Adastra Announces Submission of Medical Sales License Application and Engagement of IR Labs Inc. to Provide Investor Relations Services

Adastra Announces Submission of Medical Sales License Application and Engagement of IR Labs Inc. to Provide Investor Relations Services

Adastra Holdings Ltd. (CSE: XTRX) (FRA: D2EP) ("Adastra" or the "Company"), a Health Canada Licensed cannabis company focused on processing, sales, organoleptic testing, and analytical testing, is pleased to announce the submission of its Medical Sales License application to Health Canada on April 1, 2022 .

Adastra Announces Submission of Medical Sales License Application (CNW Group/Adastra Holdings Ltd.)

A Medical Sales License would permit Adastra to perform the following activities:

  • Sell cannabis extracts to medical cannabis patients and licensed health practitioners;
  • Develop products classified as cannabis extracts:
    • Inhaled (vaporizer cartridge and shatter),
    • Ingested (tincture, oil, capsule, soft gel and oral spray),
    • Other (suppository);
  • Sell dried cannabis

On August 31, 2021 , Adastra announced its acquisition of 1225140 B .C. Ltd., doing business as PerceiveMD , a lean digital patient care platform providing complimentary assessments for alternative treatments of medical cannabis and other breakthrough therapies, such as psychedelics.

"I am particularly excited about the future of cannabinoid-based medical treatments, especially the pharmaceutical distribution of these remedies," said Michael Forbes , Chief Executive Officer, Corporate Secretary and Director of Adastra. "Having strong ties to the medical community, I am confident that CBD, CBN and CBG specifically will play a significant role in the Canadian medical market in the near future. Adastra's ability to sell to the growing and established medical market positions the Company to leverage its existing clinics for direct-to-patient sales and pharmacy sales soon. We are also uniquely positioned to tap into my pharmacy retail network in order to provide Adastra's medical cannabinoid products to patients across Canada ."

Engagement with irlabs

Adastra is also pleased to announce that it has entered into an engagement letter dated effective April 8, 2022 (the "Agreement") with IR Labs Inc. ("irlabs"), whereby irlabs has agreed to provide the Company with certain investor relations services (the "Services") in the areas of: (i) capital markets advisory, including strategic advisory and introductions to investors and investment bankers; and (ii) the development and management of an investor relations and communications program, including public relations/media, social media and stakeholder relations.

Either party may terminate the Agreement at any time by providing the other party with 30 days' prior written notice of termination. In consideration for the Services, the Company has agreed to pay irlabs a monthly fee of $10,000 in cash, plus applicable taxes (the "Monthly Fee"), due and payable on the last day of each month. The first payment will be $15,000 in cash, plus applicable taxes, due and payable on April 30, 2022 . The Company has also agreed to reimburse irlabs for all reasonable out-of-pocket expenses incurred in connection with irlabs performing the Services. In addition, irlabs will bill a monthly charge totalling 3% of the Monthly Fee to cover subscription fees for market intelligence platforms, media monitoring, certain information retrieval services, and other ordinary course items that will not be billed to the Company on an itemized basis. irlabs has agreed not to incur any aggregate disbursements greater than $500 a month without the Company's approval. irlabs' contact person, address, email and telephone number are as follows: Alyssa Barry (Principal and Co-Founder), 400 - 22 E 5th Ave, Vancouver, BC V5T 1G8, alyssa@irlabs.ca , 604-997-0965.

irlabs is a dynamic investor relations firm that applies innovative strategies to create visibility, drive investor engagement and make an impact. Headquartered in Vancouver, BC with team members located across North America , irlabs is industry and sector agnostic and supports both private and public companies with their investor relations programs, corporate communications and corporate governance. For more information visit www.irlabs.ca .

About Adastra Holdings Ltd.

