Canopy Rivers Reports Third Quarter Fiscal Year 2021 Financial Results

Comprehensive income of $82.2 million driven by significant increase in value of investment in TerrAscend

Announced transformative and accretive transaction with Canopy Growth, expected to close by the end of February

Anticipates being in strong financial and strategic position to pivot to the U.S. market following the closing of CGC Transaction

Canopy Rivers Inc. (" Canopy Rivers " or the " Company ") (TSX: RIV) (OTC: CNPOF) today released its unaudited condensed interim consolidated financial statements and management's discussion and analysis (" MD&A ") for the three and nine months ended December 31, 2020 (" Q3 2021" ).

"Our quarter was highlighted by the announcement of our milestone transaction with Canopy Growth, which we believe will provide substantial value to our shareholders," said Narbé Alexandrian, President and CEO, Canopy Rivers. "Our portfolio companies continue to gain momentum, and we are further encouraged by the potential for regulatory reform in the U.S. given recent progress at the state level and the new administration's position on cannabis reform. We believe that we will have the opportunity to enter the U.S. market at an ideal point in time, and that our balance sheet, simplified share structure, strategic flexibility, and deep domain expertise will enable us to deliver value to shareholders as we consider potential material investments or acquisitions in the U.S."

Q3 2021 Financial Results ^¹


Select Summary of Quarterly Results		Three months ended 31-Dec-20		Three months ended 31-Dec-19
Operating income (before equity method investees and fair value changes)	$	3,003	$	5,021
Operating expenses		3,390		3,860
Net operating income (loss) (before equity method investees and fair value changes)		(387)		1,161
Equity method investees and fair value changes		4,524		(3,208)
Other PharmHouse-related charges ⁽¹⁾		(13,700)		-
Net operating loss		(9,563)		(2,047)
Net income (loss)		1,406		(2,679)
Other comprehensive income (loss) (net of tax)		80,759		(37,244)
Total comprehensive income (loss)		82,165		(39,923)

Basic earnings (loss) per share ("EPS")	$	0.01	$	(0.01)
Diluted EPS	$	0.01	$	(0.01)

Cash flows used in operating activities		(953)		(3,523)
Cash flows provided by (used in) investing activities		944		(30,391)
Cash flows provided by financing activities		76		813

		Nine months ended 31-Dec-20		Nine months ended 31-Dec-19
Operating income (loss) (before equity method investees and fair value changes)	$	(130)	$	9,333
Operating expenses		7,615		15,819
Net operating loss (before equity method investees and fair value changes)		(7,745)		(6,486)
Equity method investees and fair value changes		(34,042)		(3,905)
Other PharmHouse-related charges ⁽¹⁾		(84,456)		-
Net operating loss		(126,243)		(10,391)
Net loss		(112,402)		(10,051)
Other comprehensive income (loss) (net of tax)		114,877		(71,280)
Total comprehensive income (loss)		2,475		(81,331)

Basic EPS	$	(0.59)	$	(0.05)
Diluted EPS	$	(0.59)	$	(0.05)

Cash flows used in operating activities		(2,815)		(6,980)
Cash flows used in investing activities		(5,910)		(48,420)
Cash flows provided by (used in) financing activities		(4)		895

⁽¹⁾ Excludes the Company's share of loss from its investment in PharmHouse common shares, which is captured in "Equity method investees and fair value changes"

"After a challenging September quarter during which we recognized material charges on our investment in PharmHouse, we ended the calendar year with significant positive momentum, as evidenced by our financial results," said Eddie Lucarelli , CFO, Canopy Rivers. "We expect to sustain this momentum during the current quarter as we work towards closing our transformative transaction with Canopy Growth. By redeeming shares at a discount to net asset value and successfully monetizing assets that carried significant liquidity restrictions, the financial merits of the transaction are clear. Fundamentally, we believe that the accretive nature and strategic value of this transaction will unlock substantial value for our shareholders and optimally position the Company to execute on new opportunities in the U.S., the world's largest cannabis market."


		Three months ended 31-Dec-20		Three months ended 31-Dec-19
Royalty, interest, and lease income (before provisions)	$	5,853	$	5,021
Provision for credit losses on interest and royalty receivables
PharmHouse		-		-
Other		(2,850)		-
Operating income (before equity method investees and fair value changes)	$	3,003	$	5,021

General and administrative expenses	$	981	$	1,755
Consulting and professional fees		441		929
Share-based compensation		80		1,133
Depreciation and amortization expense		50		43
Restructuring costs		1,838		-
Operating expenses	$	3,390	$	3,860

Net operating income (loss) (before equity method investees and fair value changes)	$	(387)	$	1,161

		Nine months ended 31-Dec-20		Nine months ended 31-Dec-19
Royalty, interest, and lease income (before provisions)	$	12,586	$	9,333
Provision for credit losses on interest and royalty receivables
PharmHouse		(8,939)		-
Other		(3,777)		-
Operating income (loss) (before equity method investees and fair value changes)	$	(130)	$	9,333

General and administrative expenses	$	3,610	$	5,300
Consulting and professional fees		1,168		2,604
Share-based compensation		434		7,787
Depreciation and amortization expense		137		128
Restructuring costs		2,266		-
Operating expenses	$	7,615	$	15,819

Net operating loss (before equity method investees and fair value changes)	$	(7,745)	$	(6,486)

Canopy Rivers reported operating income (before equity method investees and fair value changes) of $3.0 million for the quarter. This includes royalty, interest, and lease income (before provisions for credit losses) of $5.9 million from the Company's various royalty, convertible debenture, and loan agreements, among other items. Offsetting this gross income was a provision for credit losses on interest and royalty receivables of $2.9 million for the quarter relating to the Company's royalty investment in Agripharm Corp. (" Agripharm "), which is currently ramping up sales to provincial distributors subsequent to the receipt of its sales licence amendment.

Operating expenses were $3.4 million for the quarter, compared with $3.9 million for the same period last year. Operating expenses included $1.0 million of general and administrative expenses relating to employee and director compensation, marketing and business development, and other public company costs; $0.4 million of professional fees relating to general legal, audit, tax, accounting, and other regulatory advisory fees; and $1.8 million of restructuring costs relating to professional and advisory fees incurred in connection with the CGC Transaction (as defined below).


		Three months ended 31-Dec-20		Three months ended 31-Dec-19
Share of loss from equity method investees
PharmHouse	$	-	$	(543)
Other		(728)		(764)
Net change in fair value of financial assets at FVTPL		4,790		(1,901)
Other PharmHouse-related charges
Provision for credit losses on loans receivable		(6,200)		-
Provision for credit losses on financial guarantee liability		(7,500)		-
Gain on disposition of equity method investee		462		-
Equity method investees and fair value changes	$	(9,176)	$	(3,208)

		Nine months ended 31-Dec-20		Nine months ended 31-Dec-19
Share of loss from equity method investees
PharmHouse	$	(37,025)	$	(1,238)
Other		(845)		(1,719)
Net change in fair value of financial assets at FVTPL		3,366		(948)
Other PharmHouse-related charges
Provision for credit losses on loans receivable		(51,956)		-
Provision for credit losses on financial guarantee liability		(32,500)		-
Gain on disposition of equity method investee		462		-
Equity method investees and fair value changes	$	(118,498)	$	(3,905)

The Company's share of loss from equity method investees was $0.7 million for the quarter, which includes the Company's equity investments in Canapar Corp. (" Canapar "), LeafLink Services International ULC (" LeafLink "), and Radicle Medical Marijuana Inc. (" Radicle ").

Canopy Rivers also reported a net increase in the fair value of financial assets that are reported at fair value through profit or loss (" FVTPL ") of $4.8 million for the quarter. The net increase was primarily driven by an $11.4 million increase in the fair value of the Company's investments in the TerrAscend Canada Inc. (" TerrAscend Canada ") term loan and TerrAscend Corp. (" TerrAscend ") warrants, and a $1.0 million increase in the fair value of the Company's investment in the preferred shares of Les Serres Vert Cannabis Inc. (" Vert Mirabel "), while partially offset by negative changes in the estimated fair values of the Company's royalty investments in Agripharm and The Tweed Tree Lot Inc. (" Tweed Tree Lot "), call option investment in Canapar, and convertible debenture investment in Civilized Worldwide Inc.

