Mr. Marc Lustig reports

PHARMACIELO ANNOUNCES Q2 2023 FINANCIAL RESULTS

Pharmacielo Ltd. has released its financial results for the second quarter ended June 30, 2023.

Management commentary

Marc Lustig, chairman and chief executive officer of Pharmacielo, commented: "Our sales and finance teams have made measurable progress, and I expect these efforts to continue to pay off over the next several quarters. From a sales perspective, we are getting more opportunities with large global customers than ever before, as weaker players exit the marketplace or fail to deliver on the quality and consistency required by these institutional-calibre entities. Alongside these steady initiatives to drive the top line, our finance team has delivered on our targeted 25-per-cent reduction in ongoing overhead expenses ahead of budget, and with no meaningful impact to our ability to execute on existing contracts and go out and win new ones. As one of the largest single investors in this company, I strongly believe that the initiatives we have under way will result in meaningful growth in the top line, and with all material capex behind us, will translate into cash flow and growth in shareholder value."

For further detailed information and analysis, please see the financial statements and management's discussion and analysis for the period ending June 30, 2023, as posted on SEDAR+ and the company's website.

Summary of recent developments:

• On July 11, 2023, Pharmacielo announced that Marc Lustig had been appointed chairman and chief executive officer of the company. Mr. Lustig has a proven history of value creation across the cannabis, capital markets and health sciences sectors.
• As announced in the company's Aug. 10, 2023, news release, Pharmacielo's sales team continues to make progress with new and existing customers. Notable upcoming catalysts include the company's first shipment to its third Brazilian customer, expected to take place during Q4 2023, and continuing shipments of THC-dominant (tetrahydrocannabinol) dried flower to a customer in Germany.
• The company is on track to achieve its objective of operating efficiently with a specific goal of lowering overhead expenses by 25 per cent compared with 2022 levels. In Q1 2023, overhead expenses were 20 per cent below the prior-year period and in Q2 2023 overhead expenses were 25 per cent below the prior-year period. As a result of the efforts of the management to right-size the company, the number of employees is now 132 from a high of 450 in 2021 and 331 at the end of 2022, with no meaningful impact on Pharmacielo's ability to execute on existing and new contracts.

The company defines overhead expenses as: consulting fees, office and general expenses, professional fees, salaries and wages, and travel and accommodation expenses.

Non-brokered private placement of debenture units

In the 2023 year to date, the company raised $3.28-million, as part of its previously announced non-brokered private placements, consisting of an aggregate of 3,280 debenture units. The units were issued at a price of $1,000 per unit for aggregate proceeds of $3.28-million. To date, since its announcement of the offering, the company has raised $14,075,000 principal amount of units. As disclosed in the company's news release dated June 29, 2023, the company intends to use the proceeds from the sale of the units for operations, working capital and the buildout of its international sales program.

About Pharmacielo Ltd.

Pharmacielo is a global company, headquartered in Canada, with a focus on ethical and sustainable cultivating, processing and supply of all natural, pharmaceutical-grade medical dried cannabis flower and cannabis products to large channel distributors. Pharmacielo's principal (and wholly owned) subsidiary is Pharmacielo Colombia Holdings S.A.S., headquartered at its cultivation and processing centre located in Rionegro, Colombia.

The board of directors and executive team of Pharmacielo comprise a diversely talented group of international business executives and specialists with relevant and varied expertise. Pharmacielo recognized the significant role that Colombia's ideal location plays in building a sustainable business in the medical cannabis industry and the company, together with its directors and executives, is executing on a business plan focused on supplying the international marketplace.

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