VANCOUVER, British Columbia, Aug. 06, 2026 (GLOBE NEWSWIRE) -- LEEF Brands Inc. (CSE: LEEF) (OTCQB: LEEEF) (“LEEF” or the “Company”), a leading California concentrate company, today reported its financial results for the second quarter ended June 30, 2026. All financial information is reported in U.S. dollars and in accordance with U.S. generally accepted accounting principles (“GAAP”), unless otherwise indicated.
Second Quarter 2026 Financial Highlights
- Net revenue was $7.3 million, a decrease of 16% from $8.7 million in Q2 2025, primarily reflecting lower volumes while the Company operated with a temporary biomass gap between 2025 and 2026 harvests from Salisbury Canyon Ranch.
- Gross profit increased 62% to $2.4 million from $1.5 million, and gross margin nearly doubled to 33% from 17%, driven by disciplined procurement and a growing contribution from higher-margin hydrocarbon products, which became the Company’s largest revenue category for the first time.
- Net loss improved to $1.3 million from $2.9 million in Q2 2025, driven by the margin improvement and a non-cash gain on derivative liabilities tied to changes in LEEF’s share price.
- Adjusted EBITDA improved to $(0.6) million from $(1.3) million in Q2 2025. Sales of the new Salisbury Canyon Ranch harvest’s higher-potency, CAT 4 distillate are expected to begin in August, driving margin improvement through the second half of Q3.
- LEEF ended the quarter with $5.0 million in cash, up from $2.2 million at year-end, and an $8.7 million working capital surplus. This liquidity gives the company the cash to hold this year’s harvest and sell selectively, rather than into depressed prices out of necessity.
“I have never been more excited about LEEF’s future,” said Micah Anderson, Chief Executive Officer of LEEF Brands. “We’re scaling Salisbury Canyon Ranch toward its full 180 acres for a bigger, more reliable biomass supply, and adding the processing capacity to support that growth and improve our economics over time. Himalaya is already a valuable, growing, higher-margin business, and there’s more room to build from here. And we’re preparing LEEF to serve interstate and international markets as those opportunities become available.”
“Q2 clearly demonstrated the value of Salisbury Canyon Ranch,” said Kevin Wilson, Chief Financial Officer. “Gross margin was 33% without our own biomass from the ranch, compared with approximately 50% during the preceding three quarters when we were running material from the ranch. With the harvest now complete, we expect our own material to begin contributing in the second half of Q3 and more fully in Q4, supporting stronger margins moving forward.”
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Operational Highlights
Expanding Salisbury Canyon Ranch
Following quarter-end, LEEF completed the largest harvest in its history at Salisbury Canyon Ranch, bringing in nearly one million plants. The first several hundred liters of distillate were produced in July, with sales expected to begin in August. Initial results are among the best the Company has produced: the distillate passed California’s elevated CAT 4 pesticide screens and tested at approximately 95% THC and 99% total cannabinoids.
LEEF added 14 acres of cultivation this spring, bringing Salisbury Canyon Ranch to approximately 80 acres, and expects to add another 21 acres this fall. The Company also entered into a supply agreement with a long-term farming partner for an additional 21 acres at a similar cost structure.
Together, LEEF’s total internal and contracted cultivation footprint is expected to reach approximately 122 acres by this fall — an 88% increase from a year ago — and is expected to carry the Company through the 2027 harvest without another gap in its own biomass supply.
LEEF remains on track to operate the full 180-acre permitted footprint at Salisbury Canyon Ranch in 2027. LEEF’s 180-acre land-use permit for cannabis is the largest in Santa Barbara County, and the capital required to bring the full footprint into production has already been invested.
Himalaya Acquisition
Himalaya, the established California concentrates brand LEEF acquired on April 27, 2026, contributed approximately $1.0 million in revenue during its first partial quarter with the Company. The acquisition gives LEEF a platform to sell products manufactured from its own clean, low-cost inputs and to participate in higher CPG margins. LEEF views Himalaya as the first step in a broader branded-products strategy and expects it to deliver strong growth and begin contributing meaningfully to cash flow in 2027.
