Mr. Philip Campbell reports

HERBAL DISPATCH REPORTS Q4 2025 GROSS SALES OF $6.2 MILLION, ACHIEVES POSITIVE ADJUSTED EBITDA, AND REPORTS FULL YEAR GROSS SALES OF $16.5 MILLION

Herbal Dispatch Inc. has released its financial results for the fourth quarter and year ended Dec. 31, 2025.

Q4 2025 highlights:

• Gross sales of $6.2-million, representing a 115-per-cent increase compared with $2.9-million in Q4 2024;
• Net revenue of $4.1-million (excluding excise taxes), up from $2.3-million in Q4 2024;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $100,000, compared with negative $600,000 in Q4 2024;
• Adjusted EBITDA of $200,000 excluding non-recurring costs related to investor relations and financing.

Full-year 2025 highlights:

• Gross sales of $16.5-million, representing a 37-per-cent increase compared with $12.1-million in 2024;
• Net revenue of $12.1-million (excluding excise taxes), up from $9.9-million in 2024;
• Adjusted EBITDA of negative $700,000, improved from negative $1-million in 2024;
• Gross margin improved to approximately 22.7 per cent in 2025, compared with 20.1 per cent in 2024, reflecting enhanced cost of goods efficiency, improved product mix and increasing scale across the company's platform, and the company expects continued improvement into 2026 as scale and operating leverage continues to increase.

Strategic momentum:

• Completed an oversubscribed non-brokered private placement, raising $2.1-million in October, 2025;
• Commenced trading on the OTCQB Venture Market under the ticker LUFFF subsequent to year-end.

Financial performance

For the three months ended Dec. 31, 2025, gross sales increased by 115 per cent to $6.2-million, compared with $2.9-million in Q4 2024. Net revenue, excluding excise taxes, increased to $4.1-million, compared with $2.3-million in the prior-year quarter. The increase was driven by higher sales volumes across both medical and recreational channels and continued growth within the company's e-commerce platform.

As of this period, the company's path to profitability is increasingly driven by expanding gross margins, with gross profit growing to $2.75-million in 2025 from $2-million in 2024, reflecting improved cost of goods sold efficiency and increasing operating leverage across the platform.

Gross profit improved in Q4 2025 as a result of increased scale and improving operating efficiencies. Cost of goods sold as a percentage of sales declined year over year, reflecting enhanced purchasing power, optimized product mix and improved supply chain execution. This expansion in gross margin is a key driver of the company's path to sustained profitability and operating leverage.

Adjusted EBITDA improved significantly in Q4 2025 to $100,000, compared with negative $600,000 in Q4 2024, driven primarily by increased scale and improved gross margins. Excluding certain non-recurring investor relations costs and professional fees related to the October, 2025, private placement, adjusted EBITDA for Q4 2025 would have been $200,000.

For the full year ended Dec. 31, 2025, adjusted EBITDA improved by 30 per cent to negative $700,000, compared with negative $1-illion in 2024, reflecting continued progress toward profitability.

Management commentary

"The fourth quarter of 2025 marked a major step forward for Herbal Dispatch as we delivered record quarterly gross sales and achieved positive adjusted EBITDA," said Philip Campbell, president and chief executive officer of Herbal Dispatch. "We have now achieved double-digit growth for the third consecutive year, reflecting the strength of our platform, our customer relationships, and our ability to expand across both Canadian and international markets.

"Looking ahead to 2026, our focus remains on scaling profitably, expanding our recreational footprint, growing medical sales -- particularly among veterans -- and accelerating export growth into federally legal international markets. With strong sales momentum and the added visibility of our OTCQB listing, we believe we are well positioned to create long-term value for shareholders."

Consolidated financial statements

The company's consolidated financial statements and management discussion and analysis for the year ended Dec. 31, 2025, are available on the company's profile on SEDAR+ and will also be posted on the company's website.

About Herbal Dispatch Inc.

Herbal Dispatch is a leading operator of cannabis e-commerce platforms in Canada, delivering quality medical and recreational products to discerning consumers at competitive prices. Its flagship marketplace has earned trust as a premier destination for exclusive access to small-batch craft cannabis and a wide selection of curated cannabis products. The company is also actively expanding through exports to international markets, positioning it for sustained growth and new revenue opportunities. The company's common shares trade on the Canadian Securities Exchange under the symbol HERB.

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