Cannara Biotech Delivers Record Q2 Results as National Expansion Accelerates

  • Record Revenue: Net revenues of $26.6 million in Q2 2025, a 35% increase compared to $19.7 million in Q2 2024, driven by national brand growth and product innovation.
  • Record Profitability: Gross pro t before fair value adjustments rose 52% to $10.8 million in Q2 2025 from $7.1 million in Q2 2024, with gross margins improving to 41%.
  • Strong Adjusted EBITDA: Delivered sixteenth consecutive quarter of positive Adjusted EBITDA, more than doubling to a record $7.1 million, up 102% from Q2 20241 .
  • Expanding Market Presence: Increased national market share to 3.9% in Q2 2025, up 34.5% from same period of prior year, with notable share gains in Québec, Ontario, and Alberta2 .
  • Strategic Execution on Track: Achieving Fiscal 2025 objective of activating two new grow zones, with the rest brought online in April and the second scheduled for May, bringing total active grow zones to 12 and expanding active canopy by 50,000 sq. ft to over 300,000 sq. ft., supporting annual production capacity of up to 40,000 kg.

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

MONTREAL, QUÉBEC – April 28, 2025 – Cannara Biotech Inc. (“Cannara”, “the Company”, “us” or “we”) (TSXV: LOVE) (OTCQX: LOVFF) (FRA: 8CB0), a vertically integrated producer of premium-grade cannabis products at affordable prices with two mega facilities based in Québec spanning over 1,650,000 sq. ft., today announced its financial and operating results for the three and six-month periods ended February 28, 2025.

The full set of interim condensed consolidated nancial statements for the three and six-month periods ended February 28, 2025, and the accompanying Management’s Discussion and Analysis can be accessed by visiting the Company’s website at investors.cannara.ca, or by accessing the Company’s SEDAR+ pro le at www.sedarplus.ca.

“Q2 2025 marks another record quarter for Cannara, driven by the continued national expansion of our premium brands, strong consumer loyalty, and disciplined execution,” said Zohar Krivorot, President & Chief Executive Of cer of Cannara. “Net revenues grew by 35% year-over-year to $26.6 million, supported by increased demand across all markets. Our estimated national retail market share reached 3.9%, with notable gains in Québec, Ontario, and Alberta—reinforcing our competitive strength across Canada.”

“Operationally, we also achieved a major cultivation milestone with our 11th grow zone activated in April and our 12th coming online in May, expanding active canopy to over 300,000 sq. ft. These additions position us to support an annual production capacity of up to 40,000 kg. With over 20 product launches planned for 2025, and with our home province of Quebec implementing vaperegulations in November, we remain focused on scaling into our unmet demand responsibly while delivering exceptional value to consumers and shareholders alike,” concluded Mr. Krivorot.

“Our second quarter results clearly demonstrate the strength of Cannara’s nancial foundation and our ability to scale pro tably,” said Nicholas Sosiak, Chief Financial Of cer of Cannara. “We delivered $3.3 million in net income, a $6.7 million improvement year-over-year, while more than doubling our Adjusted EBITDA to $7.1 million. This marks our 16th consecutive quarter of positive Adjusted EBITDA, a testament to the consistency and resilience of our operating model. Gross pro t before fair value adjustment for the second quarter of 2025 increased 52% to $10.8 million, and gross margins improved to 41%, reflecting the benefits of higher yields, enhanced scale, and disciplined cost control, although, operating cash ow for the quarter was impacted by the early remittance of excise taxes and increased investment in packaging materials to support sales growth in the second half of the year.”

“Importantly, we achieved these results while continuing to invest in our brands and national expansion strategy, which we are able to execute at very low capital expenditures, presenting incredibly high return on investment opportunity within our base operations,” concluded Mr. Sosiak.

Cannara Biotech’s CFO, Nicholas Sosiak, will host an earnings webcast on Tuesday, April 29, 2025, at 11:00 a.m. ET, consisting of prepared remarks followed by a question-and-answer session.

A Media Snippet accompanying this announcement is available by clicking on this link.

Participants can find the live webcast here or on the Cannara Biotech investor website at www.cannara.ca/investors/company-events. For interested individuals unable to join, the event will be archived on the company’s website.

