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Formerly Westleaf Inc.

Decibel Announces Retirement of Paul Wilson as CEO


CALGARY, ALBERTA – March 25, 2024 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a premium cannabis producer, announces that Paul Wilson, the Company’s Chief Executive Officer has informed the Board of Directors (the “Board”) of his intention to retire from Decibel. As a result of Mr. Wilson’s retirement, the Board is preparing a transition plan, with the intention of a new Chief Executive Officer being named in the coming weeks.

Decibel thanks Mr. Wilson for his dedication, leadership, and contributions to the business and wishes him the best in his retirement.

For More Information Contact:

Decibel Cannabis Company Inc.

info@decibelcc.com

1-844-993-4769

www.decibelcc.com

About Decibel

Decibel is a consumer-centred cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio, sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

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.

Decibel to Sell its Retail Cannabis Stores to FIKA


CALGARY, ALBERTA – March 22, 2024 –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 that it has entered into a binding agreement for the sale of the assets of its brick-and-mortar retail cannabis operations (“Prairie Records”) to Fire and Flower Inc., a wholly-owned subsidiary of 2759054 Ontario Inc. d.b.a FIKA (“FIKA”), for approximately $3.0 million (the “Transaction”). Prairie Records is comprised of three cannabis stores in Alberta and three cannabis stores in Saskatchewan.   

“Decibel remains committed to our core mission of delivering exceptional cannabis brands and products in Canada and around the world. The sale of Prairie Records marks a strategic decision in our growth journey, enabling us to focus resources and drive innovation in our core branded product business. We are dedicated to expanding and diversifying our premium product brand portfolio in Canada and globally.” said Adam Coates, Chief Revenue Officer. “Prairie Records continues to hold its place as one of the most unique and beloved cannabis retail brands in Canada. We are proud of Prairie Records’ legacy, the team that helped make it a success and believe that FIKA is a great fit to continue serving Prairie Records customers now and into the future.” The Transaction is subject to customary conditions of closing for a transaction of this nature and is expected to close before the end of Q1 2024.

For More Information Contact:

Decibel Cannabis Company Inc.

info@decibelcc.com

1-844-993-4769

www.decibelcc.com

About Decibel

Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

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.

Forward-Looking Statements

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, the terms of and anticipated closing of the Transaction; the Company’s ability to drive innovation in its core branded product business; and the Company’s ability to expand and diversify it’s premium product brand portfolio in Canada and globally.

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: the ability of the parties to satisfy the conditions to closing of the Transaction; the ability of the parties to complete the Transaction on the terms currently contemplated or at all; satisfaction of all international regulatory requirements, including applicable product testing; risks relating to delays; other regulatory changes and impacts; capital requirements; construction impacts; displacement requirements; unforeseen requirements resulting from the COVID-19 pandemic and other global macro-economic events, conditions and factors; the ability to obtain and maintain licenses to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licenses (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, international export rules and regulations; 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 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 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 news 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 Third Quarter Results with $30.2 Million of Net Revenue, $6.7 Million of Adjusted EBITDA, and Positive Free Cash Flow


CALGARY, ALBERTA – November 16, 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 and nine month periods ending September 30, 2023.

“With continued success in our ready to consume product strategy, our recent launches including General Admission Blinker, General Admission edibles, and our new brand Vox Popz crushable pre-rolls are expected to further cement our ready to consume position and meaningful growth in the coming year.” said Paul Wilson, CEO of Decibel. “Alongside these top line growth initiatives, we are pleased to have concluded the expansion of our manufacturing capacity, which will expand gross margin and support our new wave of product launches.”

