TORONTO, ON – November 14, 2022 – Trees Corporation (NEO: TREE) (the “Company” or “Trees”),
is pleased to announce its third-quarter financial results for the three and nine month periods ended
September 30, 2022, and 2021.
HIGHLIGHTS OF THE THIRD QUARTER OF 2022 (the “QUARTER”)
• Record Sales and System-wide sales(1) of $2.5 million and $3.7 million respectively, for the Quarter;
• 40% growth in same-store corporate sales(1), from the third quarter of 2021;
• Gross margin of $1.0 million, or 36% of sales, a 71% increase from the third quarter of 2021 and a 27%
increase from the second quarter of 2022;
• 13 Trees Cannabis branded stores currently operating at the date of this release, with a 14th store
(Etobicoke, Ontario) scheduled to open before year end; and
• Receipt of B.C. retail license approval, allowing for imminent closure of B.C. 5-store acquisition.
The Company has increased revenues in the Quarter by 60% from the first quarter of 2022, while total gross
profit has increased by 78% over the same period due to a strengthening retail gross profit margin percentage
which averaged 32% in the Quarter compared to 28% in the first quarter of 2022.
“I am very proud of our team and their exceptional work in delivering continued strong growth in sales and
profitability over the past 9 months”, said Campbell Becher, CEO of Trees. Mr. Becher added “With the
imminent acquisition of our 5 Trees brand licensed store in B.C., anticipated to close before year end, our
quarterly revenue and gross profit margin will jump by nearly 50% beginning in the first full quarter after
the closing.”
Surging sales growth in 2022 is largely attributed to same-store sales growth of 40% over the third quarter
in 2021. Jeff Holmgren, President and CFO said, “our strong same-store sales growth demonstrates the
ever-increasing depth of our relationships within existing communities in which we serve. With a continued
hyper-focus on the consumer experience, despite intense competition in Canadian retail cannabis markets,
Trees is proving its operational excellence while forging a near-term path towards corporate profitability
and long term sustainable growth, one customer at a time.”
Selected Financial Information
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 and
nine months ended September 30, 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 www.TreesCorp.ca.
About Trees
Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded on
the NEO Exchange, Trees offers a differentiated retail experience, that aims to educate, amplify and unlock
emerging consumer segments and need states that allows Trees to uniquely engage the 360-cannabis
consumer. The Company currently has 13 Trees branded storefronts in Canada, including eight (8) stores
owned and operated in Ontario (with a 9th store scheduled to open before the end of the year) and five (5)
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 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. In September 2022, the Company received its provincial license to
operate in British Columbia from the British Columbia Liquor and Cannabis Regulation Branch. The
Company has commenced with the closing of the APA which it anticipates completing in the fourth quarter
of 2022.
Non-IFRS Financial Measures
Throughout this MD&A, references are made to non-IFRS financial measures, including system-wide sales,
same store sales, earnings before interest, taxes, and depreciation, and amortization (“EBITDA”). These
measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a
supplemental measure of the Company’s operating performance and therefore highlight trends in
Company’s core business that may not otherwise be apparent when relying solely on IFRS measures.
Management uses non-IFRS measures in measuring the financial performance of the Company.
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, forwardlooking
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
Email: jeffh@treescorp.ca