News Releases – Decibel Cannabis

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Formerly Westleaf Inc.

Decibel Announces First Quarter Results with Record $27.1 Million of Net Revenue, $6.8 Million of Adjusted EBITDA, and $0.01 of Adjusted EPS

Posted on May 29, 2023May 28, 2023

CALGARY, ALBERTA – May 29, 2023 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a market leader in premium cannabis and extract manufactured products, is pleased to announce its interim financial results for the three month period ending March 31, 2023.

“We’ve started the year off with another strong quarter that represents both significant year over year acceleration as well as sequential growth.” said Paul Wilson, CEO of Decibel. “Our New, Unique and Innovative products, assortments and formats continue to resonate with both new and existing customers. This provides ample momentum as we approach a number of material and additional catalysts this summer, when we expect to build market share and brand position in Canada, and in turn continue to leverage our business internationally”.

First Quarter Highlights

Record National Market Share⁽¹⁾ of 6.7% in Q1 2023 which placed Decibel as the 3^rd largest licensed producer in Canada by market share.
- As of April 2023, Decibel’s market share was 7.1% which placed Decibel as the 2^nd largest licensed producer in Canada by market share.
Record Net Revenue was $27.1 million in the first quarter of 2023, with sequential growth of 5% over the prior quarter, despite seasonal weakness, and year over year growth of 63%. Net revenue improvement was driven by continued growth in demand for derivative products, expanded operational capacity, and expanded distribution.
Gross Margin Before Fair Value Adjustments was 49% in the first quarter of 2023, compared to 43% in the prior quarter and 35% in the first quarter of 2022. The increase year over year was the result of significant cost savings which began in the third quarter of 2022 from initiatives including operational efficiencies, automation equipment commissioned, and sourcing of more cost-effective components related to the manufacturing of cannabis products.
Adjusted EBITDA⁽²⁾ of $6.8 million in the first quarter of 2023, with a sequential decline of 4% over the prior quarter and year over year growth of 175%. This marks Decibel’s eleventh quarter of consecutive quarterly positive adjusted EBITDA.
Record Adjusted Net Income⁽²⁾ of $3.3 million in the first quarter of 2023, with sequential growth of 87% over the prior quarter and a year over year improvement of $5.0 million.
Record Adjusted Earnings Per Share (“Adjusted EPS”)⁽³⁾: of $0.01 Adjusted EPS in the first quarter, with a sequential improvement of $0.01 over the prior quarter and a year over year improvement of $0.01.

Notes:

¹ HiFyre Retail Analytics, Licensed Producer Sales over Time Nationally

² Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

³ Non-GAAP ratio. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

Summary Highlights

Notes:

¹In the table above, wholesale inventory transferred to the retail stores and subsequently sold of $668 for the three months, has been eliminated from retail sales and attributed to wholesale sales of flower and extracts to provide a more accurate depiction of business performance.

²Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

³Refer to “Cash Flows” for further details.

Link to Decibel’s Investor Presentation

Decibel’s interim financial statements for the three month period ending March 31, 2023 (“FinancialStatements”) and related Management’s Discussion & Analysis for three month periods ending March 31, 2023, are available under the Company’s profile at www.sedar.com.

As of March 31, 2023, Decibel was in compliance with all of its financial covenants under its credit facilities and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, Saskatchewan. The Plant, Decibel’s extraction facility, in Calgary, Alberta, has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

Non-GAAP Measures

This press release contains certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Adjusted Net Income is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted EPS is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding. This non-GAAP financial measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Supplementary Financial Measures

Retail Sales is a supplementary financial measure that is intended to provide a more accurate depiction of the revenue earned by the Company’s retail operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is removed from Retail Revenue as presented in the Company’s Financial Statements.

Gross Sales of Flower is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale flower operations. Inventory transferred directly from the Company’s wholesale flower operations to the Company’s retail operations is added to Gross Wholesale Revenue of Flower as found in the Company’s Financial Statements to arrive at Gross Sales of Flower.

Net Sales of Flower is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale flower operations. Excise taxes associated with flower sales are subtracted from Gross Sales of Flower to arrive at Net Sales of Flower.

Gross Sales of Extracts is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale extracts operations. Inventory transferred directly from the Company’s wholesale extracts operations to the Company’s retail operations is added to Gross Wholesale Revenue of Extracts as found in the Company’s Financial Statements to arrive at Gross Sales of Extracts.

Net Sales of Extracts is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale extracts operations. Excise taxes associated with extracts sales are subtracted from Gross Sales of Extracts to arrive at Net Sales of Extracts.

Forward Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things: that the Company has strong momentum heading into 2023; expectations that demand for Decibel’s products will grow; the Company’s ability to meet consumer demand; Decibel’s expectations that it will build its position in Canada and turn leverage into international opportunities; anticipated growth in Decibel’s net revenue, growth in demand for Decibel’s products, and improvements made to Decibel’s operational capacity in the first quarter of 2023; anticipated future volatility in gross margin related to price competition; Decibel’s targeted gross margin; Decibel’s expectations that it will remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; timing and completion of construction and expansion of the Company’s production facilities and retail locations; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated, or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable.

With respect to forward-looking statements and FOFI contained in this press release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel’s products; Decibel’s ability to realize operational efficiencies and effect certain cost saving measures (including in the impact thereof); Decibel’s ability to enter new markets and industry verticals; Decibel’s ability to attract, develop and retain key personnel; Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: anticipated future volatility in gross margin; Decibel’s targeted gross margin; and Decibel’s expectations that it will remain in compliance with its financial covenants for the remainder of its twelve-month forecast period, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Market, Independent Third Party and Industry Data

Certain market, independent third party and industry data contained in this news release is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but Decibel has not conducted its own independent verification of such information. This news release also includes certain data derived from independent third parties. While Decibel believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Decibel has not independently verified any of the data from independent third party sources referred to in this news release or ascertained the underlying assumptions relied upon by such sources.

