Mr. Paul Rosen reports

1933 INDUSTRIES REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS

1933 Industries Inc. has released its third quarter financial results for the nine months ended April 30, 2023, and 2022.

The company owns 91 per cent of Alternative Medicine Association (AMA), the company's cultivation and production subsidiary focused on the medical and adult-use cannabis market, and 100 per cent of consumer packaged goods manufacturer Infused MFG LLC. The company's revenue is derived from wholesale cannabis sales in Nevada and from the sale of hemp-derived wellness products under the Canna Hemp brand sold across the United States through e-commerce at the Canna Hemp website.

Q3 2023 consolidated operating highlights

The company recorded revenues of $4.1-million for Q3 2023 and $13.3-million year-to-date 2023, compared with $4.3-million for Q3 2022 and $9.9-million YTD 2022. During the reporting period, the company continued its retrofit and upgrade of the cultivation facility's irrigation piping system, which negatively impacted flower cultivation and yields. Despite the disruption in production, AMA improved revenues by 12 per cent from $3.6-million in its previous quarter in 2023. Improvements and maintenance to the building will continue into fourth quarter 2023.

Expenses were $1.8-million for Q3 2023 and $3.9-million YTD 2023, while expenses were $13.7-million for Q3 2022 and $18.7-million YTD 2022.

Gross margin was ($1.6-million) for Q3 2023 and a loss of $1-million YTD 2023. The decline in margins resulted from a change in the fair value of certain AMA inventories and from non-normalized expenses incurred by infrastructure upgrades.

Net loss was $3.4-million for Q3 2023, of which $2.5-million was non-cash charges from a net realizable value adjustment related to certain AMA inventories due to the renovation and upgrading of the company's cultivation facility. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was a loss of $2.8-million for Q3 2023. Cash at the end of the period was $1.7-million.

Management commentary

Paul Rosen, chairman and chief executive officer of 1933 Industries, commented: "I am pleased to report on the substantial completion of the upgrade of the irrigation and humidification systems in our cultivation facility. This infrastructure undertaking was a necessary step to increase production of high-quality flower and trim for our sought-after cannabis products, which are consistently ranked as top sellers in Nevada. The upgrade will continue into the current quarter and is important for our long-term growth. Despite the construction in progress, we increased our revenue from the previous quarter. Demand for the company's AMA products remains strong and has continued to accelerate into the current quarter."

Financial statements are prepared in accordance with international financial reporting standards. Detailed information regarding the company's financial results, as well as management's discussion and analysis, can be found at SEDAR and the company's website.

Please note the next financial release dates in accordance with the continuous disclosure schedule set out by the B.C. Securities Commission.

   2023 FINANCIAL RELEASE DATES        

Reporting quarter      Release date     

Q4/YE 2023            Nov. 28, 2023
Q1 2024                Jan. 1, 2024  
Q2 2024               April 2, 2024    
Q3 2024                July 2, 2024     
Q4/YE 2024            Nov. 28, 2024

About 1933 Industries Inc.

1933 Industries is a Nevada-based company, focusing on the cultivation and manufacturing of a large portfolio of cannabis consumer packaged goods in a variety of formats for both the wholesale and retail markets. Its product offerings through its in-house brands include: wholesale flower, prerolls, and extracted products under the AMA and Level X brands for the Nevada market, and Canna Hemp, a national cannabidiol brand of wellness products that includes tinctures, gummies, topicals and sports recovery products. The company owns 91 per cent of Alternative Medicine Association and 100 per cent of Infused.

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