Cannara reports record Q3 revenues and expanded national distribution

Delivered strong Q3 financial results:  Generated $31.8 million in total net revenues, $13.4 million in gross profit before fair value adjustments, or 42% of revenues, $8.5 million in adjusted EBITDA 1 , and $5.7 million in operating cash flow. Expanded national distribution and retail penetration: Cannara products exceeded 49,000 points of distribution as of June 2026 and represented an estimated 3.3% of total cannabis product retail listings nationally, up from 3.1% during Q3 2026, 3.0% in Q2 2026 and 2.9% in Q1 2026 2 , while estimated national retail market share remained at 4.4% in Q3 2026 3 , demonstrating continued outperformance relative to product listing penetration. Accelerated cultivation capacity expansion: Activated two additional grow zones at the Valleyfield facility in Q3 2026, bringing total zones in production to 14 of 24 and increasing current annualized production capacity to over 58,000 kg.

The Company expects to activate four additional grow zones in fiscal 2027, increasing projected annual production capacity to approximately 75,000 kg and reaching this targeted capacity approximately one year ahead of the original fiscal 2028 timeline. All financial results are reported in Canadian dollars, unless otherwise stated. MONTREAL, July 15, 2026 (GLOBE NEWSWIRE) -- Cannara Biotech Inc. (“ Cannara ”, “the Company ”, “ us ” or “ we ”) ( TSX: LOVE ) ( OTCQX: LOVFF ) ( FRA: 8CB0 ), a vertically integrated producer of premium-grade cannabis products at affordable prices with two mega facilities based in Québec spanning over 1,600,000 sq. ft., today announced its financial and operating results for the fiscal quarter ended May 31, 2026.

The condensed interim consolidated financial statements and related notes thereto and the accompanying Management’s Discussion and Analysis can be accessed by visiting the Company’s website at investors.cannara.ca , or by accessing the Company’s SEDAR+ profile at www.sedarplus.ca . The Company’s latest investor presentation is available at www.cannara.ca/investors/investor-deck/ . Management Commentary: "The third quarter demonstrated the depth and resilience of our business, with gross cannabis revenues rising 16% year-over-year to a record $44.1 million while we maintained profitability, expanded our national distribution footprint and continued to strengthen Cannara’s operating platform.

Beyond our core operations, we advanced several strategic priorities, including completing the acquisition of Medican Organic Inc., securing exclusive Canadian rights to Blue River’s proprietary Ampersand™ live rosin infusion technology, and entering our first long-term international supply agreement with Curaleaf. Together with the acceleration of our cultivation capacity expansion, these milestones support Cannara’s next phase of disciplined, profitable growth," commented Zohar Krivorot, Founder and Chief Executive Officer of Cannara. "Cannara delivered another quarter of profitable growth, generating $31.8 million in total net revenues, $13.4 million in gross profit before fair value adjustments at a 42% margin, and $8.5 million in adjusted EBITDA, up 11% year-over-year.

We remained profitable with net income of $4.8 million and generated $5.7 million in operating cash flow. While free cash flow reflected continued capital investment in the Valleyfield expansion, these investments are designed to expand processing capacity, support future grow-zone activations and unlock the next phase of growth while maintaining the financial discipline that underpins our profitability," said Nicholas Sosiak, Chief Operating Officer and interim Chief Financial Officer of Cannara. Q3 2026 EARNINGS WEBCAST Cannara Biotech Chief Operating Officer and Interim Chief Financial Officer Nicholas Sosiak will host an earnings webcast on  Wednesday, July 15, 2026 , at 11:00 AM ET , consisting of prepared remarks followed by a question-and-answer session.

Participants may register to attend the earnings webcast via a webcast link or via local dial-in as follows: Investors are encouraged to submit questions by email in advance to investors@cannara.ca . For interested individuals unable to join, the event will be archived on the company’s website. Q3 2026 FINANCIAL HIGHLIGHTS Q3 2026 vs Q3 2025 Comparable Period Highlights Gross cannabis revenues before excise taxes increased to $44.1 million in Q3 2026 from $37.8 million in Q3 2025, a $6.2 million, or 16%, increase.