The Copany also updated its recoverability assessment relating to PharmHouse Inc. (" PharmHouse ") to determine the quantum of any charges to be recognized in respect of its various PharmHouse-related financial assets, as well as any charges related to PharmHouse's $90.0 million non-revolving syndicated credit facility (the " PharmHouse Credit Facility "), which the Company has guaranteed (the " PharmHouse Guarantee ") (collectively, the " PharmHouse Recoverability Assessment "). Based on the updated PharmHouse Recoverability Assessment, the Company recognized an additional provision for credit losses on the Company's loans receivable with PharmHouse of $6.2 million , representing the full amount advanced to PharmHouse pursuant to the DIP Financing (as defined below) during the quarter, as well as an additional provision for credit losses on the PharmHouse Guarantee liability of $7.5 million , resulting in an estimated liability on the Company's statement of financial position related to the PharmHouse Guarantee of $32.5 million as at December 31, 2020 .

After consideration of operating income, operating expenses, equity method investees, FVTPL fair value changes, PharmHouse charges, and expected tax recoveries, among other items, Canopy Rivers reported net income of $1.4 million for the quarter.


		Three months ended 31-Dec-20		Three months ended 31-Dec-19
TerrAscend	$	105,000	$	(21,000)
Vert Mirabel		(9,500)		(15,642)
YSS		(55)		(1,252)
Headset		(200)		(82)
Zeakal		(600)		(255)
BioLumic		(100)		-
Dynaleo		-		-
Other		-		(3,118)
Gross change in fair value of financial assets at FVTOCI	$	94,545	$	(41,349)
OCI income tax expense (recovery)		13,786		(4,154)
Net change in fair value of financial assets at FVTOCI ⁽¹⁾	$	80,759	$	(37,195)

		Nine months ended 31-Dec-20		Nine months ended 31-Dec-19
TerrAscend	$	138,500	$	(51,000)
Vert Mirabel		(3,400)		(14,498)
YSS		(273)		(2,449)
Headset		(500)		(118)
Zeakal		(1,500)		(501)
BioLumic		(39)		-
Dynaleo		835		-
Other		(976)		(11,961)
Gross change in fair value of financial assets at FVTOCI	$	132,647	$	(80,527)
OCI income tax expense (recovery)		17,748		(9,350)
Net change in fair value of financial assets at FVTOCI ⁽¹⁾	$	114,899	$	(71,177)

⁽¹⁾ In addition to the fair value change noted above, net change in fair value of financial assets at FVTOCI also includes FX gains/losses related to equity method investees denominated in USD currency

Other comprehensive income was $80.8 million for the quarter, driven by the increase, net of tax, in the fair value of financial assets that are reported at fair value through other comprehensive income (" FVTOCI "). The Company reported a gross increase in the fair value of financial assets at FVTOCI of $94.5 million for the quarter, which was primarily attributable to the positive change in the fair value of the Company's exchangeable share investment in TerrAscend. This was driven by a significant increase in TerrAscend's share price during the quarter and a lower estimate of the liquidity discount used in the exchangeable share valuation due to positive cannabis regulatory reform momentum in the U.S., including support for cannabis legalization at all three levels of government and the success of five cannabis ballot initiatives at the state level. Partially offsetting this material increase was a decrease in the estimated fair value of the Company's investment in Vert Mirabel common shares of $9.5 million , driven primarily by lower expectations about long-term wholesale cannabis pricing in Canada .


Period ended		As at 31-Dec-20		As at 31-Mar-20
Cash	$	37,995	$	46,724
Loans receivable		-		42,450
Equity method investees		6,413		50,543
Financial assets at FVTPL		82,780		80,170
Financial assets at FVTOCI		201,450		64,599
Other assets		10,661		15,899
Total assets	$	339,299	$	300,385

Financial guarantee liability	$	32,500	$	-
Other liabilities		4,321		2,107
Total shareholders' equity		302,478		298,278
Total liabilities and shareholders' equity	$	339,299	$	300,385

CGC Transaction Update

On December 21, 2020 , Canopy Rivers entered into a definitive agreement with Canopy Growth Corporation (" Canopy Growth ") (TSX: WEED) (NASDAQ: CGC) pursuant to which Canopy Rivers agreed to sell its interests in TerrAscend and TerrAscend Canada, Vert Mirabel, and Tweed Tree Lot to Canopy Growth for $115.0 million in cash, up to 3.75 million common shares ^² in Canopy Growth, and the cancellation of Canopy Growth's multiple voting shares and subordinated voting shares of Canopy Rivers (the " CGC Transaction "). The CGC Transaction represents a return on invested capital of approximately 5.6x and an internal rate of return of approximately 101% as at the time of announcement. Following the anticipated close of the CGC Transaction, the Company expects to have approximately $310 million in net cash and liquid securities on a pro forma basis. ^³

The Company believes the CGC Transaction will propel it to its next phase of growth. Among the numerous benefits it provides to shareholders, the CGC Transaction unlocks value and provides significant liquidity for the Company, eliminates the Company's dual-class share structure, and enables the Company to access previously unavailable investment and acquisition opportunities in the U.S. In the weeks following the announcement of the CGC Transaction, the market reacted favourably, with a significant increase in the Company's share price. As the Company reviews its corporate strategy and considers potential material investments in, or acquisitions of, established operating businesses in the U.S. cannabis market, its priority remains delivering value for its shareholders.

There will be a special meeting of shareholders on February 16, 2021 to approve the CGC Transaction. The Company is encouraged by early voting results, which signal strong support for the CGC Transaction, and expects that the CGC Transaction will close shortly after receiving shareholder approval. Following approval, the Company's corporate name will change to RIV Capital Inc., and further updates on the CGC Transaction and other corporate events will be communicated under this name. The Company is also initiating the process to delist its shares from the TSX following the completion of the CGC Transaction and list its securities on an alternate stock exchange that does not prohibit listed Canadian companies to invest in or acquire legal U.S.-based cannabis businesses.

The Company's operating results and financial position for the quarter include estimates of fair value for the assets being sold or transferred to Canopy Growth in connection with the CGC Transaction. Given that the CGC Transaction has not yet closed, the Company's fair value estimates as at December 31, 2020 , are based upon valuation methodologies, inputs, and assumptions that reflect current circumstances and are consistent with prior reporting periods, and may result in fair value estimates that are different than the actual values ascribed to these individual assets pursuant to the plan of arrangement in respect of the CGC Transaction. The Company anticipates that the full impact of the CGC Transaction on the Company's financial position and future outlook will be reflected in its financial results for the quarter ending March 31, 2021 .

_______________________
¹	The financial highlights in this summary are presented in CA$ thousands.
²	The actual number of Canopy Growth common shares issued pursuant to the Transaction are subject to a downward adjustment in the event that certain rights of first refusal in respect of the Vert Mirabel common shares are exercised.
³	Based on estimated net cash proceeds from the CGC Transaction, the Company's current adjusted cash balance, and the implied value of 3.75 million Canopy Growth common shares based on the closing price of $62.35 per share on February 9, 2021, net of the estimated liability in respect of the PharmHouse Guarantee. This estimate is based upon a significant number of assumptions and will be updated as additional information becomes available.

PharmHouse Update

Resolving PharmHouse's restructuring proceedings under the Companies' Creditors Arrangement Act (" CCAA ") in a manner that maximizes value preservation for the Company's shareholders continues to be a top priority.

As previously disclosed, the Sale and Investment Solicitation Process (" SISP ") to identify interest in, and opportunities for, a sale of, or investment in, all or part of PharmHouse's assets or business remains underway. Phase one of the SISP concluded on November 30, 2020 , and a number of parties were selected by PharmHouse (with the assistance of the monitor and the SISP advisor) to continue into phase two. Binding offers for phase two of the SISP are due on or about February 16, 2021 , and the Company expects to provide an update on the SISP shortly thereafter.

Day-to-day operations at PharmHouse have continued throughout its restructuring, and the Company believes that PharmHouse has taken significant steps forward in its operations over the past few months. PharmHouse continues to source new opportunities in the Canadian cannabis sector and ramp up its cannabis growing operations, and the Company continues to support PharmHouse with a debtor-in-possession interim, non-revolving credit facility (the " DIP Financing "). During the quarter, the maximum amount available to be drawn pursuant to the DIP Financing was increased by approximately $2.5 million to a total of $9.7 million , and the maturity date was extended from December 29, 2020 , to February 28, 2021 . The court-ordered stay of proceedings with respect to PharmHouse was also extended to February 28, 2021 .