Decibel Announces Year End and Fourth Quarter Results with Record Fourth Quarter $25.8 Million Net Revenue and $7.1 Million Adjusted EBITDA

Posted on April 24, 2023April 24, 2023

CALGARY, ALBERTA – April 24, 2023 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a market leader in premium cannabis and extract manufactured products, is pleased to announce its audited financial results for the three and twelve month periods ending December 31, 2022.

“Our fourth quarter results capped off a year of strong financial performance with record results including market share, net revenue, adjusted EBITDA, and adjusted net income. This creates momentum heading into 2023 with demand continuing to grow and assets well positioned to deliver on this demand”, said Paul Wilson, CEO of Decibel. “We have a number of 2023 catalysts that support an outlook where Decibel continues to build its market share and brand position in Canada and in turn leverage into international opportunities.”

Fiscal Year 2022 Financial Highlights

Record Net Revenue of $79.3 million in 2022, an increase of 51% over 2021.
Record Adjusted EBITDA⁽¹⁾ of $17.0 million in 2022, an increase of 129% over 2021.
Record Adjusted Net Income⁽¹⁾ of $3.1 million in 2022, an increase of $11.7 million over 2021.
Record Adjusted Earnings per Share⁽²⁾ of $0.01, an increase of $0.03 over 2021.
First branded product sale to Israel as Decibel begins to expand internationally.

Notes:

¹ Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

² Non-GAAP ratio. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

Fourth Quarter Highlights

Record National Market Share⁽¹⁾ of 6.0% in Q4 2022 and 6.6% in December 2022 which placed Decibel as the 4^th and 3^rd largest licensed producer in Canada by market share for the respective periods.
- Fastest growing large licensed producer in 2022
- As of March 2023, Decibel’s market share was 6.8% which placed Decibel as the 2^nd largest licensed producer in Canada by market share.
- The Company’s preliminary results indicate sequential net revenue growth in the first quarter of 2023, driven by continued growth in demand and further improvements to operational capacity to meet demand.
Record Net Revenue was $25.8 million in the fourth quarter of 2022, with strong sequential growth of 41% over the prior quarter and year over year growth of 84%. The net revenue growth was driven by increased demand for the Company’s derivative products and the Company’s first two sales of branded dried flower product in Israel. Net revenue growth year over year was driven by expanded distribution, new infused products and continued growth in demand for derivative products.
Gross Margin Before Fair Value Adjustments was 43% in the fourth quarter of 2022, compared to 52% in the prior quarter and 26% in the fourth quarter of 2021. The fourth quarter was partially impacted by a provision and write off of cultivation and extraction inventory of approximately $3.2 million. The increase year over year was a result of significant cost savings realized in the third quarter of 2022 from initiatives including operational efficiencies, automation equipment commissioned, and sourcing of more cost-effective components related to the manufacturing of cannabis products. The Company anticipates that there may be future volatility in its gross margin related to price competition and continues to target the upper end of its previously stated target of 40 – 45% gross margin.
Record Adjusted EBITDA⁽²⁾ of $7.1 million in the fourth quarter of 2022, with strong sequential growth of 66% over the prior quarter and year over year growth of 387% over the fourth quarter of 2021. This marks Decibel’s tenth quarter of consecutive quarterly positive adjusted EBITDA.
Adjusted Net Income⁽²⁾ of $1.8 million in the fourth quarter of 2022, with a sequential decline of 40% over the prior quarter and a year over year improvement of $5.6 million over the fourth quarter of 2021. The fourth quarter was partially impacted by a write off of cultivation and extraction inventory of approximately $3.2 million. This marks Decibel’s third quarter of positive adjusted net income.
Leverage: At the end of the fourth quarter of 2022, Decibel had a funded debt to trailing twelve month EBITDAof 2.57x and a funded debt to annualized EBITDA of 1.55x.

Notes:

¹ HiFyre Retail Analytics, Licensed Producer Sales over Time Nationally, October 1, 2022 – March 31, 2023.

² Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

Operating Highlights

New Unique and Innovative Products

The Company launched a total of 13 new products in various provinces in the fourth quarter of 2022, including

5 General Admission SKU’s in vape and infused pre-rolls in distillate and live resin formats; and
- 8 Qwest SKU’s in dried flower, standard pre-rolls, and infused pre-rolls formats.

Summary Highlights

Notes:

¹In the table above, wholesale inventory transferred to the retail stores and subsequently sold of $39 and $501 for the three and twelve months, respectively, have been eliminated from retail sales and attributed to wholesale sales of flower and extracts to provide a more accurate depiction of business performance.

² Supplementary financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

³Refer to “Cash Flows” in the MD&A (as defined herein) for further details.

⁴Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

⁵ Non-GAAP ratio. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

Link to Decibel’s Investor Presentation

Decibel’s audited financial statements for the year ending December 31, 2022 (“FinancialStatements”) and related three and twelve month periods ending December 31, 2022 Management’s Discussion & Analysis (“MD&A”), are available under the Company’s profile at www.sedar.com. As of December 31, 2022, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310

www.decibelcc.com

Cautionary Statements

Non-GAAP Measures

Non-GAAP Financial Measures

Adjusted Net Income is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Adjusted Earnings per Share is a non-GAAP financial measure that is calculated as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding. This non-GAAP financial measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

Supplementary Financial Measures

Forward Looking Information

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: anticipated future volatility in gross margin; Decibel’s targeted gross margin; and Decibel’s expectations that it will remain in compliance with its financial covenants for the remainder of its twelve-month forecast period, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Preliminary Financial Information

The Company’s expectations for its Q1 2023 results, including net revenue growth in the quarter, are based on, among other things, the Company’s anticipated financial results for the three month period ended March 31, 2023. The Company’s anticipated financial results are unaudited and preliminary estimates that: (i) represent the most current information available to management as of the date of hereof; (ii) are subject to completion of interim review procedures that could result in significant changes to the estimated amounts; and (iii) do not present all information necessary for an understanding of the Company’s financial condition as of, and the Company’s results of operations for, such periods. The anticipated financial results are subject to the same limitations and risks as discussed under “Forward Looking Statements” above. Accordingly, the Company’s anticipated financial results for such periods may change upon the completion and approval of the financial statements for such periods and the changes could be material.