New Processing Facility
Following the quarter, LEEF raised an additional $5.2 million to fund the planned purchase of a dedicated facility to dry, cure, freeze, and store biomass before it moves to LEEF Labs for extraction. It will support the Company’s full 180-acre footprint at Salisbury Canyon Ranch and, over time, is expected to roughly double the amount of biomass LEEF can retain from each harvest. The facility may also create an additional revenue stream by offering drying, curing, and storage services to other cultivators.
Interstate Commerce and International Export Opportunities
LEEF filed DEA registration applications across its California and Nevada licenses and engaged Shane Pennington, a partner at Blank Rome, to guide the process. The Company is also identifying potential international markets and preparing its cultivation and manufacturing operations to meet applicable GACP and destination-market GMP standards, with a goal of producing export-ready products in 2027.
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LEEF has met with many of the larger U.S. multi-state operators, several of which have also contacted the Company directly, and describes the response as unanimously positive. Management believes LEEF’s cost structure, extraction expertise, and production capacity could position the Company as a valuable supply and manufacturing partner to other operators as interstate and international markets develop. Interstate commerce and international exports are not guaranteed, and their timing remains uncertain.
Investing in the Team
During the quarter, LEEF strengthened its leadership team and added strategic expertise to support its next phase of growth. Chris Crouch joined LEEF as Chief Revenue Officer, bringing more than a decade of cannabis experience across retail, CPG, operations and revenue leadership, most recently as Chief Operating Officer of Turn, a leading U.S. vape company, and previously in senior roles at Urbn Leaf, Volcom, Pac Sun, and Quiksilver. LEEF also engaged Hirsh Jain of Ananda Strategy as a strategic advisor to help the Company navigate the evolving policy and regulatory environment and evaluate opportunities related to federal rescheduling, interstate commerce, and international exports.
Capital Raise
During the six months ended June 30, 2026, LEEF raised gross proceeds of approximately $9.0 million through the issuance of preferred and common shares, and raised an additional $5.2 million in July 2026, bringing total gross proceeds raised in 2026 to approximately $14.2 million. Proceeds have funded the expansion of Salisbury Canyon Ranch, the planned purchase of the new processing facility, and continued investment in inventory ahead of the Company’s largest-ever harvest.
Conference Call Details
Date: Thursday, August 6, 2026
Time: 5:00 p.m. Eastern Time
Webcast: To listen live or access the replay, please visit: https://edge.media-server.com/mmc/p/29ke5ia3
Non-GAAP Financial Measures
The Company uses Adjusted EBITDA, a non-GAAP financial measure, to evaluate its operating performance. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company’s calculation may not be comparable to similarly titled measures used by other companies.
Beginning with the second quarter of 2026, the Company’s definition of EBITDA excludes excise and other taxes previously included in the income tax adjustment; prior-period amounts have been conformed to the current presentation. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure is included in the accompanying financial tables below.
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LEEF BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) |
| |
| Three Months Ended June 30, 2026 and 2025 |
| |
| | Three Months
Ended June 30,
2026 | | | Three Months
Ended June 30,
2025 | |
| Net revenue | $ | 7,274,908 | | | $ | 8,691,656 | |
| Cost of sales | $ | 4,864,545 | | | $ | 7,201,635 | |
| Gross profit | $ | 2,410,363 | | | $ | 1,490,021 | |
| Operating expenses | | | | | | | |
| Advertising and promotion | | 21,904 | | | | 62,061 | |