The increase was driven by deeper market penetration in existing markets, product innovation and expanded product formats that contributed to overall sales growth; Total revenues, net of excise taxes, increased to $31.8 million in Q3 2026 from $27.3 million in Q3 2025, a $4.5 million, or 16%, increase; Gross profit before fair value adjustments increased to $13.4 million in Q3 2026 from $12.1 million in Q3 2025. This growth was driven by higher sales volumes and expanded production capacity following the activation of the 11th and 12th grow zones in fiscal 2025; Gross profit before fair value adjustments as a percentage of revenue was 42% in Q3 2026 compared to 44% in Q3 2025. The slight decrease in gross profit before fair value adjustments as a percentage of revenue was primarily attributable to product mix.

The Company continues to invest in cultivation and post-processing initiatives intended to improve yield, product quality and transformation costs while remaining competitive in the market; Operating income was $7.4 million in Q3 2026, compared to $6.8 million in Q3 2025, driven by higher revenues while maintaining gross margin and controlling operating expenses; Income before income taxes was $6.9 million in Q3 2026, up 19% from $5.8 million in Q3 2025; Net income was $4.8 million in Q3 2026, compared to $4.1 million in Q3 2025; Adjusted EBITDA 4 increased by 11%, from $7.6 million in Q3 2025 to $8.5 million in Q3 2026; The Company generated operating cash flow of $5.7 million in Q3 2026, compared to $13.9 million in Q3 2025, with the prior-year period benefiting from the timing of cash receipts and payments; Free cash flow 4 was $1.3 million in Q3 2026, compared to $11.7 million in Q3 2025, primarily reflecting higher capital expenditures related to the ongoing Valleyfield Facility construction project; Generated earnings per share of $0.05 in Q3 2026 compared to $0.05 in Q3 2025. Q3 2026 YTD vs Q3 2025 YTD Highlights Gross cannabis revenues before excise taxes rose to $123.7 million for Q3 2026 YTD, compared to $109.5 million in the same period in 2025, an increase of $14.2 million, or 13%. This growth demonstrates the continued success of the Company’s commercial and operational initiatives, including deeper market penetration across existing provinces, expansion into new markets and continued enhancement of its product portfolio through new genetics and innovative SKUs; Total revenues, net of excise taxes, increased to $89.1 million in Q3 2026 YTD from $79.0 million in Q3 2025 YTD, a $10.1 million, or 13%, increase; Gross profit before fair value adjustments increased to $38.5 million in Q3 2026 YTD from $32.7 million in Q3 2025 YTD, a $5.8 million, or 18%, increase, attributable to increased production capacity, operating scale and continued improvements across cultivation and post-processing; Gross profit before fair value adjustments as a percentage of revenue was 43% in Q3 2026 YTD, compared to 41% in Q3 2025 YTD, reflecting the scalability of the Company’s operating model, continued operational efficiencies and effective cost management; Operating income was $13.3 million in Q3 2026 YTD, compared to $16.9 million in Q3 2025 YTD.

The decrease was primarily attributable to higher non-cash share-based compensation expense of $2.7 million, together with increased investments in sales and marketing to support continued revenue growth and market expansion; Net income was $7.5 million in Q3 2026 YTD compared to $9.8 million in Q3 2025 YTD; Adjusted EBITDA 5 increased by 13%, from $20.7 million in Q3 2025 YTD to $23.3 million in Q3 2026 YTD; The Company generated operating cash flow of $16.6 million in Q3 2026 YTD compared to $17.2 million in Q3 2025 YTD; Free cash flow 5 decreased to $4.3 million in Q3 2026 YTD from $12.3 million in Q3 2025 YTD, primarily reflecting increased capital expenditures related to the ongoing construction of the Company’s Valleyfield facility; Generated earnings per share of $0.08 in Q3 2026 YTD compared to earnings per share of $0.11 in Q3 2025 YTD. Q3 2026 vs Q2 2026 Quarter over Quarter (“QoQ”) Highlights Gross cannabis revenues before excise taxes increased by 17%, from $37.8 million in Q2 2026 to $44.1 million in Q3 2026. The increase reflects the seasonal recovery in consumer demand following the post-holiday slowdown experienced in the prior quarter, together with continued growth in both the retail and B2B channels; Total revenues, net of excise taxes, increased by 17% from $27.2 million in Q2 2026 to $31.8 million in Q3 2026; Gross profit before fair value adjustments was $13.4 million in Q3 2026, up 16% QoQ, primarily due to higher sales in the quarter; Gross profit before fair value adjustments as a percentage of revenue remained stable at 42% in Q3 2026 compared to 43% in Q2 2026.