The Company continues to work collaboratively with the syndicate of lenders under the PharmHouse Credit Facility during the CCAA proceedings. No repayments of principal have occurred and the current outstanding balance remains $90.0 million , with interest payable by PharmHouse monthly.

Subsequent to the quarter, on February 10, 2021 , the Company received a statement of claim (the " Claim ") filed by the PharmHouse majority shareholder concerning certain disputes relating to PharmHouse. The Claim is substantially similar to a claim previously filed in September 2020 , which was subsequently discontinued. The Claim makes a number of allegations against Canopy Rivers, Canopy Growth, TerrAscend, and TerrAscend Canada. As with the previously filed statement of claim, Canopy Rivers views the Claim as it relates to its actions to be completely without merit and intends to vigorously defend its position at the appropriate time and in the appropriate forum.

Q3 2021 Portfolio Updates

The following represents a summary of other key developments within the Canopy Rivers portfolio during Q3 2021:

Agripharm, pursuant to its exclusive licence to distribute SLANG products in Canada , shipped the first O.pen line of vape products to British Columbia in October, followed by Ontario in December. Agripharm also distributed SLANG's Firefly Mini products for sale in Ontario .
Canopy Rivers sold its 49% interest in Italy -based Canapar to RAMM Pharma Corp. for consideration of up to $9.0 million , including a cash payment of $7.0 million and contingent consideration of $2.0 million .
Dynaleo Inc. received its sale licence from Health Canada, enabling it to supply and sell cannabis edibles to provincial, territorial, and private wholesalers across Canada .
Greenhouse Juice Company (" Greenhouse Juice ") announced that its products are available at IGA and Fresh St. Market locations in the Vancouver area. Greenhouse Juice also expanded its home delivery service, including extended shelf-life guarantees and carbon offsetting all deliveries.
Headset Inc. launched Headset Insights in Saskatchewan . In Canada , Headset Insights is also available in Alberta , British Columbia , and Ontario .
High Beauty, Inc. entered into a co-development and commercial partnership with Lygos, Inc., a vertically integrated provider of safe and sustainable specialty ingredients.
TerrAscend announced its third quarter results, reporting sales of approximately $51.0 million and adjusted EBITDA of approximately $17.8 million , and announced the close of a US$120.0 million debt financing.
YSS Corp. (" YSS ") announced its third quarter results, reporting a 24% revenue increase quarter-over-quarter. YSS also announced the opening of several new stores during the quarter, bringing its total to 19 in Alberta and Saskatchewan . Subsequent to the quarter, YSS entered into an agreement with Alcanna Inc. to combine cannabis retail businesses to form Nova Cannabis Inc., which will target the value-conscious consumer, an under-served segment of the market that is estimated to account for approximately 70% of the total recreational cannabis market in Canada (both legal and illicit).

This press release should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements and MD&A for the three and nine months ended December 31, 2020 , which are available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.canopyrivers.com/investors . All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

For more information regarding the Company and its portfolio companies, please refer to the MD&A and the Company's annual information form dated June 2, 2020 (" AIF "), also available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.canopyrivers.com/investors .

About Canopy Rivers Inc.

Canopy Rivers is an investment and acquisition company specializing in cannabis with a portfolio of 17 companies across various segments of the cannabis value chain. We believe that bringing together people, capital, and ideas raises the potential of the entire cannabis industry. By leveraging our industry insights, in-house expertise, and thesis-driven approach to investing, we aim to provide shareholders with exposure to specialized and disruptive cannabis companies.

Forward-Looking Statements

This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. To the extent any forward-looking information in this news release constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: the Company's expectations regarding legislation, regulations, and licensing related to the Canadian and global cannabis markets and product offerings in Canada and internationally; the evolution of cannabis markets globally and the potential for global investment opportunities to arise; the potential outcomes for the cannabis sector as a result of the U.S. election; expectations regarding the Company's ability to capitalize on the opportunity in the United States once it is federally permissible to do so; the estimated recoverable amount of PharmHouse's assets en bloc; the expected amount of the Company's liability in respect of the PharmHouse Guarantee; expectations with respect to the SISP; the expectation that PharmHouse will require additional capital beyond that available pursuant to the DIP Financing prior to the conclusion of the CCAA Proceedings; expectations with respect to the Claim, including the merits thereof; the supply of Dynaleo's products to the Canadian adult-use market by the end of the calendar year; the closing of the transactions contemplated by the CGC Transaction; the Company's financial position following the completion of the transactions contemplated by the CGC Transaction; the anticipated timing and occurrence of the shareholder meeting to approve the arrangement contemplated under the CGC Transaction; the anticipated benefits, costs and risks associated with the CGC Transaction, including the implied value of, or anticipated proceeds from, the CGC Transaction; the anticipated benefits of the collapse of the Company's dual-class share structure in connection with the CGC Transaction; the attractiveness of the Company's shares as acquisition currency following the CGC Transaction; the anticipated de-listing of the Company's securities on the TSX and the subsequent listing of its securities on a stock exchange that does not prohibit investments or acquisitions of companies with business activities related to marijuana operations in the U.S.; the Company's ability and position to pivot to the U.S. market following the completion of the CGC Transaction; the benefits associated with an entry into the U.S. cannabis market; the Company's expected focus and priorities for the coming quarters; the Company's ability to sustain its current momentum; the Company's belief that it is well-positioned for U.S. market development through its investment in TerrAscend as well as its expectations regarding the conversion and implied value of its TerrAscend exchangeable shares; and expectations for other economic, business, and/or competitive factors.

Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein. Our actual financial position and results of operations may differ materially from management's current expectations. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the possibility that the CGC Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, the required shareholder approval or approval of the court, or other approvals and other conditions of closing necessary to complete the CGC Transaction, or for other reasons; the occurrence of any event, change or other circumstances that could give rise to the termination of the CGC Transaction; the delay of implementation of the CGC Transaction or failure to complete the CGC Transaction for any reason; the Company's ability to alter its capital structure on the anticipated terms; the entry into the U.S. market by the Company, including by way of investment or acquisition; the profitability of engaging in investments or operations in the U.S.; the potential for the company's board of directors and shareholders to be prosecuted for aiding and abetting violations of U.S. federal law; enhanced scrutiny of the Company's investments and operations if the Company invests in or operates U.S. cannabis businesses; the effect of operating or investing in the U.S. on the Company's existing contractual arrangements and business relationships; the risks associated with U.S. banking and anti-money laundering laws and regulations; the classification of the Company's income as proceeds of crime and the ability of the Company to declare or pay dividends or effect other distributions or the repatriation of funds back to Canada ; risks associated with the termination, renegotiation and enforcement of material contracts; credit, liquidity and additional financing risks for the Company and its investees; litigation risks; stock market volatility; regulatory and licensing risks; cannabis pricing risks; changes in cannabis industry growth and trends; changes in the business activities, focus and plans of the Company and its investees and the timing associated therewith; the Company's actual financial results and ability to manage its cash resources; changes in general economic, business and political conditions, including challenging global financial conditions and the impact of the novel coronavirus pandemic; competition risks; potential conflicts of interest; the regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; changes in the Company's relationship with Canopy Growth and its investees; changes in applicable laws; compliance with extensive government regulation, including the Company's interpretation of such regulation; changes in the global sentiment towards, and public opinion of, the cannabis industry; reliance on material contracts; risk of default by investees; divestiture risks; and the risk factors set out in the Company's AIF, filed with the Canadian securities regulators and available on the Company's profile on SEDAR at www.sedar.com .

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

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SOURCE Canopy Rivers Inc.

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Canopy Growth WEED:CA CGC Cannabis Investing

Trulieve Reports Third Quarter 2024 Results Ahead of Florida Adult-Use Vote

Third quarter revenue of $284 million , up 3% year over year, in line with guidance
Gross margin of 61%, compared to 52% during the third quarter of 2023
Year to date cash flow from operations of $241 million and free cash flow of $162 million *
Florida adult-use campaign support of $48 million during the third quarter

Trulieve Cannabis Corp . (CSE: TRUL ) (OTCQX: TCNNF ) ("Trulieve" or "the Company"), a leading and top-performing cannabis company in the U.S., today announced its results for the quarter ended September 30, 2024. Results are reported in U.S. dollars and in accordance with U.S. Generally Accepted Accounting Principles unless otherwise indicated. Numbers may not sum perfectly due to rounding.

