– Cultivation, Production and Processing Expansion Ongoing in Arizona and Nevada

– Unity Rd. Brand Accelerates Ramp by Signing Ten Agreements for National Cannabis Dispensary Franchise Expansion

– Management to Host Conference Call and Webcast to Discuss Key Operational and Financial Highlights Today at 2:00 p.m. ET

PHOENIX, Jan. 18, 2022 /PRNewswire/ — Item 9 Labs Corp. (OTCQX: INLB) (the “Company”)—a vertically integrated cannabis dispensary franchisor and operator that produces premium, award-winning products—today reported operating and financial results for the 12 months ended September 30, 2021, the Company’s fiscal year 2021 (“FY2021”). Item 9 Labs Corp. management will be hosting an earnings results call today, January 18, at 2:00 p.m. Eastern time (11:00 a.m. Pacific time); details are provided below.

Key Financial Highlights for FY2021 (compared with FY2020)

• Revenue increased 170% to $21.9 million
• Gross profit increased 161% to $8.6 million
• Gross margin remained flat at approximately 40%
• Operating loss of $5.6 million compared with operating loss of $5.4 million
• Operating expenses as a percentage of revenue declined to 65% from 107%
• Net loss of $10.9 million compared with net loss of $12.3 million
• Net loss included $5.3 million ($700,000 cash) of interest expense compared with $7.0 million ($450,000 cash)
• Adjusted EBITDA loss of $1.7 million (compared with adjusted EBITDA loss of $2.5 million)

Key Business Highlights During and Subsequent to FY2021

• Won Seven First Place Awards for Product Excellence in 2021: The Company’s premium cannabis product brand, Item Nine Labs, secured its first Cannabis Cup—the most prestigious milestone that cannabis brands strive for worldwide—taking home first place in the “vape pens” category with its Black and Blue Kush Broad Spectrum Cartridge and third place in the “pre-rolls” category with its Do-Si-Do strain. The elevated mainstream brand also earned two first-place awards, two second-place awards and one third-place award for its high-quality vape and concentrate products at the 710 Degree Cup and three first-place awards at the Errl Cup—Arizona’s largest and longest-running annual cannabis festivals and awards events. All told, the decorated brand has earned 23 awards in product competitions since its inception, including 14 first-place finishes.
• Secured $19 Million Construction-Financing Loan from Pelorus Equity Group for Expansion of Cultivation & Lab Sites in Arizona & Nevada: The financing is funding master site expansion in Arizona, including acquisition of the 45 acres of adjacent land next to the Company’s existing 19,200 square foot facility. Capacity of the Company’s Arizona operations, once all expansion is complete, is expected to be enhanced by 31x. Pelorus Equity Group is a leading provider of value-add bridge commercial real estate loans to cannabis businesses and owners with cannabis-related real estate.
• Executed Asset Purchase Agreement for a Colorado Dispensary Kickstarts National Growth Plan: Item 9 Labs Corp. plans to aggressively expand its dispensary franchise, Unity Rd., by acquiring and converting cannabis retail stores, training the local team and selling the business to new and existing Unity Rd. franchise partners. As the Company seeks to keep dispensary ownership local, this growth strategy offers turnkey investment opportunities for prospective cannabis entrepreneurs. In October, Item 9 Labs Corp. executed an Asset Purchase Agreement for an existing dispensary license and storefront in Adams County, Colorado. This will be the first corporate-owned shop under the Unity Rd. brand. Currently, the Company is awaiting regulatory approval by Colorado’s Marijuana Enforcement Division (the “MED”) and expects the shop to be operational in the first half of 2022. Item 9 Labs Corp. plans to operate the store for 6-18 months and utilize it for franchise partner and team training as well as tours with prospective franchise partners.
• Expanded Footprint of Unity Rd. Dispensary Franchise into New England: Item 9 Labs Corp. signed agreements with entrepreneurial groups for development in New Jersey and Virginia and is currently assisting the New Jersey groups in submitting their dispensary license applications in March. The Company also signed a lease in Maine for the state’s first Unity Rd. shop and is awaiting license approval from the state.
• Signed First Unity Rd. Agreement in South Dakota: Unity Rd. kicked off local expansion in South Dakota with the signing of an agreement that will bring the brand’s first shop to the Mount Rushmore State. The retailer has partnered with local serial entrepreneur BJ Olson and his business partner to develop at least one Unity Rd. shop and is currently guiding them through the state’s dispensary license process.
• Joined the International Franchise Association (IFA), Solidifying Position as First Cannabis Dispensary Franchise to Become Members: Utilizing the franchise business model for national development, Unity Rd. continues to blaze trails by becoming the first brand of its kind to be named an IFA member. The organization’s membership base includes more than 1,000 franchise brands across 300 industries, and Unity Rd. is currently the sole franchise model to represent the plant-touching cannabis space.
• Enhanced Board of Directors with Two Independent Appointments: Item 9 Labs Corp. recently named Eric C. Kutscher, Pharm. D., M.B.A., F.A.S.H.P., and Lawrence X. Taylor to its Board of Directors. Kutscher and Taylor bring a combined 55-plus years of experience across patient-centered healthcare, leadership, M&A and strategic planning. Their appointments demonstrate the Company’s focus on strengthening its corporate governance through more independent directors.
• Bolstered Franchise and Marketing Teams with Key Hires to Support Company Growth: Throughout the second half of 2021, Item 9 Labs Corp. made several strategic management hires to support national franchise expansion of Unity Rd. and accelerate momentum across the franchise and Item Nine Labs products: Mike Keskey II as General Counsel, Kristen Mathis as Vice President of Marketing, Tracy Timko as Director of Franchise Support, Erica Tarnowski as Franchise Development Manager, and Emily Gritti as Senior Manager of Trade Marketing & Events.