Investors are encouraged to submit questions in advance to investors@cannara.ca. While live questions will be accepted during the session, priority will be given to those submitted by email.

Q2 2025 FINANCIAL HIGHLIGHTS

Q2 2025 vs Q2 2024 Comparable Period

  • Gross cannabis revenues before excise taxes increased by 40% to $36.8 million, reflecting strong demand across existing and new markets and the successful launch of new products and genetics;
  • Net revenues rose 35% to $26.6 million, driven by national brand expansion and higher sales volumes;
  • Gross profit before fair value adjustments grew 52% to $10.8 million, supported by the activation of the 10th grow zone in 2024, improved yields from newly optimized genetics, and reduced production costs;
  • Gross margin before fair value adjustments improved to 41%, up from 36%, reflecting enhanced cultivation efficiency and scale;
  • Operating income reached $5.9 million, compared to a $2.0 million operating loss in Q2 2024, driven by increased sales, lower cost of production, and operational leverage;
  • Net income was $3.3 million, compared to a net loss of $3.4 million, and includes a $1.4 million deferred tax expense, signaling a shift to sustained taxable profitability;
  • Adjusted EBITDA more than doubled to $7.1 million, up 102% from $3.5 million, marking Cannara’s sixteenth consecutive quarter of positive Adjusted EBITDA3 ;
  • The Company generated negative operating cash ow of $2.6 million in Q2 2025, compared to positive $2.4 million in Q1 2025. The decline reflects strategic investments in raw material packaging to secure bulk pricing and reduce stock-out risk, along with advance payments of excise tax obligations;
  • Free cash ow for Q2 2025 fell by $5.3 million, from $1.3 million in Q2 2024 to negative $4.0 million in Q2 20253 ;
  • Earnings per share were $0.04, compared to a loss per share of $0.04 in the prior year period.

Q2 2025 YTD vs Q2 2024 YTD Comparable Year-To-Date

  • Gross cannabis revenues before excise taxes rose 36% to $71.7 million, up from $52.6 million, driven by deeper market penetration, new market entries, and expanded product offerings including new genetics and SKUs;
  • Net revenues increased 32% to $51.7 million, compared to $39.2 million in the prior year period;
  • Gross profit before fair value adjustments grew 37% to $20.6 million, supported by expanded production capacity from the 10th grow zone and improved cultivation yields that reduced cost per gram;
  • Gross margin before fair value adjustments improved to 40%, up from 38%, re ecting ef ciency gains in cultivation and processing;
  • Operating income rose to $10.1 million, up from $1.5 million, reflecting stronger sales, better cost control, and operational leverage; Net income was $5.6 million, compared to a net loss of $1.3 million, and includes a $2.1 million deferred tax expense tied to the Company’s expectation of continued taxable profitability;
  • Adjusted EBITDA increased by 51% to $13.1 million, up from $8.7 million, marking Cannara’s sixteenth straight quarter of positive Adjusted EBITDA4 ;
  • Operating cash ow totaled $3.3 million, slightly above $3.2 million in the same period of last year;
  • Free cash ow improved by $1.3 million, turning positive at $0.6 million, up from negative $0.7 million in the prior year, re ecting stronger earnings and disciplined capital deployment4 ;
  • Earnings per share were $0.06, compared to a loss per share of $0.01 in the prior year period.

Q2 2025 vs Q1 2025 Quarter over Quarter (“QoQ”)

  • Gross cannabis revenues before excise taxes increased by 5% to $36.8 million, up from $34.9 million, driven by strong organic growth in Québec and across other provinces, supported by focused distribution and wholesale expansion;
  • Net revenues rose by 6% to $26.6 million, compared to $25.1 million, reflecting continued market share gains across key provinces;
  • Gross profit before fair value adjustments increased by 11% to $10.8 million, up from $9.8 million, due to higher sales volumes and improved cost ef ciencies from economies of scale;
  • Gross margin before fair value adjustments improved to 41%, up from 39%, supported by higher cultivation yields and ongoing enhancements in cultivation ef ciency and quality;
  • Operating income increased to $5.9 million, up from $4.2 million, as revenue growth outpaced operating expenses, which remained stable quarter over quarter;
  • Net income grew by 44% to $3.3 million, up from $2.3 million, supported by increased sales and margin expansion;
  • Adjusted EBITDA rose 18% to $7.1 million, compared to $6.0 million, marking the Company’s sixteenth consecutive quarter of positive Adjusted EBITDA4 ;
  • Operating cash ow declined from $5.8 million to negative $2.6 million, due to advance excise tax payments and strategic raw material purchases to support long-term supply stability;
  • Free cash flow was negative $4.0 million, compared to positive $4.6 million, reflecting an $8.6 million swing tied to planned inventory investments and proactive excise tax positioning4 .

