Mr. Hugo Alves reports

AUXLY PROVIDES UPDATE ON STALKING HORSE BID FOR AYURCANN

Auxly Cannabis Group Inc.'s stalking horse bid for the assets of Ayurcann Holdings Corp. was not selected as the successful bid in the court-supervised sale process.

As previously disclosed, the stalking horse bid was submitted in the Ayurcann sale process concurrently with Auxly providing debtor-in-possession financing to Ayurcann in a principal amount of up to $2.0-million. The DIP facility is non-revolving, bearing interest at 12 per cent per annum, with a 2.0-per-cent upfront commitment fee earned and paid to the company upon execution. The DIP facility is secured by way of a court-ordered superpriority charge in favour of the company over all of Ayurcann's property.

Pursuant to the terms of the sales process, Auxly's bid has been selected as the "back-up bid" in accordance with the sale process rules and, should the successful bid not close by May 15, 2026, will be the winning bidder at its original stalking horse bid amount.

As part of the closing of the successful bid, the DIP facility will be repaid, including interest, by the successful bidder. Additionally, the break fee and expense reimbursement contemplated in the stalking horse bid will be paid to the company as part of the closing of the successful bid.

Hugo Alves, chief executive officer of Auxly commented: "Our stalking horse bid for Ayurcann was opportunistic in nature and contingent on exceeding our internal return thresholds. Our team will continue to pursue non-organic growth opportunities with vigilance where there is a strong strategic fit and, in the meantime, we can continue to focus on growing our business organically. We expect to generate significant free cash flow in 2026 and we are evaluating all our capital allocation alternatives to maximize shareholder value."

About Auxly Cannabis Group Inc.

Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto. Its mission is to help consumers live happier lives through quality cannabis products that they trust and love. The company's vision is to be a leader in branded cannabis products that deliver on a consumer promise of quality, safety and efficacy.

We seek Safe Harbor.