Mr. Oren Shuster reports

IM CANNABIS REPORTS 2023 FINANCIAL RESULTS

IM Cannabis Corp. has released its financial and operational results for the year ended Dec. 31, 2023, the highlights of which are included in this news release. All figures are reported in Canadian dollars. The company's full set of consolidated audited financial statements for the years ended Dec. 31, 2023 and 2022 (the "Annual Financial Statements") and accompanying management's discussion and analysis (the "Annual MD&A") can be accessed by visiting the company's website at https://investors.imcannabis.com/, and its profile pages on SEDAR+ at www.sedarplus.ca, and EDGAR at http://www.sec.gov/edgar.

FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2023

• Revenue decreased to $48.8 million for the fiscal year ended Dec. 31, 2023 (compared with $53.3 in 2022), representing a decrease of 10 per cent.
  • Primarily due to negative currency fluctuations and the impact of the Israel-Hamas war on the company's operations.
• Revenue decreased to $10.7 million for the three months ended Dec. 31, 2023 (compared with $14.5 million in 2022), representing a decrease of 26 per cent.
  • Primarily due to the interruption on the company's supply chain caused by the Israel-Hamas war and the company discounting certain outstanding inventory at lower prices.
• Gross profit increased to $9.8 million for the fiscal year ended Dec. 31, 2023 (compared with $9.2 million in 2022), representing an increase of 7.5 per cent
• Gross profit decreased to $0.8 million for the three months ended Dec. 31, 2023 (compared with $2.6 million in 2022), representing a decrease of 68 per cent
  • Primarily due to the interruption on the company's supply chain caused by the Israel-Hamas war and the company discounting certain outstanding inventory at lower prices.
  • The company's fair value adjustment was approximately $1 million for the fiscal year ended Dec. 31, 2023 (compared with $2.1 million in 2022).
• G&A expenses decreased to $11 million for the fiscal year ended Dec. 31, 2023 (compared with $21.5 million in 2022), representing an decrease of 49 per cent
• G&A expenses decreased to $3.3 million for the three months ended Dec. 31, 2023 (compared with $9.8 million in 2022), representing a decrease of 66 per cent
  • Primarily due to the impairment on Y2022 and restructuring and HC adjustments in 2023.
• Selling and marketing expenses decreased to $10.8 million for the fiscal year ended Dec. 31, 2023 (compared with $11.5 million in 2022), representing an decrease of 6 per cent
• Selling and marketing expenses decreased to $2.8 million for the three months ended Dec. 31, 2023 (compared with $3.1 million in 2022), representing a decrease of 10 per cent
  • Primarily due to a decrease in share based compensation payments and a restructuring of the company's personnel.
• Net Loss from continuing operations for the fiscal year ended Dec. 31, 2023 was $10.2 million, as compared with $24.9 million in 2022.
• Net Loss from continuing operations for the three months ended Dec. 31, 2023 was $3.5 million, as compared with a Net Loss of $9.6 million in the fourth quarter of 2022.
• Diluted Loss per Share for the fiscal year ended Dec. 31, 2023 was $0.74, compared with a loss of $3.81 per Share in 2022.
• Diluted Loss per Share for the three months ended Dec. 31, 2023 was $(0.25), compared with a basic loss of $)2.94( per share and a diluted loss of $)3.55( per share in for the three months ended Dec. 31, 2022.
• Cash and Cash Equivalents as of Dec. 31, 2023, was $1.8 million, compared with $2.4 million as of Dec. 31, 2022.
• Total assets were $48.8 million as of Dec. 31, 2023, compared with $60.7 million as of Dec. 31, 2022, representing a decrease of 20 per cent.
  • Primarily attributed to an inventory reduction of about $6.6 million, a reduction in other current assets of $1.8 million and a reduction of non-current assets of about $3.5 million.
• Total Liabilities were $35.1 million as of Dec. 31, 2023, compared with $36.9 as of Dec. 31, 2022, representing a decrease of about 5 per cent.
  • Primarily attributed to a reduction in trade payables of $6.1 million.
• Operating expenses decreased to $22.6 million for the year ended Dec. 31, 2023 (compared with $40 million in 2022), representing a decrease of 43 per cent
• Operating expenses decreased to $6 million for the three months ended Dec. 31, 2023 (compared with $13.3 million in 2022), representing a decrease of 55 per cent
• Adjusted EBITDA1 decreased to $8 million for the year ended Dec. 31, 2023, (compared with $11.5 in 2022), representing a decrease of 30 per cent
• Total Dried Flower sold in 2023 was approximately 8,609 kg with an average selling price of $5.14 per gram (compared with approximately 6,794kg, with an average selling price of $7.12 per gram in 2022).
  • Primarily due to increased competition within the retail segment and the company discounting certain outstanding inventory at lower prices.
• Total Dried Flower sold in the fourth quarter of 2023 was about 2,082kg with an average selling price of $4.52 per gram (compared with about 2,334kg with an average selling price of $5.19 per gram in 2022).
  • Primarily due to increased competition within the retail segment and the company discounting certain outstanding inventory at lower prices.