The Company’s ability to maintain a consistently strong gross margin while continuing to scale its operations reflects the benefits of ongoing investments in cultivation, manufacturing efficiencies and product mix optimization; Operating income increased to $7.4 million in Q3 2026 from $3.3 million in Q2 2026, reflecting stronger operating performance driven by higher revenues and continued margin generation. The increase was also supported by a higher unrealized fair value adjustment on biological assets following the opening of two additional cultivation rooms during the third quarter of 2026; Net income was $4.8 million in Q3 2026 compared to net income of $1.7 million in Q2 2026; Adjusted EBITDA 5 increased by $2.5 million to $8.5 million in Q3 2026; Cash from operating activities was $5.7 million in Q3 2026, up from $2.9 million in Q2 2026, driven by net changes in working capital items; Free cash flow 5 for Q3 2026 was $1.3 million compared to negative $0.3 million in Q2 2026. The $1.6 million variance reflects the increase in cash flows from operations while supporting capital expenditures related to the Valleyfield Facility.

Q3 2026 OPERATIONAL HIGHLIGHTS Product innovation and distribution platform momentum Cannara continued to advance its innovation strategy in Q3 2026, with new launches across dried flower, pre-rolls, infused pre-rolls, vapes, concentrates and CBD formats. The quarter was highlighted by the continued scaling of Nugz Flavour Bomb, which expanded across infused pre-roll and liquid diamond vape formats and now ranks among Ontario’s top three best-selling infused pre-roll multipacks 6 . Flavour Bomb also leads the segment in sales per SKU, generating nearly six times the category average in retail sales with only three SKUs, underscoring Cannara’s ability to create differentiated, high-velocity product platforms.

Additional launches included new Tribal formats across Gran Turismo, Porto Leche, Neon Sunshine and Bubble Up, as well as the launch of Nugz Great Buy OZ dried flower in a 28 gram format and Orchid’s Jean Guy CBD across dried flower, pre-rolls and flower sticks. Expanding Distribution and Maintaining Strong Market Share Across Canada As of the date of the MD&A, Cannara products exceeded 49,000 points of distribution and represented an estimated 3.3% of total cannabis product retail listings nationally, compared to 3.1% in Q3 2026, 3.0% in Q2 2026 and 2.9% in Q1 2026 7 . This increasing retail penetration, together with Cannara’s estimated national retail market share of 4.4% in Q3 2026 8 , reflects continued outperformance relative to product listings and a strengthening presence in the Canadian cannabis market.

In Ontario, Canada’s largest and most competitive cannabis market, Cannara’s estimated retail market share increased to 3.5% in Q3 2026 and reached 3.7% in June 2026, while Alberta reached a record 2.9% estimated retail market share in June 2026, highlighting continued progress in expanding beyond the Company’s Québec leadership position 9 . Q3 2026 vs Q2 2026 Market Share 8 The table below presents the Company’s market share for the most recent completed quarter in comparison to the previous quarter, with QoQ changes expressed in percentage points (“pp”): Q3 2026 vs Q3 2025 Market Share 10 The table below presents the Company’s market share for the most recent completed quarter compared to the corresponding quarter in the prior year, with year over year (“YoY”) changes expressed in percentage points: Advancing Cannara's Vertically Integrated Platform Through Strategic M&A and Partnerships During and subsequent to Q3 2026, Cannara advanced several operational and strategic milestones that strengthen its vertically integrated platform and position the Company for continued domestic and international growth. In May 2026, Cannara completed the acquisition of all shares of Medican Organic Inc., a wholly owned subsidiary of BZAM Ltd., for an aggregate purchase price of $2.8 million, finalizing the Company's prior acquisition of its Valleyfield cultivation and manufacturing facility, originally purchased from Medican in June 2021, and completed following Medican's exit from proceedings under the Companies' Creditors Arrangement Act (" CCAA ").