Q3 2024 Financial and Operational Highlights*

Revenue of $284 million increased 3% year over year, with 95% of revenue from retail sales.
Achieved gross margin of 61%, with GAAP gross profit of $173 million .
Reported net loss attributable to common shareholders of $60 million . Adjusted net loss of $12 million * excludes $48 million in campaign support and other non-recurring charges, asset impairments, disposals and discontinued operations.
Achieved adjusted EBITDA of $96 million *, or 34% of revenue, up 24% year over year.
Generated cash flow from operations of $30 million and free cash flow of $(7) million *, both of which were impacted by $48 million in campaign support.
Cash and short term investments at quarter end totaled $319 million .
Launched adult use sales at three Ohio locations: Beavercreek, Columbus , and Westerville .
Rolled out #YesOn3 product line to support Smart and Safe Florida adult-use campaign.
Entered partnership with Professional Pickleball Association and Major League Pickleball to sponsor events in Arizona , Florida , and Georgia .
Opened 15 new dispensaries in Florida and Pennsylvania .
Ended the quarter with 30% of retail locations outside of the state of Florida .

*See "Non-GAAP Financial Measures" below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.

Recent Developments

Opened five new retail locations in Bonita Springs , Hallandale , Lake Placid , Orlando , and St. Augustine, Florida .
Currently operate 220 retail dispensaries and over four million square feet of cultivation and processing capacity in the United States .

Management Commentary

"As voters in Florida cast their ballots across the state today, there is an opportunity to make history by approving cannabis legalization for personal use," said Kim Rivers , Trulieve CEO. "With 156 stores in Florida , scaled production capacity, and sufficient capital to support further investment, if approved, Trulieve is best positioned to fully prepare for the launch of recreational sales next Spring."

Financial Highlights*

Results of Operations	For the Three Months Ended								For the Nine Months Ended
(Figures in millions except per share data)	September 30, 2024		September 30, 2023		% Better / (Worse)	June 30, 2024		% Better / (Worse)	September 30, 2024		September 30, 2023		% Better / (Worse)
Revenue	$	284	$	275	3 %	$	303	(6 %)	$	885	$	842	5 %
Gross profit	$	173	$	143	21 %	$	182	(5 %)	$	529	$	435	22 %
Gross margin %		61 %		52 %			60 %			60 %		52 %
Operating expenses	$	173	$	120	(44 %)	$	132	(31 %)	$	432	$	686	37 %
Operating expenses %		61 %		43 %			43 %			49 %		81 %
Net loss**	$	(60)	$	(25)	(137 %)	$	(12)	NMF	$	(95)	$	(493)	81 %
Net loss continuing operations	$	(60)	$	(23)	(163 %)	$	(11)	NMF	$	(94)	$	(399)	76 %
Adjusted net (loss) income	$	(12)	$	(15)	19 %	$	0	NMF	$	(22)	$	(47)	53 %
Basic and diluted shares outstanding		190		189			190			190		189
EPS continuing operations	$	(0.32)	$	(0.12)	(168 %)	$	(0.04)	NMF	$	(0.52)	$	(2.09)	75 %
Adjusted EPS	$	(0.06)	$	(0.08)	20 %	$	0.00	NMF	$	(0.12)	$	(0.25)	54 %
Adjusted EBITDA	$	96	$	78	24 %	$	107	(10 %)	$	309	$	235	32 %
Adjusted EBITDA Margin %		34 %		28 %			35 %			35 %		28 %

NMF - No Meaningful Figure

*See "Non-GAAP Financial Measures" below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.

**Net loss attributable to common shareholders which excludes non-controlling interest.

Conference Call

The Company will host a conference call and live audio webcast on November 5, 2024, at 8:30 A.M. Eastern time , to discuss its third quarter 2024 financial results. Interested parties can join the conference call by dialing in as directed below. Please dial in 15 minutes prior to the call.

North American toll free: 1-844-824-3830		Passcode: 3735709

International: 1-412-542-4136		Passcode: 3735709

A live audio webcast of the conference call will be available at:
Trulieve Cannabis Corp Q3 2024 Earnings

A powerpoint presentation and archived replay of the webcast will be available at:
https: //investors.trulieve.com/events

The Company's Form 10-Q for the quarter ended September 30, 2024, will be available on the SEC's website or at https://investors.trulieve.com/quarterly-results . The Company's Management Discussion and Analysis for the period and the accompanying financial statements and notes will be available under the Company's profile on https://www.sedarplus.ca/landingpage/ and on its website at https://investors.trulieve.com/quarterly-results . This news release is not in any way a substitute for reading those financial statements, including the notes to the financial statements.

Trulieve Cannabis Corp. Condensed Consolidated Balance Sheets (Unaudited) (in millions, except for share data)

	September 30, 2024	December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$ 237.7	$ 201.4
Short-term investments	80.2	—
Restricted cash	0.9	6.6
Accounts receivable, net	9.0	6.7
Inventories	220.9	213.1
Income tax receivable	5.8	—
Prepaid expenses	19.2	17.6
Other current assets	26.6	23.7
Notes receivable - current portion, net	1.8	6.2
Assets associated with discontinued operations	0.9	2.0
Total current assets	603.0	477.3
Property and equipment, net	701.6	676.4
Right of use assets - operating, net	116.1	95.9
Right of use assets - finance, net	65.6	58.5
Intangible assets, net	873.3	917.2
Goodwill	483.9	483.9
Notes receivable, net	5.8	7.4
Other assets	23.0	10.4
Long-term assets associated with discontinued operations	2.0	2.0
TOTAL ASSETS	$ 2,874.2	$ 2,729.1
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities	$ 96.1	$ 83.2
Deferred revenue	6.7	1.3
Notes payable - current portion	3.3	3.8
Operating lease liabilities - current portion	11.6	10.1
Finance lease liabilities - current portion	9.1	7.6
Construction finance liabilities - current portion	1.8	1.5
Contingencies	4.6	4.4
Liabilities associated with discontinued operations	3.5	3.0
Total current liabilities	136.7	114.8
Long-Term Liabilities:
Private placement notes, net	364.4	363.2
Notes payable, net	112.8	115.9
Operating lease liabilities	113.4	92.2
Finance lease liabilities	68.4	61.7
Construction finance liabilities	135.9	136.7
Deferred tax liabilities	204.2	207.0
Uncertain tax position liabilities	384.1	180.4
Other long-term liabilities	6.5	7.1
Long-term liabilities associated with discontinued operations	39.4	41.6
TOTAL LIABILITIES	$ 1,565.8	$ 1,320.4
MEZZANINE EQUITY
Redeemable non-controlling interest	$ 7.1	$ —
SHAREHOLDERS' EQUITY
Common stock, no par value; unlimited shares authorized. 189,154,228 and 186,235,818 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	$ —	$ —
Additional paid-in-capital	2,048.0	2,055.1
Accumulated deficit	(736.0)	(640.6)
Non-controlling interest	(10.7)	(5.9)
TOTAL SHAREHOLDERS' EQUITY	1,301.3	1,408.6
TOTAL LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS' EQUITY	$ 2,874.2	$ 2,729.1