Q2 2025 OPERATIONAL & FINANCIAL HIGHLIGHTS

Operational

Please click here for attached detailed explanations and tables for operational and financial highlights.

CAPITAL TRANSACTIONS AND OTHER EVENTS

During Q2 2025, the Company issued 625,000 common shares for RSUs that vested.

Subsequent to quarter-end, the Company granted 100,000 stock options at an exercise price of $1.25 and 84,400 stock options at an exercise price of $1.80 to employees and consultant subject to certain vesting and conditions in accordance with the Company’s employee share option plan. The Company also granted 22,500 RSUs without performance conditions and exercisable for no consideration.

CONTACT

Nicholas Sosiak, CPA, CA
Chief Financial Officer
nick@cannara.ca

Zohar Krivorot
Founder & Chief Executive Officer
zohar@cannara.ca

Neither the 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.

ABOUT CANNARA

Cannara Biotech Inc. (TSXV: LOVE) (OTCQX: LOVFF) (FRA: 8CB0), is a vertically integrated producer of affordable premium-grade cannabis and cannabis-derivative products for the Canadian markets. Cannara owns two mega facilities based in Québec spanning over 1,600,000 sq. ft., providing the Company with 100,000 kg of potential annualized cultivation output. Leveraging Québec’s low electricity costs, Cannara’s facilities produce premium-grade cannabis products at an affordable price. For more information, please visit cannara.ca.

CAUTIONARY STATEMENT REGARDING “FORWARD-LOOKING” INFORMATION

This news release may contain “forward-looking information” within the meaning of Canadian securities legislation (“forward-looking statements”). These forward-looking statements are made as of the date of this MD&A and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements with respect to the anticipated benefits of DTC eligibility of the Common Shares and the completion of the Olymbec Share Issuance.

Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to, the Company and its operations, its projections or estimates about its future business operations, its planned expansion activities, anticipated product offerings, the adequacy of its financial resources, the ability to adhere to financial and other covenants under lending agreements, future economic performance, and the Company’s ability to become a leader in the field of cannabis cultivation, production, and sales.

In certain cases, forward-looking statements can be identified by the use of words such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur” or “be achieved” or the negative of these terms or comparable terminology. In this document, certain forwardlooking statements are identified by words including “may,” “future,” “expected,” “intends” and “estimates.” By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in, or implied by, such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors which are discussed in greater detail under “Risk Factors” in the Company’s AIF available on SEDAR+ at www.sedarplus.ca and under the “Investor Area” section of our website at https://www.cannara.ca/en/investor-area.

Other risks not presently known to the Company or that the Company believes are not significant could also cause actual results to differ materially from those expressed in its forward-looking statements. Although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, readers are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Certain assumptions were made in preparing the forward-looking information concerning the availability of capital resources, business performance, market conditions, as well as customer demand. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

1 Please refer to the “Non-GAAP Measures and Other Financial Measures” section of this news release for corresponding denitions.

2 National retail market share gures are based on estimated retail sales data for the periods of December 2024 to February 2025. Calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada. This combined approach provides a more accurate re ection of Cannara’s national performance across all licensed markets.

3 Please refer to the “Non-GAAP Measures and Other Financial Measures” section of this news release for corresponding denitions.

4 Please refer to the “Non-GAAP Measures and Other Financial Measures” section of this news release for corresponding denitions.

5 National retail market share gures are based on estimated retail sales data for the periods of September 2024 to February 2025. Calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada

6 National retail market share gures are based on estimated retail sales data for the periods of December 2023 to February 2024 and December 2024 to February 2025. Calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada

7 National retail market share gures are based on estimated retail sales data for the periods of December 2024 to February 2025 and March 2025. Calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada