Mr. Sam Gibbons reports

GOODNESS GROWTH HOLDINGS CLOSES ON INITIAL $2.0 MILLION TRANCHE OF $10.0 MILLION FINANCING COMMITMENT

Goodness Growth Holdings Inc. has closed on a $2-million (U.S.) tranche of a new convertible debt facility which enables the company to access up to $10-million (U.S.) in aggregate principal amount of convertible notes. This facility is being financed by a separate affiliate of the company's senior secured lender and was previously announced as in final discussions on March 31, 2023.

Interim chief executive officer Josh Rosen commented: "We are pleased to close this convertible loan as we anticipated in late March. We appreciate the collaborative nature of our relationship with Chicago Atlantic, who have patiently supported our business improvement plans subsequent to Verano's decision to wrongfully terminate our merger transaction last year. This gives us additional flexibility to execute our strategy for the year ahead, which encompasses a focus on producing and selling higher-quality products more efficiently, with the underlying measuring stick of improving cash flow from operations."

The convertible facility has a term of three years, with an interest rate of 12.0 per cent, including 6.0 per cent cash and 6.0 per cent paid in kind. The initial tranche's principal amount of convertible notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into subordinate voting shares of the company at the option of the holders at any time by written notice to the company, at a conversion price equal to 14.5 U.S. cents. For each future tranche advanced, the principal amount of convertible notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into subordinate voting shares of the company at the option of the holders at any time by written notice to the company, at a conversion price equal to the lesser of 14.5 U.S. cents, or a 20-per-cent premium over the 30-day volume-weighted average price of the company's subordinate voting shares calculated on the day prior to the date on which each tranche is advanced, if permitted by the Canadian Securities Exchange. The lenders also have the right to advance any remaining undrawn finances on the convertible loan facility to the company at any time.

Finally, in connection with this financing, the company will issue 6.25 million warrants to purchase subordinate voting shares of the company to the lenders. The warrants will have a term of five years with a strike price equal to 14.5 U.S. cents. The company does not expect to issue any additional warrants related to this convertible loan facility.

About Goodness Growth Holdings Inc.

Goodness Growth Holdings is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs.

We seek Safe Harbor.