Trulieve Cannabis Corp. Condensed Consolidated Statements of Operations (Unaudited) (in millions, except for share data)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Revenue	$ 284.3	$ 275.2	$ 885.3	$ 842.2
Cost of goods sold	111.0	132.3	356.6	407.4
Gross profit	173.3	142.9	528.7	434.8
Expenses:
Sales and marketing	66.7	59.4	191.0	181.2
General and administrative	81.9	34.5	161.5	108.7
Depreciation and amortization	28.3	27.0	84.2	82.6
Impairment and disposal of long-lived assets, net of (recoveries)	(4.3)	(1.2)	(4.4)	5.5
Impairment of goodwill	—	—	—	307.6
Total expenses	172.7	119.6	432.3	685.6
Income (loss) from operations	0.6	23.3	96.5	(250.8)
Other income (expense):
Interest expense, net	(17.5)	(20.8)	(47.6)	(60.9)
Interest income	4.2	1.9	11.5	4.3
Gain on debt extinguishment	—	8.2	—	8.2
Other (expense) income, net	(0.2)	1.1	(4.8)	5.9
Total other expense, net	(13.5)	(9.6)	(40.9)	(42.6)
(Loss) income before provision for income taxes	(12.8)	13.7	55.6	(293.4)
Provision for income taxes	47.4	36.6	150.0	105.9
Net loss from continuing operations	(60.2)	(22.9)	(94.4)	(399.3)
Net loss from discontinued operations, net of tax benefit (provision) of zero, zero, zero, and $(0.6), respectively	(1.6)	(2.9)	(4.6)	(99.1)
Net loss	(61.9)	(25.8)	(99.0)	(498.3)
Less: net loss attributable to non-controlling interest from continuing operations	(1.4)	(0.5)	(2.8)	(3.8)
Less: net loss attributable to redeemable non-controlling interest from continuing operations	(0.3)	—	(0.9)	—
Less: net loss attributable to non-controlling interest from discontinued operations	—	—	—	(1.2)
Net loss attributable to common shareholders	$ (60.2)	$ (25.4)	$ (95.3)	$ (493.4)

Earnings Per Share (see numerator reconciliation below)
Net loss per share - Continuing operations:
Basic and diluted	$ (0.32)	$ (0.12)	$ (0.52)	$ (2.09)
Net loss per share - Discontinued operations:
Basic and diluted	$ (0.01)	$ (0.02)	$ (0.02)	$ (0.52)
Weighted average number of common shares used in computing net loss per share:
Basic and diluted	190.2	188.9	190.0	189.0

EPS Numerator Reconciliation
Net loss attributable to common shareholders (from above)	$ (60.2)	$ (25.4)	$ (95.3)	$ (493.4)
Net loss from discontinued operations, net of tax, attributable to common shareholders	1.6	2.9	4.6	97.9
Adjustment of redeemable non-controlling interest to maximum redemption value	(2.1)	—	(9.0)	—
Net loss from continuing operations available to common shareholders	$ (60.6)	$ (22.5)	$ (99.7)	$ (395.5)

Trulieve Cannabis Corp. Condensed Consolidated Statements of Cash Flows (Unaudited) (in millions)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Cash flows from operating activities
Net loss	$ (61.9)	$ (25.8)	$ (99.0)	$ (498.3)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	28.3	27.0	84.2	83.6
Depreciation included in cost of goods sold	13.3	14.5	40.1	45.4
Gain on debt extinguishment	—	(8.2)	—	(8.2)
Impairment and disposal of long-lived assets, net of (recoveries)	(4.3)	(1.2)	(4.4)	5.5
Impairment of goodwill	—	—	—	307.6
Amortization of operating lease right of use assets	3.0	2.5	8.3	7.8
Share-based compensation	5.5	4.5	15.6	7.4
Allowance for credit losses	0.5	0.5	4.9	0.9
Deferred income taxes	(6.2)	(6.5)	(2.7)	(18.7)
Loss from disposal of discontinued operations	—	0.6	—	69.8
Other non-cash changes	(0.3)	1.7	0.9	5.0
Changes in operating assets and liabilities:
Inventories	(13.3)	26.2	(8.3)	66.5
Accounts receivable	(1.5)	(1.2)	(0.7)	(1.9)
Prepaid expenses and other current assets	4.9	4.3	(0.9)	9.3
Other assets	(1.1)	0.3	(6.1)	2.0
Accounts payable and accrued liabilities	4.9	8.9	4.6	4.5
Income tax receivable / payable	0.5	(0.1)	(4.3)	(49.9)
Other liabilities	—	0.9	0.2	(14.4)
Operating lease liabilities	(1.6)	(2.1)	(6.0)	(6.9)
Deferred revenue	2.3	(2.2)	5.3	(6.0)
Uncertain tax position liabilities	51.0	50.7	203.8	61.8
Other long-term liabilities	1.8	(1.8)	(0.7)	(2.6)
Proceeds received from insurance for operating expenses	4.4	—	5.9	—
Net cash provided by operating activities	30.3	93.4	240.8	70.4
Cash flows from investing activities
Purchases of property and equipment	(36.9)	(6.3)	(79.0)	(31.0)
Capitalized interest	(1.2)	0.9	(0.9)	0.1
Purchases of internal use software	(6.8)	(3.4)	(18.3)	(7.7)
Purchases of short-term investments	(80.0)	—	(80.0)	—
Cash paid for licenses	(6.5)	—	(7.0)	(4.0)
Payment for initial direct costs on finance leases	(0.6)	—	(0.6)	—
Proceeds from disposal activities	0.3	3.5	1.0	11.7
Proceeds from notes receivable repayments	0.3	0.2	0.9	0.6
Proceeds received from insurance recoveries on property and equipment	—	—	0.5	—
Net cash used in investing activities	(131.5)	(5.0)	(183.4)	(30.3)
Cash flows from financing activities
Payments for taxes related to net share settlement of equity awards	(12.2)	—	(12.3)	—
Payments on finance lease obligations	(1.9)	(1.8)	(5.5)	(5.7)
Payments on notes payable	(1.4)	(0.7)	(3.8)	(5.5)
Payments on construction finance liabilities	(0.9)	(0.7)	(2.5)	(1.3)
Payments and costs related to consolidated VIE settlement transaction	—	—	(5.1)	—
Distributions to subsidiary non-controlling interest	—	—	(1.1)	(0.1)
Payments on private placement notes	—	(47.6)	—	(47.6)
Payments for debt issuance costs	—	(0.4)	—	(0.4)
Proceeds from non-controlling interest holders' subscription	—	—	3.0	—
Proceeds from equity exercises	—	—	0.2	—
Net cash used in financing activities	(16.4)	(51.3)	(27.1)	(60.6)
Net (decrease) increase in cash, and cash equivalents	(117.5)	37.2	30.3	(20.5)
Cash, cash equivalents, and restricted cash, beginning of period	356.1	159.9	208.0	213.8
Cash and cash equivalents of discontinued operations, beginning of period	—	1.8	0.3	5.7
Less: cash and cash equivalents of discontinued operations, end of period	—	(0.1)	—	(0.1)
Cash, cash equivalents, and restricted cash, end of period	$ 238.6	$ 198.9	$ 238.6	$ 198.9

The consolidated statements of cash flows include continuing operations and discontinued operations for the periods presented.

Non-GAAP Financial Measures (Unaudited)

In addition to our results determined in accordance with GAAP, we supplement our results with non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin %, adjusted net (loss) income, adjusted net (loss) income per diluted share, and free cash flow. The Company calculates EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization; adjusted EBITDA as net income (loss) before net interest expense, interest income, income tax expense, depreciation and amortization and also excludes certain extraordinary items; adjusted EBITDA margin as adjusted EBITDA as % of revenue, adjusted net (loss) income as net income (loss) less certain extraordinary items; adjusted EPS as adjusted net (loss) income divided by basic and diluted shares outstanding; and free cash flow as cash flow from operations less capital expenditures. Our management uses these non-GAAP financial measures in conjunction with GAAP financial measures to evaluate our operating results and financial performance. We believe these measures are useful to investors as they are widely used measures of performance and can facilitate comparison to other companies. These non-GAAP financial measures are not, and should not be considered as, measures of liquidity. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with GAAP financial performance measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found below. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP.