Market, Independent Third Party and Industry Data

Decibel Provides Preliminary Record Level Q4 2022 Results and 2023 Outlook

Posted on February 6, 2023February 5, 2023

CALGARY, ALBERTA – February 6, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, is pleased to provide preliminary unaudited fourth quarter results and 2023 financial outlook.

Highlights

Q4 2022 record Net Revenue of $25.25 – $26.25 million (>38% growth from Q3 2022)
Q4 2022 record Adjusted EBITDA of $6.25 – $7.25 million (>47% growth from Q3 2022)
Q4 2022 achieved <3.0x Debt to trailing twelve-month Adjusted EBITDA
Targeting 2023 Net Revenue year-over-year growth of >35%

Management Commentary

Decibel has continued its market share gains, becoming the third largest LP in Canada by market share and the fastest growing large LP with 77% growth in 2022. We remained focused on developing consumer loyalty and category expansion supported through refinement of differentiation within our products. By creating demand, it led to an abundance of attractive investment opportunities by way of automation and supply chain optimization, leading to record level gross margin in the back half of the year. Through these steps, we’ve grown Decibel’s top and bottom line substantially, capping off the year with record level results. We are steadfast in our strategic plan that has driven our recent success, while remaining nimble to navigate a highly dynamic Canadian marketplace and ever-growing international landscape.

We plan to grow our position to become a market leader in Canada through organic growth centered around a pipeline of new, unique, and innovative products, and a strong revenue generation engine to grow distribution. Growing our footprint and recognition in Canada will in turn create a foundation to expand our brands internationally, bringing quality and choice to consumers abroad.

With demand in place, Decibel has invested aggressively to expand its margins and drive free cash flow, with a pipeline of high return on capital opportunities still in place. This year, we are increasing our focus on improving operating cash conversion with the streamlining of operations, a continued transition towards automation, and improving our balance sheet. We think this is critical given the current challenges present in the industry, and positions Decibel to further reinvest in its business and reinforce its ability to outcompete.

Link to Decibel’s Updated Investor Presentation

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

www.decibelcc.com

Cautionary Statements

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, the Company’s plans to become a market leader in Canada and eventual growth internationally; the Company’s expectation of improving operating cash conversion; the Company’s expectation that growing its footprint and recognition in Canada will create a foundation to expand internationally; Decibel’s expectation as to the results of its investments; the Company’s 2023 financial outlook, including targeting and achieving 35% net revenue growth year-over-year through a new, unique, and innovative product pipeline, expanded distribution, and international expansion; strengthening the balance sheet while maintaining certain levels of debt to adjusted EBITDA; the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, supply chain disruptions, the occurrence of plant pestilence, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Company’s Annual Information Form for the year ended December 31, 2020 and Management’s Discussion and Analysis for the year ended December 31, 2021, which are available at www.sedar.com.

With respect to forward-looking statements and FOFI contained in this press release,[1] Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel’s products; streamlining of operations and a transition towards automation will improve Decibel’s balance sheet; Decibel’s ability to enter new markets and industry verticals; Decibel’s ability to attract, develop and retain key personnel; Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: targeted net revenue growth of greater than 35% in 2023, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

PRELIMINARY FINANCIAL INFORMATION

The Company’s expectations for its H2 and Q4 gross margin, cash flow from operations, net revenue and adjusted EBITDA (see “Non-GAAP Measures”) are based on, among other things, the Company’s anticipated financial results for the three and twelve month period ended December 31, 2022. The Company’s anticipated financial results are unaudited and preliminary estimates that: (i) represent the most current information available to management as of the date of hereof; (ii) are subject to completion of interim review procedures that could result in significant changes to the estimated amounts; and (iii) do not present all information necessary for an understanding of the Company’s financial condition as of, and the Company’s results of operations for, such periods. The anticipated financial results are subject to the same limitations and risks as discussed under “Forward Looking Statements” above. Accordingly, the Company’s anticipated financial results for such periods may change upon the completion and approval of the financial statements for such periods and the changes could be material.

Cautionary Statement Regarding Certain Non-GAAP Measures

This news release contains certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licenced producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Consolidated Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Adjusted EBITDA: Adjusted EBITDA is a non-GAAP financial measure that is intended to provide a proxy for the Company’s operating cash flow and is widely used by industry analysts to compare Decibel to its competitors and derive expectations of future financial performance of the Company. Adjusted EBITDA increases comparability between comparative companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of fair value adjustments on biological assets, inventory, and financial instruments, which may be volatile on a period to period basis. For a complete breakdown of the historical composition of adjusted EBITDA please refer to the Corporation’s most recent MD&A on SEDAR.

Decibel Announces Another Record Market Share Month in December

Posted on January 23, 2023January 23, 2023

CALGARY, ALBERTA – January 23, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, is pleased to announce another month of record market share in December 2022.