Management Commentary

Item 9 Labs Corp.’s Chief Executive Officer, Andrew Bowden, stated, “Our company has never been in a better position. With Arizona’s adult-use sales going live in January 2021, our products and brand have been gaining tremendous traction. We have grown to $2 million in revenue per month and solidified our spot in Arizona as one of the top brands in every dispensary we sell through, which is more than 50% of Arizona’s dispensaries. The state’s combined adult-use and medical markets have continuously grown each month and surpassed $1 billion in annual sales in November. With expansion underway at our Arizona site that will add 45,000 square feet, we will be in a position to meet this increased demand in the second half of 2022 with our additional cultivation, production, and processing space.”

Item 9 Labs Corp.’s Chief Strategy Officer, Jeffrey Rassas, commented, “Our cannabis dispensary franchise, Unity Rd., is already gaining strong traction and our team is executing a strategic initiative to expand the brand’s footprint from coast to coast. We have a national acquisition plan to accelerate expansion and began executing a couple months ago with our first deal in Adams County, Colorado. We have a robust pipeline of opportunities across a wide range of appealing states and expect to make further announcements over the next few months. There are a tremendous amount of synergies we gained from the acquisition of Unity Rd.’s parent company, OCG Inc., including expanded business offerings and expertise, operational efficiencies, cost savings and revenue upside.”

Item 9 Labs Corp.’s Chief Financial Officer, Bobby Mikkelsen, commented, “With our 170% annual growth in revenue to $21.9 million, we have demonstrated the scalability of our business throughout fiscal year 2021 and saw growth and profitability in the second and third quarters. In the fourth quarter and through the end of December 2021, we have made additional hires, continued development of our Nevada site and began construction on our site in Arizona, which has caused our expenses to rise. While we build out our capabilities and bolster our team for future growth, we are confident in the greater demand and believe we are strengthening our position for increased business in Arizona.”

Arizona Master Cultivation Site Expansion

In November, Item 9 Labs Corp. broke ground on the initial phase of the master expansion of its Coolidge, Arizona cultivation & lab site. $13.5 million of the proceeds from the Pelorus loan will go toward this initial buildout, which more than doubles current operations space. As part of the expansion, the Company recently acquired the neighboring 45 acres of the site. At 50 acres, the site is one of the largest properties in Arizona that is zoned to grow and cultivate flower. The initial development phase is estimated to be completed in Summer 2022 and includes the construction of three steel buildings and two greenhouses – adding 9,600 square feet for indoor cultivation, 9,600 square feet of lab and packaging and a 9,600 square foot head house to support the addition of the two 18,000 square foot greenhouses.