Reconciliation of Non-GAAP EBITDA and Adjusted EBITDA (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders to non-GAAP EBITDA and Adjusted EBITDA for each of the periods presented:

(Amounts expressed in millions of United States dollars)	Three Months Ended						For the Nine Months Ended
(Amounts expressed in millions of United States dollars)	September 30, 2024		September 30, 2023		June 30, 2024		September 30, 2024		September 30, 2023
Net loss attributable to common shareholders	$	(60.2)	$	(25.4)	$	(12.0)	$	(95.3)	$	(493.4)
Add (deduct) impact of:
Interest expense, net	$	17.5	$	20.8	$	15.4	$	47.6	$	60.9
Interest income	$	(4.2)	$	(1.9)	$	(4.0)	$	(11.5)	$	(4.3)
Provision for income taxes	$	47.4	$	36.6	$	47.2	$	150.0	$	105.9
Depreciation and amortization	$	28.3	$	27.0	$	28.1	$	84.2	$	82.6
Depreciation included in cost of goods sold	$	13.3	$	14.6	$	13.3	$	40.1	$	42.7
EBITDA (Non-GAAP)	$	42.1	$	71.8	$	88.0	$	215.0	$	(205.5)
EBITDA Margin (Non-GAAP)		15 %		26 %		29 %		24 %		(24 %)

Impairment of goodwill	$	—	$	—	$	—	$	—	$	307.6
Impairment and disposal of long-lived assets, net of (recoveries)	$	(4.3)	$	(1.2)	$	1.2	$	(4.4)	$	5.5
Legislative campaign contributions	$	48.4	$	0.5	$	5.0	$	62.7	$	19.6
Acquisition, transaction, and other non-recurring costs	$	2.6	$	8.5	$	4.3	$	10.6	$	16.1
Share-based compensation	$	5.5	$	4.5	$	5.0	$	15.6	$	7.4
Gain on debt extinguishment	$	—	$	(8.2)	$	—	$	—	$	(8.2)
Other (expense) income, net	$	0.2	$	(1.1)	$	1.8	$	4.8	$	(5.9)
Discontinued operations, net of tax, attributable to common shareholders	$	1.6	$	2.9	$	1.6	$	4.6	$	97.9
Adjusted EBITDA (Non-GAAP)	$	96.1	$	77.7	$	107.0	$	308.8	$	234.5
Adjusted EBITDA Margin (Non-GAAP)		34 %		28 %		35 %		35 %		28 %

Reconciliation of Non-GAAP Adjusted Net (Loss) Income (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders to non-GAAP adjusted net (loss) income, for each of the periods presented:

	For the Three Months Ended						For the Nine Months Ended
(Amounts expressed in millions of United States dollars)	September 30, 2024		September 30, 2023		June 30, 2024		September 30, 2024		September 30, 2023
Net loss attributable to common shareholders	$	(60.2)	$	(25.4)	$	(12.0)	$	(95.3)	$	(493.4)
Net loss from discontinued operations, net of tax, attributable to common shareholders	$	1.6	$	2.9	$	1.6	$	4.6	$	97.9
Adjustment of redeemable non-controlling interest to maximum redemption value	$	(2.1)	$	—	$	1.9	$	(9.0)	$	—
Net loss from continuing operations available to common shareholders	$	(60.6)	$	(22.5)	$	(8.5)	$	(99.7)	$	(395.5)
Add (deduct) impact of:
Adjustment of redeemable non-controlling interest to maximum redemption value	$	2.1	$	—	$	(1.9)	$	9.0	$	—
Impairment of goodwill	$	—	$	—	$	—	$	—	$	307.6
Impairment and disposal of long-lived assets, net of (recoveries)	$	(4.3)	$	(1.2)	$	1.2	$	(4.4)	$	5.5
Legislative campaign contributions	$	48.4	$	0.5	$	5.0	$	62.7	$	19.6
Acquisition, transaction, and other non-recurring costs	$	2.6	$	8.5	$	4.3	$	10.6	$	16.1
Fair value of derivative liabilities - warrants	$	—	$	—	$	—	$	—	$	(0.3)
Adjusted net (loss) income (Non-GAAP)	$	(11.9)	$	(14.7)	$	0.2	$	(21.9)	$	(47.0)

Reconciliation of Non-GAAP Adjusted Net (Loss) Income Per Diluted Share (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders per share to non-GAAP adjusted net (loss) income per diluted share, for each of the periods presented:

	For the Three Months Ended						For the Nine Months Ended
(Amounts expressed are per share except for shares which are in millions)	September 30, 2024		September 30, 2023		June 30, 2024		September 30, 2024		September 30, 2023
Net loss attributable to common shareholders	$	(0.32)	$	(0.13)	$	(0.06)	$	(0.50)	$	(2.61)
Net loss from discontinued operations, net of tax, attributable to common shareholders	$	0.01	$	0.02	$	0.01	$	0.02	$	0.52
Adjustment of redeemable non-controlling interest to maximum redemption value	$	(0.01)	$	—	$	0.01	$	(0.05)	$	—
Net loss from continuing operations available to common shareholders	$	(0.32)	$	(0.12)	$	(0.04)	$	(0.52)	$	(2.09)
Add (deduct) impact of:
Adjustment of redeemable non-controlling interest to maximum redemption value	$	0.01	$	—	$	(0.01)	$	0.05	$	—
Impairment of goodwill	$	—	$	—	$	—	$	—	$	1.63
Impairment and disposal of long-lived assets, net of (recoveries)	$	(0.02)	$	(0.01)	$	0.01	$	(0.02)	$	0.03
Legislative campaign contributions	$	0.25	$	0.00	$	0.03	$	0.33	$	0.10
Acquisition, transaction, and other non-recurring costs	$	0.01	$	0.05	$	0.02	$	0.06	$	0.09
Fair value of derivative liabilities - warrants	$	—	$	—	$	—	$	—	$	0.00
Adjusted net (loss) income (Non-GAAP)	$	(0.06)	$	(0.08)	$	0.00	$	(0.12)	$	(0.25)
Basic and diluted shares outstanding		190.2		188.9		190.3		190.0		189.0

Reconciliation of Non-GAAP Free Cash Flow (Unaudited)
The following table presents a reconciliation of GAAP cash flow from operating activities to non-GAAP free cash flow, for each of the periods presented:

	For the Three Months Ended						For the Nine Months Ended
(Amounts expressed in millions of United States dollars)	September 30, 2024		September 30, 2023		June 30, 2024		September 30, 2024		September 30, 2023
Cash flow from operating activities	$	30.3	$	93.4	$	71.3	$	240.8	$	70.4
Payments for property and equipment	$	(36.9)	$	(6.3)	$	(26.5)	$	(79.0)	$	(31.0)
Free cash flow (Non-GAAP)	$	(6.6)	$	87.2	$	44.8	$	161.8	$	39.4

Forward-Looking Statements

This news release includes forward-looking information and statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the Company's expectations or forecasts of business, operations, financial performance, cash flows, prospects, and other plans, intentions, expectations, estimates, and beliefs and include statements regarding the potential approval of cannabis legalization for personal use in Florida , the Company's growth opportunities and the Company's positioning for the future. Words such as "expects", "continue", "will", "anticipates" and "intends" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the Company's current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein, including, without limitation, the risks discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our periodic reports subsequently filed with the United Sates Securities and Exchange Commission and in the Company's filings on https://www.sedarplus.ca/landingpage/ . Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof and, except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward looking information and statements herein, whether as a result of new information, future events or results, or otherwise.

About Trulieve

Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S., with leading market positions in Arizona , Florida , and Pennsylvania . Trulieve is poised for accelerated growth and expansion, building scale in retail and distribution in new and existing markets through its hub strategy. By providing innovative, high-quality products across its brand portfolio, Trulieve delivers optimal customer experiences and increases access to cannabis, helping patients and customers to live without limits. Trulieve is listed on the CSE under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF. For more information, please visit Trulieve.com .

Facebook: @Trulieve
Instagram: @Trulieve_
X: @Trulieve

Investor Contact
Christine Hersey , Vice President of Investor Relations
+1 (424) 202-0210
Christine.Hersey@Trulieve.com

Media Contact
Phil Buck , APR, Corporate Communications Manager
+1 (406) 370-6226
Philip.Buck@Trulieve.com

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Cronos Group Inc. to Hold 2024 Third Quarter Earnings Conference Call on November 12, 2024

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) ("Cronos" or the "Company") will hold its 2024 third quarter earnings conference call on Tuesday, November 12, 2024 at 8:30 a.m. ET. Cronos' senior management team will discuss the Company's financial results and will be available for questions from the investment community after prepared remarks.

To attend the conference call or webcast, participants should register online at https://ir.thecronosgroup.com/events-presentations . To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. The webcast of the call will be archived for replay on the Company's website.

