Mr. Nirup Krishnamurthy reports

SCHWAZZE ANNOUNCES THIRD QUARTER 2023 FINANCIAL RESULTS

Medicine Man Technologies Inc., operating as Schwazze, has released financial and operational results for the third quarter ended Sept. 30, 2023.

Management commentary

"We continued to increase our retail footprint during the quarter to a total of 63 stores in Colorado and New Mexico while further integrating our recently acquired assets in both states," said Nirup Krishnamurthy, chief executive officer of Schwazze. "We also generated a 41-per-cent increase in our wholesale business year over year as we are gaining momentum in New Mexico and improved penetration in Colorado. When looking at wholesale penetration, Schwazze now sells into seven of the 10 largest operators in Colorado and New Mexico with its expanding product portfolio.

"In Colorado, we have increased efforts to expand our reach to medical patients through the Standing Akimbo banner with new presence in Colorado Springs and Fort Collins. We also opened a new Starbuds store in Lakewood in August and are seeing promising early results. Alongside new store openings, we are currently remodelling and/or relocating certain stores to further enhance the customer experience.

"In New Mexico, cannabis operators are navigating increased competition as a result of new licences. While legal cannabis sales in the state were up 19 per cent year over year in Q3, total store count was up 76 per cent, leading to lower revenue on a per-store basis. In response to these market dynamics, we are strategically investing in the retail experience and remain committed to attracting and retaining our customers and patients there. Our strategy is to, first, further integrate the Everest assets while refining assortment, in-stock position and standard costs from a combined integrated supply chain; second, invest in our leading retail position by bringing new products to our shelves while sharpening pricing and promotional efforts; third, support the state as it implements cannabis regulation and enforcement to heighten testing and safety standards; and finally, continue to expand our wholesale business in the state.

"As we look to 2024, our strategy remains unchanged: leverage our operating playbook and further integrate our acquired assets to drive customer acquisition and sales across our expanded footprint. We will continue to evaluate opportunities that can enhance our geographic footprint and brand portfolio."

Schwazze chief financial officer Forrest Hoffmaster added: "As we focus on revenue growth, customer acquisition and generating positive cash flow, we are also making steady progress on integrating our recent acquisitions to drive operational efficiencies and cost synergies at scale. In addition, we are in the process of optimizing our inventory through an ERP implementation across our cultivation and manufacturing facilities, which we expect will lead to one-time inventory valuation adjustments as we close out the year. These initiatives will enable us to recognize further improvements across our business as we continue to deepen our presence in the markets we serve."

Conference call

The company will conduct a conference call today, Nov. 14, 2023, at 5 p.m. Eastern Time, to discuss its results for the third quarter ended Sept. 30, 2023.

Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the company prior to the call by e-mailing ir@schwazze.com.

Date:  Tuesday, Nov. 14, 2023

Time:  5 p.m. Eastern Time

Toll-free dial-in:  888-664-6383

International dial-in:  416-764-8650

Conference ID:  64450430

Webcast:  SHWZ Q3 2023 earnings call

The conference call will also be broadcast live and available for replay on the investor relations section of the company's website.

Toll-free replay number:  888-390-0541

International replay number:  416-764-8677

Replay ID:  450430

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at 720-330-2829.

About Medicine Man Technologies Inc.

Schwazze (OTCQX: SHWZ) (NEO: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico, and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.

Schwazze is anchored by a high performance culture that combines customer-centric thinking and data science to test, measure and drive decisions and outcomes. The company's leadership team has deep expertise in retailing, wholesaling and building consumer brands at Fortune 500 companies, as well as in the cannabis sector.

Medicine Man was Schwazze's former operating trade name. The corporate entity continues to be named Medicine Man Technologies Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

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