion of the BC Hydro project from September 2022 onwards.

Inventory expensed to cost of sales amounted to $3.7 million in the fourth quarter of 2022, which is an increase of $0.3 million or 9% when compared to the third quarter of 2022 (September 30, 2021: $3.4 million). This ratio was marginally ahead of the net revenue growth due to product mix, with a higher proportion of sales derived from concentrate products in the fourth quarter, most notably infused pre-rolls.

The Company incurred operating expenses of $4.8 million in the fourth quarter of 2022 which is an increase of $1.0 million or 26% when compared to the third quarter of 2022 (September 30, 2022: $3.8 million). The increase is mainly due to non-cash share-based compensation from the issuance of deferred share units and restricted share units compared to the prior quarter. The Company has also incurred additional corporate expenses relating to the professional fees such as for the search for new board nominees and a year-to-date true up of the bonus accrual to account for performance under the Company bonus plan.

Net loss during the fourth quarter of 2022 was $3.1 million, compared to net profit in the third quarter of 2022 of $2.0 million. The movement was driven primarily by a quarter over quarter decrease to fair value adjustments to cannabis plants of $4.3 million. There has been a change in growing approach over the past year in order to increase plant density and uniformity. This has resulted in a higher number of plants, therefore decreasing the number of grams per plant, which has been reflected in the Company’s fair value of its cannabis inventory.

2022 Highlights:

• Record net revenue of $35.5 million (57% increase) for the year ended December 31, 2022
• Achieved Adjusted EBITDA¹ of $1.9 million for the year ended December 31, 2022
• Achieved operating cash flow of $2.0 million for the year ended December 31, 2022
• Achieved positive Free Cash Flow³ of $2.2 million in the second half of 2022
• Extended existing Debenture for 18 months to December 31, 2024
• 2.4%⁵ national market share of flower and pre-rolls
• 6.3%² national market share of premium flower and pre-rolls

For the year ended December 31, 2022, the Company reported net revenue of $35.5 million, a 57% increase compared to the prior year. For the year ended 31 December 2022, Adjusted EBITDA was a profit of $1.9 million, compared to a loss of $8.0 million in the twelve months ended December 31, 2022.

2022 Annual Results of Operations

Net revenue

The Company delivered record net revenue of $35.5 million for the year ended December 31, 2022. This represents significant net revenue growth of 57%, compared to the prior year. Across the year, the Company doubled the number of SKUs for sale with the launch of several new strains, and product formats compared to the prior year. The sales growth was underpinned by an increase in product yield, THC and quality from our Delta Facility.

Revenue growth in 2022 versus the prior year was primarily driven by the expansion of 1964 Supply Co, having a full year of sales in all key markets, continued range expansion, and a new hero strain with Comatose.

Simply Bare Organic delivered flat net revenue compared to prior year. The brand was particularly affected by the overall market decrease in flower pre-rolls with the market shifting to infused pre-rolls, increased quality competition and price compression. In the second half of the year, performance improved with the launch of new strains, larger formats, and an infused pre-roll offering.

The strike in BC, the cyber attack impacting the distribution center in Ontario and rotating strikes in SQDC stores in August 2022 had an impact on the net revenue achieved in the third quarter of 2022 given that the orders were either halted for weeks or significantly slowed down in both BC and Ontario, but we are unable to quantify the impact of these events.

Throughout 2022, revenue growth continued across all our key markets (Alberta, BC, Ontario, and Quebec) which together make up 97% of our sales in the year December 31, 2022 (December 31, 2021: 94%).

Production costs

For the year ended December 31, 2022, production costs increased by $1.3 million (14%) compared to the prior year.

Under the Company’s accounting policy, production costs are expensed as incurred. Production costs consist of the direct and indirect costs incurred to grow cannabis plants to the point of harvest. They include labour related costs, cultivation materials and consumables, utilities, facility costs, certain overheads, and production related depreciation. This methodology means that unless product is produced and sold during the period, the production costs associated with inventory held at period end are expensed prior to revenue being derived.

