Mr. Tim Conder reports

TILT HOLDINGS REPORTS FIRST QUARTER 2023 RESULTS

Tilt Holdings Inc. has released its financial and operating results for the three months ended March 31, 2023. All financial information is reported in United States dollars and prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) unless otherwise indicated.

"In my first few weeks as the interim CEO, I have had the pleasure of visiting some of our current and future operational sites -- engaging with our employees and speaking directly with our customers," said interim chief executive officer Tim Conder. "I am encouraged by the passion I have encountered and the excitement about Tilt's future."

Mr. Conder continued: "Looking ahead, I will be working closely with our team to sharpen our focus on operational excellence. We expect to optimize our operations, instill frugality as a core value and hold ourselves and our team to high levels of accountability. Our responsibility to our stakeholders -- employees, customers, partners and shareholders -- is paramount."

Q1 2023 financial summary

• Revenue was $42.3-million in the three months ended March 31, 2023, compared with $42.4-million in the prior-year period.
• Gross profit was $8.8-million in the three months ended March 31, 2023, or approximately 20.8 per cent of revenue, compared with $9.4-million or approximately 22.1 per cent of revenue in the prior-year period. The decrease in gross profit and gross margin was primarily due to price compression in the Massachusetts cannabis market, partially offset by an increase in gross profit and margin in the company's inhalation business driven primarily by lower costs of goods.
• Net loss improved to $4.9-million in the three months ended March 31, 2023, compared with a net loss of $11.6-million in the prior-year period. The improvement was primarily driven by an $8.4-million gain from the previously announced sale leaseback transaction for the company's Pennsylvania cultivation and manufacturing facility.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (non-GAAP (generally accepted accounting principles)) was $(79,000) in the three months ended March 31, 2023, compared with $1.5-million in the prior-year period. The decrease was driven by lower gross profit, higher general and administrative expenses, and increased retail headcount in Massachusetts.
• At March 31, 2023, the company had $5.2-million of cash, cash equivalents and restricted cash compared with $3.5-million at Dec. 31, 2022. Total net debt at March 31, 2023, was $48.9-million compared with $59.7-million at Dec. 31, 2022.

Recent financing update

• In March, 2023, the company announced it amended its existing revolving credit facility to increase credit availability, improve terms and extend the maturity date.
• In February, 2023, the company announced a series of transactions that alleviated its near-term debt maturity and further reduced its non-revolving debt.
• In conjunction with the issuance of the amended and restated notes in February, 2023, the company also completed a sale-leaseback transaction for its Pennsylvania cultivation and manufacturing facility for approximately $15-million.

Q1 2023 operational highlights

• Launched Coda Signature, a leading cannabis industry chocolatier, in the Massachusetts market.
• Introduced Black Buddha Cannabis, social impact driven cannabis wellness brand, in the Pennsylvania market.
• Announced a licensing agreement to bring new patented stackable cartridge technology ThredzTM, to market through subsidiary Jupiter Research LLC.

Recent operational highlights

• Appointed Tim Conder, board member and former president and chief operating officer of the company, as interim chief executive officer, and Mark Scatterday, founder of Jupiter and former chief executive officer of the company, as senior adviser focused on the company's inhalation business.

Earnings call and webcast

Tilt management will host a conference call today at 5 p.m. Eastern Time to discuss its financial and operational results. There will not be a question-and-answer period.

Date:  Monday, May 15, 2023

Time:  5 p.m. Eastern Time

Toll-free dial-in number:  888-886-7786

International dial-in number:  416-764-8658

Conference ID:   19884450

Webcast:   Tilt Q1 2023 earnings call

Please call the conference telephone number five to 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Elevate IR at 720-330-2829.

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

About Tilt Holdings Inc.

Tilt helps cannabis businesses build brands. Through a portfolio of companies providing technology, hardware, cultivation and production, Tilt services brands and cannabis retailers in regulated markets across 39 states in the United States, as well as Canada, Israel, South America and the European Union. Tilt's core businesses include: Jupiter Research LLC, a wholly owned subsidiary and leader in the vaporization segment focused on hardware design, research, development and manufacturing; Commonwealth Alternative Care Inc. in Massachusetts; Standard Farms LLC in Pennsylvania; Standard Farms Ohio LLC in Ohio; and its partnership with the Shinnecock Indian nation in New York. Tilt is headquartered in Phoenix, Ariz.

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