Mr. Josh Rosen reports

GOODNESS GROWTH HOLDINGS ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 RESULTS

Goodness Growth Holdings Inc. has released its financial results for its fourth quarter and full year ended Dec. 31, 2022. Key financial results are presented in this news release in summary form, with supporting commentary and discussion from management of certain key operating metrics, which the company uses to judge its operating performance. The company's audited financial statements and management's discussion and analysis for the year ended Dec. 31, 2022, will be filed on Form 10-K with the U.S. Securities and Exchange Commission and on SEDAR later today. All currency figures referenced in this news release are denominated in U.S. dollars.

Management commentary

Interim chief executive officer Josh Rosen commented: "Our fourth quarter results reflected revenue growth in each of our markets as well as continued improvements in margin performance, which was amplified by removal of the negative performance drag we experienced last year in our former Arizona cultivation facility. In building on the improved financial performance, I see numerous opportunities for us to drive meaningfully better operational efficiencies and quality. This room for improvement, coupled with what we anticipate will be meaningful state-regulatory catalysts, provides us a strong growth trajectory. My mandates from the board include augmenting our operational capabilities to better capitalize on our market opportunities and managing our balance sheet and liquidity to support our long-term success."

Mr. Rosen continued: "Over the past several months, we've taken considerable measures to improve the strength of our business, including reorganizing our management team with a decentralized approach to our state-based markets and the infusion of new battle-tested talent and resources. I'm particularly pleased with how recently promoted Amber Shimpa has risen to the occasion in helping drive the change management as our president and CEO of Vireo of Minnesota. As we enter 2023, we are focused on executing against a few key strategic priorities to strengthen our balance sheet and improve our operating and cash flow performance. The amendment to our senior secured debt was an important first step in addressing the most acute aspect of our balance sheet: extending the near-term maturity. And we're close to finalizing terms with a separate affiliate of Chicago Atlantic for an additional $10-million in capital as the second step."

Mr. Rosen concluded: "In an effort to align our communications with our internal priorities, we plan to provide additional disclosures surrounding the performance of our business in our core markets moving forward. We believe additional transparency surrounding our operations with key performance indicators will enable investors to better evaluate our performance, both good and bad. We intend to focus future discussions around relevant drivers of cash flow and operating performance rather than adjusted EBITDA, although we have provided that legacy metric with today's results for consistency with previous disclosures. Our strong year-over-year same-store sales growth in retail was supported by regulatory catalysts, in particular, the addition of flower in Minnesota in April, 2022, which drove overall market growth. I'd also highlight that we're putting meaningful emphasis on more efficiently producing greater amounts of quality or what we refer to as 'A' flower as a core driver of improvement over the coming several quarters."

Credit facility and corporate governance updates

The company also announced today in a separate news release that it has executed a fifth amendment to its Green Ivy credit facility, in addition to several corporate governance updates. The amended credit facility reduces cash outlays through the removal of a required amortization schedule and extends the maturity date on the credit facility loans to April 30, 2024, with opportunities for performance-based extensions through Jan. 31, 2026. The company will issue up to 15 million subordinate voting shares to the lenders in consideration for the credit facility amendments. In addition, the company is in advanced discussions with another affiliate of Chicago Atlantic to finalize a $10.0-million secured convertible loan financing.

Other events

On Oct. 13, 2022, Goodness Growth received a notice of purported termination of the agreement with Verano Holdings Corp., pursuant to which Verano had agreed to purchase all of the company's stock, subject to the satisfaction of certain conditions. The notice asserted certain breaches of the arrangement agreement, including claims that the company's public filings and communications with respect to its business and continuing operations were misleading, and that the company breached its representations to Verano under the arrangement agreement. Verano also claimed, as a result of such breaches, that it is entitled to payment of the $14,875,000 termination fee and its transaction expenses of up to $3-million. Goodness Growth denies all of Verano's allegations and affirmatively states that it has complied with its obligations under the arrangement agreement in all material respects at all times. Goodness Growth believes that Verano had no factual or legal basis to justify or support its purported grounds for termination of the arrangement agreement.

On Oct. 21, 2022, Goodness Growth commenced an action in the Supreme Court of British Columbia against Verano arising out of what Goodness Growth believes was the wrongful repudiation by Verano of the arrangement agreement. The company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance. Due to uncertainties inherent in litigation, it is not possible for Goodness Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded.

Balance sheet and liquidity

As of Dec. 31, 2022, total current assets were $46.7-million, including cash on hand of $15.1-million. Total current liabilities were $29.7-million.

Following the issuance of 15 million subordinate voting shares to the lenders in connection with the fifth amendment to the company's credit facility and the conversion of the company's former supervoting shares to subordinate shares, the company will have a total of 128,126,330 equity shares issued and outstanding on an as-converted basis, 178,921,494 shares outstanding on an as-converted fully diluted basis, and 131,348,007 fully diluted shares on the treasury method basis.

Conference call and webcast information

Goodness Growth management will host a conference call with research analysts on Monday, April 3, 2023, at 8:30 a.m. ET (7:30 a.m. CT), to discuss its financial results for its fourth quarter and year ended Dec. 31, 2022. Interested parties may attend the conference call by dialling 1-888-414-4585 (toll-free in the United States and Canada) or 1-646-960-0331 (toll international) and referencing conference ID No. 8663261.

A live audio webcast of this event will also be available in the events and presentations section of the company's investor relations website.

About Goodness Growth Holdings Inc.

Goodness Growth is a cannabis company, the mission of which is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. The company is evolving with the industry and is in the midst of a transformation to being significantly more customer-centric across its operations, which include cultivation, manufacturing, wholesale and retail business lines. Today, the company is licensed to grow, process and/or distribute cannabis in five markets and operates 18 dispensaries in four states.

Additional information

Additional information relating to the company's full-year 2022 results will be available on EDGAR and SEDAR later today. Goodness Growth management occasionally elects to provide certain non-GAAP (generally accepted accounting principles) financial measures, such EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA (defined as earnings before interest, taxes, depreciation and amortization, less certain non-cash equity compensation expense, one-time transactions and other non-recurring non-cash items) in circumstances which it believes provide additional perspective and insights when analyzing the core operating performance of the business. These measures do not have any standardized meaning and may not be comparable with similar measures presented by other issuers. During fiscal year 2022, Goodness Growth management discussed and provided reconciliations of quarterly EBITDA and adjusted EBITDA to directly comparable GAAP financial measures. As a result, references and reconciliations to these measures have been provided in this news release. However, management does not undertake any responsibility to provide similar disclosures in future periods.

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