The increase in production costs is related to an increase in plant density, plant handling techniques applied and increased overall yield of cannabis crops meaning additional labour is required during the cultivation cycle and at harvest. In addition, there has been a notable increase in the costs of fertilizer and other input materials due to inflation as well as the need to use additional inputs due to larger crop sizes and an increased number of plants on hand. The additional cultivation labour, plant density and plant handling techniques have directly related to increased quality and yield from the Delta Facility.

From September 2022, the Company has started to recognize savings with the completion of the BC Hydro project.

Inventory expensed to cost of sales

For the year ended December 31, 2022, inventory expensed to cost of sales increased by $2.5 million (26%) compared to the prior year.

After cannabis is harvested, the remaining costs incurred in drying, processing, and packaging are capitalized to inventory and expensed once the finished good is sold. The ratio of inventory expensed to cost of sales was 34% of net revenue for the year ended December 31, 2022 (December 31, 2021: 42%). This ratio is directly impacted by throughput from the facility meaning that overheads are spread over a larger number of units and given the increase in production this has positively impacted the ratio. In 2022, the Company has also benefitted from an improved brand and product mix with a larger share of our sales coming from our premium brands, Simply Bare Organic and 1964 Supply Co., and less of the brand, Homestead Cannabis Supply, relative to 2021.

Given the high inflationary environment in which the Company is operating in 2022, Management continues to monitor these costs closely and identify cost savings initiatives.

Gross profit and loss from operations

For the year ended December 31, 2022, growing net revenue and production efficiencies combined for an increase to gross profit of $12.3 million compared to the prior year. Despite a significant increase in net revenues of 57%, operating expenses remained relatively stable with an increase of $1.5 million (10%) for the year ended December 31, 2022 as the Company began to see the results of operating leverage.

For the year ended December 31, 2022, the Company’s loss from operations has significantly decreased to $2.6 million from $13.3 million in the prior year.

Rubicon Organics achieved Adjusted EBITDA¹ profitability of $1.9 million and positive operating cash flow of $2.0 million for the year ended December 31, 2022. The Company also achieved a Free Cash Flow³ of $2.2 million in the second half of 2022.

Reviewing 2022’s Key Priorities

Rubicon Organics defined a three-pillar strategy for 2022 focused on yield and quality, improving product mix to optimize margin, and investigating the international market.

Optimize Yield & Quality — In 2022, the Company completed facility upgrades, invested in process improvements, and continued to identify opportunities for cost and quality efficiencies. Two significant facility upgrades occurred with the installation of new dehumidification units and completion of the BC Hydro grid connection. From January until August we saw an increase in both quality and yield of cannabis produced, but in the autumn with certain facility maintenance and seasonal growing conditions we had a relative plateau in production. In 2022, the Company has now achieved repeated crops over our nameplate capacity of 11,000 kg’s and seen an increase in our average THC per crop, with certain strains as high as 29% THC. We believe that our quality step change was experienced by the consumers beginning in April 2022 leading to the improved rate of sale of our products and increased demand.

Premiumization — The second pillar was to implement our commercial strategies within the Canadian domestic market to maximize the gross profit for each unit produced from our Delta Facility. With our approach, the provincial distributors and our consumers have access to a greater range of product formats and strain varieties. During 2022, our strategy has proven successful as evidenced by Rubicon achieving 6.3%² market share of the premium flower and pre-roll market. In 2022, there was noticeable increase in competition with the rise of the craft producers and we believe that this competition led to the super-premium brand Simply Bare Organic experiencing a relatively flat year on revenues, despite increase in units sold. In contrast 1964 Supply Co. had a tremendous positive groundswell in the market, in particular from summer 2022 and with the success of the Comatose strain.