Third Quarter Highlights

  • National Market Share(2) of7.5% in Q3 2023 which placed Decibel as the 2nd largest licensed producer in Canada by market share.
  • Net Revenue of $30.2 million in the third quarter of 2023, with a sequential decline of 2% over the prior quarter, and year over year growth of 65%. Net revenue growth was driven by growth in demand for vapes and infused products, increased manufacturing capacity, international sales(4), and the launch of the Company’s new brand Vox and General Admission Edibles. International sales were impacted by $1.4 million due to third party lab delays which have since been resolved with Q3 volumes having been sold in Q4 2023.
  • Gross Margin Before Fair Value Adjustments was43% in the third quarter of 2023, compared to 42% in the prior quarter and 52% in the third quarter of 2022. The third quarter was impacted by a $368 thousand write off of aged product and increased temporary labour of $566 thousand to meet market demand. The Company completed certain operational investments in November, including the expansion of its manufacturing capacity, which at current production and sales is anticipated to realize cash-flow savings of approximately $10 million at full year production rate.
  • Adjusted EBITDA(1) of$6.7 million in the third quarter of 2023, with a sequential decline of 8% over the prior quarter and year over year growth of 57%.
  • Positive Free Cash Flow(1) of$1.2 million in the third quarter of 2023, with a sequential increase of 152% over the prior quarter and a year over year decline of 50%.
  • Adjusted Net Income(1) of$523 thousand in the third quarter of 2023, with a sequential decline of 88% over the prior quarter and a year over year decline of 82%. Adjusted Net Income was negatively impacted by a litigation expense of $3 million related to arbitration that is now concluded.
  • Adjusted Earnings Per Share (“Adjusted EPS”)(3): of nil in the third quarter, a decrease of $0.01 from the prior quarter and a year over year decrease of $0.01.

Year to Date Highlights

  • Net Revenue of $88.2 million, an increase of 65% over 2022.
  • Adjusted EBITDA(1) of $20.8 million, an increase of 109% over 2022.
  • Positive Free Cash Flow(1) of $3.4 million, a decrease of 31% over 2022.
  • Adjusted EPS(3) of $0.02, an increase of $0.02 over 2022.

Notes:

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

2 HiFyre Retail Analytics, Licensed Producer Sales over Time Nationally

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

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

Summary Highlights1

In the table above, wholesale inventory transferred to the retail stores and subsequently sold of $802 thousand and $2.2 million for the three and six month periods, has been eliminated from retail sales and attributed to gross Canadian recreational sales and net Canadian recreational sales 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.

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

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

Link to Decibel’s Investor Presentation

Decibel’s interim financial statements for the three and nine month periods ending September 30, 2023 (“FinancialStatements”) and related Management’s Discussion & Analysis for three and nine month periods ending September 30, 2023, are available under the Company’s profile atwww.sedarplus.ca.

As of September 30, 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 a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

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 Statement Regarding Certain Non-GAAP Measures

This press release contains certain financial performance measures that are “specified financial measures” (as such term is defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure) and are not recognized or defined and do not have a standardized meaning under IFRS. 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 specified financial 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 specified financial 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 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 EBITDA 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. This non-GAAP financial measure is intended to provide a proxy for the Company’s net income and comprehensive income and is used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and 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.

Free cash flow is a non-GAAP financial measure that is used to measure Decibel’s ability to generate value and grow the Company’s business. Free cash flow is calculated as cash flow from operations less cash used in investing activities. 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.

.

Non-GAAP Ratios

Adjusted EPS is a non-GAAP ratio that is intended to provide a proxy for the Company’s net income and comprehensive income and is used to compare Decibel to its competitors and derive expectations of future financial performance of the Company. This measure increases comparability between comparative companies by eliminating variability resulting from differences in management assumptions related to the impact of fair value adjustments on biological assets, which may be volatile on a period-to-period basis. Adjusted EPS 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 ratio should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate 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 Financial Statements.

International sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company’s wholesale operations.

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

Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is added to net Canadian recreational sales as found in the Financial Statements to arrive at net Canadian recreational sales.

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: Decibel’s focus, strategy, priorities and plans; the anticipated benefits to be derived from (i) the completion of its capacity expansion and the estimated $10 million in annual savings derived therefrom (ii) the Company’s recent product launches and its expectations that they will contribute to meaningful growth in the coming year; (iii) the expansion of the Company’s manufacturing facility, including its expectations that it will expand the Company’s gross margin, support its new wave of product launches and reduce its increased temporary labour expense; the Company’s expectation that it will remain in compliance with all of its financial covenants under its credit facilities for the remainder of its twelve-month forecast period 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; the risk that the Company may not be able to meet consumer demand; the risk that the Company’s new product launches may not contribute to meaningful growth in the coming year; the risk that the expansion of the Company’s manufacturing facility may not expand the Company’s gross margin, support its new wave of product launches or reduce its increased temporary labour expense; 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: demand for Decibel’s products; 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 as and when required; 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: the anticipated benefits to be derived from the expansion of the Company’s manufacturing facility, including its expectations that it will expand the Company’s gross margin and reduce its increased temporary labour expense; 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.

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.