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(in thousands of USD)	Three months ended September 30,						Change					Nine months ended September 30,						Change
		2024			2023		$			%			2024			2023		$			%
Cronos net revenue, excluding Cronos GrowCo net revenue ⁽ⁱ⁾	$	29,996		$	24,810		$	5,186		21	%	$	83,046		$	63,326		$	19,720		31	%
Cronos GrowCo net revenue ⁽ⁱⁱ⁾		4,268			—			4,268		N/A			4,268			—			4,268		N/A
Net revenue	$	34,264		$	24,810		$	9,454		38	%	$	87,314		$	63,326		$	23,988		38	%

Cost of sales		30,341			20,124			10,217		51	%		72,216			52,614			19,602		37	%
Inventory write-down		312			716			(404	)	(56	)%		707			716			(9	)	(1	)%
Gross profit	$	3,611		$	3,970		$	(359	)	(9	)%	$	14,391		$	9,996		$	4,395		44	%
Gross margin ⁽ⁱⁱⁱ⁾		11	%		16	%	N/A			(5) pp			16	%		16	%	N/A			—pp

Inventory step-up recorded to cost of sales		7,116			—			7,116		N/A			7,116			—			7,116		N/A
Adjusted Gross Profit ⁽ⁱ^v⁾	$	10,727		$	3,970		$	6,757		170	%	$	21,507		$	9,996		$	11,511		115	%
Adjusted Gross Margin ⁽^v⁾		31	%		16	%	N/A			15pp			25	%		16	%	N/A			9pp

Net income (loss)	$	7,324		$	(1,590	)	$	8,914		N/M		$	(3,919	)	$	(25,288	)	$	21,369		85	%

Adjusted EBITDA ⁽^iv⁾	$	(6,019	)	$	(15,187	)	$	9,168		60	%	$	(27,739	)	$	(46,774	)	$	19,035		41	%

Other Data
Cash and cash equivalents ^(vi)	$	862,034		$	571,656		$	290,378		51	%
Short-term investments ^(vi)		—			267,905			(267,905	)	(100	)%
Capital expenditures ⁽^vii⁾		6,536			325			6,211		1,911	%		9,446			1,631			7,815		479	%

	As of September 30, 2024			As of December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	862,034		$	669,291
Short-term investments		—			192,237
Accounts receivable, net		20,480			13,984
Interest receivable		7,190			10,012
Other receivables		5,690			6,341
Current portion of loans receivable, net		233			5,541
Inventory, net		47,250			30,495
Prepaids and other current assets		7,326			5,405
Held-for-sale assets		8,971			—
Total current assets		959,174			933,306
Equity method investments, net		—			19,488
Other investments		2,900			35,251
Non-current portion of loans receivable, net		16,086			69,036
Property, plant and equipment, net		162,516			59,468
Right-of-use assets		1,052			1,356
Goodwill		38,028			1,057
Intangible assets, net		4,247			21,078
Other assets		130			45
Total assets	$	1,184,133		$	1,140,085

Liabilities
Current liabilities
Accounts payable	$	6,532		$	12,130
Income taxes payable		94			64
Accrued liabilities		31,766			27,736
Current portion of lease obligation		980			994
Derivative liabilities		192			102
Current portion due to non-controlling interests		—			373
Total current liabilities		39,564			41,399
Non-current portion due to non-controlling interests		1,243			1,003
Non-current portion of lease obligation		872			1,559
Deferred tax liability		11,143			—
Total liabilities		52,822			43,961

Shareholders' equity
Share capital		616,403			613,725
Additional paid-in capital		51,523			48,449
Retained earnings		413,995			416,719
Accumulated other comprehensive gain (loss)		(361	)		20,678
Total equity attributable to shareholders of Cronos Group		1,081,560			1,099,571
Non-controlling interests		49,751			(3,447	)
Total shareholders' equity		1,131,311			1,096,124
Total liabilities and shareholders' equity	$	1,184,133		$	1,140,085

	Three months ended September 30,						Nine months ended September 30,
(In thousands of U.S. dollars, except share and per share amounts, unaudited)		2024			2023			2024			2023
Net revenue, before excise taxes	$	46,594		$	33,912		$	120,639		$	86,264
Excise taxes		(12,330	)		(9,102	)		(33,325	)		(22,938	)
Net revenue		34,264			24,810			87,314			63,326
Cost of sales		30,341			20,124			72,216			52,614
Inventory write-down		312			716			707			716
Gross profit		3,611			3,970			14,391			9,996
Operating expenses
Sales and marketing		5,528			5,296			15,190			16,334
Research and development		1,242			1,246			3,201			4,392
General and administrative		12,760			14,366			34,434			39,673
Restructuring costs		—			1,423			630			1,423
Share-based compensation		2,262			1,957			6,513			6,823
Depreciation and amortization		1,098			1,457			3,237			4,515
Impairment loss on long-lived assets		14,376			—			16,350			—
Total operating expenses		37,266			25,745			79,555			73,160
Operating loss		(33,655	)		(21,775	)		(65,164	)		(63,164	)
Other income
Interest income, net		12,460			13,375			40,156			37,021
Share of income from equity method investments		—			1,057			2,365			831
Gain on revaluation of loan receivable		11,804			—			11,804			—
Gain on revaluation of equity method investment		32,469			—			32,469			—
Loss on revaluation of financial instruments		(293	)		(5,291	)		(6,550	)		(7,856	)
Impairment loss on other investments		—			—			(25,650	)		—
Foreign currency transaction gain (loss)		(7,432	)		8,816			12,370			3,999
Loss on held-for-sale assets		(10,422	)		—			(10,422	)		—
Other, net		(315	)		974			(737	)		1,011
Total other income		38,271			18,931			55,805			35,006
Income (loss) before income taxes		4,616			(2,844	)		(9,359	)		(28,158	)
Income tax benefit		(2,708	)		(1,254	)		(5,440	)		(2,870	)
Income (loss) from continuing operations		7,324			(1,590	)		(3,919	)		(25,288	)
Loss from discontinued operations		—			(182	)		—			(4,238	)
Net income (loss)		7,324			(1,772	)		(3,919	)		(29,526	)
Net loss attributable to non-controlling interest		(1,025	)		(128	)		(1,270	)		(353	)
Net income (loss) attributable to Cronos Group	$	8,349		$	(1,644	)	$	(2,649	)	$	(29,173	)
Comprehensive income (loss)
Net income (loss)	$	7,324		$	(1,772	)	$	(3,919	)	$	(29,526	)
Other comprehensive income (loss)
Foreign exchange gain (loss) on translation		12,408			(20,090	)		(20,113	)		(1,096	)
Comprehensive income (loss)		19,732			(21,862	)		(24,032	)		(30,622	)
Comprehensive loss attributable to non-controlling interests		(269	)		(41	)		(344	)		(136	)
Comprehensive income (loss) attributable to Cronos Group	$	20,001		$	(21,821	)	$	(23,688	)	$	(30,486	)
Net income (loss) per share
Basic - continuing operations	$	0.02		$	—		$	(0.01	)	$	(0.07	)
Basic - discontinued operations		—			—			—			(0.01	)
Basic net income (loss) per share attributable to Cronos Group	$	0.02		$	—		$	(0.01	)	$	(0.08	)

Diluted - continuing operations	$	0.02		$	—		$	(0.01	)	$	(0.07	)
Diluted - discontinued operations		—			—			—			(0.01	)
Diluted net income (loss) per share attributable to Cronos Group	$	0.02		$	—		$	(0.01	)	$	(0.08	)

	Nine months ended September 30,
		2024			2023
Operating activities
Net loss	$	(3,919	)	$	(29,526	)
Adjustments to reconcile net loss to cash used in operating activities:
Share-based compensation		6,513			6,840
Depreciation and amortization		6,811			6,933
Impairment loss on long-lived assets		16,350			205
Impairment loss on other investments		25,650			—
Loss from investments		4,103			7,103
Changes in expected credit losses on long-term financial assets		1,026			(1,339	)
Revaluation of equity method investment		(32,469	)		—
Revaluation of loan receivable		(11,804	)		—
Loss on held-for-sale assets		10,422			—
Inventory step-up recorded to cost of sales		7,116			—
Foreign currency transaction (gain) loss		(12,370	)		(3,999	)
Other non-cash operating activities, net		(11	)		(1,904	)
Changes in operating assets and liabilities:
Accounts receivable, net		(5,402	)		6,976
Interest receivable		(1,018	)		(14,601	)
Other receivables		1,658			25
Prepaids and other current assets		(1,217	)		1,074
Inventory		7,162			976
Accounts payable		(9,102	)		(7,595	)
Income taxes payable		(9	)		(32,728	)
Accrued liabilities		1,633			1,910
Cash flows provided by (used in) operating activities		11,123			(59,650	)
Investing activities
Purchase of short-term investments		—			(537,186	)
Proceeds from short-term investments		187,166			380,765
Cash acquired in business combinations		5,993			—
Dividends received from equity method investment		—			1,301
Dividend proceeds		—			346
Advances on loans receivable		(8,822	)		—
Proceeds from repayment on loans receivable		5,290			14,151
Purchase of property, plant and equipment		(8,868	)		(1,287	)
Purchase of intangible assets		(578	)		(344	)
Other investing activities		—			862
Cash flows provided by (used in) investing activities		180,181			(141,392	)
Financing activities
Withholding taxes paid on share-based awards		(918	)		(812	)
Cash flows used in financing activities		(918	)		(812	)
Effect of foreign currency translation on cash and cash equivalents		2,357			8,866
Net change in cash and cash equivalents		192,743			(192,988	)
Cash and cash equivalents, beginning of period		669,291			764,644
Cash and cash equivalents, end of period	$	862,034		$	571,656
Supplemental cash flow information
Interest paid	$	—		$	—
Interest received	$	38,965		$	22,203
Income taxes paid	$	621		$	33,013