Founded in 2018 and formerly known as Phyto Extractions Inc., Adastra is a leading manufacturer and supplier of innovative ethnobotanical and cannabis science products designed for the adult-use and medical markets and forward-looking therapeutic applications. Adastra is recognized as a high-capacity processor and co-manufacturer throughout Canada . Adastra is known for its popular line of Phyto Extractions branded cannabis concentrate products available on shelves at over 1,400 adult-use retailers across the country. The Company also operates Adastra Labs, a 13,500 sq. ft. agricultural-scale Health Canada licensed facility located in Langley, BC , focused on extraction, distillation, and manufacturing of cannabis-derived products. Adastra has successfully taken steps in becoming a licensed cultivator, tester, extractor, and seller of controlled substances, including Psilocybin, Psilocin, MDMA, N, N-Dimethyltryptamine (DMT), 5- MeO-DMT, and LSD by applying for a Controlled Substances Dealer's Licence, which is under review by Health Canada. Pending Health Canada approval, Adastra is poised to be a drug formulation and development leader in this emerging sector. In addition, with the recent acquisition of 1225140 B .C. Ltd., doing business as PerceiveMD, Adastra operates a multidisciplinary centre for medical cannabis and psychedelic therapies, working alongside doctors and healthcare professionals within the regulated environment to help create efficacious remedies that address the actual needs of patients. For more information, visit: www.adastraholdings.ca .

About PerceiveMD

PerceiveMD has created the first of its kind, research-based, multidisciplinary centre for medical cannabis and other forward-thinking therapies such as psychedelics. It offers a holistic, team-based approach that focuses on the patient. Its team of nurses, pharmacists, physicians, practitioners, specialists, and educators will all work together to ensure that you are properly assessed, informed, and prescribed where appropriate. For more information, visit: www.perceivemd.ca .

Forward-Looking Information

This news release includes forward-looking information within the meaning of Canadian securities legislation, concerning the business of the Company. Forward-looking information is based on certain key expectations and assumptions made by the management of the Company. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Forward-looking information in this news release includes statements with respect to: (i) the anticipated grant of the Medical Sales License by Health Canada; (ii) the activities that the Company could conduct with a Medical Sales License; (iii) the effect of CBD, CBN and CBG on the Canadian medical market in the near future; (iv) the ability of the Company to leverage its existing clinics for direct-to-patient and pharmacy sales through its ability to sell to the growing and established medical market; (v) the Company's ability to benefit from a pharmacy retail network to provide Adastra's medical cannabinoid products to patients Canada -wide; and (vi) the Agreement with irlabs including the Services irlabs has agreed to provide to the Company. There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information, including: (i) adverse market conditions; (ii) risks inherent in the cannabis extraction sector in general; (iii) changes in regulations surrounding cannabis as a controlled substance; and (iv) other factors beyond the control of the Company. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

SOURCE Adastra Holdings Ltd.

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Adastra Receives Controlled Substances Dealer's License

Adastra Receives Controlled Substances Dealer's License

Adastra Holdings Ltd. (CSE:XTRX) (FRA:D2EP) ("Adastra" or the "Company"), a leading cannabis company focused on processing, adult-use and medical sales, organoleptic testing and analytical testing, is pleased to announce that the Company has received its Controlled Drug and Substances Dealer's License ("Dealer's License") on August 24, 2022. This license allows Adastra to process psilocybin and psilocin, the active compounds derived from psychedelic mushrooms

"This is another significant step forward in the next phase of Adastra's goal to become a leader in alternative, plant-based treatments and remedies for physical, mental health and optimal functioning," said Michael Forbes, Chief Executive Officer of Adastra. "The medically regulated psychedelics market is just beginning to lay its foundation in North America; receiving this license enables us to process, formulate and perform scientific tests to verify the active ingredient and its stability for use in products once the market matures."

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Adastra Holdings Reports Record Second Quarter Results; Momentum Accelerating in Second Half of the Year

Adastra Holdings Reports Record Second Quarter Results; Momentum Accelerating in Second Half of the Year

  • Record gross revenues of $5.34M YTD 2022, representing 192% growth compared to YTD 2021.
  • Q2 2022 gross revenues of $3.05M, representing an increase of 33% over last quarter (Q1 2022).

Adastra Holdings Ltd. (CSE:XTRX)(FRA:D2EP) ("Adastra" or the "Company"), a leading cannabis company focused on processing, adult-use and medical sales, organoleptic testing and analytical testing, is pleased to report financial results for the three and six months ended June 30, 2022

"Adastra experienced a record-breaking first half of the year, demonstrating growth and gaining strong momentum as we continued to execute on our transformational strategy," said Michael Forbes, Chief Executive Officer of Adastra. "Building on our first quarter achievements, we are once again reporting record revenues and gross profit levels in Q2 2022. In the first six months alone, our gross revenues are close to what we achieved for the entire twelve months last year."

