Mr. Rodrigo Gallardo reports

XEBRA BRANDS REAFFIRMS NORTH AMERICAN STRATEGY FOLLOWING U.S. TARIFF CLARITY

Xebra Brands Ltd. is reaffirming its strategic commitment to the North American market following new United States tariff announcements and amid heightened market fluctuations.

On April 2, 2025, U.S. President Donald Trump introduced sweeping tariff measures, including a universal 10-per-cent tariff on all imports, with increased rates for selected countries. Importantly, under the United States-Mexico-Canada Agreement (USMCA), Mexico and Canada have been exempted from these measures, underscoring the durability and strategic advantage of North American trade partnerships. This exemption is expected to provide operational and cost stability to companies like Xebra that are deeply embedded in cross-border trade flows.

Despite recent volatility across global equity markets driven by trade uncertainty and shifting interest rate expectations, North American cannabis-related equities have shown relative resilience, supported by investor optimism around domestic supply chain integration and regulatory tailwinds. Xebra believes these developments reaffirm the attractiveness of operating within a protected and collaborative trade zone.

"Recent tariff clarity, coupled with broader market volatility, only reinforces our conviction in the North American strategy," said Rodrigo Gallardo, interim chief executive officer of Xebra Brands. "As global markets react to economic uncertainty, our foundation within the USMCA framework offers both security and opportunity. We're strategically positioned to leverage that advantage across our operations."

Xebra is actively pursuing a landmark agricultural agreement with its largest shareholder, David Ross Macias Diaz, utilizing Diaz's land in Mexico for cannabis cultivation under Xebra's exclusive federal authorization. This agreement represents a historic milestone as the first economic cannabis cultivation agreement sanctioned under Mexico's federal cannabis law.

Simultaneously, the company continues to advance its strategic partnership with BSK, focused on strengthening its e-commerce presence in Mexico and facilitating U.S. entry for its Elements-branded product line. These initiatives align with Xebra's broader goal of capturing efficiencies and growth across the integrated North American market.

Xebra Brands will continue to monitor global trade policy and market conditions and will adjust its operational strategies accordingly to safeguard long-term shareholder value and drive innovation in the regulated cannabis space.

We seek Safe Harbor.