We continue to expect the premium market to outpace the growth of the total market in Canada in line with the performance in established markets such as Colorado and California. While the premium market has grown, there have been many new entrants from the smaller craft and micro-cultivator licensed producers who have been successful in gaining share overall. Despite this increase in competition we believe that Rubicon is well positioned to take advantage of the rise of craft momentum as consumer preferences shift from a focus on THC to the importance of terpenes to their experience.

International — At the beginning of 2022 we set our third pillar to open the routes to market for our products internationally. However, there has been significant price compression in the international markets and Rubicon Organics currently has domestic demand in excess of the volume available from our Delta Facility, thus we are prioritizing the domestic sale of our cannabis to continue to develop our Canadian brands which should deliver more consistent profitability. While we believe that there will be opportunities in the international markets, we have decided to continue to focus on the Canadian market in the short-term and thus for the time being, the Company will not continue to pursue its EU-GMP certificate or maintain other certifications required solely for international export. Rubicon expects to continue to evaluate and investigate international markets for future opportunities.

Company Outlook

Rubicon Organics has set out four key priorities for 2023:

1. Optimize Yield and Cultivation at the Delta Facility

Our priority is delivering super-premium quality cannabis flower products in the Canadian market. Producing at scale in a greenhouse environment is subject to seasonal impacts and commercializing new strains to meet the demand in market and our brand standards can present challenges. We remain focused on ongoing refinement and optimization in our cultivation systems. In 2022 the Company achieved several crops exceeding our nameplate 11,000 kg’s capacity, and we expect 2023 to be a year of steady and consistent quality production. Additional tables will be installed in the facility to improve air circulation and increase capacity in the second half of 2023, with standard maintenance scheduled during downtime.

2. Maximize Canadian Premium Opportunity

Rubicon is focused on maximizing the gross margin we earn from each gram produced from our Delta Facility. Delivering both the right genetics and product formats to the customer at the right price to value ratio and maintaining good relationships with the provincial distributors and retail stores are critical to our success. In 2023 we are driving to grow the Simply Bare Organic brand and to premiumize opportunistically elements of the 1964 Supply Co brand, the impact of both would be positive on our gross profit.

As we have forecast demand beyond our available supply from the Delta Facility we have begun projects that we expect to incrementally grow our net revenue and gross profit. We intend to launch products that do not require the Delta Facility’s capacity that we anticipate will add incremental gross profit to our results in a cost effective and efficient manner, such as through contract grow relationships to Rubicon’s quality standards. We are also actively looking to build our revenue with the launch of new products under our existing brands which can be contracted to other licensed producers thus not utilizing our existing capacity. We intend to deliver this incremental gross profit without significant incremental overhead cost to our business, thus driving additional overall profitability.

3. Drive Efficiency in Processes and Systems

As steady state has been established at the Delta Facility, we now are seeking to create efficiency in our systems away from manual processes or those where there is reliance on key individuals to increase the resilience and repeatability of our systems and reduce cost. As part of this process, Rubicon is evaluating new information systems and expects to begin implementing new systems beginning in the second half of 2023. This project will drive incremental cost in the short-term, but we believe will improve efficiency of the existing business and ready Rubicon for further growth.

4. Create a Proud, Engaged Team Delivering Outstanding Results

With turmoil in the cannabis sector in the last number of years coupled with the stresses relating to work in the pandemic and tightness of the labour market, we have seen considerable turnover in the business. We believe that in order to deliver a premium product to market, our team members being engaged and proud is important to put our best foot forward with our consumers and customers. Furthermore, the cost and resources used when there is labour turnover can be considerable. As part of achieving an engaged and proud team, we have set clear goals and objectives linked to reward to recognize the hard work and accomplishments of team members. We also have begun reviewing our Company values listening to our people as part of the process and Rubicon’s evolution now that we are in a more steady state.

Rubicon believes that our cannabis quality, brand positionings and product offerings will drive continued growth in net revenue, resulting in an increase in gross profit and Adjusted EBITDA for the full year 2023. With a stable cost base, this anticipated growth in net revenue and gross profit would improve our operating leverage. Additionally, we expect to achieve positive cashflow for the full year, pending opportunistic investment decisions.