With this initial expansion phase, the Company expects to increase output of cannabis plant material by 250-300%, with a per unit cost reduction of at least 30%. Further, the additional greenhouses will reduce reliance on third-party sourced material for lab productions by 40-50%. Expansion of the existing lab allows for the addition of more state-of-the-art equipment for all extraction processes, which will support product diversification.

Nevada Cultivation Site Expansion

The remaining proceeds from the Pelorus loan are to complete the Company’s 20,000 square foot facility in Pahrump, Nevada that is currently approximately 85% finished. The expansion includes 4,450 square feet for flower, 990 square feet of vegetation space, 400 square feet for clones, 300 square feet for dry curing and 615 square feet of space for genetics. The facility also includes more than 2,500 square feet of post-processing and lab space, along with the opportunity for a joint venture with a 1,100 square foot commercial kitchen. The remainder of the building is ancillary rooms such as water rooms, offices, locker rooms and break rooms. Item 9 Labs Corp. anticipates the Nevada facility will be operational in Spring 2022.

Financial Results for FY2021 Ended September 30, 2021

• Revenue: For the 12 months ended September 30, 2021, revenue was $21.9 million, an increase of $13.8 million, or 170%, compared with $8.1 million for the 12 months ended September 30, 2020. This growth was primarily driven by the Company investing in increased production capacity to better meet the market demand of Item Nine Labs products.
• Gross Profit: For the 12 months ended September 30, 2021, gross profit was $8.6 million, an increase of $5.3 million, or 161%, compared with $3.3 million for the 12 months ended September 30, 2020. The resulting gross margin was 39%, compared with 41% for the 12 months ended September 30, 2020. The Company experienced lower gross profit margins in the fourth quarter of 2021 due to price reductions as competition rises in Arizona. Additionally, to deepen the market penetration of Item Nine Labs products, the Company sourced plant and extract materials from third parties, the effect of which is higher gross profit, but lower gross margin.
• Total Operating Expenses: For the 12 months ended September 30, 2021, total operating expenses were $14.2 million, an increase of $5.5 million, or 63%, compared with $8.7 million for the 12 months ended September 30, 2020. The Company has invested heavily into FY2021 and 2022 to meet growing demand in Arizona as well as funding the build out of its cultivation and lab site in the Grand Canyon State. Management believes this will improve earnings and future cash position. Operating expenses as a percentage of revenue decreased to 65% from 107%, reflecting the Company’s focus on increasing revenue and scaling its platform more efficiently. Management believes this ratio will decrease going forward as it scales the business.

  Of note, $7.8 million of the Company’s operating expenses for the 12 months ended September 30, 2021 were non-cash expenses, including depreciation, amortization and stock-based compensation.

  Of note, $3.9 million of interest expense in 2021 is non-cash amortization of the debt discount.

• Operating Loss: For the 12 months ended September 30, 2021, operating loss was $5.6 million, in-line with an operating loss of $5.4 million for the 12 months ended September 30, 2020.
• Adjusted EBITDA: After adding back non-cash operating expenses, depreciation and amortization, interest and stock-based compensation, Adjusted EBITDA for the 12 months ended September 30, 2021 was $1.7 million, as compared with an Adjusted EBITDA loss of $2.5 million for the 12 months ended September 30, 2020.
• Net Loss: For the 12 months ended September 30, 2021, net loss attributable to the Company was $10.9 million, or net loss of ($0.14) per share, compared with a net loss of $12.3 million, or ($0.20) per share, for the 12 months ended September 30, 2020.
• Cash: Cash and cash equivalents totaled $1.5 million as of September 30, 2021.

Conference Call and Webcast Information – Tuesday, January 18, 2022 at 2:00 p.m. ET (11:00 a.m. PT)

Item 9 Labs Corp.’s Chief Executive Officer Andrew Bowden and Chief Financial Officer Bobby Mikkelsen will host the Company’s FY2021 results call.

• Date: Tuesday, January 18, 2022
• Time: 2:00 p.m. Eastern time (11:00 a.m. Pacific time)
• Access by Zoom: A live and archived webcast will be available via Sequire, click on this webcast link to register or access the replay.
• Access by Phone: Please call the conference telephone number 10-15 minutes prior to the start time:
• Questions: Please submit questions to [email protected] before the presentation begins. The management team will do their best to answer all questions.

