Mr. Mark Aiken reports

CHRISTINA LAKE CANNABIS REPORTS FIRST QUARTER 2023 RESULTS

Christina Lake Cannabis Corp. has released its financial results for the first quarter ended Feb. 28, 2023. All amounts are expressed in Canadian dollars unless otherwise noted.

Q1'23 Highlights

Revenue up 16% to $1.9M over Q1'22

Distillate shipments increased by 80% compared to Q1'22

Gross margin of $616k or 32.2% before fair value adjustments

Decreased G&A expenses by $173k or 14%

"Q1 has continued on the growth trajectory we established in fiscal 2022, while demonstrating the typical seasonality we expect in the first quarter" said Mark Aiken, Chief Executive Officer of Christina Lake Cannabis. "As the industry continues to face headwinds, our organization remains focused on delivering strong results, optimizing our operations and growth. Actual Q1 distillate shipments increased by 80% compared to Q1 2022, creating revenue growth of 16% despite the market price compression.

The Management team has been focused on strategic initiatives including:

Expanded production capacity of industry leading distillate;

New product introductions (Pre-rolls and Infused Pre-Rolls, Kief, Hash, and Infused Hash);

Expanded customer base; and

Turnkey formulations.

Going forward, all signs point to continuing strong quarterly demand, sales growth, and strong performance as we continue to march towards our FY2023 goals."

Q1 distillate shipments increased by 80% compared to Q1 2022. Revenue grew 16% to $1.9M from $1.7M in the comparative quarter despite the market price compression. Revenue growth was driven by the growing demand in our premium distillate and expanding customer base.

Gross Margin Before Fair Value Adjustments was 32% of revenue from sale of goods for Q1'23, compared with 55% in Q1'22. Cost of goods sold included a slight increase in the input biomass cost as well as capitalized depreciation expense. The Company continued to realize production efficiencies to combat price compression in the wholesale distillate market as production and sales continued to ramp up. This was offset by an expanded product mix, which includes various grades of premium distillate.

Total general & administrative ("G&A") expenses declined by $173k or 14% in Q1'23 compared to Q1'22, driven by year-over-year reductions in consulting fees, marketing, salaries and share based compensation expenses. G&A decreased to 57% of revenue during the quarter, compared with 77% in Q1'22.

Loss and comprehensive loss in Q1'23 was $(1.2M) which is a $440k increase from Q1'22 loss of $(770k). The year-over-year increase is primarily driven by an increase in cost of goods sold and changes in fair value of inventory sold, which was offset by an increase in revenue and reduction in general and administrative expenses.

Cash and Working Capital

As at February 28, 2023, the Company had working capital of $2,175,609 (November 30, 2022 - $3,683,558) which consisted of cash of $1,500,047 (November 30, 2022 - $1,810,639), receivables of $1,146,313 (November 30, 2022 - $1,906,820), prepaid expenses of $45,570 (November 30, 2022 - $3,885), inventory of $5,064,765 (November 30, 2022 - $5,766,418). Current liabilities, being accounts payable and accrued liabilities, current portion of loan and current portion of convertible debentures, $5,609,837 (November 30, 2022 - $5,832,954).

About Christina Lake Cannabis Corp.

Christina Lake Cannabis is a licensed producer of cannabis under the Cannabis Act. It has secured a standard cultivation license and corresponding processing amendment from Health Canada (March 2020 and August 2020, respectively) as well as a research and development license (early 2020). Christina Lake Cannabis' facility consists of a 32-acre property, which includes over 950,000 square feet of outdoor grow space, offices, propagation and drying rooms, research facilities, and a facility dedicated to processing and extraction. Christina Lake Cannabis also owns a 99-acre plot of land adjoining its principal site. CLC focuses its production on creating high quality extracts and distillate for its B2B client base with proprietary strains specifically developed for outdoor cultivation to enhance extraction quality.

We seek Safe Harbor.