As a business we are now looking to increase the volume of product that we have available for sale to fill the demand we have for our quality products. The business is evaluating several options to increase our capacity. We believe that despite any market volatility, inflationary pressures, regulatory change, our product quality and brand portfolio has positioned Rubicon to win in the premium cannabis market.

Conference Call
The Company will be hosting a conference call to discuss Q4 2022 results on Monday, April 3, 2023. Conference call details are as follows:

ABOUT RUBICON ORGANICS INC.

Rubicon Organics Inc. is the global brand leader in premium organic cannabis products. The Company is vertically integrated through its wholly owned subsidiary Rubicon Holdings Corp, a licensed producer. Rubicon Organics is focused on achieving industry leading profitability through its premium cannabis flower, product innovation and brand portfolio management, including its flagship super-premium brand Simply Bare Organic, its premium brand 1964 Supply Co., its premium concentrate brand LAB THEORY, its mainstream brand Homestead Cannabis Supply and its topical brand Wildflower.

The Company ensures the quality of its supply chain by cultivating, processing, branding and selling organic certified, sustainably produced, super-premium cannabis products from its state-of-the-art glass roofed facility located in Delta, BC, Canada.

CONTACT INFORMATION

Margaret Brodie
Interim CEO & CFO
Phone: +1 (437) 929-1964
Email: ir@rubiconorganics.com

The TSX Venture Exchange or its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) does not accept responsibility for the adequacy or accuracy of this press release.

Non-GAAP Financial Measures

This press release contains certain financial performance measures that are not recognized or defined under IFRS (“Non-GAAP Measures”) including, but not limited to, “Adjusted EBITDA” and “Free Cash Flow”. As a result, this data may not be comparable to data presented by other companies. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company as well as its liquidity. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. For more information, please refer to the “Selected Financial Information” section in the MD&A for the year ended December 31, 2022, which is available on SEDAR at www.sedar.com.

Below is the Company’s quantitative reconciliation of Adjusted EBITDA calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. The following table presents a reconciliation of Adjusted EBITDA to the most comparable IFRS financial measure for the three and twelve months ended December 31, 2022 and December 31, 2021.

Free Cash Flow is a non-GAAP measure used by management that is not defined by IFRS and may not be comparable to similar measures presented by other companies. Management believes that Free Cash Flow presents meaningful information regarding the amount of cash flow required to maintain and organically expand our business, and that the Free Cash Flow measure provides meaningful information regarding our liquidity requirements.

Below is the Company’s quantitative reconciliation of Free Cash Flow calculated as net cash provided by (used in) operating activities, less purchases of and deposits on property, plant and equipment. The following table presents a reconciliation of Free Cash Flow to the most comparable IFRS financial measure for the three months ended December 31, 2022, September 30, 2022, December 31, 2021 and September 30, 2021.

Cautionary Statement Regarding Forward Looking Information

This press release contains forward-looking information within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, statements regarding Rubicon Organics’ goal of achieving industry leading profitability are “forward-looking statements”. Forward-looking information can be identified by the use of words such as “will” or variations of such word or statements that certain actions, events or results “will” be taken, occur or be achieved.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward looking statements. The forward-looking information in this press release is based upon certain assumptions that management considers reasonable in the circumstances, including the impact on revenue of new products and brands entering the market, and the timing of achieve Adjusted EBITDA profitability and cash flow positive. Risks and uncertainties associated with the forward looking information in this press release include, among others, dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing federal, provincial, local or other licenses and any inability to obtain all necessary governmental approvals licenses and permits for construction at its facilities in a timely manner; regulatory or political change such as changes in applicable laws and regulations, including bureaucratic delays or inefficiencies or any other reasons; any other factors or developments which may hinder market growth; Rubicon Organics’ limited operating history and lack of historical profits; reliance on management; and the effect of capital market conditions and other factors on capital availability; competition, including from more established or better financed competitors; and the need to secure and maintain corporate alliances and partnerships, including with customers and suppliers; and those factors identified under the heading “Risk Factors” in Rubicon Organic’s annual information form dated March 31, 2023 filed with Canadian provincial securities regulatory authorities. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although Rubicon Organics has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended.