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Adastra Expands Market Footprint Through Receipt of Medical Sales License from Health Canada

Adastra Expands Market Footprint Through Receipt of Medical Sales License from Health Canada

Adastra Holdings Ltd. (CSE:XTRX)(FRA:D2EP) ("Adastra" or the "Company"), a leading cannabis company focused on processing, product development, sales, organoleptic testing and analytical testing, is pleased to announce it has received its Medical Sales License from Health Canada which now authorizes Adastra to sell cannabinoid-containing products that are formulated for and distributed to the medical cannabis market

With its Medical Sales License, Adastra is now authorized to:

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Adastra Holdings Continues to Execute on Transformational Strategy; New Product Launches; Outlines Growth Strategy

Adastra Holdings Continues to Execute on Transformational Strategy; New Product Launches; Outlines Growth Strategy

  • Endgame Extracts brand launched in BC in Q1 2022 with a 100% case sell-through achieved in 48-hours; Endgame is currently ranked #3 and #4 for its shatter sales in BC – with launches planned for other large Canadian markets ( Alberta and Ontario ) to follow
  • Adastra continues to add new revenue streams, including the addition of new co-manufacturing contracts for several well-known Canadian brands to start in 2022
  • Continued expansion for product sales and distribution across Canada – Phyto Extractions is now available in the Northwest Territories and Yukon
  • Expanded capabilities and automation: pre-roll machine installed to meet anticipated consumer demand for this sought-after product category
  • Added extraction and processing shifts to increase end-product output and fulfill demand

 Adastra Holdings Ltd. (CSE: XTRX) (FRA: D2EP) ("Adastra" or the "Company"), a leading cannabis company focused on processing, sales, organoleptic testing and analytical testing, is pleased to provide the Company's shareholders with a corporate update from Michael Forbes Director and Chief Executive Officer of Adastra:

Endgame Extracts (CNW Group/Adastra Holdings Ltd.)

"Dear Shareholders,

I joined Adastra in May 2021 as Director and CEO and embarked on a journey to transform the business. Over the last twelve months, I have optimized all major aspects of our business to set Adastra up for long term success. Running a "good" business is not good enough for me. My goal is to lead a "great" business, by actively adapting all aspects to create long-term significant value for our shareholders.

As a pharmacist by education and training, my entire career has been firmly rooted in medicine, alternative treatments, cannabis production, sales and entrepreneurship. Joining Adastra, I have brought this expertise and multi-faceted, strategic focus to grow our business in areas such as sales volume, production output and capabilities, partnerships, market share and investor engagement. We have made meaningful progress, and we believe this is just the beginning.

Executing on Our Growth Strategy

Over the past twelve months we have achieved the following:

  • Corporate rebrand from Phyto Extractions Inc. back to our original name – Adastra Holdings Ltd. to position us as a trusted leader in cannabis and ethnobotanical extraction, processing, formulation and product development.
  • Acquired Phyto Extractions and PerceiveMD to vertically integrate our product reach.
  • Developed and launched in-house brand, Endgame Extracts, starting with a strategic initial SKU drop to British Columbia . Unique crossed flavour and strain profiles, priced in line with customer and retailer expectations to ensure sell-through alongside a quality experience.
  • Introduced several hydrocarbon extracts, novel full spectrum vape formulations, additional product SKUs for our wholly owned brand Endgame, and brands leveraging our extraction expertise via co-manufacturing complex concentrates, like THCA diamonds and high terpene full spectrum extract products.
  • Expanded our market share by branching into new domestic markets including British Columbia , with Endgame Extracts, with Alberta and Ontario to follow. Brought Phyto Extractions to the Northwest Territories and Yukon .
  • Executed marketing and sales initiatives to heighten brand awareness among consumers and retailers.
  • Restructured and reduced costs across the organization to ensure a solid foundation as we move forward. This includes adding production shifts to meet processing demand for provincial distributors for Endgame and our co-manufacturing partners' product SKUs, automating processes with new equipment and refining our practices.
  • Received our organoleptic testing license in June 2021 , enabling us to test product formats and formulations with a consumer audience. This reduces risk and cost associated with the "guess work" involved in product SKU launches, as consumption is heavily restricted by regulations.

