Mr. Ed Schmults reports

STATEHOUSE ANNOUNCES CANADIAN PARENT ENTERS BANKRUPTCY PROCEEDINGS IN CANADA FOLLOWING INITIATION OF RECEIVERSHIP PROCEEDINGS IN THE U.S.

Statehouse Holdings Inc. has made an assignment into bankruptcy pursuant to Canada's Bankruptcy and Insolvency Act.

On Sept. 25, 2024, Pelorus Fund REIT LLC filed a complaint in the San Diego Superior Court seeking, among other remedies, that Statehouse and its various subsidiaries be placed into receivership. Additionally, Pelorus Fund REIT, Pelorus Fund LOC LLC and holders of a majority in principal amount of the company's 9.0 per cent secured notes due April, 2025, provided notices to the company that the company is in default of its payment obligations pursuant to certain loans advanced by the lenders to Statehouse and various subsidiaries of the company.

In connection with the receivership proceedings, the company and the lenders entered into a stipulation dated Oct. 9, 2024, for the appointment of a receiver to preserve the continuing operations of the business in California. Further updates regarding the receivership proceedings in the United States and the operations of the business in California will be provided in due course.

The difficult decision to commence the bankruptcy proceedings for the Canadian parent entity, Statehouse, was made following receipt of notice from the lenders after careful consideration of the current financial condition of the company and its subsidiaries, the company's inability to pay their liabilities as they become due, the receivership proceedings in the United States initiated by Pelorus Fund REIT and the months-long negotiations between the company, the lenders and various other secured creditors of the company.

Trading on the Canadian Securities Exchange has been halted, and the company anticipates that trading on the CSE will be suspended and that Statehouse will ultimately be delisted once the bankruptcy is initiated.

About Statehouse Holdings Inc.

Statehouse, a vertically integrated enterprise with cannabis licences covering retail, major brands, distribution, cultivation, nursery and manufacturing, is one of the oldest and most respected cannabis companies in California. Founded in 2006, its predecessor company Harborside was awarded one of the first six medical cannabis licences granted in the United States. Today, the company operates 11 dispensaries covering northern and Southern California, an integrated cultivation facility in Salinas, and manufacturing in Greenfield, Calif. Statehouse is a leading brand house in California by market share, with a diversified product across multiple brands, form factors and price points. Statehouse sells its six popular house brands to over 700 retailers across California, including the Kingpen, Dime Bag, Loudpack, Fuzzies, Sublime, Urbn Leaf and Smokiez lines of products. Statehouse is a publicly listed company, currently trading on the Canadian Securities Exchange under the ticker symbol STHZ and on the OTCQB under the ticker symbol STHZF. The company continues to play an instrumental role in making cannabis safe and accessible to a broad and diverse community of California and Oregon consumers.

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