“Our continued market share growth in a highly competitive environment is a testament to our commitment to innovation and quality products”, said Paul Wilson, CEO of Decibel. “With continued success in our brands and products, the demand we are experiencing has been tremendous and provides opportunity for growth for Decibel in 2023.”

Record National Market Share¹: Achieved 6.7% in December 2022 which places Decibel as the third largest LP in Canada by market share.

Fastest growing top 10 LP by market share over 2022 with 77% market share growth
- Record Canadian market share driven by gains in vape and pre-roll categories:
  - #1 in national vape sales with a 17.7% market share
  - #1 in national pre-roll sales with an 11.8% market share

New Unique and Innovative

Decibel is launching or expanding distribution of the following products in January:

Total of 11 products launched in the Ontario market
- 6 General Admission and Qwest infused pre-rolls
- 1 General Admission distillate vape
- 4 Qwest jarred flower and pre-rolls

¹HiFyre Retail Analytics, Licensed Producer Sales over Time Nationally, January 1, 2022 – December 31, 2022.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310

www.decibelcc.com

Cautionary Statements

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, Decibel’s opportunity for growth in 2023 and the launch of certain products in January of 2023; the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

These forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Decibel Announces Timing of Annual Meeting of Shareholders and New Director Nominees

Posted on November 23, 2022November 23, 2022

CALGARY, ALBERTA – November 21, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), announces the timing of its annual general meeting (the “Meeting”) of holders of common shares (the “Shareholders”) of the Company will be held at 4:00pm (Calgary Time) on Friday, December 9, 2022 (the “Meeting”). The management information circular related to the Meeting was mailed to Shareholders on November 18^th and is also publicly available on Decibel’s SEDAR page.

“We are launching the next chapter of the Decibel story with an exceptional new group of experienced cannabis and CPG board members who will create immense value for the Decibel shareholders”, said Cody Church current Chairman of Decibel. “I would like to sincerely thank Mike Kelly and Ivan Casselman for their tireless work and outstanding contributions over the last few years and as we transition off the board, we would like to thank Decibel for the opportunity to be part of this great story”, said Church.

“Decibel is very excited by the proposed slate of directors. We are very fortunate to have attracted such an accomplished group, all with notable cannabis pedigrees. This is a testament to Decibel’s success and most importantly our obvious potential”, said Paul Wilson, Chief Executive Officer of Decibel.

New Director Nominees

Paul Wilson (CEO)

Paul is currently a director and CEO of Decibel. Prior to joining Decibel, Paul served as CEO, President, EVP, and officer for consumer businesses, including leadership roles at Canadian Tire, Mark’s, Princess Auto, Spence Diamonds and Alcanna Nova Cannabis. As an experienced brand builder, Mr. Wilson has a consistent winning record in sectors ranging from hard goods to apparel and in formats ranging from start-ups and small chains to department stores and national chains.

Manjit Minhas

Manjit has significant CPG expertise, having co-founded the Minhas Brewery, Distillery and Winery with over 90 brands of beers, spirits liqueurs and wines. Her products are sold in 5 provinces as well as 47 states throughout the USA and 16 other countries. She also appears as a television personality on the Canadian reality series, Dragon’s Den, where she has invested in dozens of Canadian businesses. Manjit also has specific cannabis industry experience as a former member of the board of directors of Inner Spirit Holdings Ltd (Spiritleaf).

Shawn Dym

Shawn is an early investor and strategic thought leader in the North American cannabis industry. As an early investor in Aphria, he served on their board until November 2019. In addition, he co-founded and serves as an advisor to the board of Green Acre Capital (Canada’s largest cannabis private investment fund) and serves as a director of Humble & Fume Inc. (“Humble & Fume”), a leading North American distributor of cannabis products. He currently oversees the investment and growth of his personal holding company.

Jakob Ripshtein

Jakob is the Chief Executive Officer of Perennial Brands Inc, a full life-cycle brand strategy organization. He was formerly the President of Aphria and held multiple roles at Diageo PLC including CFO of Diageo North America. In June 2021 Jakob joined Humble & Fume, as Chairman of the Board. He also serves on the Audit Committee and Compensation and Corporate Governance Committee of Humble & Fume.

Nadia Vattovaz

Nadia is CFO and Head of Logistics for Sporting Life Group. Her experience includes launching and overseeing new multi-jurisdictional companies and business lines, extensive M&A, leading the execution of complex multi-functional initiatives, transformation and navigating regulatory environments. Prior to her current role, Nadia was the COO of Fire & Flower, a cannabis retailer with over 100 locations across Canada, and held senior finance roles at Holt Renfrew, Canadian Tire, and Maple Leaf Foods.

Decibel would like to thank all of the directors not standing for re-election for their efforts in helping the Corporation achieve its success to date.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310

www.decibelcc.com

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, Decibel’s expectations regarding future appointment and success of its director nominees; that Decibel and the Shareholders will be positively affected by the appointment of such director nominees; and that Decibel’s production house will fuel the growth of its brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond..

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays; regulatory changes and impacts; capital requirements; construction impacts; displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic; the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; timing and completion of construction and expansion of the Company’s production facilities and retail locations; the risk that the Company may not remain in compliance with all of its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Company’s Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2021, which are available at www.sedar.com.

With respect to forward-looking statements contained in this press release, Decibel has made assumptions regarding, but not limited to: Decibel’s ability to raise additional capital and to execute on its plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws. These forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Decibel Announces First International Shipment of Qwest Flower to Israel

Posted on November 18, 2022

CALGARY, ALBERTA – November 18, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, is pleased to announce it has delivered its first shipment of Qwest dried flower to Breath of Life International Ltd (“Breath of Life”) for sale in the Israel market. This marks the Company’s first international shipment and revenue generation.