By improving the delivery of our many capabilities, today we are a trusted processor and co-manufacturing partner to many Canadian brands who share our commitment for quality and innovation.

Our Key Areas of Focus

As we move forward, our strategic key areas are as follows:

  1. Medical product development and formulation – Manufacturing alternative plant-medicine treatments for sale in the medical market (i.e., capsules, tinctures). Adastra's wholly-owned PerceiveMD platform assesses patients seeking alternative treatments and remedies and provides documentation to enable access. Maximizing the full potential of PerceiveMD will bolster Adastra's future business and add additional revenue. Additionally, we have submitted a Medical Sales Licence application to Health Canada which will allow us to manufacture and sell medical cannabis product formats to the Canadian medical market. We believe PerceiveMD addresses the gap that exists in the market today for a patient access platform. Having this online platform in-house provides us with an advantage over many of our peers to meet the existing demand that we believe is underserved today.

  2. New premium cannabis extract product innovations – We are committed to maintaining our edge by staying ahead of trends and consumer preferences including:
  • THCA diamonds (high potency extracts) – commissioned equipment to develop diamonds for our Endgame brand and for our co-manufacturing partners.
  • Single-source shatter – this is a growing product category that we are pleased to serve with our institutional knowledge and expertise.
  • Full-spectrum vape cartridges – the market is maturing, with customer preferences refining and we are pleased to deliver on preferred flavour notes and quality experience.
  • Dried Flower Products – Pre-rolls are currently the fastest growing segment of the Canadian cannabis market. Infused pre-rolls is a category that has outpaced dried flower-only pre-rolls in legal US markets. On December 17, 2021 , we received Health Canada approval for the amendment of our sales licence to include dried flower. We see significant opportunity to continue to grow our pre-roll business (pre-rolls, infused pre-rolls, and larger quantity flower) for our Endgame and Phyto brands.

  • Market Trends and Other Alternative Treatments – We have demonstrated our ability to stay ahead of consumer trends by proactively amending our licences and expanding our capabilities to meet the ever-evolving preferences of consumers and the companies we partner with. In particular, we are seeing a significant movement towards alternative medicine. Having been involved in the cannabis industry for more than a decade, combined with my experience running pharmacies and wellness clinics, I have seen firsthand the positive impact and efficacy of cannabis for certain patients, as well as the increasing popularity of alternative treatments and remedies. We are committed to staying ahead of the game. We have submitted a Controlled Substances Dealer's Licence application to Health Canada to include psilocybin and, following approval thereof, we can begin formulating and developing alternative treatments for patients.
  • We are enjoying continued growth in the demand for high quality cannabis concentrates and products by continually adapting to changing consumer preferences.

    From a recreational lens, cannabis is an increasingly adopted alternative to alcohol, particularly when available in CPG formats (i.e., vapes and beverages) and presents far less opportunity for harm and undesirable side effects. The mainstream shift to "West Coast Sober" is happening, and we are here to stay at the forefront.

    We believe we have established a diversified platform for profitable growth and differentiation in the marketplace. We look to leverage this momentum over the coming months to create sustainable value for our customers, partners and shareholders.

    We are here for the future and the long run and maintain our commitment to growing and innovating."

    About Adastra Holdings Ltd.

    Founded in 2018 and formerly known as Phyto Extractions Inc., Adastra is a leading manufacturer and supplier of innovative ethnobotanical and cannabis science products designed for the adult-use and medical markets and forward-looking therapeutic applications. Adastra is recognized as a high-capacity processor and co-manufacturer throughout Canada . Adastra is known for its popular line of Phyto Extractions branded cannabis concentrate products available on shelves at over 1,400 adult-use retailers across the country. The Company also operates Adastra Labs, a 13,500 sq. ft. agricultural-scale Health Canada licensed facility located in Langley, BC , focused on extraction, distillation, and manufacturing of cannabis-derived products. Adastra has successfully taken steps in becoming a licensed cultivator, tester, extractor, and seller of controlled substances, including Psilocybin, Psilocin, MDMA, N, N-Dimethyltryptamine (DMT), 5- MeO-DMT, and LSD by applying for a Controlled Substances Dealer's Licence, which is under review by Health Canada. Pending Health Canada approval, Adastra is poised to be a drug formulation and development leader in this emerging sector. In addition, with the recent acquisition of 1225140 B .C. Ltd., doing business as PerceiveMD, Adastra operates a multidisciplinary centre for medical cannabis and psychedelic therapies, working alongside doctors and healthcare professionals within the regulated environment to help create efficacious remedies that address the actual needs of patients. For more information, visit: www.adastraholdings.ca.

