Cannara Biotech (LOVE) investor relations material

Strategic positioning and operational highlights

• Vertically integrated operations across two Quebec facilities totaling 1.6 million sq. ft. enable full control from cultivation to distribution, supporting premium product quality and cost leadership.

• Achieved a 26% increase in production capacity over the past year without additional capital costs, with the ability to double annual output to 100,000 kg using existing assets.

• Quebec market leadership is reinforced by a 12.8% share, up 32% year-over-year, and dominance in infused pre-rolls and premium vapes nationally.

• Five vapes approved for Quebec’s new category launch in November, securing 20% of retail shelf space and leveraging a 23% national vape market share.

• Brand portfolio includes Tribal (exclusive genetics), Nugs (trend-driven, value), and Orchid CBD (Canada’s top CBD flower), each targeting distinct consumer segments.

Financial performance and capital management

• Posted $80 million net revenue and $32.7 million gross profit in the first nine months of 2025, already surpassing prior year’s full results.

• Gross margin reached 41% year-to-date, with adjusted EBITDA of $20.7 million (26% margin) and net income up 53% to $9.8 million.

• Generated $17.2 million in operating cash flow and $12.3 million in free cash flow in nine months, with cash balance rising to $14.4 million and working capital at $49.4 million.

• Reduced term debt from $34 million to $28.5 million through asset sales and repayments, and secured a $10 million credit facility upsize for 2026 CAPEX.

• Interest rates on debt lowered to below 6% after renegotiating credit agreements, saving $375,000 annually.

Growth initiatives and competitive advantages

• $10 million investment in a new processing center at Valleyfield will unlock additional grow rooms, supporting scalable expansion to 100,000 kg annual capacity.

• Expansion is highly capital efficient, with new rooms generating strong returns and leveraging existing teams and SOPs for operational consistency.

• Quebec’s low electricity rates ($0.059/kWh) and high entry barriers provide a cost and market advantage, enabling disruptive pricing and strong margins.

• Focus on proprietary genetics, pheno-hunting, and continuous SOP refinement drives yield and quality improvements, supporting margin resilience against market oversupply.

• Over 50% insider ownership and a tight shareholder float align management with long-term value creation.