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 Launches General Admission ‘Blinker’ Closed Loop Vape System


CALGARY, ALBERTA – October 4, 2023 –Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSX-V:DB) (OTCQB:DBCCF), a leading manufacturer of cannabis ready to consume products, is pleased to announce the launch of General Admission ‘Blinker’ closed loop vape system of products. These products are expected to be available to order for licensed retailers in British Columbia the week of October 16th, in Ontario on October 19th, in Saskatchewan the week of October 23rd, in Alberta on November 3rd and in Manitoba by mid-November.

“Blinker positions Decibel to meet consumer demand for a better vape experience that delivers bold flavours, smart innovation, best-in-class airflow and superior reliability in performance” said Warren Matzelle, Chief Marketing and Product Officer. “The game-changing Blinker vape system features industry-leading innovation to address the many consumer pain points with existing vape products in today’s market.  Blinker lets the consumer focus on having an enjoyable, problem-free vape experience.”

Decibel welcomes you to discover more about the future of vaping with the General Admission Blinker closed loop vape system, please visit www.generaladmission.ca/blinker

The initial products expected to be launched for the General Admission Blinker system are:

  • Tiger Blood 0.95g vape pod
  • Peach Rizz 0.95g vape pod
  • 5 Loco 0.95g vape pod
  • Essentials Mixer Pack 4×0.28 vape pods
  • Social Sampler Pack 4×0.28g vape pods
  • Blinker Vape Battery

Key Highlights of the General Admission Blinker System include:

  • Large initial assortment of flavours and SKUs which consumers have shown to love in other formats like infused pre-rolls, 510 vape cartridges and edibles
  • Blinker pods will be line priced with existing General Admission 510 vape cartridges
  • Blinker vape batteries will be priced in-line with standard 510 batteries, making the system comparable in cost to the 510 system for consumers
  • Smart pod technology reduces common vape issues like, clogging and leaking, with best-in-class airflow, vapour production and flavour

For More Information Contact:

Decibel Cannabis Company Inc.

info@decibelcc.com

1-844-993-4769

www.decibelcc.com

About Decibel

Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

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.

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, the Company’s strategy, focus and values; the Company’s expectations of when the Blinker closed loop vape system of products will be available to order for licensed retailers in certain provinces; the anticipated benefits to be derived from the Blinker closed loop vape system of products; the initial products that are expected to be launched for the Blinker closed loop vape system; the expected MSRP of the Blinker vape batteries; Decibel’s expectations that the Blinker closed loop vape system will change the vape category; Decibel’s expectations with respect to the impact that the new product launch will have on the Company’s business; Decibel’s expectations regarding market, industry and consumer feedback related to the Blinker closed loop vape system; and 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: satisfaction of all international regulatory requirements, including applicable product testing; risks relating to delays; other regulatory changes and impacts; capital requirements; construction impacts; displacement requirements; global macro-economic events, conditions and factors; the ability to obtain and maintain licenses to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licenses (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, international export rules and regulations; 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 delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable; and the risk that the Blinker closed loop vape system of products may not be available to order for licensed retailers when anticipated in the provinces anticipated;

With respect to forward-looking statements contained in this news release, Decibel has made assumptions regarding, but not limited to: 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.

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 news 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 Expands Global Footprint with Agreement to Supply Medical Cannabis to 4C LABS for Distribution in the United Kingdom


CALGARY, ALBERTA – August 30, 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 that it has expanded its global footprint by entering into a supply agreement (the “Agreement”) to provide premium dried medical cannabis flower to 4C LABS, a healthcare, technology, and pharmaceutical company focused on virtual prescribing, pharmaceutical distribution and clinical development in cannabis based medicinal products for human health in the United Kingdom and Channel Islands (the “UK”).  

Key Highlights

  • Decibel to supply 4C LABS with Qwest branded, craft-quality Medical Cannabis for distribution to UK medical cannabis patients
  • Decibel to grant strain exclusivity of rare and unique cultivars to be distributed by 4C LABS
  • 3-year supply agreement
  • Initial shipment expected before year end
  • Minimum purchase commitments achieve exclusivity over certain genetics and QWEST brand in the UK

“We are excited to partner with 4C LABS, a leading organization in the growing medical cannabis industry in the UK, that echoes Decibel’s commitment to quality and patient care. Not only will this unlock a strong partnership and a new market for Decibel’s craft cannabis products, it also sets the stage for further growth into other European markets” said Adam Coates, Chief Revenue Officer.  “Decibel’s success with Qwest flower products in Canada and in Israel’s medical market reinforces the demand for premium cannabis products and the reputation we have built to service that demand.”

