Auxly Cannabis Group (XLY) investor relations material

Business and market position

• Focuses on cultivation and manufacturing of pre-rolls, dried flower and vapes, formats representing 85%-90% of monthly industry sales.

• Back Forty is Canada’s top cannabis brand by dollars sold; products reach every province and territory and 97% of retail locations.

• Holds ~8% of the total market as the second-largest producer by market share; Imperial Brands owns 19.9% and is a strategic partner.

• The executive team has more than 70 years of combined regulated-cannabis experience and has worked together since the startup phase.

Financial performance and capital allocation

• TTM through Q2: CAD 166M net operating revenue, CAD 51M EBITDA and CAD 47M cash flow.

• Q2 net revenue was CAD 45.8M, up 18% YoY; gross margin was 55% vs. 52% a year earlier.

• Q2 adjusted EBITDA was CAD 14.3M, up 24% YoY, with a 31% margin; operating cash flow was CAD 13.4M, up 31%, and EBITDA conversion was 94%.

• Cash is the primary KPI; organic growth is viewed as the best capital use, including a CAD 30M three-year capital program and distribution investments.

• Active under a standing NCIB; also evaluates acquisitions against strategic and return criteria and may strengthen the balance sheet.

Canadian and international markets

• Canadian cannabis market is projected to grow at an average ~5% annually through 2030, reaching CAD 7.4B; management expects faster growth from its brands and capabilities.

• International expansion is staged: shipments go to the U.K. and Israel, with Germany expected imminently; current activity tests product demand and counterparties.

• Management sees international markets as a long-term opportunity, but prioritizes Canadian returns and does not plan to rush; Imperial Brands may support expansion as markets mature.

• Germany is viewed as unlikely to be oversupplied near- to mid-term: cultivation facilities require over CAD 200M and roughly three years to build, while energy and labour costs are high.

• Canadian pricing is expected to remain robust near- to medium-term as demand rises and cultivation capacity remains finite.

• International sales currently use local distributors; longer-term, the goal is to retain more margin. Canadian anti-tied-house rules limit LP retail ownership and prohibit vertical integration.