“This shipment is our first step of many into the international cannabis markets”, said Adam Coates Chief Revenue Officer of Decibel. “The Qwest brand has built a reputation in Canada as a favourite for consumers with the highest quality, craft cannabis products. As international cannabis markets expand, the demand for more premium products, like Qwest, will be at the forefront of growth and Decibel is well positioned to take a leadership position in this category.”

Key Highlights

$4.8 million supply and trademark license agreement executed with Breath of Life to launch the Qwest brand in Israel.

First shipment includes four Qwest strains:

Icicle, Frosted Cherry Cookies, Sour Strawberry x Trophy Wife and Apple Mac

A second shipment to Israel is expected for late Q4 2022 or early Q1 2023 as a result of strong pre-sales of the first shipment.

The second shipment is expected to include the introduction of two new Qwest cultivars: Terpee Slerpee and Grape Cream Cake.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310

www.decibelcc.com

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, Decibel’s expectations regarding future shipments to Israel; and the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations.

With respect to forward-looking statements contained in this press release, Decibel has made assumptions regarding, but not limited to: Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Decibel Announces Third Quarter Results with Record Level Positive Net Income, Adjusted Net Income and Adjusted EBITDA

Posted on November 15, 2022November 15, 2022

CALGARY, ALBERTA – November 15, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, is pleased to announce its third quarter financial results for the three and nine month periods ending September 30, 2022.

“Our third quarter results coupled with another record market share month to start the fourth quarter continue to demonstrate our focus in achieving our 2022 operational outlook”, said Paul Wilson, CEO of Decibel. “With highly successful recent product launches, the demand we are experiencing has been tremendous and provides opportunity for material growth for Decibel. The continued progress by our productivity initiatives alongside another period of record gross profit position us well to deliver on this demand and drive further profitability, as we track towards a strong fourth quarter to end 2022.”

Financial Highlights

Record National Market Share¹: Achieved5.3% in October 2022 which places Decibel as the 6^th largest LP in Canada by market share.

The Company anticipates sequential net revenue growth to resume in the fourth quarter supported by continued growth in demand (market share) and improved operational capacity to meet demand.

Record 5.3% recreational National Market Share in October driven by gains in vape and pre-roll categories:

#1 company in vape sales with a 14.5% market share

#3 company in pre-roll sales with an 8.4% market share

Net Revenue: $18.3 million of total net sales in Q3, with a sequential decline of 1% over Q2 2022 and an increase of 37% over Q3 2021. The sequential net revenue decline was driven by a higher proportion of derivative sales which receive more punitive excise tax rates, whereas gross sales grew sequentially by 9% over Q2 2022. Net revenue growth over Q3 2021 was driven by expanded distribution, successful launches of new infused products and continued growth in demand for derivative products.

Record Gross Margin Before Fair Value Adjustments: Significant sequential improvement to 52% in Q3, compared to 41% in Q2 2022 and 31% in Q3 2021. The increase was driven by investments made during the summer, including operational efficiencies, automation equipment commissioned, and sourcing of more cost-effective components related to the manufacturing of cannabis products. The Company anticipates there may be future volatility in its gross margin related to price competition and continues to target the upper end of the previously stated target of 40 – 45% gross margin.

Record Adjusted EBITDA: $4.3 million of Adjusted EBITDA in Q3, with strong growth of 32% over Q2 2022 and 139% over Q3 2021. This marks Decibel’s ninth quarter of consecutive quarterly positive adjusted EBITDA.

Record Adjusted Net Income: $2.9 million of Adjusted Net Income in Q3, an improvement of $3.0 million over Q2 2022 and $4.9 million over Q3 2021. This marks Decibel’s second quarter of positive Adjusted Net Income.

Derivative Sales: $13.7 million of net sales in Q3, with strong sequential growth of 6% over Q2 2022 and 108% over Q3 2021. The increase in sale of wholesale extracts is primarily attributable to expanded distribution, the launch of a new infused product line, and continued growth in demand for vapes and concentrates. This demand growth trend is continuing into Q4 2022 with record level demand, market share, and distribution for Decibel derivative products.

Flower Sales: $2.3 million of net sales in Q3, a sequential decline of 34% over Q2 2022 and 40% over Q3 2021. The decrease in sales of wholesale flower products was driven by a material proportion of the Thunderchild facility being upgraded during the period to enhance yields and quality. Nearing the end of the quarter, the Company began reserving inventory in preparation for international exports.

Cash Flow & Working Capital: $3.6 million of cash flow from operations in Q3, a sequential increase of $1.8 million over Q2 2022 and an improvement of $9.5 million over Q3 2021. This marks Decibel’s third consecutive quarter of positive cash flow from operations.

Leverage: At the end of Q3 2022, Decibel had a funded debt to trailing twelve-month EBITDA of 3.9x.

Operating Highlights

New Unique and Innovative

The Company launched or expanded distribution of the following products in the quarter:

Total of 5 products launched in various provinces over the course of Q3 2022
2 General Admission vape flavours in distillate and live resin formats
3 General Admission and Qwest infused pre-rolls

Summary Highlights

Link to Decibel’s Investor Presentation

Decibel’s financial statements for the three and nine month periods ending September 30, 2022 (“Financial Statements”) and related Management’s Discussion & Analysis (“MD&A”), are available under the Company’s profile at www.sedar.com. As of September 30, 2022, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.

Hybrid Financial Engagement

The Company is pleased to announce that it has retained Hybrid Financial Ltd. (“Hybrid”) to provide marketing services to the Company. Hybrid has been engaged to heighten market and brand awareness for Decibel and to broaden the Company’s reach within the investment community.

Hybrid has been engaged by the Company for an initial period of six (6) months starting November 7th (the “Initial Term”) and then may be renewed for successive three (3) month periods thereafter. Hybrid will be paid a monthly fee of $15,000, plus applicable taxes, during the Initial Term.