These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although Rubicon Organics has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. Rubicon Organics assumes no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, new information or for any other reason except as required by law.

We have made numerous assumptions about the forward-looking statements and information contained herein, including among other things, assumptions about: optimizing yield, achieving revenue growth, increasing gross profit, operating cashflow and Adjusted EBITDA profitability. Even though the management of Rubicon Organics believes that the assumptions made, and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. Investors are cautioned against undue reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management’s current views of our near and longer term prospects and may not be appropriate for other purposes. Rubicon Organics assumes no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, changes in assumptions, new information or for any other reason except as required by law.

¹ Adjusted EBITDA is a non-GAAP measure that is calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. See ‘Non-GAAP Financial Measures’ for details on the Adjusted EBITDA calculation.
² Hifyre data for premium flower & pre-rolled products covering twelve months ending December 31, 2022
³ Free Cash Flow is a non-GAAP measure that is calculated as net cash provided by (used in) operating activities, less purchases of and deposits on property, plant and equipment. See ‘Non-GAAP Financial Measures’ for details on the Free Cash Flow calculation.
⁴ Hifyre data for flower & pre-rolled products covering three months ending December 31, 2022
⁵ Hifyre data for premium flower & pre-rolled products covering three months ending December 31, 2022

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

WINNIPEG, Manitoba, March 31, 2023 (GLOBE NEWSWIRE) — DELTA 9 CANNABIS INC. (TSX: DN) (OTCQX: DLTNF) (“Delta 9” or the “Company”) is pleased to announce financial and operating results for the three-month and full year ending December 31, 2022.

Financial Highlights for the Year Ending December 31, 2022

• Net revenues of $63.2 million in 2022, an increase of 2% compared to $62.3 million in 2021, including the following revenue segmentation highlights:
  • Retail revenues increased 26% to $52.2 million in 2022
  • Wholesale revenues decreased 35% to $12.1 million in 2022
  • Business to business revenues decreased 65% to $1.7 million in 2022
• Gross profit¹ of $12.9 million in 2022 compared to $18.3 million last year.
• Adjusted EBITDA² (loss) of $(5.2) million in 2022 compared to an Adjusted EBITDA² of $2.0 million last year.
• Loss from Operations of $(20.3) million in 2022 compared to Loss from Operations of $(7.6) million last year.

Financial Highlights for the Three-Month Period Ending December 31, 2022

• Quarterly net revenues of $17.6 million for the fourth quarter of 2022, an increase of 3% compared to $17.1 million for the same quarter last year.
  • Sequentially net revenues increased 12% for the fourth quarter of 2022 compared to $15.7 million in the third quarter of 2022.
• Gross profit¹ of $3.4 million for the fourth quarter of 2022 compared to $4.9 million for the same quarter last year.
  • Sequentially gross profit increased 76% in the fourth quarter of 2022 compared to $1.9 million in the third quarter of 2022.
• Sequentially Adjusted EBITDA² (loss) improved to $(1.5) million in the fourth quarter of 2022 compared to and Adjusted EBITDA² (loss) of $(1.7) million in the third quarter of 2022.

“We are pleased to report record fourth quarter and year end revenues for 2022 demonstrating the versatility of our business model with measurable improvements versus the third quarter of 2022,” said John Arbuthnot, CEO of Delta 9 Cannabis. “Challenges persist in the Canadian cannabis industry, which continues to struggle with intense competition resulting in margin compression and affecting overall growth. We remain confident that Delta 9 will be able to navigate the industry challenges and return the Company to growth and profitability in the coming quarters.”

