Mr. Micah Anderson reports

LEEF BRANDS REPORTS FULL YEAR 2023 FINANCIAL RESULTS ALONG WITH FIRST QUARTER 2024 FINANCIAL RESULTS

Leef Brands, Inc. has released its audited financial statements for the year ended 2023 along with the interim financial statements for the three months ended March 31, 2024.

First quarter 2024 highlights:

• Net sales of $7.9-million, an increase of 35 per cent from the fourth quarter of 2023;

• Gross profit of $3.2-million, an increase of 26 per cent from Q4 2023;

• Gross margin of 40.6 per cent, an increase of 25 per cent from full year 2023;

• Adjusted earnings before interest, taxes, depreciation and amortization of $1.77-million, an increase of 347 per cent from Q4 2023.

Full year 2023 highlights:

• Net sales of $30.5-million, an increase of 13 per cent from full year 2022;

• Gross profit of $9.9-million, an increase of 4 per cent from full year 2022;

• Adjusted EBITDA of $1.64-million, an increase of 162 per cent from full year 2022.

Operational highlights:

• The company had record gross margins of 40.6 per cent in the first quarter of 2024;

• The company had $1.77-million in adjusted EBITDA in the first quarter of 2024;

• The company had positive cash flow from operations in both full year 2023 and the first quarter of 2024;

• The company reduced selling, general and administrative expenses by 36 per cent in 2023 versus 2022;

• The company is on track to plant the Salisbury Canyon Ranch in Q2 2024.

The company also provided an update to its previously announced cultivation project, the Salisbury Canyon Ranch, a 1,900-acre property located in Santa Barbara county with a 187-acre land use permit for cannabis cultivation.

"We have made substantial progress in relation to the construction of the farm," stated Micah Anderson, chief executive officer. "Our buildout is advancing steadily, and we are in close collaboration with county and state partners to ensure readiness for planting by late spring, targeting a fall harvest. This project will greatly improve upon our supply chain, reduce costs, enhance efficiencies and align our strategic goals for sustainable growth."

Management commentary

"I am proud of the team and their performance in the past year and specifically in this quarter," Mr. Anderson continued. "We've seen stronger margins and EBITDA in the first quarter of the year and believe Q1 results are the beginning signs of success stemming from the efforts to reduce redundancies after our merger with Icanic Brands. We're right on schedule for planting at Salisbury Canyon Ranch this spring. This project is not only expanding our operations but also building strong momentum for continued financial health and growth."

"We've achieved record gross margins of 40.6 per cent in Q1 2024, alongside positive cash flow from operations throughout 2023 and into the first quarter of 2024," added Kevin Wilson, chief financial officer. "These milestones are a testament to the Leef team's exceptional management of our supply chain and our commitment to partnering with high-quality customers. The dedication and strategic focus have been crucial in reaching these financial highs. As we move forward with our plans to plant at Salisbury Canyon Ranch, we're confident in our team's ability to sustain and build on this momentum throughout the year and into 2025."

The company has also announced the issuance of 15 million common shares at an average price of three cents per share to settle $450,000 (U.S.) of payables to a service provider.

Select financial highlights

Leef's full audited financial statements for the full year 2023 and the first quarter of 2024 are available on the company's website and under the company's profile on SEDAR+.

About Leef Brands Inc.

Leef Brands Inc. is a leading California-based extraction and manufacturing cannabis company, recognized for its large-scale vertical integration and as one of the state's most sophisticated operators. With a comprehensive supply chain, cutting-edge manufacturing processes, and a dynamic bulk concentrate portfolio, Leef powers some of the largest brands in California.

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