Hybrid has agreed to comply with all applicable securities laws and the policies of the TSX Venture Exchange (the “TSXV”) in providing the Services.

¹HiFyre Retail Analytics, Licensed Producer Sales over Time Nationally, October 1, 2022 – October 31, 2022.

²In the table above, wholesale inventory transferred to the retail stores and subsequently sold of $48 and $462 for the three and nine months, respectively, have been eliminated from retail sales and attributed to wholesale sales of flower and extracts to provide a more accurate depiction of business performance.

³Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

⁴Refer to “Cash Flows” in the MD&A for further details.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

About Hybrid Financial Ltd.

Hybrid is a sales and distribution company that actively connects issuers to the investment community across North America. Using a data driven approach, Hybrid provides its clients with comprehensive coverage of both American and Canadian markets. Hybrid Financial has offices in Toronto and Montreal.

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310

www.decibelcc.com

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements

Non-GAAP Measures

This news release contains the financial performance metrics Adjusted EBITDA and Adjusted Net Income, measures that are not recognized or defined under IFRS (a “Non-GAAP Measure”). As a result, this data may not be comparable to data presented by other cannabis companies. For an explanation and reconciliation of Adjusted EBITDA and Adjusted Net Income to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the MD&A for the three and nine months ended September 30, 2022. The Company believes that Adjusted EBITDA and Adjusted Net Income are useful indicators of operational performance and are specifically used by management to assess the financial and operational performance of the Company.

The Company calculates Adjusted EBITDA as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. Non-GAAP Measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

¹ Relates to depreciation and amortization included in cost of goods sold, write downs of inventory to net realizable value, and abnormal waste. For the three months ended September 30, 2022, non-cash cost of goods sold was comprised of $376 of depreciation and amortization. For the nine months ended September 30, 2022, non-cash cost of goods sold was comprised of $1,284 of depreciation and amortization.

² Severance payments of $46 are added back in the Company’s Adjusted EBITDA calculation for covenant reporting purposes. For the nine months ended September 30, 2022, other adjustments included $349 of severance payments and $245 of air freight charges related to supply chain issues. These amounts are included in SG&A expenses and cost of goods sold in the Company’s consolidated statements of income (loss) and comprehensive income (loss).

³ Other non-cash costs relate primarily to the destruction of inventory at the three processing facilities. These amounts are included in cost of good sold in the Company’s consolidated statements of income (loss) and comprehensive income (loss).

⁴ Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

The Company calculates Adjusted Net Income as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. Non-GAAP Measures should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate the Decibel’s operating results, underlying performance and prospects in a manner similar to Decibel’s management.

¹ Non-GAAP financial measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Measures” for further details.

Accordingly, these Non-GAAP Measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, Decibel’s 2022 operational outlook; the opportunity to Decibel for material growth; Decibel’s expected fourth quarter results; our anticipated gross margin; the anticipated continued growth in demand for vapes and concentrates; Decibel’s expectations regarding its compliance with financial covenants; the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays; regulatory changes and impacts; capital requirements; construction impacts; displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic; the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; timing and completion of construction and expansion of the Company’s production facilities and retail locations; the risk that the Company may not remain in compliance with all of its financial covenants for the remainder of its twelve-month forecast period; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Company’s Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2021, which are available at www.sedar.com.

With respect to forward-looking statements and FOFI contained in this press release, Decibel has made assumptions regarding, but not limited to: Decibel’s ability to enter new markets and industry verticals; Decibel’s ability to attract, develop and retain key personnel; Decibel’s ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches, Decibel’s ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel’s industry or the global economy; the Company’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; consumer interest in the Company’s products; anticipated and unanticipated costs; government regulation of the Company’s activities and products; the timely receipt of any required regulatory approvals; the Company’s ability to conduct operations in a safe, efficient and effective manner; the Company’s construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: that the Company is ahead of its previously stated target to achieve 40-45% gross margin and Decibel’s expected fourth quarter results, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements and FOFI contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and FOFI included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements and FOFI to reflect new information, subsequent events or otherwise unless so required by applicable securities laws. These forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Decibel Announces International Expansion and IMC-GAP Certification

Posted on June 29, 2022June 29, 2022

CALGARY, AB, June 29, 2022 /CNW/ – Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSXV: DB) (OTCQB: DBCCF), a premium cannabis producer, is pleased to announce that is has received its certification to export its cannabis products internationally.

“This is a very important milestone for the outlook of the Company as this certification unlocks untapped markets for Decibel. The opportunity allows the Company to provide its high-quality craft cannabis products internationally, while also setting the stage for the Decibel brands to develop international recognition and additional consumer exposure,” said Paul Wilson, Chief Executive Officer.

Key Highlights

IMC-G.A.P certification enabling new international sales channels in Israel
Anticipated initial international export to occur in the second half of 2022

“After a number of ongoing conversations, we are well aware of the international demand for our cannabis products,” said Adam Coates, Chief Revenue Officer. “As global cannabis markets expand, we’ve seen a clear demand for higher quality than what is currently available. Decibel is well positioned to deliver on this growing demand for premium cannabis outside of Canada.”

To enable the international export the Company received its CUMCS Equivalency IMC-G.A.P. certification (the “Certification”). The Company will be required to maintain its Certification by demonstrating its continued compliance with the international regulations on an ongoing basis.About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, the Company’s expectations regarding its ability to meet consumer demand internationally and to develop international recognition and additional consumer exposure, the timing of the Company’s first international export, the Company’s ability to meet the requirements related to international export; the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations and its other business plans and expectations. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada and international bodies; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company’s credit facilities; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Decibel Cannabis Company Inc.