As part of the acquisition, the Company recognized an identifiable intangible asset of $2.7 million, which related to intellectual property acquired by the Company. In July 2026, the Company secured an exclusive agreement with Blue River of Florida, LLC (" Blue River "), granting Cannara exclusive Canadian rights to manufacture and commercialize Ampersand™ infused live rosin ingestible products using Blue River's proprietary infusion technology, with first products expected to launch under the Nugz brand in 5-gram containers containing 500 mg of THC, subject to applicable regulatory approvals and provincial listing processes. In July 2026, Cannara also entered into its first long-term international supply agreement with Curaleaf International Limited (" Curaleaf ") for the production and supply of bulk cannabis flower destined for international markets, commencing August 1, 2026.

The Agreement, if fully realized, has a potential aggregate contract value of up to C$21 million over the term of the Agreement, based on committed supply volumes and the terms and conditions of the Agreement. As part of the agreement, Curaleaf will support Cannara's pursuit of EU-GMP certification of its processing centre at the Valleyfield facility. FINANCING Interest rates : As of May 31, 2026, the Company had achieved a weighted average interest rate of 4.88% across its debt facilities.

Capital draws: During Q3 2026, the Company drew $2.0 million under its $10.0 million credit facility, which was secured to finance the construction of the new post-processing centre at the Valleyfield Facility. CAPITAL TRANSACTIONS Share options: Subsequent to quarter-end, the Company granted 40,000 share options to employees at an exercise price of $1.90 per share, vesting over four years and expiring after ten years. SELECTED FINANCIAL HIGHLIGHTS NON-GAAP MEASURES AND OTHER FINANCIAL MEASURES The Company reports its financial results in accordance with International Financial Reporting Standards (“ IFRS ”).

Cannara uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures are not calculated in accordance with IFRS. National Instrument 52-112 respecting Non-GAAP and Other Financial Measures Disclosure (“ NI 52-112 ”) prescribes disclosure requirements that apply to the following types of measures used by the Company: (i) non-GAAP financial measures (ii) non-GAAP and other supplementary financial ratios and (iii) total of segments measures.

In this news release, the following non-GAAP measures, non-GAAP and other supplementary financial ratios and segment measures are used by the Company are used by the Company: adjusted EBITDA, free cash flow, working capital, segment gross profit before fair value adjustments as a percentage of segment net revenue, segment gross profit as a percentage of segment net revenue, segment operating income as a percentage of segment net revenue, and adjusted EBITDA as a percentage of net revenue. There are no total of segments measures included in this press release. Additional details for these non-GAAP and other financial measures can be found in the section entitled “Non-GAAP and Other Financial Measures” of Cannara’s MD&A for the fiscal quarter ended May 31, 2026, which is posted on Cannara’s website at www.cannara.ca and filed on SEDAR+ at www.sedarplus.ca .

Reconciliations of non-GAAP financial measures and non-GAAP ratios to the most directly comparable IFRS measures are provided below. Management believes that these non-GAAP financial measures and non-GAAP ratios provide useful information to investors regarding the Company’s financial condition and results of operations as they provide key metrics of its performance. These measures are not recognized under IFRS, do not have any standardized meanings prescribed under IFRS and may differ from similar computations as reported by other issuers, and accordingly may not be comparable.