About Item 9 Labs Corp.
Item 9 Labs Corp. (OTCQX: INLB) is a vertically integrated cannabis operator and dispensary franchisor delivering premium products from its large-scale cultivation and production facilities in the United States. The award-winning Item 9 Labs brand specializes in best-in-class products and user experience across several cannabis categories. The company also offers a unique dispensary franchise model through the national Unity Rd. retail brand. Easing barriers to entry, the franchise provides an opportunity for both new and existing dispensary owners to leverage the knowledge, resources, and ongoing support needed to thrive in their state compliantly and successfully. Item 9 Labs brings the best industry practices to markets nationwide through distinctive retail experience, cultivation capabilities, and product innovation. The veteran management team combines a diverse skill set with deep experience in the cannabis sector, franchising, and the capital markets to lead a new generation of public cannabis companies that provide transparency, consistency, and well-being. Headquartered in Arizona, the company is currently expanding its operations space up to 640,000+ square feet on its 50-acre site, one of the largest properties in Arizona zoned to grow and cultivate flower. For additional information, visit item9labscorp.com.

Use of Non-GAAP Financial Measures
To supplement the Company’s financial statements presented on a GAAP basis, Item 9 Labs Corp. provides Adjusted EBITDA as a supplemental measure of its performance. To provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its financial and decision-making surrounding pro forma operations, Item 9 Labs Corp. supplements its consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, with Adjusted EBITDA as a non-GAAP financial measure of earnings. Adjusted EBITDA represents EBITDA plus stock-based compensation and acquisition related expenses. Item 9 Labs Corp. management uses Adjusted EBITDA as a financial measure to evaluate the profitability and efficiency of the business model. The Company uses these non-GAAP financial measures to assess the strength of the underlying operations of the business. These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze its operations between periods and over time. Item 9 Labs Corp. finds this especially useful when reviewing pro forma results of operations, which include large non-cash amortizations of intangible assets from acquisitions and stock-based compensation. Investors should consider its non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, including, but not limited to, risks and effects of legal and administrative proceedings and governmental regulation, especially in a foreign country, future financial and operational results, competition, general economic conditions, proposed transactions that are not legally binding obligations of the company and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include the introduction of new technology, market conditions and those set forth in reports or documents we file from time to time with the SEC. We undertake no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Media Contact:
Item 9 Labs Corp.
Jayne Levy, VP of Communications
Email: [email protected]

Investor Contact:
Item 9 Labs Corp.
800-403-1140
Email: [email protected]

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, January 14, 2022 /CNW/ – High Tide Inc. (“High Tide” or the “Company”) (TSXV: HITI) (Nasdaq: HITI) (FSE: 2LYA), a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, announced today that its Canna Cabana retail cannabis store located at 155 Albert Street North in Regina, Saskatchewan, has begun selling recreational cannabis products for adult use. This opening represents High Tide’s 107thbranded retail location across Canada, and 7th in Saskatchewan, selling recreational cannabis products and consumption accessories. Building on the earlier successful launches of two other locations, this store will be the third Canna Cabana to open in Regina, Saskatchewan’s capital and second-largest city. The new Canna Cabana store is located on Albert Street, which is a major north-south thoroughfare and commercial corridor in Regina. It is also one block south of the Northgate Mall, and is easily accessible from several nearby residential communities.

“The Government of Saskatchewan has made the province one of the most attractive for private-sector cannabis retailers, and as a result of their business friendly orientation we will continue to invest in the province,” said Raj Grover, President and Chief Executive Officer of High Tide. “Despite some delays with the building permit approvals process related to the pandemic, I look forward to announcing two additional Regina store openings in the coming weeks. Combined, this growth will make Canna Cabana one of the largest cannabis retailers in the city, and allow us to bring our innovative discount club concept to many more Reginans. Our revamped Cabana Club loyalty program has been well-received by our customers and I’m very encouraged by the results that I have seen so far. I look forward to sharing more information about its progress, as well as our fourth quarter 2021 results, on January 27th,” added Mr. Grover.

