An anonymous director reports

DECIBEL PROVIDES PRELIMINARY RECORD LEVEL Q4 2022 RESULTS AND 2023 OUTLOOK

Decibel Cannabis Company Inc. has released its preliminary unaudited fourth quarter results and 2023 financial outlook.

Highlights:

• Q4 2022 record net revenue of $25.25-million to $26.25-million (over 38 per cent growth from Q3 2022);
• Q4 2022 record adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $6.25-million to $7.25-million (over 47 per cent growth from Q3 2022);
• Q4 2022 achieved under three times debt to trailing 12-month adjusted EBITDA;
• Targeting 2023 net revenue year-over-year growth of over 35 per cent.

Management commentary

Decibel has continued its market share gains, becoming the third largest LP in Canada by market share and the fastest growing large LP with 77 per cent growth in 2022. The company remained focused on developing consumer loyalty and category expansion supported through refinement of differentiation within the company's products. By creating demand, it led to an abundance of attractive investment opportunities by way of automation and supply chain optimization, leading to record level gross margin in the back half of the year. Through these steps, we've grown Decibel's top and bottom line substantially, capping off the year with record level results. The company is steadfast in its strategic plan that has driven its recent success, while remaining nimble to navigate a highly dynamic Canadian marketplace and ever-growing international landscape.

The company plans to grow its position to become a market leader in Canada through organic growth centred around a pipeline of new, unique and innovative products, and a strong revenue generation engine to grow distribution. Growing the company's footprint and recognition in Canada will in turn create a foundation to expand the company's brands internationally, bringing quality and choice to consumers abroad.

With demand in place, Decibel has invested aggressively to expand its margins and drive free cash flow, with a pipeline of high return on capital opportunities still in place. This year, the company is increasing its focus on improving operating cash conversion with the streamlining of operations, a continued transition toward automation and improving the company's balance sheet. The company thinks this is critical given the current challenges present in the industry and positions Decibel to further reinvest in its business and reinforce its ability to out-compete.

About Decibel Cannabis Company Inc.

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, B.C., is a licensed and operating 26,000-square-foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, Sask. The plant, Decibel's extraction facility in Calgary, Alta., has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of the company's brands: Qwest, Qwest Reserve, Blendcraft and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

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