Mr. Hugo Alves reports

AUXLY ANNOUNCES 14:1 SHARE CONSOLIDATION

Auxly Cannabis Group Inc. will complete a consolidation of the outstanding common shares in the capital of the company on the basis of 14 preconsolidation common shares to one postconsolidation common share. The consolidation was previously approved by the company's shareholders at its annual general and special meeting of shareholders on June 30, 2026. The board of directors subsequently approved a consolidation ratio of 14 preconsolidation common shares for one postconsolidation common share, which is within the range of ratios authorized by shareholders at the meeting.

Management commentary

"This is an important step forward for Auxly. We are one of the fastest-growing, most profitable operators in the Canadian cannabis sector, and we are effecting this consolidation from a position of strength to improve Auxly's market quality and align our capital structure with the business we have built. This is not a precursor to a financing or any other dilution as we have previously said and our actions under our standing NCIB program have shown. We are buyers of our shares, not issuers. Coming off a record year in 2025, our financial results continue to strengthen, our balance sheet is the strongest it has been in years and we have a disciplined framework for deploying capital where it can generate the highest returns for our shareholders. We are building to last, and our outlook is for continued growth in net revenue, profitability and cash flow generation," said Hugo Alves, chief executive officer of Auxly.

For a detailed commentary on the company's position with respect to the consolidation, refer to Auxly's first quarter 2026 letter to shareholders.

Additional details

Notice of the consolidation has been provided to the Toronto Stock Exchange. The common shares will continue to be listed on the TSX under the symbol XLY and in the United States under the symbol CBWTF. The common shares are expected to begin trading on a postconsolidation basis on the TSX on or about July 28, 2026. Following the consolidation, the new Cusip number for the common shares is 05335P703, and the new ISIN for the common shares is CA05335P7039.

As a result of the consolidation, the company's issued and outstanding common shares will be reduced from approximately 1,418,570,505 common shares to approximately 101,326,464 common shares (disregarding the treatment of any resulting fractional common shares). Each shareholder's ownership percentage in the company and proportional voting power remains unchanged after the consolidation, except for minor changes and adjustments resulting from the treatment of any resulting fractional common shares. The company will not be issuing fractional postconsolidation common shares. Where the consolidation would otherwise result in a shareholder being entitled to a fractional common share, the number of postconsolidation common shares issued to such shareholder will be rounded down to the nearest whole number of common shares.

The company's registered shareholders holding their common shares in certificated form will receive a letter of transmittal from Computershare Investor Services Inc., the company's transfer agent, in respect to the consolidation, which each registered shareholder will need to sign and complete. The letter of transmittal will contain instructions to registered shareholders on how to surrender the certificates representing their preconsolidation common shares and authorize Computershare to issue a direct registration advice(s) representing their postconsolidation common shares. The company's registered shareholders whose common shares are represented by a DRS will not be required to complete and sign a letter of transmittal, and a DRS statement representing their postconsolidation common shares will automatically be issued to those registered shareholders by Computershare.

Non-registered shareholders who hold their common shares through an intermediary such as a bank, trust company, securities dealer or broker should note that these intermediaries may have their own procedures for processing the consolidation, which may differ from those described above for registered shareholders. Non-registered shareholders who have questions should contact their intermediary for more information.

The exercise or conversion price and the number of common shares issuable under any of the company's outstanding convertible securities will be proportionately adjusted to reflect the consolidation in accordance with the respective terms thereof.

About Auxly Cannabis Group Inc.

Auxly is a leading Canadian consumer packaged goods company in the cannabis product market, headquartered in Toronto, Canada. Its mission is to help consumers live happier lives through quality cannabis products that they trust and love.

Its vision is to be a global leader of quality cannabis products.

We seek Safe Harbor.