4^th Quarter Operational and Subsequent Q1 2023 Highlights:

• Delta 9 installed a new fully-automated pre-roll machine that will produce up to 4 million pre-rolls per year compared to the 1 million produced in 2022 that generated $2.3 million. The new machine will significantly lower manufacturing costs and improve contribution margin for pre-roll sales. We appreciated the contribution from the Provincial Government that covered 25% of the cost of the machine.
• Delta 9 shipped bulk dried cannabis flower to a customer in Australia, marking the Company’s first export of dried cannabis flower material to an international market. The Company has also received seven additional export permits from Health Canada and intends to complete multiple shipments of dried cannabis flower and cannabis extracts to the Australian market in the first and second quarter of 2023. The shipments are anticipated to include approximately 100 Kg of dried cannabis flower material and 6 Kg of cannabis distillate. This shipment marks a significant milestone for Delta 9 as it enters the global cannabis market.
• Delta 9 opened two more retail cannabis stores in Western Canada in Q1 2023 quarter that brings the total store count to 41. The companies retail strategy continues to find the best available real estate in high-traffic and high-population density areas. Delta 9’s retail network has expanded by 25 stores in the past twelve months and is expected to continue expansion of the retail portfolio across Canada in 2023.
• Delta 9 announced various cost cutting measures as a part of the Company’s 2023 strategic plan with the goal of producing positive cash flow from operations. The Company plans to streamline its cultivation operations and right-size capacity at its Winnipeg based cultivation facilities, as well as various other cost cutting measures including reducing public company and investor relations costs. The Board of Directors and executive have also agreed to reduce compensation as part of their commitment to achieving positive cash flows from operations in the current fiscal year. The cost savings are expected to reduce operating costs by $3 Million to $4 Million in 2023. As a part of the plan, cultivation capacity at the Company’s Winnipeg based cultivation facilities were cut by approximately 40%, which included a temporary layoff of approximately 40 staff.
• Delta 9 received a Cannabis Distributor License from the Liquor Gaming and Cannabis Authority of Manitoba, making the Company the first licensed distributor of cannabis products in the province. Under the License, Delta 9 is authorized to acquire, store, sell and deliver cannabis in accordance with The Liquor, Gaming and Cannabis Control Act. The Company’s distribution services will allow out-of-province suppliers to improve logistics efficiencies and reduce shipping costs into the Manitoba market and will provide Delta 9 with additional diversified revenue streams. Total retail cannabis sales in Manitoba for the twelve months ending August 30, 2022, exceeded $169 Million, according to data from Statistics Canada, with more than 150 licensed retail stores in operation as of September 30, 2022.
• Delta 9 announced that Mr. Stuart Starkey joined the Company’s board of directors following the previously announced resignation of Joanne Duhoux-Defehr as a director of the Company. Over the past 15 years, Mr. Starkey was an entrepreneur, para-athlete, and non-profit founder. As President of Two Small Men Canada, Mr. Starkey grew a national moving chain to achieve corporate and franchise revenues of $35 Million per year with over 400 employees. As Co-founder of Mighty Moving Mr. Starkey grew a cross-docking and logistics business to service dozens of large chain retailers, with offices across Alberta. He has since successfully exited both Two Small Men Canada and Mighty Moving.
• Delta 9 established an at-the-market equity program (the “ATM Program”) that allows the Company to issue up to $5,000,000 of common shares in the capital of the Company from treasury to the public from time to time, at the Company’s discretion. Distributions of the Common Shares through the ATM Program will be made between the Company and Haywood Securities Inc.

Summary of Quarterly Results:

1. Gross Profit, before changes in the fair value of biological assets.
2. Adjusted EBITDA is a non-IFRS measure, and is calculated as earnings before interest, tax, depreciation and amortization, share-based compensation expense, fair value changes and other non-cash items.