	Three months ended September 30, 2024
	Continuing Operations			Discontinued Operations		Total
Net income	$	7,324		$	—	$	7,324
Interest income, net		(12,460	)		—		(12,460	)
Income tax benefit		(2,708	)		—		(2,708	)
Depreciation and amortization		3,567			—		3,567
EBITDA		(4,277	)		—		(4,277	)
Impairment loss on long-lived assets ⁽ⁱ⁾		14,376			—		14,376
Revaluation gain on loan receivable ⁽ⁱⁱ⁾		(11,804	)		—		(11,804	)
Gain on revaluation of equity method investment ⁽ⁱⁱⁱ⁾		(32,469	)		—		(32,469	)
Loss on revaluation of financial instruments ^(iv)		293			—		293
Foreign currency transaction loss		7,432			—		7,432
Transaction costs ^(vi)		334			—		334
Loss on held-for-sale assets ^(vii)		10,422			—		10,422
Other, net ^(viii)		315			—		315
Share-based compensation ^(ix)		2,262			—		2,262
Financial statement review costs ^(xi)		(19	)		—		(19	)
Inventory step-up recorded to cost of sales ^(xiii)		7,116			—		7,116
Adjusted EBITDA	$	(6,019	)	$	—	$	(6,019	)

Cronos Group Inc.
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)

Cronos Group Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars, except share amounts, unaudited)

	Three months ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total
Net loss	$	(1,590	)	$	(182	)	$	(1,772	)
Interest income, net		(13,375	)		(1	)		(13,376	)
Income tax benefit		(1,254	)		—			(1,254	)
Depreciation and amortization		2,148			—			2,148
EBITDA		(14,071	)		(183	)		(14,254	)
Share of income from equity method investments		(1,057	)		—			(1,057	)
Loss on revaluation of financial instruments ^(iv)		5,291			—			5,291
Foreign currency transaction gain		(8,816	)		—			(8,816	)
Other, net ^(viii)		(974	)		(31	)		(1,005	)
Restructuring costs ^(ix)		1,423			28			1,451
Share-based compensation ^(x)		1,957			(4	)		1,953
Financial statement review costs ^(xi)		344			—			344
Inventory write-down ^(xii)		716			—			716
Adjusted EBITDA	$	(15,187	)	$	(190	)	$	(15,377	)

	Nine months ended September 30, 2024
	Continuing Operations			Discontinued Operations		Total
Net loss	$	(3,919	)	$	—	$	(3,919	)
Interest income, net		(40,156	)		—		(40,156	)
Income tax benefit		(5,440	)		—		(5,440	)
Depreciation and amortization		6,811			—		6,811
EBITDA		(42,704	)		—		(42,704	)
Share of income from equity method investments		(2,365	)		—		(2,365	)
Impairment loss on long-lived assets ⁽ⁱ⁾		16,350			—		16,350
Revaluation gain on loan receivable ⁽ⁱⁱ⁾		(11,804	)		—		(11,804	)
Gain on revaluation of equity method investment ⁽ⁱⁱⁱ⁾		(32,469	)		—		(32,469	)
Loss on revaluation of financial instruments ^(iv)		6,550			—		6,550
Impairment loss on other investments ^(v)		25,650			—		25,650
Foreign currency transaction gain		(12,370	)		—		(12,370	)
Transaction costs ^(vi)		530			—		530
Loss on held-for-sale assets ^(vii)		10,422			—		10,422
Other, net ^(viii)		737			—		737
Restructuring costs ^(ix)		630			—		630
Share-based compensation ^(x)		6,513			—		6,513
Financial statement review costs ^(xi)		(525	)		—		(525	)
Inventory step-up recorded to cost of sales ^(xiii)		7,116			—		7,116
Adjusted EBITDA	$	(27,739	)	$	—	$	(27,739	)

	Nine months ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total
Net loss	$	(25,288	)	$	(4,238	)	$	(29,526	)
Interest income, net		(37,021	)		(9	)		(37,030	)
Income tax benefit		(2,870	)		—			(2,870	)
Depreciation and amortization		6,689			244			6,933
EBITDA		(58,490	)		(4,003	)		(62,493	)
Share of income from equity method investments		(831	)		—			(831	)
Impairment loss on long-lived assets ⁽ⁱ⁾		—			205			205
Loss on revaluation of financial instruments ^(iv)		7,856			—			7,856
Foreign currency transaction gain		(3,999	)		—			(3,999	)
Other, net ^(viii)		(1,011	)		132			(879	)
Restructuring costs ^(ix)		1,423			562			1,985
Share-based compensation ^(x)		6,823			17			6,840
Financial statement review costs ^(xi)		739			—			739
Inventory write-down ^(xii)		716			839			1,555
Adjusted EBITDA	$	(46,774	)	$	(2,248	)	$	(49,022	)

	As Reported											As Adjusted for Constant Currency
	Three months ended September 30,						As Reported Change					Three months ended September 30,			Constant Currency Change
		2024			2023		$			%			2024		$			%
Net revenue	$	34,264		$	24,810		$	9,454		38	%	$	34,661		$	9,851		40	%
Gross profit		3,611			3,970			(359	)	(9	)%		3,608			(362	)	(9	)%
Gross margin		11	%		16	%		N/A		(5)pp			10	%		N/A		(6)pp

Operating expenses		37,266			25,745			11,521		45	%		38,079			12,334		48	%
Net income (loss) from continuing operations		7,324			(1,590	)		8,914		N/M			8,219			9,809		N/M
Adjusted EBITDA		(6,019	)		(15,187	)		9,168		60	%		(6,514	)		8,673		57	%

	Nine months ended September 30,						As Reported Change					Nine months ended September 30,			Constant Currency Change
		2024			2023		$			%			2024		$			%
Net revenue	$	87,314		$	63,326		$	23,988		38	%	$	88,456		$	25,130		40	%
Gross profit		14,391			9,996			4,395		44	%		14,591			4,595		46	%
Gross margin		16	%		16	%		N/A		—pp			16	%	N/A			—pp

Operating expenses		79,555			73,160			6,395		9	%		80,415			7,255		10	%
Net loss from continuing operations		(3,919	)		(25,288	)		21,369		85	%		(2,424	)		22,864		90	%
Adjusted EBITDA		(27,739	)		(46,774	)		19,035		41	%		(28,022	)		18,752		40	%

	As of September 30,			As of December 31,			As Reported Change					As of September 30,			Constant Currency Change
		2024			2023		$			%			2024		$			%
Cash and cash equivalents	$	862,034		$	669,291		$	192,743		29	%	$	865,277		$	195,986		29	%
Short-term investments		—			192,237			(192,237	)	(100	)%		—			(192,237	)	(100	)%
Total cash and cash equivalents and short-term investments	$	862,034		$	861,528		$	506		—	%	$	865,277		$	3,749		—	%

(Exchange rates are shown as C$ per $)	As of
	September 30, 2024	September 30, 2023	December 31, 2023
Spot rate	1.3525	1.3577	1.3243
Year-to-date average rate	1.3601	1.3455	N/A

(Exchange rates are shown as ILS per $)	As of
	September 30, 2024	September 30, 2023	December 31, 2023
Spot rate	3.7269	3.8138	3.6163
Year-to-date average rate	3.6994	3.6385	N/A

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