Mr. Peter Bilodeau reports

HARBORSIDE INC. PROVIDES UPDATE ON TIMING OF FILING OF FINANCIAL STATEMENT

Harborside Inc. has provided an update regarding the filing of the company's audited annual financial statements and corresponding management's discussion and analysis for the year ended Dec. 31, 2019, as well as its restated annual financial statements for the years ended Dec. 31, 2017, and 2018, and the interim financial report and corresponding management's discussion and analysis for the period ended March 31, 2020.

Update on financial statement filings

The company continues to work diligently and expeditiously with its auditor to finalize the annual filings and the first quarter filings. As a result of the significant effort by the new finance team and progress to date, the company expects to complete the filing of the outstanding filings by the end of August, 2020. However, no assurance can be given that the anticipated timing of filing will be met due to the unprecedented impact of the COVID-19 pandemic on the company and its employees, the need for the company's auditor to complete its audit work, and the company's ability to rely on timely information in relation to its financial reporting obligations, among other things.

In the interim, the company continues to be subject to the previously disclosed cease trade order. The company expects trading to resume on the Canadian Securities Exchange shortly after the revocation of the CTO.

Update on executive compensation disclosure

The company continues to rely on the temporary blanket relief provided by the Canadian Securities Administrators under Ontario Instrument 51-504 (Temporary Exemptions from Certain Requirements to File or Send Securityholder Materials) of the Ontario Securities Commission to postpone the public filing of its executive compensation disclosure until such time as it is filed and delivered to shareholders as part of the company's information circular relating to its 2020 annual meeting of shareholders. The company will provide further information on its annual meeting when an appropriate date has been determined.

Management commentary

"There has been an overabundance of speculation in the markets as to the reasoning for the CTO, and we understand the concerns. We expect that the impact of the restatement on the 2017 and 2018 annual financial statements is primarily non-operating in nature and relates solely to accounting changes made to previously disclosed transactions. The restatement of the 2019 quarterly statements is primarily due to a business combination that must be accounted for as an acquisition under [international financial reporting standard] 3 and the quantum reserved in relation to the provision for taxes purported to be owing. While the ongoing COVID-19 pandemic has presented numerous challenges to the global community, Harborside included, the underlying fundamentals of our business remain very strong," said Peter Bilodeau, chairman and interim chief executive officer of Harborside. "I'm proud of the sequential growth in revenue we have achieved, which together with the strategic and operational initiatives we have implemented, are expected to drive sustained, long-term improvement in our profitability."

Mr. Bilodeau continued, "I'd like to reassure our shareholders that our team has continued to work expeditiously with our auditors to complete all past due reporting, including finalizing our fiscal 2019 and Q1 2020 filings, as well as the restatement of our 2017 and 2018 results, which we anticipate will be completed prior to the end of August, 2020."

About Harborside Inc.

Harborside is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California's only cannabis drive-through window, a dispensary in Oregon and a cultivation facility in Salinas, Calif. Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers. Co-founded by Steve DeAngelo and dress wedding in 2006, Harborside was awarded one of the first six medical cannabis licences granted in the United States.

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