A comprehensive discussion of Delta 9’s financial position and results of operations is provided in the Company’s Management Discussion & Analysis for the three-month and year ending period ending December 31, 2022 filed on SEDAR and can be found at www.sedar.com.

2022 Forth Quarter Results Conference Call

A conference call to discuss the above results is scheduled for April 3, 2023. The conference call will be hosted that day at 10:00 a.m. Eastern Time by John Arbuthnot, Chief Executive Officer, and Jim Lawson, Chief Financial Officer, followed by a question-and-answer period.

For more information contact:

Investor & Media Contact:
Ian Chadsey VP Corporate Affairs
Mobile: 204-898-7722
E-mail: ian.chadsey@delta9.ca

About Delta 9 Cannabis Inc.

Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. The company sells cannabis products through its wholesale and retail sales channels and sells its cannabis grow pods to other businesses. Delta 9’s wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9’s shares trade on the Toronto Stock Exchange under the symbol “DN” and on the OTCQX under the symbol “DLTNF”. For more information, please visit www.delta9.ca.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) the Company’s plans to establish cannabis distribution operations in Manitoba; and (ii) the Company’s plans to continue to expand its retail operations in Canada. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including all risk factors set forth in the annual information form of Delta 9 dated March 31, 2023 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

• Revenue of $4.5M compared to $3.7M in Q1 2022, an increase of 21%
• Operating Cash Flow (OCF), before changes in working capital (WC), of $1.3M compared to $0.5M in Q1 2022, an increase of 176%
• Free Cash Flow¹ (FCF) of $0.8M, after $0.4M spend on WC and capital expenditures
• Ended quarter with $3.5M of cash on hand, after $0.4M in debt repayment in the quarter
• Closed a $2.0M convertible debenture financing at 9% interest and half warrant coverage

MEDFORD, Ore., March 28, 2023 /CNW/ – Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a craft cannabis company operating in Oregon and Michigan, is pleased to report its fiscal first quarter 2023 results for the three months ended January 31, 2023. All financial information is provided in U.S. dollars unless otherwise indicated.

First Quarter 2023 Financial Summary ($USD Millions)

Management Commentary

“We continue to demonstrate our operating abilities by generating substantial free cash flow margins while operating in extremely competitive markets. Our financial results for Q1 2023 were improved from Q4 2022 due to of our continued pursuit of operating efficiencies, and a modest increase in average wholesale pricing in Oregon,” said Obie Strickler, CEO of Grown Rogue.

“As we move forward, we are proactively ramping up our genetics programs in both Oregon and Michigan to make sure we stay on the front line of delivering industry-leading quality to our consumers. We believe that our philosophy and practice of constant iteration and improvement will engender more customer trust and deepen the relationship we have with our existing fans,” Mr. Strickler continued.

“Regarding capital allocation, we continue to focus on producing free cash flow to best position ourselves to meet our balance sheet obligations while being prepared for new market opportunities, using only a modest amount on increased working capital. With our internal cash generation and the recent $2M convertible debenture capital raise, we feel confident in our ability to take advantage of high-quality opportunities as they arise.

I want to thank the entire Grown Rogue team for their continued efforts and look forward to updating investors on our new market efforts in due course.”

Oregon Market Highlights ($USD Millions)

• #1 Flower brand for seven consecutive quarters, according to LeafLink’s MarketScape data
• Grown Rogue increased Oregon sungrown capacity with a lease option of 35 additional acres in Oregon’s Rogue Valley, that includes an addition cultivation license
• Focusing on increasing market share by launching craft pre-roll products in Q2-Q3 2023

Michigan Market Highlights ($USD Millions)

• Grown Rogue exercised its option and acquired 87% of Canopy Management, LLC resulting in its controlling interest in Golden Harvests, LLC
• Launching strain specific packaging in Q2-Q3 2023 which has garnered significant interest from customers

Michigan operations are through Golden Harvests, LLC.

Financial Statements and aEBITDA reconciliation