Mr. Edoardo Mattei reports

RED WHITE & BLOOM PROVIDES UPDATE ON EXISTING ALEAFIA HEALTH SECURED LOAN AND ANNOUNCES NEW DEBTOR-IN-POSSESSION FINANCING FOR ALEAFIA HEALTH

Red White & Bloom Brands Inc. is providing an update on the indebtedness of Aleafia Health Inc. and certain of its affiliates in connection with the loan agreement made as of Dec. 24, 2021, as amended on March 28, 2022, June 17, 2022, April 26, 2023, May 15, 2023, and May 31, 2023, and assigned to Red White on June 6, 2023.

Today, Aleafia announced that it has received an order from the Ontario Superior Court of Justice (commercial list) under the Companies' Creditors Arrangement Act (the CCAA), in order to restructure its business and financial affairs. The initial order approved, among other things, debtor-in-possession financing (DIP financing) to be provided by Red White to finance the Aleafia CCAA proceedings and other short-term working capital requirements pursuant to a term sheet between Red White and Aleafia dated July 24, 2023. Under the Aleafia DIP term sheet, Red White agreed to advance DIP financing in the amount of $6.6-million. The continued availability of the DIP loan is conditional upon, among other things, certain conditions being satisfied, including the initial order remaining in effect. A copy of the DIP term sheet will be filed on SEDAR+.

As noted in the joint press release of Red White and Aleafia dated July 14, 2023, Aleafia was in breach of certain covenants under the Aleafia senior secured loan agreement, and the previously announced proposed transaction between the parties had been mutually terminated. Red White did not waive any outstanding breaches and reserved all of its rights and remedies under the Aleafia senior secured loan agreement. Red White also provided a series of extensions and other accommodations under the Aleafia senior secured loan agreement.

After the close of markets yesterday, in light of Aleafia's financial position, Red White issued demand letters and notices to enforce security under Section 244 of the Bankruptcy and Insolvency Act and provided Aleafia with the aforementioned DIP loan to allow Aleafia to proceed with the Aleafia CCAA proceedings.

About Red White & Bloom Brands Inc.

Red White & Bloom is a multistate cannabis operator and house of premium brands in the U.S. legal cannabis sector. Red White is predominantly focusing its investments on the major U.S. markets, including Arizona, California, Florida, Massachusetts, Missouri and Michigan.

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