Mr. Sonny Newman reports

C21 INVESTMENTS ANNOUNCES Q3 RESULTS

C21 Investments Inc. has released its unaudited interim financial statements and management discussion and analysis for the third quarter ended Oct. 31, 2023. The company's financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP). All currency is reported in U.S. dollars.

Q3 financial highlights (Aug. 1, 2023, to Oct. 31, 2023):

• Revenue of $6.9-million -- same-store sales increased for a second straight quarter, offset by a decline in wholesale volumes;
• Earnings (loss) per share of nil;
• Gross margin of 40 per cent -- an increase of 50 basis points sequentially;
• Cash flow from operations of $2.7-million year-to-date; Q3 operating cash flow and free cash flow were positive adjusted for tax payments made in the quarter relating to prior periods;
• Total liabilities reduced $2.1-million year to date;
• Appointed Aron Swan as chief operating officer.

Q3 management and operational commentary

"We continued to see stable retail revenue and cash generation again this quarter, a testament to the strength of our operations and management team," stated chief executive officer and president Sonny Newman. "We experienced a second consecutive quarter of increased same-store sales, reflecting our strong brand and loyal customer base. We are also pleased with the success of our drive-through initiative that commenced during the quarter, which has added new efficiencies to our operations."

C21's Q3 revenue of $6.9-million was down 3.9 per cent from the previous quarter. Lower wholesale revenues in the quarter were partially offset by an increase in same-store sales for the second straight quarter.

Gross margin was 40 per cent for Q3, an increase of 50 basis points sequentially. Gross margins continue to stabilize as the impact of curtailing cultivation in previous quarters has lessened. Margins, while improving, remain compressed relative to historical levels as a result of continued pricing pressures in the state and other factors (see management's discussion and analysis for full discussion).

C21 reported a Q3 net loss of $400,000, or nil earnings per share, virtually unchanged from the previous quarter. The company generated $900,000 of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), also unchanged from Q2.

Cash flow from operations remained at $2.7-million year to date, impacted by $1-million of income taxes paid during the quarter, including tax payments related to prior periods. Adjusted for only the Q3 tax expense, operating cash flow and free cash flow were both positive for the quarter.

Cash at the end of Q3 was $1.9-million, flat since the start of the year. Income taxes paid in the quarter were $1-million with $300,000 in capital expenditures on building drive-through in Sparks. Total liabilities have been reduced by $2.1-million year to date.

During the quarter, the company appointed Mr. Swan as its chief operating officer (see news release dated Sept. 7, 2023). C21 has established the COO role to support the company's long-term growth objectives. In addition, the company completed construction on drive-through operations at its flagship dispensary in Sparks, commencing operation in September.

About C21 Investments Inc.

C21 Investments is a vertically integrated cannabis company that cultivates, processes and distributes quality cannabis and hemp-derived consumer products in the United States. The company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing and distribution assets in strategic markets, leveraging industry-leading retail revenues with high-growth potential multimarket branded consumer packaged goods. The company owns Silver State Relief and Silver State Cultivation in Nevada, including legacy Oregon brands Phantom Farms, Hood Oil and Eco Firma Farms. These brands produce and distribute a broad range of tetrahydrocannabinol and cannabidiol products from cannabis flowers, prerolls, cannabis oil, vaporizer cartridges and edibles.

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