RELEASE OF FOURTH QUARTER 2021 RESULTS AND WEBCAST

The Company also announced today that it will release its financial and operational results for the quarter and fiscal year ended October 31, 2021, after financial markets close on Thursday, January 27, 2022. High Tide’s fourth quarter and fiscal year 2021 financial and operational results will be available on SEDAR and on the Company’s website at www.hightideinc.com/invest.

Following the release of its fourth quarter financial and operational results, High Tide will host a webcast and conference call with Raj Grover, President and Chief Executive Officer, and Rahim Kanji, Chief Financial Officer, at 6:00 PM Eastern Time on Thursday, January 27, 2022. The webcast and conference call will discuss High Tide’s fourth quarter and fiscal year 2021 financial and operational results, as well as the Company’s plans for 2022.

Webcast Link for High Tide Earnings Event:

https://events.q4inc.com/attendee/701958923

Participants may pre-register for the webcast by clicking on the link above prior to the beginning of the live webcast. Three hours after the live webcast, a replay of the webcast will be available at the same link above.

Participants may access the audio of the High Tide earnings event through either the new webcast format, or the conference call line below. However, any participant who wishes to ask a question must access the event via conference call, as the webcast does not support live questions.

Dial-In Information:

Canada Dial-In Number (Toll-Free): +1 833 950 0062

Canada Dial-In Number (Local): +1 226 828 7575

United States Dial-In Number (Toll-Free): +1 844 200 6205

United States Dial-In Number (Local): +1 646 904 5544

Dial-In Number for All Other Locations: +1 929 526 1599

Participant Access Code: 037197

*Participants will need to enter the participant access code before being met by a live operator*

ABOUT HIGH TIDE

High Tide is a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 107 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan, and was featured in the third annual Report on Business Magazine’s ranking of Canada’s Top Growing Companies in 2021. The Company is also North America’s first and only cannabis discount club retailer, featuring Canna Cabana, Meta Cannabis Co., and Meta Cannabis Supply Co. banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its established e-commerce platforms including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more recently in the hemp-derived CBD space through Nuleafnaturals.com, FABCBD.com, BlessedCBD.co.uk, and CBDcity.com, as well as its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. High Tide’s strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value.

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

For more information about High Tide Inc., please visit www.hightideinc.com, its profile page on SEDAR at www.sedar.com, and its profile page on EDGAR at www.sec.gov.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this news release are forward-looking information or forward-looking statements. Such information and statements, referred to herein as “forward-looking statements” are made as of the date of this news release or as of the date of the effective date of information described in this news release, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (generally, forward-looking statements can be identified by use of words such as “outlook”, “expects”, “intend”, “forecasts”, “anticipates”, “plans”, “projects”, “estimates”, “envisages, “assumes”, “needs”, “strategy”, “goals”, “objectives”, or variations thereof, or stating that certain actions, events or results “may”, “can”, “could”, “would”, “might”, or “will” be taken, occur or be achieved, or the negative of any of these terms or similar expressions, and other similar terminology) are not statements of historical fact and may be forward-looking statements.

Such forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to the ability of High Tide to execute on its business plan and that High Tide will receive one or multiple licenses from Alberta Gaming, Liquor & Cannabis, British Columbia’s Liquor Distribution Branch, Liquor, Gaming and Cannabis Authority of Manitoba, Alcohol and Gaming Commission of Ontario or the Saskatchewan Liquor and Gaming Authority permitting it to carry on its Canna Cabana Inc. business. High Tide considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that any one or more of the government, industry, market, operational or financial targets as set out herein will be achieved. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.

The forward‐looking statements contained herein are current as of the date of this news release. Except as required by law, High Tide does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances. Any and all forward-looking statements included in this news release are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this news release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available.

CONTACT INFORMATION

Media Inquiries

Omar Khan

Senior Vice President – Corporate and Public Affairs

[email protected]

Investor Inquiries

Vahan Ajamian

Capital Markets Advisor

[email protected]

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.

Fiscal 2021 revenues of $17.3 million, gross profit of $10.5 million or 61% and an Adjusted EBITDA of $1.5 million, strong indicators of Cannara’s performance and successful operating strategy

All financial results are reported in Canadian dollars, unless otherwise stated.