These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS. Reconciliation of Adjusted EBITDA Adjusted EBITDA is a non-GAAP Measure and can be reconciled with net income, the most directly comparable IFRS financial measure, as detailed below. Adjusted EBITDA as a percentage of total revenues is a non-GAAP financial ratio, determined as adjusted EBITDA divided by total revenues. *Non-GAAP financial measure **Non-GAAP financial ratio NON-GAAP MEASURES AND OTHER FINANCIAL MEASURES Reconciliation of free cash flow Free cash flow is a non-GAAP measure and can be reconciled with Cash from operating activities, the most directly comparable IFRS financial measure, as detailed below. *Non-GAAP financial measure Reconciliation of working capital Working capital is a non-GAAP Measure and can be reconciled with total current assets and total current liabilities, the most directly comparable IFRS financial measure, as detailed below. *Non-GAAP financial measure CONTACT ABOUT CANNARA Cannara Biotech Inc. ( TSX: LOVE ) ( OTCQX: LOVFF ) ( FRA: 8CB0 ), is a vertically integrated producer of affordable premium-grade cannabis and cannabis-derivative products.

Cannara owns two mega facilities based in Québec spanning over 1,600,000 sq. ft., providing the Company with 100,000 kg of potential annualized cultivation output. Leveraging Québec’s favourable energy costs, Cannara maintains an efficient, low-cost production model. For more information, please visit  cannara.ca .

CAUTIONARY STATEMENT REGARDING “FORWARD-LOOKING” INFORMATION  This news release may contain “forward-looking information” within the meaning of Canadian securities legislation (“ forward-looking statements ”). These forward-looking statements are made as of the date of this press release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to, statements regarding the activation of four additional cultivation zones in fiscal 2027; the projected increase in annual production capacity to approximately 75,000 kg, and reaching targeted capacity approximately one year ahead of the original fiscal 2028 timeline; the launch of the Company’s first Ampersand™ products under the Nugz brand; potential future product development and international commercialization opportunities under the Blue River agreement; the performance of the long-term supply agreement with Curaleaf, including support for the Company’s pursuit of EU-GMP certification at the Valleyfield facility; continued brand and product expansion, including the pipeline of new genetics from the Company’s pheno-hunting program; and the Company’s ability to maintain or grow its retail market share, expand national distribution and sustain profitable growth across domestic and international markets.

In certain cases, forward-looking statements can be identified by the use of words such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur” or “be achieved” or the negative of these terms or comparable terminology. In this document, certain forward-looking statements are identified by words including “may,” “future,” “expected,” “intends” and “estimates.” By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in, or implied by, such forward-looking information.

These risks and uncertainties include, but are not limited to, the risk factors which are discussed in greater detail under “Risk Factors” in the Company’s AIF available on SEDAR+ at www.sedarplus.ca and under the “Investor Area” section of our website at https://www.cannara.ca/en/investor-area . Other risks not presently known to the Company or that the Company believes are not significant could also cause actual results to differ materially from those expressed in its forward-looking statements. Although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, readers are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information.

Certain assumptions were made in preparing the forward-looking information concerning the availability of capital resources, business performance, market conditions, as well as customer demand. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law. 1 Please refer to the Non-GAAP and Other Financial Measures section of this news release for corresponding definitions. 2 As reported by Turff Analytics, July 2026. 3 Based on retail market sales dollar estimates for the periods of March 2026 to May 2026, calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada. 4 Please refer to the Non-GAAP and Other Financial Measures section of this news release for corresponding definitions. 5 Please refer to the Non-GAAP and Other Financial Measures section of this news release for corresponding definitions. 6 As reported by OCS Wholesale Sales Data, March to May 2026. 7 As reported by Turff Analytics, July 2026. 8 Based on retail market sales dollar estimates for the periods of March 2026 to May 2026, calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada. 9 Based on retail market sales dollar estimates for the periods of December 2025 to February 2026, March 2026 to May 2026 and June 2026, calculated using dataset from Weedcrawler for Quebec retail sales contributions, NSLC for Nova Scotia retail sales, and Hifyre dataset for the rest of Canada. 10 As reported by Hifyre data for the periods of March to May 2025 and March to May 2026 in all listed provinces excluding Québec where Weed Crawler was deemed to be more accurate, and Nova Scotia where NSLC wholesale data was deemed to be more accurate.

Globe Newswire July 15, 2026 - 5:00 AM PDT News by QuoteMedia www.quotemedia.com