| Depreciation and amortization | | 350,235 | | | | 304,107 | |
| Wages and salaries | | 2,155,828 | | | | 1,943,497 | |
| Office and general expenses | | 705,705 | | | | 733,569 | |
| License and compliance | | 31,603 | | | | 13,506 | |
| Research and development expenses | | 6,281 | | | | 10,570 | |
| Legal and professional fees | | 644,399 | | | | 338,269 | |
| Insurance expenses | | 110,358 | | | | 121,780 | |
| Excise and other taxes | | 59,801 | | | | 59,142 | |
| Lease expenses | | 186,296 | | | | 183,333 | |
| Travel and business development | | 126,310 | | | | 93,346 | |
| Total operating expenses | $ | 4,398,720 | | | $ | 3,863,180 | |
| Loss from operations | $ | (1,988,357 | ) | | $ | (2,373,159 | ) |
| Other (income) expense | | | | | | | |
| Interest expense | | 242,195 | | | | 579,387 | |
| Change in fair value of derivative liability | | (1,581,817 | ) | | | (566,681 | ) |
| Other expense (income) | | (18,037 | ) | | | (60,557 | ) |
| Total other (income) expense | $ | (1,357,659 | ) | | $ | (47,851 | ) |
| Loss before provision for income taxes | $ | (630,698 | ) | | $ | (2,325,308 | ) |
| Provision for income taxes | | 704,050 | | | | 607,891 | |
| Net loss and comprehensive loss | $ | (1,334,748 | ) | | $ | (2,933,199 | ) |
| Less: Preferred stock dividends | | 137,491 | | | | – | |
| Net loss and comprehensive loss applicable to common shareholders | $ | (1,472,239 | ) | | $ | (2,933,199 | ) |
| Loss per common share – basic and diluted | $ | (0.01 | ) | | $ | (0.02 | ) |
| Weighted average common shares outstanding | | 290,003,245 | | | | 175,442,331 | |
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LEEF BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(Unaudited)
|
| |
| Six Months Ended June 30, 2026 and 2025 |
| |
| | Six Months Ended June 30, 2026 | | | Six Months Ended June 30, 2025 | |
| Net revenue | $ | 16,651,910 | | | $ | 18,089,917 | |
| Cost of sales | $ | 9,616,897 | | | $ | 14,526,606 | |
| Gross profit | $ | 7,035,013 | | | $ | 3,563,311 | |
| Total operating expenses | $ | 7,739,703 | | | $ | 7,844,015 | |
| Loss from operations | $ | (704,690 | ) | | $ | (4,280,704 | ) |
| Total other (income) expense | $ | (622,319 | ) | | $ | (2,942,285 | ) |
| Loss before provision for income taxes | $ | (82,371 | ) | | $ | (1,338,419 | ) |
| Provision for income taxes | | 1,678,630 | | | | 1,329,004 | |
| Net loss and comprehensive loss | $ | (1,761,001 | ) | | $ | (2,667,423 | ) |
| Less: Preferred stock dividends | | 137,491 | | | | – | |
| Net loss and comprehensive loss applicable to common shareholders | $ | (1,898,492 | ) | | $ | (2,667,423 | ) |
| Loss per common share – basic and diluted | $ | (0.01 | ) | | $ | (0.02 | ) |
| Weighted average common shares outstanding | | 275,008,957 | | | | 175,085,129 | |
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LEEF BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS |
| |
| | June 30, 2026 (unaudited) | | | December 31,
2025 | |
| ASSETS | | | | | | | |
| Cash | | 4,950,962 | | | | 2,190,722 | |
| Accounts receivable, net | | 2,212,582 | | | | 1,592,653 | |
| Inventory, net | | 7,146,535 | | | | 3,350,889 | |
| Prepaid expenses and deposits | | 1,545,020 | | | | 505,438 | |
| Deferred costs and other current assets | | 512,656 | | | | 508,987 | |
| Total current assets | $ | 16,367,755 | | | $ | 8,148,689 | |
| Property and equipment, net | | 25,554,412 | | | | 25,041,313 | |
| Right of use assets, net | | 1,689,020 | | | | 1,678,072 | |
| Goodwill | | 6,053,307 | | | | – | |
| Intangible assets, net | | 2,335,747 | | | | 1,122,199 | |
| Assets held for sale | | 400,000 | | | | 400,000 | |
| Other assets | | 12,605 | | | | 12,605 | |
| Total assets | $ | 52,412,846 | | | $ | 36,402,878 | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | |
| Accounts payable and other accrued liabilities | | 4,322,541 | | | | 4,768,534 | |
| Related party payables | | 1,129,641 | | | | 1,916,770 | |
| Current portion of notes payable | | 1,956,438 | | | | 1,001,395 | |
| Current portion of related party consideration payable | | – | | | | 340,000 | |
| Lease liabilities, short term | | 277,229 | | | | 160,285 | |