MONTREAL, Dec. 8, 2021 /CNW/ – Cannara Biotech Inc. (“Cannara” or the “Company“) (TSXV: LOVE) (OTCQB: LOVFF) (FRA: 8CB), a vertically integrated producer of premium-grade cannabis and derivative products with two mega cultivation facilities based in Québec spanning over 1,650,000 sq. ft., today announced its fourth quarter and fiscal year 2021 financial and operating results for the three and twelve-month periods ended August 31, 2021.

Driven by premium “AAAA” grade cannabis, disruptive pricing and exceptional consumer response to world-class products, the Company accomplished significant growth in 2021 from the commercialization of its cannabis operation in Quebec. As a result, the Company increased its total yearly gross revenue compared to prior year by 565%, from $2.6 million to $17.3 million and its fourth quarter gross revenue compared to fourth quarter of 2020 by 957%, from $613 thousand to $6.5 million, generating net income of $1.1 million and an Adjusted EBITDA of $1.4 million for a second consecutive quarter of profitability. With the initiation of commercial sales in Q2 2021 and the acquisition of the Valleyfield Facility, Cannara is well-positioned for national growth in 2022.

Selected Financial Highlights

Full Year 2021 Financial Highlights:

Financial

• Delivered a total revenue of $17.3 million, an increase of $14.7 million from the year prior;
• Gross profit of $10.5 million or 61%, representing an increase of $9.3 million from the year prior;
• Operating expenses down by $2.9 million compared to prior year;
• Adjusted EBITDA amounted to $1.5 million, an increase of $9.8 million from the year prior;
• Net loss amounted to $1.5 million, a significant decrease of $11.6 million from a net loss of $13.1 million in the prior year;
• Cash on hand of $8.2 million, an increase of $0.4 million from year prior. The Company supported the Cannabis operations for the first half of the fiscal year until it commercialized its products. In addition, the Company received financing and invested in the acquisition of the Valleyfield Facility and related capital expenditures;
• Working capital of $12.4 million provides the Company with liquidity to execute on its strategy.

Q4 2021 Financial and Operating Highlights:

Financial

• Delivered a total revenue of $6.5 million, an increase of $5.9 million from $0.6 million in the fourth quarter of 2020;
• Gross profit of $4.5 million or 70%, representing an increase of $4.9 million from the year prior;
• Adjusted EBITDA amounted to $1.4 million, an increase of $2.8 million from a negative adjusted EBITDA of $1.4 million in the fourth quarter of 2020;
• Net income amounted to $1.1 million, an increase of $5.0 million from a net loss of $3.9 million in the fourth quarter of 2020;
• Completed a non-brokered private placement of $24.3 million and convertible debenture raise of $5.7 million to finance the acquisition of the Valleyfield Facility. In addition, the Company converted its $5 million credit facilities bearing interest at 13% into a $5 million convertible debenture bearing interest at 4% and convertible into common shares at a price of $0.18 per share.

Operating Highlights:

• Acquired the Valleyfield Facility: a 1 million sq. ft. cultivation and manufacturing facility from The Green Organic Holdings Ltd. (“TGOD”), for $27 million plus funding of certain deposit requirements of approximately $5.7 million by a letter of credit. The Valleyfield Facility received its cultivation license in September 2021 and propagated its first 9,600 plants in November 2021;
• Expanded to the Saskatchewan market during the quarter;
• Introduced new SKUs to the Quebec market: Cuban Linx and Do-Si-Dos (Tribal Brand) and CBD Runtz (Orchid CBD brand) in both 3.5 gram dry flower ad 2.5 gram pre-roll formats;
• Sold approximately 1,696 kg of cannabis during the fourth quarter of 2021.

Highlights Subsequent to Fourth Quarter

• Secured additional bank credit amounting to $22 million increased from a previous loan of $5.4 million with Canadian Imperial Bank of Commerce (“CIBC”);
• Expanded to Ontario market;
• Launched two new hash products within the Nugz brand in Quebec retail stores; Old School Hash in a 3-gram bar and Ice Water Hash in a 1-gram temple ball;
• Granted an aggregate total of 7,935,000 stock options to certain employees and board members at an exercise price of $0.18 per common share, subject to certain vesting conditions.

