Mr. Jesse Redmond reports

LEEF BRANDS ANNOUNCES US$5.2 MILLION PREFERRED FINANCING TO PURCHASE PROCESSING FACILITY

Leef Brands Inc. has closed its oversubscribed financing previously announced on March 12, 2026, and May 11, 2026, bringing total gross proceeds raised across all closings of the financing to approximately $14.5-million (U.S.).

Proceeds from the financing will be used to purchase a cannabis processing and storage facility that will dry, cure, freeze and store biomass harvested at Salisbury Canyon Ranch before it is transported to Leef Labs in Mendocino county for extraction. The facility is expected to provide the capacity needed to support Salisbury Canyon Ranch today, accommodate the company's planned expansion to its fully permitted 180-acre cultivation footprint, and provide additional capacity when Leef expands cultivation to serve future interstate commerce and international export markets. In addition to supporting the company's cultivation operations, the facility has the potential to generate an additional revenue stream by providing processing and storage services for other cultivators.

"This financing represents another important milestone for Leef as we continue investing in the infrastructure needed to support our long-term growth strategy," said Micah Anderson, chief executive officer of Leef Brands. "Over the past two years, we've built one of California's premier low-cost cultivation platforms at Salisbury Canyon Ranch. Owning our own processing and storage facility is the next step in strengthening our vertically integrated supply chain, supporting the continued expansion of Salisbury Canyon Ranch and positioning Leef to capitalize on future opportunities in California, interstate commerce and international export markets."

In connection with the closing, the company issued an aggregate of 33,401,551 preferred shares -- Series 2 of the company (each, a Series A-2 share), each Series A-2 share convertible into one common share of the company at an initial conversion price of 25 U.S. cents per common share, subject to customary anti-dilution adjustments, comprising: (i) an aggregate of 12,601,551 Series A-2 shares issued as consideration for the cancellation of an aggregate of 11,204,376 preferred shares -- Series 1 of the company, including Series A-2 shares issued as one-time supplemental payment to the holders of Series A-1 shares in respect of the 40-day period from June 1, 2026, to July 10, 2026, during which such holders' Series A-1 shares were accruing dividends in favour of such holders, calculated on the same economic basis as the dividend rate applicable to the Series A-1 shares; and (ii) an aggregate of 20.8 million Series A-2 shares issued at a price of 25 U.S. cents per Series A-2 share, for gross proceeds of $5.2-million (U.S.).

Jamie Mendola, an insider of the company, participated in the exchange, which constitutes a related party transaction pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company relied on sections 5.5(a) and 5.7(1)(a) of MI 61-101 for an exemption from the formal valuation and minority shareholder approval requirements, respectively, of MI 61-101, as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Series A-2 shares acquired pursuant to the exchange by insiders under the financing exceeded 25 per cent of the company's market capitalization.

About Leef Brands Inc.

Leef Brands is a leading California- and New York-based extraction and manufacturing cannabis company. With a comprehensive supply chain, innovative manufacturing processes, a dynamic bulk concentrate portfolio and a growing line of branded products, Leef powers some of the largest cannabis brands in the United States.

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