Ms. Regina Costa reports

STEM HOLDINGS ANNOUNCES APPROVAL OF DEBENTURE REPRICING

Stem Holdings Inc. has received the approval of the holders of the 8.00 per cent unsecured convertible debentures of the company to amend the terms of the convertible debentures. As of the date hereof, a total principal amount of approximately $2.56-million (U.S.) of convertible debentures was outstanding.

The debentureholders have approved amendments to the terms of the convertible debentures to: (i) reprice the convertible debentures from the current conversion price of 10 Canadian cents per share of common stock of the company to one U.S. cent per common share; and (ii) permit the company to force the conversion of the principal amount of the then outstanding convertible debentures and any accrued and unpaid interest thereof at the new conversion price at any time in the sole discretion of the company.

The debenture amendments will be implemented pursuant to the terms of a supplemental indenture to be entered into between the company and Olympia Trust Company. A copy of the supplemental indenture will be available on the company's profile on SEDAR+.

The company intends to convert the entire principal amount of the convertible debentures and any accrued and unpaid interest thereon at the new conversion price on or around Dec. 1, 2023. Assuming the conversion of the entire principal amount of convertible debentures and any accrued and unpaid interest thereon at the new conversion price, approximately 264 million common shares will be issued, representing approximately 48.5 per cent the common shares outstanding following such conversion.

About Stem Holdings Inc.

Stem Holdings (OTCQB: STMH and Canadian Securities Exchange: STEM) is a leading omnichannel vertically integrated cannabis branded product and technology company with state-of-the-art cultivation, processing, extraction, retail, distribution and delivery-as-a-service operations throughout the United States. Stem Holdings' family of award-winning brands includes TJ's Gardens, TravisxJames and Yerba Buena flower and extracts, and Cannavore edible confections, and e-commerce delivery platforms provide direct-to consumer proprietary logistics and an omnichannel UX (user experience)/CX (customer experience).

We seek Safe Harbor.