Mr. Zohar Krivorot reports

CANNARA REDUCES COST OF DEBT WITH LOWER INTEREST RATE AND PARTIAL DEBENTURE REPAYMENT; WINS 2025 BRAND OF THE YEAR

In recognition of Cannara Biotech Inc.'s continued commitment to product excellence and innovation, Cannara was honoured with two awards at the sixth Annual Grow Up Awards Gala held in Toronto on May 28, 2025. The company's Tribal brand was named Brand of the Year, and its Nugz Happle product was awarded the Accessory of the Year prize. The Grow Up Awards Gala is a nationally recognized event celebrating outstanding achievement in the Canadian cannabis industry. These accomplishments follow recent steps taken by the company to reduce its cost of capital, including a partial repayment of its Olymbec convertible debenture and a reduction in the interest rate on its Bank of Montreal credit facility.

"We are tremendously honoured to announce our recognition of Brand of the Year and Accessory of the Year at the 2025 Grow Up Awards. These awards highlight our strong and growing brand presence, our leading genetic strategy, and our focus on delivering premium-quality consumer experiences across our product portfolio," said Zohar Krivorot, president and chief executive officer of Cannara Biotech. "We're proud to represent Quebec's cannabis industry with Tribal, Canada's leading mass market premium 3.5 g cannabis brand."

"Being awarded Brand of the Year reflects our commitment to delivering premium cannabis at disruptive pricing while building a leading national brand. This recognition comes as we continue to strengthen our financial position through the partial repayment of our Olymbec convertible debenture and a reduced interest rate on our credit facility -- demonstrating disciplined execution across both operations and capital management," said Nicholas Sosiak, chief financial officer of Cannara Biotech.

The Grow Up Conference and Expo is one of Canada's leading industry events. The annual Grow Up Awards are one of the industry's highest honours, with winners selected through open voting by industry participants and the public.

Olymbec convertible debenture repayment

The company announced it has made a $1-million repayment against the outstanding convertible debenture originally issued on June 21, 2021, as amended on Aug. 31, 2023, Jan. 30, 2024, and Feb. 21, 2025, to Olymbec. This repayment aligns with Cannara's disciplined approach to capital management and reflects its commitment to reducing leverage while maintaining financial flexibility.

For a full description of the Olymbec convertible debenture, please refer to the company's annual information form for the fiscal year ended Aug. 31, 2024. A copy of the Olymbec convertible debenture is available under the company's profile on SEDAR+.

Reduced interest rate on credit facility

The company is pleased to announce a total reduction of 50 basis points in the interest rate spread on its BMO credit facility. This reduction was achieved in two stages: an initial 25 basis point decrease secured through an amendment to the credit agreement, followed by an additional 25 basis point reduction triggered by the company's successful achievement of certain covenant thresholds as of Q2 2025 (ended Feb. 28, 2025). As a result, Cannara's overall cost of debt is now below 6 per cent, underscoring its strong financial performance and disciplined approach to capital structure management.

All other original terms and conditions of the BMO credit facility remain in full force and effect. For a full description of the BMO restated credit facility, please refer to the company's annual information form for the fiscal year ended Aug. 31, 2024. A copy of the restated credit facility is available under the company's profile on SEDAR+.

About Cannara Biotech Inc.

Cannara Biotech is a vertically integrated producer of affordable premium-grade cannabis and cannabis-derivative products for the Canadian markets. Cannara owns two mega facilities based in Quebec spanning over 1,650,000 square feet, providing the company with 100,000 kilograms of potential annualized cultivation output. Leveraging Quebec's low electricity costs, Cannara's facilities produce premium-grade cannabis products at an affordable price.

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