“4C LABS is building a patient focused best-in-class product line for the UK & Channel Islands, the Qwest craft flower line strengthens the top end of the 4C LABS product offerings. Decibel’s innovative craft quality Qwest flower products will fill an empty segment in the UK market and bring a world class BC Cannabis product to UK patients” said Greg Dobbin, CEO 4C LABS. Decibel’s success in Canada, the most competitive cannabis market in the world, is a product of hard work, innovation and attention to detail, qualities that will resonate with UK patients.”

For More Information Contact:

Decibel Cannabis Company Inc.

info@decibelcc.com

1-844-993-4769

www.decibelcc.com

4C LABS

Greg Dobbin

1-604-603-5333

greg@4clabs.ca

About Decibel

Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

About 4C LABS

4C LABS is a patient focused healthcare, technology, and pharmaceutical company concentrating on virtual prescribing, pharmaceutical distribution and clinical development in cannabis based medicinal products (“CBMPs”) for human health. 4C LABS is committed to advancing scientific research, as well as enabling the regulation, distribution and prescribing of CBPMs in the UK and Channel Islands. Its work with leading scientists, specialist physicians, and pharmacists is underpinned with disruptive technologies that are driving an approach to treatment that prioritizes patients and evidence over stigma. 4C LABS works closely with Drug Science, the Cannabis Industry Council (CIC), The Medicines and Healthcare Products Regulatory Agency (MHRA) and the Care Quality Commission (CQC) to catalyze safe, regulated change in the medical landscape. 4C LABS is fully licensed in the UK with MS WDA, Schedule 1 Narcotics and Production licenses.

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.

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, the timing of the initial shipment; expectations with respect to the impact the Agreement will have on the Company’s business; expectations regarding international markets and the Company’s position therein; the Company’s ability to grow its brands into new and innovative territories as well as product formats, variations and 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: satisfaction of all international regulatory requirements, including applicable product testing; risks relating to delays; other regulatory changes and impacts; capital requirements; construction impacts; displacement requirements; global macro-economic events, conditions and factors; the ability to obtain and maintain licenses to retail cannabis products; review of the Company’s production facilities by Health Canada and maintenance of licenses (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, international export rules and regulations; 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; 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 Record Second Quarter Results with $30.9 Million of Net Revenue, $7.3 Million of Adjusted EBITDA, and Positive Free Cash Flow


Most profitable pure play public cannabis company in Canada1,2

CALGARY, ALBERTA – August 17, 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 and six month periods ending June 30, 2023.

“Our strong second quarter sequential net revenue growth, driven by demand for our core products and international exports, continues to exceed our publicly-stated targets.” said Paul Wilson, CEO of Decibel. “We continue to highlight the success in our new, unique and innovative product strategy, demonstrated through clear consumer preference to our infused pre-roll strategy. In 2023, our industry leading brand, General Admission, has grown category share to 49%3 (+6% YTD3) in light of significant category competition through new competitive brands: +50 Brands3 (+56% YTD3) & New SKU’s: +156 SKU’s3 (+62% YTD3). Currently the infused pre-roll segment makes up ~34% of the Canadian pre-roll category3, in established US markets it makes up ~60% (California & Arizona YTD Sales ‘233). We continue to see tailwinds for our core business that will further reinforce our Canadian market position and international presence.”

Second Quarter Highlights

  • Record National Market Share(4) of7.5% in Q2 2023 which placed Decibel as the 2nd largest licensed producer in Canada by market share.
  • As of July 2023, Decibel’s market share was 7.6% which placed Decibel as the 2nd largest licensed producer in Canada by market share.
  • Record Net Revenue of $30.9 million in the second quarter of 2023, with sequential growth of 14% over the prior quarter, and year over year growth of 66%. Net revenue improvement was driven by net Canadian recreational sales through growth in demand for vapes and infused products, increased manufacturing capacity, international sales, and the launch of the Company’s new brand Vox and General Admission Edibles near the end of the quarter.
  • Gross Margin Before Fair Value Adjustments was42% in the second quarter of 2023, compared to 49% in the prior quarter and 41% in the first quarter of 2022. The second quarter was impacted by a $754 thousand write off of aged product and increased temporary labour of $0.9 million to meet market demand as the Company is in the process of expanding manufacturing capacity.
  • Record Adjusted EBITDA(2) of$7.3 million in the second quarter of 2023, with sequential growth of 8% over the prior quarter and year over year growth of 126%.
  • Positive Free Cash Flow(2) of$0.5 million in the second quarter of 2023, with sequential decline of 75% over the prior quarter and a year over year decline of 51%. During the quarter, the Company reduced accounts payable by $4.2 from the prior quarter, which negatively impacted Free Cash Flow.
  • Record Adjusted Net Income(2) of$4.3 million in the second quarter of 2023, with sequential growth of 27% over the prior quarter and a year over year improvement of $4.2 million.
  • Adjusted Earnings Per Share (“Adjusted EPS”)(5): of $0.01 Adjusted EPS in the second quarter, consistent with the prior quarter and a year over year improvement of $0.01.

