The Parent Company Pro Forma Q4 Revenue Increases 40% to $40 Million

TPCO Holding Corp. Reports Fourth Quarter and Full Year 2020 Results and Files Business Acquisition Report for Qualifying Transactions

Unaudited Consolidated Pro Forma Fourth Quarter Revenues of $40 Million; Unaudited Consolidated Pro Forma Full Year Revenues of $189 Million

SAN JOSE, Calif.-March 15, 2021-(BUSINESS WIRE)–TPCO Holding Corp. (“The Parent Company” or the “Company”) (NEO: GRAM.U, GRAM.WT.U) (OTCQX: GRAMF; OTC PINK: GRMWF), formerly Subversive Capital Acquisition Corp., today announced financial results for the fourth quarter and year ended December 31, 2020 along with the filing of its Business Acquisition Report (“BAR”) in connection with its Qualifying Transactions in respect of each of CMG Partners, Inc. (“Caliva”), and Left Coast Ventures., (“LCV”) and SISU Extraction LLC (“SISU”) completed on January 15, 2021. All amounts are expressed in U.S. dollars.

The Company’s audited consolidated financial statements for the three months and year ended December 31, 2020, as well as its accompanying management discussion and analysis (“MD&A”) and the BAR have been filed on SEDAR www.sedar.com.

The Company cautions investors that the consolidated pro forma financial statements (i.e. which consolidates TPCO Holding, Caliva, LCV and SISU) as of December 31, 2020 included in the BAR and provided as exhibits to this press release are unaudited. The entity level financial statements for Caliva, LCV and SISU as of December 31, 2020 which are included in the BAR are audited. Please refer to TPCO’s MD&A for additional detail and discussion on the Company’s results from operations.

The Company will separately file its Annual Information Form (“AIF”) before the end of March 2021.

Fourth Quarter 2020 Financial Highlights

• Unaudited consolidated pro forma revenues for the fourth quarter was $40.2 million, a 40% increase compared to $28.7 million in the fourth quarter of 2019.
• Unaudited consolidated pro forma EBITDA loss for the fourth quarter was $93.4 million compared to a loss of $18.5 million in the fourth quarter of 2019. The fourth quarter 2020 EBITDA loss includes various transaction, non-recurring and approximately $70.5 million of non-cash expenses.
• Unaudited consolidated pro forma Adjusted EBITDA loss for the fourth quarter was $17.7 million compared to a loss of $12.0 million in the fourth quarter of 2019. Adjusted EBITDA removes the effects of changes in fair value of financial instruments, impairment charges and other non-cash items.

Full Year 2020 Financial Highlights

• Unaudited consolidated pro forma revenues for the year ended 2020 was $188.7 million, a 76% increase compared to $107.2 million in 2019.
• Unaudited consolidated pro forma EBITDA loss for the year ended 2020 was $126.1 million compared to a loss of $136.1 million in 2019.
• Unaudited consolidated pro forma Adjusted EBITDA loss for the year ended 2020 was $34.6 million compared to a loss of $61.3 million in 2019.
• The Company had $337.9 million of unaudited consolidated pro forma cash available on December 31, 2020 to execute on its growth strategy.

We are excited to have closed 2020 with momentum forming the largest vertically integrated cannabis company in California by revenue, vertically integrated footprint, brand portfolio and balance sheet post our transaction close in January. This year is pivotal for The Parent Company as we work through the complex integration process to lay the foundation for future growth and acquisitions.

Steve Allan, The Parent Company’s CEO

Our team has been diligently working to integrate the newly combined businesses over the last two months and we expect synergies will be realized in our financial results in the back half of 2021. We are optimizing our brand portfolio, planning to launch the first of our value-tier products near the end of this quarter, and expanding our omnichannel footprint in the coming weeks to reach more consumers.

“California is the largest and most influential cannabis market globally, and we believe The Parent Company is best positioned to consolidate and become one of the leaders in this cannabis market,” continued Allan. “Our vertically integrated supply chain, brand portfolio, unrivaled consumer access, and one of the healthiest balance sheets in cannabis will allow us to reshape the industry starting with California. We have a long runway for growth, especially as we execute on our consolidation strategy, and believe we can create meaningful long term shareholder value.”

The Parent Company Investment Highlights

• Proven Business Model – The Parent Company is the largest vertically integrated omni-channel cannabis platform in California. The Parent Company’s operational footprint spans cultivation, extraction, manufacturing, distribution, brands, retail and delivery.
• Progressive Operational Platform – The Parent Company owns its supply chain, enabling the company to leverage scale and produce and distribute a broad portfolio of cannabis products across consumer segments.
• Omnichannel Platform – The Parent Company’s scalable omnichannel business offers customers convenient express or scheduled delivery, and in-store or curbside pick-up, all through a single user-centric e-commerce platform, Caliva.com. This omnichannel e-commerce platform, offering both a robust portfolio of first and third-party brands, allows The Parent Company to rapidly scale its direct-to-consumer reach to all Californians.
• Exclusive Brand Partnerships and Leading Cultural Influence – Brand strategy and marketing playbook led by Shawn “JAY-Z” Carter and Roc Nation, leveraging unparalleled cultural influence of leading artists and entertainers to build the most valuable and scalable brand portfolio in cannabis. JAY-Z officially launched his flagship cannabis line, MONOGRAM, on December 10, 2020.
• Unrivaled Consumer Reach – TPCO currently reaches over 50% of consumers in California through Caliva.com, its existing direct-to-consumer platform. The Parent Company plans to have significant consumer reach in California, reaching 75% of consumers in the state by the end of 2021 and almost 90% by the end of 2022 through scaling of its omnichannel platform.
• Strong Balance Sheet –The Parent Company is one of the most well-capitalized cannabis companies in the United States and will pursue an aggressive consolidation strategy to accelerate growth and market share gains.
• Industry-Defining Social Impact – Led by Shawn “JAY-Z” Carter, The Parent Company will fund The Parent Company Social Equity Ventures with an initial target of $10 million and an annual contribution of at least 2% of its net income to invest in minority-owned and Black-owned cannabis businesses and contribute to the effort to rectify the wrongs of prohibition through diversifying both the business leadership and workforce of the cannabis industry. Beyond investing, the fund will also support organizations and programs focused on diversifying the cannabis workforce through job fairs and placement, industry training and education, as well as Social Equity application support.

About The Parent Company

The Parent Company (TPCO Holding Corp.) (NEO: GRAM.U, GRAM.WT.U) (OTCQX: GRAMF; OTC PINK: GRMWF) is California’s leading vertically integrated cannabis company combining best-in-class operations with leading voices in popular culture and social impact. The Parent Company brings together global icon and entrepreneur Shawn “JAY-Z” Carter, entertainment powerhouse ROC NATION, California’s leading direct-to-consumer platform CALIVA, and leading cannabis and hemp manufacturer, LEFT COAST VENTURES, to form a cannabis industry leader for the post-prohibition era. Chief Visionary Officer Shawn “JAY-Z” Carter, one of the most recognized and celebrated entrepreneurs of our time, will guide The Parent Company’s brand strategy in partnership with Roc Nation, the world’s preeminent entertainment company with a roster of culture-making artists, athletes and influencers. The brands we build together will pave a new path forward for a legacy rooted in equity, access, and justice.

For more information, please visit www.theparent.co.

Original Press Release

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