Aleafia Health Continues to Gain Share in Adult Use Cannabis Market and Drive International Sales Growth

TORONTO – Aleafia Health Inc. (TSX: AH, OTCQX: ALEAF) provided a corporate update demonstrating that the Company continues to deliver market share advances by focusing on the highest revenue generating dried flower, pre-roll, and vape product categories. Consumers continue to express strong interest in its Sunday Market House of Brands adult-use cannabis products in these categories.

“In February, the Company reported that it had changed the business’ strategy towards being a branded cannabis products provider, with branded cannabis representing 80% of total net revenue in 2021 compared to 33% in 2020,” said Aleafia Health CEO Tricia Symmes. “Now we continue to deliver on that strategy, with record growth in market share in February and unique product introductions that demonstrate the success of our Sunday Market House of Brands, setting the stage for future success in the highest volume cannabis categories.”

In February, Aleafia Health achieved record 2.06% adult use market share in four major markets, advancing 33% from 1.54% in November 2021. In the same time frame, market share in flower rose to 1.86% from 1.47%, pre-rolls rose to 2.62% from 2.09%, vapes rose to 2.18% from 0.92%, and oil rose to 4.01% from 2.68%.⁽¹⁾ These advances in market share would have been stronger absent temporary capacity limitations at the Company’s Grimsby greenhouse facility.

Among Canadian LPs, in its four major markets, the Company ranked in February 2022⁽¹⁾:

• 13th overall, up from 30th in February 2021
• 11th in pre-rolls, up from 37th in February 2021
• 11th in vapes, up from 18th in February 2021

This 17-position overall market share rank increase, from 30^th to 13^th, demonstrates the success of the Sunday Market House of Brands. This growth was driven by strong retail pull-through of the Divvy product portfolio, Sunday Market’s everyday brand. The Company recently shipped its first flower SKUs to British Columbia, including 14g bags of Divvy Sour Kush and Flo, and 3.5g bags of Divvy Black Widow CBD, the Company’s spicy balanced flower offering. Divvy has consistently been one of the top 12 most searched brands on OCS.ca since its first product launch in April 2021. In addition, the Company’s Kin Slips discrete sublingual strip brand ranks #1 in Ontario.

As another indicator of consumer demand and sales momentum for adult use products, the Company for the first time has received a $1 million purchase order from Ontario, covering a wide range of products. In addition, Aleafia Health has secured purchase orders in 2022 year-to-date from Australia and Europe that exceed 2021 second half sales to international markets. Aleafia continues to target international sales as a future growth area, benefitting from its strong relationships with overseas distributors.

“Many of the Company’s new listings are line extensions, which speak volumes about the confidence the OCS and AGLC have in the Company, as those provincial authorities usually list line extensions only if predecessor products have been successful, which ours clearly were.”

“Divvy, the Company’s well-established everyday brand is focused on an exceptional value proposition, with a full suite of dried flower, pre-rolls, vapes and cannabis derivative products, benefitting from supply agreements with Ontario, Alberta, Saskatchewan, British Columbia,” Symmes said. “The Company has more than 100 provincial listings and seven new SKUs in Ontario and six in Alberta this Spring. That continued revenue velocity, in combination with the continued cost containment and rationalization initiatives underway, is helping drive us towards achieving breakeven Adjusted EBITDA⁽²⁾ profitability in the second half of 2022.”

1. Based on HiFyre data for Ontario, Alberta, British Columbia and Saskatchewan markets.
2. Please see “Adjusted EBITDA” section of the Company’s MD&A dated February 14, 2022 for reconciliation to IFRS equivalent.

Forward Looking Information

This news release contains forward-looking information within the meaning of applicable Canadian and United States securities laws. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this news release. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including risks contained in the Company’s annual information form filed with Canadian securities regulators available on the Company’s SEDAR profile at www.sedar.com. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

(This information is primarily sourced from Aleafia Health Inc.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).