Mr. Micah Anderson reports

LEEF BRANDS ANNOUNCES FULL EARLY CONVERSION OF ~US$10.5 MILLION OF USD CONVERTIBLE DEBENTURES

Leef Brands Inc. has completed the full early conversion of its outstanding 11-per-cent secured convertible debentures due Sept. 9, 2027, in principal amount together with accrued and unpaid interest of approximately $10,588,928 (U.S.).

The conversion was completed under amended incentive terms that offered debenture holders the opportunity to settle their debentures into units at a conversion price of 25 cents per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at 30 cents for a period of 36 months. Under the early settlement, approximately 59,209,048 units will be issued.

In addition, the company confirms that chief executive officer Micah Anderson settled his full debenture under the terms above, as well as an additional $982,080 in notes payable at 25 cents per unit, demonstrating strong insider alignment and confidence in the company's long-term growth strategy.

Strategic rationale

The full early conversion delivers several important benefits for Leef:

• Strengthens the balance sheet by eliminating substantially all remaining long-term debenture debt. The company has two remaining pieces of real estate debt on its balance sheet. One note payable for $4.2-million at 4-per-cent interest and a second for $7-million at 0-per-cent interest.
• Improves financial flexibility as the company scales operations in California and New York, positioning Leef for strategic growth initiatives, including expanding Salisbury Canyon Ranch and its New York operations.
• Demonstrates strong commitment from insiders and long-standing debenture holders, many of whom have supported the company through multiple operating cycles.

This early conversion comes as the company's operational momentum builds, highlighted by 24-per-cent year-over-year revenue growth and a doubling of gross margins in Q3.

Management commentary

"We are pleased to complete this full conversion, which immediately strengthens our capital structure and enhances our financial flexibility heading into 2026," said Micah Anderson, chief executive officer of Leef Brands. "This moment reflects the hard work of our team, the progress we've made in California and New York, and our commitment to long-term shareholder value. I am proud to participate personally in this conversion alongside our long-standing debenture holders."

Kevin Wilson, chief financial officer of Leef Brands, added: "We appreciate the continued confidence shown by our debenture holders, many of whom have supported Leef through challenging periods. With this conversion complete, the company enters 2026 with a simplified balance sheet, improved margins from cultivation, and a new, high-margin revenue stream from our New York operations."

About Leef Brands Inc.

Leef Brands is a vertically integrated, multistate cannabis operator focused on extraction, manufacturing, cultivation and product innovation. With operations in California and New York, Leef partners with top brands to deliver high-quality concentrates, ingredients and finished goods. The company's large-scale cultivation project at Salisbury Canyon Ranch and New York processing facility position Leef for sustainable growth across regulated markets.

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