For further information: Stuart Boucher, stuart.boucher@decibelcc.com, 780-619-0310, www.decibelcc.com

Decibel Announces First Quarter Results with Record Net Revenue and Adjusted EBITDA

Posted on May 25, 2022May 25, 2022

CALGARY, ALBERTA – May 25, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, is pleased to announce its first quarter financial results for the three month period ending March 31, 2022.

“Decibel remains on track to achieve its previously communicated targets, which is a testament to the focus on our strategic plan, and particularly our New, Unique and Innovative products and dedication to our customers”, said Paul Wilson, CEO of Decibel. “We see momentum growing in our core business, and at the same time are driving towards creating shareholder value by restructuring our balance sheet. This makes Decibel one of the few in the cannabis space to repay convertible debentures rather than accept shareholder dilution.”

Key Financial Highlights – First Quarter

Record Net Revenue: $16.7 million of total net sales in Q1 2022, with strong growth of 19% over Q4 2021 and 32% over Q1 2021. Net revenue growth was driven by the launch of Decibel’s new infused pre-roll lines and continued growth in demand for flower, vape and concentrate products, despite Q1 historically being a seasonally weak period.
Gross Margin Before Fair Value Adjustments: 35% in Q1 2022, compared to 26% in Q4 2021 and 39% in Q1 2021. The Company has a number of initiatives and capital investments in progress and expects to be successful achieving the targeted 40 – 45% gross margin by the second half of 2022.
Positive Adj. EBITDA: Record $2.5 million of adjusted EBITDA in Q1 2022, with strong growth of 70% over Q4 2021 and 21% over Q1 2021. This marks Decibel’s seventh consecutive quarter of positive adjusted EBITDA.
Derivative Sales: $10.3 million of net sales in Q1 2022, with strong growth of 50% over Q4 2021 and 85% over Q1 2021. Sales growth was driven by increased demand for vape and concentrate products, as well as the launch of a new infused pre-roll line in late Q4 2021 and early Q1 2022.
Flower Sales: $4.2 million of net sales in Q1 2022, with an 8% decline over Q4 2021 and 10% growth over Q1 2021. The Company anticipates that the infrastructure upgrades to its cultivation facilities focusing on enhanced quality, will reinvigorate growth within its flower sales. Sales growth over Q1 2021 was driven by increased volumes from the Thunderchild facility becoming operational.
Record Market Share: 4.3% in April 2022, marking the sixth consecutive month of record market share.
Cash Flow & Working Capital: Cash flow from operations was $3.0 million in Q1 2022, an improvement of $8 million over Q4 2021 and $6 million over Q1 2021. In Q4 2021, the Company made significant investments in working capital to meet the growing demand for Decibel brands and products and mitigate against supply chain risks. The Company anticipates reduced working capital needs in 2022 and is seeing improvements in its supply chain. The Company has identified various initiatives and capital investments to accelerate cash flow generation and manage working capital levels that are expected to support Q2 2022 onwards.
Capital Projects: In Q1 2022, the Company made the following progress on its capital projects:
- The Plant: Completed Phase 1 of its processing hub expansion at The Plant and received its Health Canada license May 2, 2022. This area will include newly automated processing and packaging lines for dried flower, pre-roll, and infused products accompanied by reduced labour and logistics costs.
- Creston Facility: Completed its infrastructure optimization project which will have an immediate impact on all new harvests, further enhancing product quality and contributing to higher yields.
- Thunderchild Cultivation Facility: Accelerated its staged infrastructure optimization to better meet growing demand for Decibel products and enhance product quality and yields. Production volumes are expected to be partially impacted in starting in Q2 2022 and resuming full run-rate production by the start of Q4 2022.
Repayment of Convertible Debentures: On May 11, 2022, the Company repaid its 9.5% convertible debentures with the draw-down of a fixed 4.75% $12 million term loan from its credit facilities. This extends the maturity date of Decibel’s $12 million of debt by 4 years, removes approximately 6% of potential shareholder dilution, and results in $0.6 million of annual interest expense savings.
New Product Launches: The Company continued its launch of new, unique and innovative products in 2022, including cultivar rotations, expanded infused products into new provinces, the entry of General Admission into the core flower segment, and additional vape line extensions:
- Introduced Qwest’s new cultivars, with Frosted Cherry Cookies and Icicle launched in May, selling out in the first two weeks.
- Expanded distribution of infused pre-rolls:
  - Kief-coated terpene infused pre-rolls into ON.
  - Distillate infused pre-rolls into BC, SK, and ON.
  - Diamond infused pre-rolls into BC, SK, and ON.
  - Hash infused pre-rolls into AB and ON.
- Launched General Admission’s first flower product offering with strong demand early on, representing $950k of net sales in Q1.
- Launched Orange Tingz (live resin), Peach Ringz (distillate), and Honeydew Boba (distillate) vapes.

Summary Highlights

¹ In the table above, wholesale inventory transferred to the retail stores and subsequently sold of $226 has been eliminated from retail sales and attributed to wholesale sales of flower and extracts to provide a more accurate depiction of business performance.

² Adjusted EBITDA is a non-GAAP performance measure. Refer to “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” for further details.

Link to Decibel’s Investor Presentation

Decibel’s financial statements for the three month period ending March 31, 2022 (“FinancialStatements”) and related Management’s Discussion & Analysis (“MD&A”), are available under the Company’s profile at www.sedar.com. As of March 31, 2022, Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, Blendcraft, and General Admission, into new and innovative product formats like concentrates, vapes, edibles and beyond.