    Forward-Looking Information

    This news release contains forward-looking information within the meaning of Canadian securities legislation concerning the business of the Company. Forward-looking information is based on certain key expectations and assumptions made by the management of the Company. Although the Company believes that the expectations and assumptions on which such forward looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Forward looking information in this news release includes statements regarding, but not limited to: creating long-term significant value for the Company's shareholders; the expectation that progress in sales volume, production output, market share and partnerships will continue in the future; the expectation that maximizing PerceiveMD will bolster the Company's future business and add additional revenue; the belief that PerceiveMD addresses the gap that exists in the market for a patient access platform; the expectation that the Company's pre-roll business represents a significant growth opportunity; the belief that the Company has established a diversified platform for profitable growth and differentiation in the marketplace and the intention to leverage this to create sustainable value for stakeholders; and other general statements regarding the Company's platform for profitable growth and creation of sustainable value for customers, partners and shareholders. There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information. Important factors that could cause actual results to differ materially from those expressed in the forward-looking information include: the availability of a qualified workforce; changes in regulations or licensing affecting the Company's business; reduced demand for cannabis and cannabis related products; reductions in the Company's retail space and store locations; and other factors beyond the control of the Company. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

    Adastra Holdings Ltd. Logo (CNW Group/Adastra Holdings Ltd.)

    SOURCE Adastra Holdings Ltd.

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    Adastra Holdings Reports First Quarter Results

    Adastra Holdings Reports First Quarter Results

    • Generated record gross revenues of $2,286,721 in Q1 2022, representing 288% growth compared to Q1 2021
    • Maintained a strong capital position in Q1 2022 with $28,176,801 in assets, and $6,712,176 in liabilities

    Adastra Holdings Ltd. (CSE: XTRX) (FRA: D2EP) ("Adastra" or the "Company") is pleased to announce that it has filed its consolidated financial statements and related management discussion and analysis for the three months ended March 31, 2022 both of which are available at www.sedar.com.

    Adastra Holdings brand ticker (CNW Group/Adastra Holdings Ltd.)

    Michael Forbes , Chief Executive Officer of Adastra, commented, "The year is off to a record-breaking start with strong momentum for the year ahead. We have achieved record revenues and gross profit, while maintaining a strong capital position."

    "Our team has made significant progress on many fronts, including bringing new brands to market, adding to our co-manufacturing portfolio and increasing production capacity and output. Our focus remains on implementing production rollout, generating multiple revenue streams and creating market expansion strategies. We have made proactive advances in all of these areas, which has ultimately resulted in a strong foundation for further continued growth of our business. We recently commissioned automated pre-roll hardware for infused pre-roll production to meet the demand for this product category."

    "To augment our revenue stream, we launched the Endgame Extracts brand, with four initial SKUs, at the British Columbia Liquor Distribution Branch, which sold out within 48 hours of product launch," added Mr. Forbes. "We submitted applications for our Medical Sales Licence and Controlled Substances Dealer's Licence, in line with our market expansion strategy. Our objective is to strategically position ourselves for further growth into in-demand cannabis product categories and in the emerging regulated psychedelics market."

    "We look forward to building on our reputation as a leader in the cannabis and patient-focused psychedelics space in order to deliver on our commitment to create long-term value for our customers, partners and shareholders."

