Mr. Obie Strickler reports

GROWN ROGUE INCREASES OWNERSHIP OF MICHIGAN OPERATIONS

Grown Rogue International Inc. has increased ownership in its Michigan operations from 52.2 per cent to 80 per cent in two transactions for total consideration of $2.8-million (U.S.), with $200,000 (U.S.) paid in cash and $2.6-million (U.S.) paid by way of four-year seller notes.

The transaction details are as follows:

• Grown Rogue increased its ownership in Golden Harvests LLC, the entity that controls its Michigan operations, operating out of an 80,000-square-foot facility that contains approximately 15,000 square feet of flowering bench space.
• Canopy Management LLC holds a 60-per-cent interest in Golden Harvests and Canopy is 87 per cent indirectly owned by the company.
• The company purchased the total remaining minority interest in Canopy for $800,000 (U.S.), which includes a 20-per- cent down payment in cash and monthly payments for a period of four years with an interest rate of 5.2 per cent per annum.
• The company purchased 20 per cent of the minority interest in Golden Harvests for $2-million (U.S.), which includes minimum quarterly payments in cash for a period of four years.
• The transaction provides for a valuation of Golden Harvests at $10-million (U.S.).
• All payments owing to the sellers are expected to be completed with cash on hand and cash generated from operations.
• The company retains the option to acquire the remaining 20 per cent of Golden Harvests at a fair market valuation.

"We are excited to announce that we increased our ownership in Golden Harvests to 80 per cent. I would first like to thank Dave Pleitner for being such a great partner as we built the Michigan business together. Our relationship set the blueprint for how we use high-quality local partners to enter new markets, like we are currently doing in New Jersey and Illinois. We cannot stress enough the importance of having a boots-on-the-ground partner with real skin in the business to drive success at the local level. All future partnerships will be measured against the excellence and collaboration of this partnership, and we view this transaction as a true win-win for Dave and our shareholders," said Obie Strickler, chief executive officer of Grown Rogue.

"Michigan is such an important asset to our company because it was the first market we proved we could migrate our operational excellence from Oregon to additional markets. Michigan has been a tremendous market for us, and we are thrilled to own a larger piece of this strong business. Michigan still has approximately 25,000 square ft of facility that can be built out and we are in discussions to expand and optimize the additional capacity," continued Mr. Strickler.

According to the Michigan Cannabis Regulatory Agency, Michigan reported over $3-billion (U.S.) in cannabis sales in 2023, making it the second-largest cannabis market in the United States. In March, 2024, sales hit a new monthly record at $288.8-million (U.S.).

The minority interest in Golden Harvests is owned by Mr. Pleitner, an insider of the company, and 8 per cent of the interest in Canopy is owned by certain directors of the company. Such insider participation represents a related party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, but the transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the transaction, nor the consideration paid, exceed 25 per cent of Grown Rogue's market capitalization.

About Grown Rogue International Inc.

Grown Rogue 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.

We seek Safe Harbor.