For More Information

Contact Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310

www.decibelcc.com

Cautionary Statements

Non-GAAP Measures

Cautionary Statement Regarding Certain Non-GAAP Measures

This MD&A contains certain financial performance measures that are not recognized or defined under IFRS (termed “Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licenced producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Consolidated Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. These Non-GAAP Measures include, but are not limited, to the following:

Non-GAAP Financial Measures

Adjusted EBITDA: Adjusted EBITDA is a measure of the Company’s financial performance. It is intended to provide a proxy for the Company’s operating cash flow and is widely used by industry analysts to compare Decibel to its competitors and derive expectations of future financial performance of the Company. Adjusted EBITDA increases comparability between comparative companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of fair value adjustments on biological assets, inventory, and financial instruments, which may be volatile on a period to period basis. Adjusted EBTIDA is not a recognized, defined, or standardized measure under IFRS. The Company calculates Adjusted EBITDA as net loss and comprehensive loss excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. Refer to “Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization” for a detailed calculation of this measure. The numbers that are input into this calculation can be found in the statement of financial position in the Company’s Consolidated Financial Statements.

Retail Sales: Retail Sales is a measure intended to provide a more accurate depiction of the revenue earned by the Company’s retail operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is removed from Retail Revenue as presented in the Company’s Consolidated Financial Statements.

Gross Sales of Flower: Gross Sales of Flower is a measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale flower operations. Inventory transferred directly from the Company’s wholesale flower operations to the Company’s retail operations is added to Gross Wholesale Revenue of Flower as found in the Company’s Consolidated Financial Statements to arrive at Gross Sales of Flower.

Net Sales of Flower: Net Sales of Flower is a measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale flower operations. Excise taxes associated with flower sales are subtracted from Gross Sales of Flower to arrive at Net Sales of Flower.

Gross Sales of Extracts: Gross Sales of Extracts is a measure intended to provide a more accurate depiction of gross revenue earned by the Company’s wholesale extracts operations. Inventory transferred directly from the Company’s wholesale extracts operations to the Company’s retail operations is added to Gross Wholesale Revenue of Extracts as found in the Company’s Consolidated Financial Statements to arrive at Gross Sales of Extracts.

Net Sales of Extracts: Net Sales of Extracts is a measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale extracts operations. Excise taxes associated with extracts sales are subtracted from Gross Sales of Extracts to arrive at Net Sales of Extracts.

Working Capital: Working Capital is an indicative measure of the Company’s ability to service its short-term financial obligations with short-term assets. Management believes this measure provides useful information about the Company’s current short-term liquidity. Refer to “Liquidity and Capital Resources” for a detailed calculation of this measure. The numbers that are input into this calculation can be found in the statement of financial position in the Company’s Consolidated Financial Statements.

Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Forward Looking Information

In this news release, forward-looking statements relate to, among other things, anticipated growth in the Company’s core business and the creation of shareholder value through restructuring the Company’s balance sheet; the initiatives and capital investments the Company has in progress and the target gross margin to be derived therefrom; the Company’s expectation that its infrastructure upgrades will lead to enhanced product quality and growth in its flower sales; the Company’s anticipated working capital needs in 2022; the Company’s expectations that its initiatives and capital investments will accelerate cash flow generation and manage working capital levels and the anticipated timing thereof; the anticipated timing of the receipt of licensing for The Plant and the anticipated benefits to be derived therefrom; the anticipated benefits to be derived from the Company’s infrastructure optimization project at the Creston Cultivation Facility; the anticipated benefits to be derived from the Company’s infrastructure optimization project at its Thunderchild Cultivation Facility and the anticipated timing thereof; the Company’s expectations that it will remain in compliance with all of its financial covenants for the remainder of its twelve-month forecast period; the Company’s ability to grow Qwest, Qwest Reserve and Blendcraft brands into new and innovative product formats, variations; and Decibel’s other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts, capital requirements, construction impacts, displacement requirements and unforeseen requirements resulting from the COVID-19 pandemic, the ability to obtain and maintain licences to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; the risk that the Company may not remain in compliance with all of its financial covenants; general business, economic, competitive, political and social uncertainties; timing and completion of construction and expansion of the Company’s production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Corporation’s Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2021, which are available at www.sedar.com.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this news release regarding prospective financial position, including, but not limited to: anticipated growth in the Company’s core business and the creation of shareholder value through restructuring the Company’s balance sheet; the initiatives and capital investments the Company has in progress and the target gross margin to be derived therefrom; the Company’s anticipated working capital needs in 2022; the Company’s expectations that its initiatives and capital investments will accelerate cash flow generation and manage working capital levels and the anticipated timing thereof; and that The Plant’s newly automated processing and packaging lines will result in significantly reduced labour and logistics costs, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material.

Decibel Announces Repayment of Convertible Debentures

Posted on May 11, 2022May 11, 2022

CALGARY, ALBERTA – May 11, 2022 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, is pleased to announce its cash repayment of its 9.5% convertible debentures, which had a maturity date of May 10, 2022 (the “Convertible Debentures”). The $12 million cash repayment represents a full payout of the Convertible Debentures, which were subject to a conversion rate of approximately 2,222 commons shares for each $1,000 of principal amount of Convertible Debentures, equal to a conversion price of $0.45 per common share.

The Company met the pre-disbursement conditions required to draw-down $12 million under its credit facility with ConnectFirst Credit Union and concurrently made the cash repayment of the Convertible Debentures. The $12 million draw-down from its credit facility is subject to a 60-month repayment term at a fixed rate of 4.75%, amortized over 144 months.

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three operating production houses along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada. Thunderchild Cultivation, is a licensed and operating 80,000 square foot indoor cultivation facility in Battleford, SK. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft, into new and innovative product formats like concentrates, vapes, edibles and beyond.

For More Information

Contact: Stuart Boucher

stuart.boucher@decibelcc.com

780-619-0310