| Taxes payable | | 6,177 | | | | 161,770 | |
| Total current liabilities | $ | 7,692,026 | | | $ | 8,348,754 | |
| Lease liabilities, net of current portion | | 1,559,963 | | | | 1,659,120 | |
| Notes payable, net of current | | 8,628,069 | | | | 9,783,361 | |
| Derivative liabilities, long term | | 12,531,203 | | | | 8,893,600 | |
| Uncertain tax positions | | 22,767,064 | | | | 15,219,548 | |
| Deferred tax liability | | 1,274,077 | | | | 766,796 | |
| Total liabilities | $ | 54,452,402 | | | $ | 44,671,179 | |
| Series A-1 Preferred stock | | 2,212,475 | | | | – | |
| Additional paid-in capital | | 137,360,450 | | | | 131,445,688 | |
| Accumulated other comprehensive loss | | (336,879 | ) | | | (336,879 | ) |
| Accumulated deficit | | (141,275,602 | ) | | | (139,377,110 | ) |
| Total stockholders’ deficit | $ | (2,039,556 | ) | | $ | (8,268,301 | ) |
| Total liabilities and stockholders’ deficit | $ | 52,412,846 | | | $ | 36,402,878 | |
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LEEF BRANDS, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (NON-GAAP)
(Unaudited) |
| |
| | Three Months Ended June 30 | | | Six Months Ended June 30 | |
| | 2026 | | | 2025 | | | 2026 | | | 2025 | |
| Net loss (GAAP) | $ | (1,334,748 | ) | | $ | (2,933,199 | ) | | $ | (1,761,001 | ) | | $ | (2,667,423 | ) |
| Depreciation and amortization | $ | 656,858 | | | $ | 569,278 | | | $ | 1,224,999 | | | $ | 1,104,515 | |
| Interest expense | $ | 242,195 | | | $ | 579,387 | | | $ | 559,029 | | | $ | 1,171,888 | |
| Income tax expense | $ | 704,050 | | | $ | 607,891 | | | $ | 1,678,630 | | | $ | 1,329,004 | |
| EBITDA (non-GAAP) | $ | 268,355 | | | $ | (1,176,643 | ) | | $ | 1,701,657 | | | $ | 937,984 | |
| Share-based compensation | $ | 700,153 | | | $ | 492,423 | | | $ | 1,189,620 | | | $ | 1,083,885 | |
| Change in fair value of derivative liabilities | $ | (1,581,817 | ) | | $ | (566,681 | ) | | $ | (1,191,412 | ) | | $ | (4,105,121 | ) |
| Other expenses (income) | $ | (18,037 | ) | | $ | (60,557 | ) | | $ | 10,064 | | | $ | (9,053 | ) |
| Adjusted EBITDA (non-GAAP) | $ | (631,346 | ) | | $ | (1,311,458 | ) | | $ | 1,709,929 | | | $ | (2,092,305 | ) |
Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” above for additional information.
About LEEF Brands Inc.
LEEF Brands Inc. is a leading California concentrate company. With a comprehensive supply chain, innovative manufacturing processes, a dynamic bulk concentrate portfolio and a growing line of branded products, LEEF powers some of the largest cannabis brands in the United States. For more information, visit www.leefbrands.com.
Forward-Looking Statements
This news release contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively, “forward-looking statements”), including statements regarding the anticipated timing and benefits of the Salisbury Canyon Ranch expansion; future cultivation and biomass supply; the anticipated operation and benefits of the Company’s new processing and storage facility; the expected performance and growth of Himalaya; future financial performance; DEA registration; GMP and GACP preparation; and potential interstate-commerce and international-export opportunities.
Forward-looking statements reflect current expectations or beliefs regarding future events or the Company’s future performance or financial results. All statements other than statements of historical fact are forward-looking statements. Although the Company believes the expectations expressed in such statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance, and actual results or developments may differ materially.
Factors that could cause actual results to differ materially include the risks disclosed in the Company’s public filings under its issuer profiles on EDGAR and SEDAR+. Readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update forward-looking statements except as required by applicable law.
Contact
LEEF Brands Inc.
Jesse Redmond
Chief Strategy & Investor Relations Officer
Phone: +1 (805) 717-9327
Email: ir@leefca.com
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