Year to Date Highlights

  • Net Revenue of $58.0 million, an increase of 65% over 2022.
  • Adjusted EBITDA(2) of $14.1 million, an increase of 147% over 2022.
  • Positive Free Cash Flow(2) of $2.3 million, a decrease of 14% over 2022 driven by a $3.7 million reduction in accounts payable.
  • Adjusted EPS(4) of $0.02, an increase of $0.02 over 2022.

Notes:

1 Based on reported “Adjusted EBITDA”2 for the interim period ended June 30, 2023, as set forth in publicly available filings on SEDAR+ of pure play Canadian cannabis companies listed on the Toronto Stock Exchange or the TSX Venture Exchange. See “Cautionary Statements – Notes about Comparables“.

2 Non-GAAP financial measure. Refer to “Cautionary Statements – Non-GAAP Measures” for further details.

3 Data provided by Headset.

4 HiFyre Retail Analytics, Licensed Producer Sales over Time Nationally.

5 Non-GAAP ratio. Refer to “Cautionary Statements – Non-GAAP Measures” for further details.

Summary Highlights1

In the table above, wholesale inventory transferred to the retail stores and subsequently sold of $721 thousand and $1.4 million for the three and six month periods, has been eliminated from retail sales and attributed to Gross Canadian recreational sales and Net Canadian recreational sales to provide a more accurate depiction of business performance.

2  Supplementary financial measure. Refer to “Cautionary Statements – Non-GAAP Measures” for further details.

3  Non-GAAP financial measure. Refer to “Cautionary Statements – Non-GAAP Measures” for further details.

4  Non-GAAP ratio. Refer to “Cautionary Statements – Non-GAAP Measures” for further details.

Link to Decibel’s Investor Presentation

Decibel’s interim financial statements for the three and six month periods ending June 30, 2023 (“FinancialStatements”) and related Management’s Discussion & Analysis for three and six month periods ending June 30, 2023, are available under the Company’s profile at www.sedar.com.

As of June 30, 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 a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

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 ratio 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.  These measures intended to provide a proxy for the Company’s net income and comprehensive income and is used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and 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.2

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations less cash used in investing activities. 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.

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 Financial Statements.

International Sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company’s wholesale operations.

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

Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company’s wholesale operations. Inventory transferred directly from the Company’s wholesale operations to the Company’s retail operations is added to Net Canadian Recreational Sales as found in the Financial Statements to arrive at Net Canadian Recreational Sales.

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 expectations for continued growth and momentum in the second half of 2023, the Company’s expectations for additional catalysts late summer and early fall and the timing and results of the same; the Company’s expectation that it will remain in compliance with all of its financial covenants under its credit facilities for the remainder of its twelve-month forecast period 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; 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 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 revenue growth 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.

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.

Notes About Comparables

This news release outline’s the Company’s performance relative to third-party issuer metrics (the “Comparables”). The Comparables were considered to be an appropriate basis for comparison with Decibel as they are publicly provided by similar pure play issuers. The information relating to the Comparables has been obtained or derived from public sources, see “Market, Independent Third Party and Industry Data”. Comparables may be affected by, among other things, the size of the business, capital structure, principal market served, historical performance and growth expectations, which can vary significantly among Decibel and the issuers providing the Comparables. In addition certain Comparables may be calculated differently by other issuers, see “Non-GAAP Measures”. Accordingly, an investment decision should not be made in reliance on the Comparables.

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 Launches General Admission Edibles


CALGARY, ALBERTA – July 5, 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 the launch of General Admission edibles that are expected to be available to order for licensed retailers in British Columbia the week of July 3rd, in Alberta on July 7th, in Saskatchewan the week of July 24th and in Ontario in August.

