Mr. Paul Wilson reports

DECIBEL ANNOUNCES FIRST QUARTER RESULTS WITH RECORD $27.1 MILLION OF NET REVENUE, $6.8 MILLION OF ADJUSTED EBITDA, AND $0.01 OF ADJUSTED EPS

Decibel Cannabis Company Inc. has released its interim financial results for the three-month period ending March 31, 2023.

"We've started the year off with another strong quarter that represents both significant year over year acceleration as well as sequential growth," said Paul Wilson, chief executive officer of Decibel. "Our new, unique and innovative products, assortments and formats continue to resonate with both new and existing customers. This provides ample momentum as we approach a number of material and additional catalysts this summer, when we expect to build market share and brand position in Canada, and in turn continue to leverage our business internationally."

First quarter highlights:

• Record national market share of 6.7 per cent in Q1 2023 which placed Decibel as the third-largest licensed producer in Canada by market share.
  • As of April, 2023, Decibel's market share was 7.1 per cent, which placed Decibel as the second-largest licensed producer in Canada by market share.
• Record net revenue was $27.1-million in the first quarter of 2023, with sequential growth of 5 per cent over the prior quarter, despite seasonal weakness, and year-over-year growth of 63 per cent. Net revenue improvement was driven by continued growth in demand for derivative products, expanded operational capacity and expanded distribution.
• Gross margin before fair value adjustments was 49 per cent in the first quarter of 2023, compared with 43 per cent in the prior quarter and 35 per cent in the first quarter of 2022. The increase year-over-year was the result of significant cost savings which began in the third quarter of 2022 from initiatives including operational efficiencies, automation equipment commissioned and sourcing of more cost-effective components related to the manufacturing of cannabis products.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $6.8-million in the first quarter of 2023, with a sequential decline of 4 per cent over the prior quarter and year-over-year growth of 175 per cent. This marks Decibel's 11th quarter of consecutive quarterly positive adjusted EBITDA.
• Record adjusted net income of $3.3-million in the first quarter of 2023, with sequential growth of 87 per cent over the prior quarter and a year-over-year improvement of $5-million.
• Record adjusted earnings per share (adjusted EPS) of one cent adjusted EPS in the first quarter, with a sequential improvement of one cent over the prior quarter and a year-over-year improvement of one cent.

Decibel's interim financial statements for the three-month period ending March 31, 2023, and related management's discussion and analysis for three-month periods ending March 31, 2023, are available under the company's profile on SEDAR.

As of March 31, 2023, Decibel was in compliance with all of its financial covenants under its credit facilities and expects to remain in compliance for the remainder of its 12-month forecast period.

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 Decibel'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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