May 16, 2022



  • $1.7M Q1 2022 revenue, a 225% increase in corporate store retail revenue over the same period in the prior year, delivery of a 31% corporate store retail gross margin;[1]
  • $2.8M of system-wide retail sales[2], a 369% increase over the same period in the prior year with a 32% system-wide retail gross margin; and
  • 267% increase in system-wide count from 3 stores in Q1 2021 to 11 in Q2 2022 (7 corporate and 4 brand licensed).

TORONTO, ON – May 16, 2022 – Trees Corporation (NEO:TREE) (the “Company” or “Trees”), a next-now cannabis company at the intersection of community, content, and commerce,  is pleased to announce its first-quarter financial results for the three months ended March 31, 2022 and 2021. 

“The Trees team has done an exceptional job in executing on our business plan,” stated Jeff Holmgren, President and Chief Financial Officer of Trees, further adding “In recent months Trees has taken giant steps forward to strengthen the balance sheet through substantive debt settlements reducing corporate debt. Trees is well positioned to move forward with confidence as it continues to execute on its growth strategy.”

Summary of the First Quarter Financial Results

During the three months ended March 31, 2022 (“Q1 2022”, the Company generated revenue of $1.7 million compared to $0.5 million in Q1 2021 (the “prior year”), representing an increase of 225%.  Revenue growth was driven by an increase in the corporate owned store count from 2 stores in Q1 2021 to 7 stores in Q1 2022, inclusive of the acquisition of Metro Cannabis in May 2021, which added 4 stores and $0.9 million of revenue for Q1 2022. 

Trees’ retail gross margin of 31% for Q1 2022 was down from 36% gross margin recorded in the prior year, reflecting increased price competition led by the entry of multiple value retailers in early 2021 who substantially reduced margins in pursuit of increased market share.  Trees has demonstrated a resilience to these competing factors through exceptional customer service, product selection and convenience, successfully mitigating the margin reduction to only 14% from the same period in the prior year.

As at March 31, 2022, the Company had a cash balance of $210,333 (December 31, 2021: $1,316,517) and a net working capital deficit of $3,776,672 (December 31, 2021: $765,973), a decrease of $3,010,698 from December 31, 2021 to March 31, 2022, largely a result of the use of cash towards operations and growth initiatives and the reclassification of shareholder loans to current in the current period.  However, subsequent to March 31, 2022, Trees has been successful in substantially strengthening its balance sheet through the combined initiatives of debt settlement negotiations and a previously announced private placement financing.

Selected Financial Information

For the three months ended March 31,20222021ChangeChange
Revenue from retail sales1,684,855518,4561,166,399224.98%
Revenue from wholesale accessory sales33,2929,39823,894254.25%
Revenue from consulting2,959   (2,959) (100.00%)
Interest income54,56654,566100.00%
Total revenue1,772,713530,8131,241,900233.96%
Total gross profit542,537193,511349,026180.36%
Gross profit margin from product sales30.60%36.46%(5.85%)(16.05%)
Operating expenses569,092137,205431,887314.78%
General and administrative expenses662,486275,009387,477140.90%
Loss from operations   (1,952,580)    (3,998,984) 2,046,40451.17%
Loss per share (basic)   (0.02)    (0.57) 0.5495.98%
Loss per share (diluted)   (0.02)    (0.57) 0.5495.98%

Consolidated Financial Statements and MD&A

The results discussed herein are a summary and are qualified in their entirety by reference to the Company’s unaudited interim condensed consolidated financial statements and accompanying notes for the three months ended March 31, 2022 and 2021, and related management’s discussion and analysis of financial condition and results of operations, copies of which are available under the Company’s profile on SEDAR and the Company’s Investor Relations website at

About Trees

Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded, Trees offers a differentiated retail experience, combined with digital platforms that aim to educate and amplify, unlocking emerging consumer segments and need states that allows Trees to uniquely engage the 360 cannabis consumer. The company has 11 Trees branded storefronts in Canada, including seven (7) stores owned and operated in Ontario and four (4) stores operated in BC, subject to the closing of the acquisition of the assets of 101 pursuant to the terms of the third amended and restated asset purchase agreement between Trees and 1015712 B.C. Ltd. (the “APA”). The closing of the transactions contemplated by the APA is subject to certain conditions precedent, including the receipt of certain licensing approvals and related regulatory consents.  Until such time as the closing of the acquisition of the assets under the terms of the APA, the BC stores are subject to a brand license agreement and are included when reporting System-Wide Retail Sales1

Non-IFRS Financial Measures

In this news release, the Company reports “system-wide retail sales” and “Retail Gross Margin”, financial measures that are not determined or defined in accordance with the International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IFRS“). Such financial measures do not have standardized meanings prescribed by IFRS and Trees’ methods of calculating these financial measures may differ from methods used by other companies. Accordingly, such non-IFRS financial measures may not be comparable to similarly titled measures presented by other companies. These measures are provided as additional information to complement IFRS by providing a further understanding of operations from management’s perspective and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

System-wide retail sales represents the sum of the revenue reported to Trees by (i) brand licensed retail cannabis stores, which are subject to a brand license agreement providing Trees with a royalty interest, and (ii) Company-owned retail cannabis stores. Management believes this measure is useful to the investment community in evaluating brand scale and market penetration and is used by management of Trees to assess the financial and operational performance of the Company and the strength of the Company’s market position relative to its competitors.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that constitute “forward-looking information” (“forward-looking information”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses 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 information.

Forward-looking statements in this document include, among others, statements relating to the Trees’ expectations regarding the closing of the transactions contemplated by the APA and receipt of regulatory approvals in connection therewith, expectations regarding the Company’s ability to unlock and capture emerging consumer segments across its platforms, expectations regarding the Company’s ability to engage its customers and new consumer segments and need states, the expectation that the Company will be successful in its growth strategy, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company’s business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company’s securities, regardless of its operating peers; (e) adverse changes in the public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. 

The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.

The NEO Exchange has neither approved nor disapproved the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release.  

For more information, please contact:

Trees Corporation

Jeffrey Holmgren

President and Chief Financial Officer


[1] Gross margin is a non-IFRS financial measure.  See “Non-IFRS Financial Measures” below.

[2] System-Wide Retail Sales is a non-IFRS financial measure.  See “Non-IFRS Financial Measures” below.