“We are excited to break into the edible category in Canada with General Admission” said Warren Matzelle, Chief Marketing and Product Officer. “We continue to demonstrate our commitment to innovation and meeting consumer needs by adding a thoughtful portfolio of edible products under General Admission.  Our new line of edibles celebrates the bold flavours, potency, and convenience consumers have shown to love in our industry leading vapes and infused pre-rolls.”

  • Tiger Blood 2 Pack Soft Chews – 10mg of THC per pack
  • Blue Rocket 2 Pack Soft Chews – 10mg of THC per pack
  • Pomegranate Dragon Fruit 2 Pack Soft Chews – 10mg of THC & 5mg of CBN per pack
  • Pineapple Guava 2 Pack Soft Chews – 10mg of THC & 10mg CBD per pack

In addition to the launch of edibles, Decibel has launched a brand-new website for General Admission. The website, www.generaladmission.ca, serves as a hub of information, allowing consumers to explore the full range of products, learn about the latest releases, and stay in-touch with the brand.

For More Information Contact:

info@decibelcc.com

1-844-993-4769

www.decibelcc.com

About Decibel

Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

Neither the 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.

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: the Company’s strategy, focus and values; the Company’s expectations of when General Admission edibles will be available to order in certain provinces; the Company’s commitment to innovation and consumer needs; the anticipated benefits to be derived from Decibel’s customers; the impact and success of Decibel’s new General Admission website; that Decibel will create a global footprint; and the Company’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. 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 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; and the risk that General Admission edibles may not be available to order when anticipated in the provinces anticipated.

With respect to forward-looking statements 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.

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.

Decibel Introduces Vox Brand with Launch of Vox Popz Crushable Pre-Rolls


CALGARY, ALBERTA – June 22, 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 the launch of its new brand, Vox, and the introduction of its first product line, Vox Popz crushable extract pre-rolls. 

Vox Popz pre-rolls are expected to be available to order for licensed retailers in Alberta on June 23rd, in British Columbia the week of June 26th, in Saskatchewan the week of July 3rd, and in Ontario in Q4 2023.

“We are thrilled to introduce the Vox brand and the first ever crushable style pre-roll to the Canadian market with Vox Popz” said Warren Matzelle, Chief Marketing and Product Officer. “The launch of Vox Popz showcases the consumer-focused new, unique, and innovative pipeline Decibel has built and continues to execute against. Vox Popz crushable pre-rolls are just the beginning, and we have an exciting lineup of innovative products planned under the Vox brand.”

Each Vox Popz pre-roll is made from premium whole flower and a flavour-enhancing extract that can be ‘popped’ to deliver an extra burst of cannabis extract flavour. The initial launch of the Vox Popz line will come in four flavours:

  • Vox Popz Frosted Kush Mintz 3×0.5g
  • Vox Popz Grape Ice 3×0.5g
  • Vox Popz Watermelon Punch 3×0.5g
  • Vox Popz Mango OG 3×0.5g

The Vox brand promises to provide a range of ready-to-consume products, empowering consumers to customize their cannabis experiences to their individual preferences.  Under the Vox brand, Decibel aims to offer customers unique, vivid experiences and approachable innovation.

About Decibel

Decibel is a consumer-focused cannabis company focused on delivering products that delight customers through a commitment to robust innovation and product quality. Leading brands General Admission, Qwest, and Vox are among its portfolio sold both across Canada and beginning to extend towards new countries to create a global footprint. Decibel operates a processing and manufacturing facility in Calgary, Alberta, and two cultivation facilities in Creston, British Columbia, and Battleford, Saskatchewan.

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.

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: the Company’s strategy, focus and values; the Company’s expectations of when Vox Popz pre rolls will be available to order in certain provinces; the Company’s expectations that it will launch additional Vox brand products in the future and that it will offer a customizable experience for Decibel’s customers; that Decibel will create a global footprint; and the Company’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. 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 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 Vox Popz pre rolls may not be available to order when anticipated in the provinces anticipated; and the risk that the Company may not  launch additional Vox brand products in the future.

With respect to forward-looking statements 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.

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.

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


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 3rd largest licensed producer in Canada by market share.
    • As of April 2023, Decibel’s market share was 7.1% which placed Decibel as the 2nd 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:

    In 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.

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

    Refer 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.

    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.

    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


    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 4th and 3rd 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 2nd 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 EBITDA of 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:

    1 In 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.

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

    Non-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

    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.

    For More Information

    Contact Stuart Boucher

    stuart.boucher@decibelcc.com

    780-619-0310

    www.decibelcc.com

    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 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

    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.

    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.

    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

    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.