Mr. Obie Strickler reports

GROWN ROGUE ANNOUNCES ENTRY INTO ILLINOIS

Grown Rogue International Inc. signed a definitive agreement on March 4, 2024, to form a joint venture with EBC Ventures (EBC), signalling the company's entrance into the Illinois market. The JV entered into a definitive agreement on Feb. 22, 2024, to acquire 100 per cent of CannEquality LLC, which holds a craft growers licence with the Illinois Department of Agriculture (IDOA). The acquisition is subject to regulatory approval from the IDOA.

The deal highlights are as follows:

• Grown Rogue will own 70 per cent of the JV and has agreed to contribute up to $6-million (U.S.) to support the development of the facility;

• The buildout will initially include about 5,000 square feet of canopy and 4,700 square feet of dedicated processing and manufacturing space, with the ability to increase to a total of 14,000 square feet of canopy allowed under the licence;

• The JV agreement includes multiple purchase options, which ultimately give Grown Rogue the ability to acquire 100 per cent of the membership interests of the JV.

Management commentary

"We are excited to announce our partnership with EBC, accelerating our ability to bring the quality and value of Grown Rogue products to the consumers of Illinois," said Obie Strickler, chief executive officer of Grown Rogue. "We have been watching the Illinois market develop and believe this partnership represents a compelling opportunity to deliver great returns on our invested capital while enhancing the overall market for Illinois cannabis consumers. The Illinois market is particularly attractive to us as we believe there is pent up demand for craft-quality flower at accessible price points.

"We have secured a great location close to Chicago that is right in our sweet spot of facility size, approximately 50,000 square feet, and current regulatory rules allow us to develop up to 14,000 square feet of canopy while maintaining sufficient space to build out a manufacturing business. The manufacturing segment is another example of us looking to broaden our scope within the industry, while staying laser focused on producing high-quality, craft cannabis that delights our consumers," continued Mr. Strickler.

"This will largely be funded by cash on hand and the cash we anticipate receiving with the recent warrant acceleration announcement. The warrants are held by a small group of investors, and we expect most or all the eligible warrants to be exercised and lead to maximum proceeds for the company of $4.7-million (U.S.)."

According to the Illinois Department of Financial and Professional Regulation, Illinois reported over $1.6-billion (U.S.) in recreational cannabis sales in 2023. This included a new record for recreational cannabis sales in December, 2023, with $154-million (U.S.).

About Grown Rogue International Inc.

Grown Rogue International is a craft cannabis company operating in Oregon, Michigan, Minnesota, Maryland and New Jersey, focused on delighting customers with premium flower and flower-derived products at fair prices. The company's roots are in southern Oregon, where it has proven its capabilities in the highly competitive and discerning Oregon market. The company's passion for quality product and value, combined with a disciplined approach to growth, prioritizes profitability and return on capital without sacrificing quality. The company's strategy is to pursue capital efficient methods to expand into new markets, bringing craft-quality product at fair prices to more consumers. The company also continues to make modest investments to improve outdoor craft cultivation capabilities in preparation for eventual interstate commerce.

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