Executive Team Appointments

• Nicolas Dupuis joins the Company with 25 years of progressive operations leadership experience in global manufacturing in the pharmaceutical industry, assumed office as Vice President, Supply Chain to spearhead supply chain strategy and further streamline business operations;
• Brian Sherman joins the Company as Vice President, Legal Affairs to lead strategic advice in regulatory compliance matters. Sherman brings industry experience having served as a senior member of the legal team at Canopy Growth.

CEO and CFO Commentaries

“Our impressive increase in revenue this quarter and incredible overall results for this year demonstrate a year of sustained growth and profitability, one which continued to drive our net income and adjusted EBITDA up,” said Zohar Krivorot, President & Chief Executive Officer of Cannara. “Our three flagship brands carved unique niches in the industry, offering handcrafted, hang-dried, slow-cured and hand-trimmed cannabis with the flower’s natural properties intact. The consumer response to these products outperformed even our expectations, as we saw a remarkable increase in both new and loyal customers embracing the dynamism of our product portfolio. We are also thrilled by the continued expansion of our Cannara family, as we increasingly rely on purpose-driven leaders whose talent for strategy shape the organization’s competencies. Over the course of the next fiscal, we are well-positioned for national growth and will continue to seek opportunities that support our mission, allocating efforts to existing and new activities.”

“Our tremendous growth was driven by strategic retail activities in Québec, combined with well-thought-out operational development investments, the cultivation and sale licenses of our two mega facilities, and the cannabis revenues generated during the second half of 2021,” said Nicholas Sosiak, Chief Financial Officer of Cannara. “The incredible performance, strong balance sheet and increase in gross profit all underscore our long-term growth strategy and commitment to our customers, against the backdrop of strong demand for our products. As we continue to generate profitable growth and outsized returns, we will move forward from a position of financial strength and are ideally positioned to showcase continued positive Adjusted EBITDA.”

Fiscal 2022 Outlook

Looking ahead, the Company expects to optimize the additional debt financing from CIBC to finalize the redesign of several zones at the Valleyfield Facility to replicate the indoor cultivation environment, including growing without utilizing the sun and launch the operations at the site.

The first 25,000 square foot zone was propagated with 9,600 plants in November 2021 and next 25,000 square foot zone is planned to be propagated in January 2022.

The Company also anticipates that its existing cash resources of $8.2 million (as at August 31, 2021), along with the forecasted cashflows and financing that occurred subsequent to year-end, will enable it to fund its planned operating expenses for at least the next twelve months from August 31, 2021.

Over the course of the next fiscal year, the Company plans to allocate efforts towards several transformative milestones as a part of its long-term strategy:

• Increased cannabis supply through the propagation of six rooms in the Valleyfield facility;
• Market release of new cannabis genetics into market;
• Accelerated Hash production & introduction of new Hash blends into market;
• Construction of a butane hash oil extraction lab, and launch of a vape cart product line;
• Further penetration of Québec and Ontario markets, and expansion into new territories;
• Continued positive Adjusted EBITDA.

Outstanding Shares

As at the date of this report, the Company had 876,481,321 common shares and 44,199,333 stock options issued and outstanding. For further information, the complete Audited Consolidated Financial Statements and Management’s Discussion and Analysis for the three and twelve-month periods ended August 31, 2021 and August 31, 2020, along with additional information about the Company and all of its public filings are available at sedar.com and the Company’s investor website, investors.cannara.ca.

About Cannara Biotech Inc.

Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) (FRA: 8CB) is a vertically integrated producer of premium-grade cannabis and cannabis-derivative products for the Québec and Canadian markets. Cannara owns two mega cultivation facilities based in Québec spanning over 1,650,000 sq. ft., providing the Company with 125,000kg of potential annualized cultivation output. Leveraging Québec’s low electricity costs, Cannara’s facilities produce craft-cultivated premium-grade cannabis products at an affordable price. For more information, please visit cannara.ca.

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

Cautionary Statement Regarding “Forward-Looking” Information

This information release contains certain forward-looking information. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by statements herein, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on the Company’s current beliefs as well as assumptions made by and information currently available to it as well as other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by the Company in its public securities filings, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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.