Aleafia Health Continues Ascent in Adult-Use Cannabis Market Share Rankings

• Adult-use cannabis market share increased three positions to 13^th in April 2022 vs 16^th in December 2021⁽¹⁾
• 53% increase in adult-use market share to 2.5% in April 2022 vs December 2021⁽²⁾, representing the 5th highest growth rate among the top 40 Canadian LPs
• Spring & Summer launch of 12 OCS and 8 AGLC SKUs builds depth in key flower, pre-roll and vape product format categories and positions the Company for a strong second half of 2022
• Company on pace to becoming a top 10 Canadian LP while building high-margin medical and international businesses

TORONTO, May 24, 2022 (GLOBE NEWSWIRE) — Aleafia Health Inc. (TSX: AH, OTCQX: ALEAF) (“Aleafia Health” or the “Company”) is pleased to announce that its upward trend in market share, purchase orders, and new SKU launches has continued in 2022’s first four months, following on from the growth in the quarter ended December 31, 2021. The Company has seen strong advances in its largest adult-use categories: flower, pre-rolls and vapes.

The Company has now achieved more than four consecutive quarters of increases in adult-use cannabis market share, rising to 2.5% in April 2022, a 134% year over year increase over April 2021. Among Canadian licensed Cannabis producers, Aleafia Health achieved a record 13th in overall market share rank in April 2022, based on retail level sales pull through, up from 16th in the quarter ended December 31, 2021.⁽³⁾

Delivering Innovative New Products with Rapid Customer Uptake

At the Ontario Cannabis Store (“OCS”), sales for the recently launched Pineapple Nuken pre-roll 12 pack exceeded $1 million in the first four months of 2022 and sales of cropped harvest products were nearly $1 million in their first month.

Focused Product Portfolio on the Largest Adult-Use Product Categories

“On our Q4 2021 earnings call earlier this year, we committed to delivering on ambitious growth plans and the Company is now meeting and, in some cases, exceeding those targets,” said Aleafia Health’s CEO Tricia Symmes. “The Company has a superb, hard-working team, and strong consumer acceptance for its Sunday Market house of brands. It’s no wonder that our everyday brand Divvy has been among the OCS’ most searched product list for the last 14 months. It’s a very exciting time for the Company as quarter by quarter we build on our foundation and get increasingly more recognition among savvy industry participants who recognize we are here to compete.”

“By strategically creating a portfolio of 37 active SKUs in the OCS, with 12 additional SKUs launching in the Spring and Summer, we are laser focused on the largest margin, top revenue-generating product categories: flower, pre-roll and vapes, with 67% of our SKU listings in those categories,” said Symmes. “In AGLC we have 43 active SKUs, with 8 SKUs pending launch, and in that market 60% of our SKU listings are in those same three large product categories.”

Continued Scaling of a Diversified Revenue Mix

“Our top three selling products in the OCS year to date ended April 30, 2022, were $1.1 million in sales of Pineapple Nuken 12-pack pre-rolls, $0.9 million in sales of 14-gram Sour Kush flower and $0.7 million in sales of California Orange vape cartridges. All three of these products are under our everyday value brand, Divvy. This demonstrates that we are building a diversified portfolio of products across our three core adult-use categories,” said Aleafia Health’s CFO Matthew Sale.

“I am also pleased to announce that we have over $9.6 million in firm purchase orders from the provincial distributors to date this quarter which we anticipate filling before June 30, 2022. This is an important milestone for Aleafia as we continue to show growth in our adult-use sales while many of our peers are delivering deteriorating sales performance. Among the top 20 largest Canadian LPs, our growth rate in adult-use sales places us in the top quartile. The Company’s run-rate in adult-use net revenue of $28 million is incredible given in Q1 2021 we generated only $1.7 million in net revenue,” said Sale.

“We are very proud of our sales success and will continue to build on our progress in flower, pre-rolls and vapes, the three largest adult-use categories,” said Symmes. “But the Company is also a developer of innovative new products that will continue to drive our sales performance. As an example, we added Bogart’s Kitchen’s Red Habanero to our groundbreaking hot sauce lineup and a winterized resin CBD vape cartridge to our popular Divvy vape lineup. We also have a revolutionary sleep-related product in the product pipeline for summer under our Noon & Night brand. A great team plus new products, new formats, new categories, and leadership in the three largest adult-use categories, that along with our solid Emblem medical cannabis brand and developing momentum in international distribution, is Aleafia Health today.”

For Investor & Media Relations:

Matthew Sale, CFO
1-833-879-2533
IR@AleafiaHealth.com
LEARN MORE: www.AleafiaHealth.com

About Aleafia Health:

Aleafia Health, a vertically integrated and federally licensed Canadian cannabis company, owns three licensed cannabis production facilities, including the first large-scale, legal outdoor cultivation facility in Canadian history, and operates a strategically located distribution centre, all in the province of Ontario. The Company produces a diverse portfolio of cannabis derivative products including oils, capsules, edibles, sublingual strips, and vapes, for sale in Canada in the adult-use and medical markets and is pursuing opportunities in select international jurisdictions. The Company owns and operates a virtual network of medical cannabis clinics staffed by physicians and nurse practitioners.

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.

¹ Based on HiFyre data for the Company’s markets: Ontario, Alberta, British Columbia and Saskatchewan as of April 30, 2022.
² Based on HiFyre data for the Company’s markets: Ontario, Alberta, British Columbia and Saskatchewan as of April 30, 2022.
³ Note retail level sales data is based on store financial information and is not the same metric as Aleafia Health revenue.