The Annual Financial Statements include a note regarding the company's ability to continue as a going concern. The Annual Financial Statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the company be unable to continue as a going concern. For more information, please refer to the "Liquidity and Capital Resources" and "Risk Factors" sections in the 2023 Annual MD&A.

Management Commentary

"IMC Germany delivered accelerated growth in 2023, growing 181 per cent from $252K in 2022 to $709K in 2023. During this time, IMC Germany was #1 in sales per stock keeping unit and posted the highest growth against its competitors in the German market.2 With the regulatory rescheduling of cannabis in Germany set to occur effective April 1 st, the company hopes to continue its growth in the market as the market evolves," said Oren Shuster, Chief Executive Officer of IMC. "In addition, as we are constantly looking for opportunities to maximize shareholder value, we are hopeful that our potential reverse merger with Israel-based Kadimastem Ltd., a clinical cell therapy public company traded on the Tel Aviv stock exchange under the symbol (TASE: KDST) will proceed as expected, which we believe will create significant value for the shareholders."

"As previously warned and as expected, unfortunately, the Israel-Hamas war had a negative impact on our fourth quarter 2023 results, which weighed on our full year results. Due to the ongoing conflict, there was a 6 per cent decrease in our yearly revenue. Coupled with our fourth quarter of 2023 inventory reduction, the war caused our fourth quarter gross profit to decrease by 68 per cent as compared with the fourth quarter of 2022. However, our gross profit for 2023 increased by 7.5 per cent to $9.8 million as compared with last year," said Uri Birenberg , Chief Financial Officer of IMC. "Partially offsetting these declines, we were able to reduce our operating costs in the fourth quarter of 2023 by 55 per cent as compared with the fourth quarter of 2022, ending the year with a 43 per cent reduction in our operating costs as compared with last year, as we leaned further into our goal of active cost management."

Conference Call

The company will host a Zoom web conference call today at 9:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Investors are invited to register by clicking here . All relevant information will be sent upon registration.

If you are unable to join us live, a recording of the call will be available on our website at https://investors.imcannabis.com/ within 24 hours after the call.

About IM Cannabis Corp.

IM Cannabis Corp. (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The company has exited operations in Canada to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the company strives to amplify its commercial and brand power to become a global high-quality cannabis player.

The IMC ecosystem operates in Israel through its commercial relationship with Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The company also operates medical cannabis retail pharmacies, online platforms and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients. Until recently, the company also actively operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries, where it cultivated, processed, packaged, and sold premium and ultra-premium cannabis at its own facilities under the WAGNERS and Highland Grow brands for the adult-use market in Canada. The company has exited operations in Canada and considers these operations as discontinued.

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