    Key Q1 2022 Financial Highlights
    • Achieved record revenues of approximately $2.3 million in Q1 2022, compared to approximately $0.6 million in Q1 2021 – representing an increase of 288%, demonstrating significant demand for Adastra's in-demand cannabis concentrate brands and products.
    • Achieved gross profit of $827,713 in Q1 2022, compared to $105,411 in Q1 2021 – representing an increase of 685%.
    • Operating expenses for Q1 2022 increased to $1,695,682 when compared to $467,771 during Q1 2021 – representing an increase of 263%.
    Key Q1 2022 Corporate and Business Highlights
    • Launched Endgame Extracts SKUs in British Columbia , which was 100% sold out within 48 hours.
    • Submitted applications for a Medical Sales Licence and a Controlled Substances Dealer's Licence.
    • Commissioned automated pre-roll equipment for infused pre-roll production.
    • Shatter production increased to 106.6 kg in Q1 2022 compared to 20.7 kg in Q1 2021.
    • Commercialized additional full spectrum extract SKUs for in-house brands and co-manufacturing partners, ex: THCA Diamonds, Sugar Wax, Shatter, Full Spectrum vaporizer cartridges.
    About Adastra Holdings Ltd.

    Founded in 2018 and formerly known as Phyto Extractions Inc., Adastra is a leading manufacturer and supplier of innovative ethnobotanical and cannabis science products designed for the adult-use and medical markets and forward-looking therapeutic applications. Adastra is recognized as a high-capacity processor and co-manufacturer throughout Canada . Adastra is known for its popular line of Phyto Extractions branded cannabis concentrate products available on shelves at over 1,400 adult-use retailers across the country. The Company also operates Adastra Labs, a 13,500 sq. ft. agricultural-scale Health Canada licensed facility located in Langley, BC , focused on extraction, distillation, and manufacturing of cannabis-derived products. Adastra has successfully taken steps in becoming a licensed cultivator, tester, extractor, and seller of controlled substances, including Psilocybin, Psilocin, MDMA, N, N-Dimethyltryptamine (DMT), 5- MeO-DMT, and LSD by applying for a Controlled Substances Dealer's Licence, which is under review by Health Canada. Pending Health Canada approval, Adastra is poised to be a drug formulation and development leader in this emerging sector. In addition, with the recent acquisition of 1225140 B .C. Ltd., doing business as PerceiveMD, Adastra operates a multidisciplinary centre for medical cannabis and psychedelic therapies, working alongside doctors and healthcare professionals within the regulated environment to help create efficacious remedies that address the actual needs of patients. For more information, visit: www.adastraholdings.ca.

    Forward-Looking Information

    This news release contains forward-looking information within the meaning of Canadian securities legislation concerning the business of the Company. Forward-looking information is based on certain key expectations and assumptions made by the management of the Company. Although the Company believes that the expectations and assumptions on which such forward looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Forward looking information in this news release includes statements regarding, but not limited to: the Company's goals of implementing production rollout, generating multiple revenue streams, and creating market expansion strategies; further continued growth of the Company's business; the Company's ability to meet the demand for infused pre-roll production; the Company's objective to position itself for further growth into in-demand cannabis product categories and in the emerging regulated psychedelics market; and the Company's goal of building on its reputation in the cannabis and patient-focused psychedelics space in order to create long-term value for customers, partners and shareholders. There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information. Important factors that could cause actual results to differ materially from those expressed in the forward-looking information include: the availability of a qualified workforce; changes in regulations or licensing affecting the Company's business; reduced demand for cannabis and cannabis related products; reductions in the Company's retail space and store locations; and other factors beyond the control of the Company. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

    SOURCE Adastra Holdings Ltd.

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    Cannabis leaf on road marked with "2025," with sunlight in the background.

    New Cannabis Consumption Trends, Regulatory Shifts Seen Driving Market in 2025

    Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

    Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

    Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

    Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

    Consumption methods evolving post-legalization

    Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

    While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

    The report notes that vaping and dabbing are particularly pronounced among younger adults.

    A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


    The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

    Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

    In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

    Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

    Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

    A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

    Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

    Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

    Meanwhile, cannabis lounges have been popping up across the US for the last several years. As of early 2025, several states had legalized or were in the process of implementing regulations for cannabis consumption lounges.

    Hemp market growth despite regulatory uncertainty

    The burgeoning hemp industry is another segment of the expanding cannabis market.

    The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

    However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

    2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

    This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

    Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

    Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

    The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

    The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

    The 2018 Farm Bill is now set to expire on September 30, 2025.

    While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

    US cannabis legalization remains stalled

    Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

    Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

    Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

    While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

    In addition to that, new research is adding complexity to the debate.

    A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

    Investor takeaway

    While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

    Don’t forget to follow us @INN_Cannabis for real-time news updates!

    Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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