"We were able to pull off a successful crop at both sites"

In 2023 Christina Lake Cannabis identified a need to secure the supply chain of biomass and flower as part of a strategy to meet growing customer demand and allow for much needed product and customer diversification. To address that need, the Company acquired a new outdoor cultivation facility in Midway.

The remainder of the year was focused on preparing the facility and execution of the inaugural crop at the Midway facility. The total cultivation footprint increased by approximately 100 acres which was challenging in terms of resources required and there were many lessons learned. Despite those challenges the CLC team was able to successfully complete the 2024 harvest.

"The 2024 crop is in and I'm proud to share our progress. Our efforts have been focused on the successful execution of our expansion plan which now includes two cultivation sites. The purchase of the Midway property provided some great opportunities but was a big challenge as well. I am pleased to say that the team did a good job, and we were able to pull off a successful crop at both sites." said Christina Lake CEO Mark Aiken.

The planting style and density was different than the Christina Lake site with plants grown directly in ground. The total harvest from the Christina Lake and Midway sites yielded approximately 105,000 kilograms of combined weight in extraction grade biomass and flower. The increase in harvested mass contributed to the growth in inventory value as at November 30, 2024 by approximately 81% compared to the prior year. The increase in harvested mass required additional labour force and other resources for both the field preparation, planting, and fall harvest as evidenced in the increase in capitalized expenses which increased by approximately 100%. In addition to ongoing distillate production, the Company will be dedicating increased resources to grading and trimming flower to fulfill sales in 2025.

"To give a little context around those challenges, we had 5 times the cultivation footprint, preparation, and requirements to execute on our 2024 crop. We are pleased to have made this strategic move as it allows CLC to capitalize on the growing flower demand and secures our extraction input biomass needs in a time when external feedstock supply is constrained, and the cost of external input biomass continues to increase.

Last year CLC was required to purchase biomass from outside sources to supplement the previously announced approximate 38,000 kg's of biomass and flower harvested in 2023. With our expansion, we are no longer reliant on external feedstock sources." said CEO Mark Aiken.

As reported in the financial statements for the period ending November 30, 2024 the company increased revenue by approximately 16% with growth largely driven by products produced from external feedstock sources. Cost of Goods Sold only increased by approximately 1% and as a result, gross margin improved by approximately 7.9% from the comparative period in 2023. The improved margin was due to a shift in product mix with increased sales of higher margin products such as outdoor flower.

"We expect 2025 to be another strong year of growth underpinned by this year's solid harvest numbers." said CEO Mark Aiken.