Mr. Edoardo Mattei reports

RWB COMPLETES TRANSFORMATIONAL FLORIDA DIVESTITURE, EXPECTED TO ELIMINATE OVER $123 MILLION OF LIABILITIES AND SIGNIFICANTLY STRENGTHEN THE COMPANY'S BALANCE SHEET

Red White & Bloom Brands Inc. has successfully closed the previously disclosed transaction involving its Florida operations with M&V Investment One LLC and its affiliates (collectively, M&V) and Royal Group Resources Ltd. (RGR).

The transaction represents a significant milestone for Red White & Bloom, significantly strengthening the company's financial position through the expected elimination of more than $123-million of consolidated liabilities, the removal of substantial future funding obligations associated with the Florida operations and the divestiture of a business that generated negative contributions to the company's consolidated financial performance. Following the transaction, Red White & Bloom will focus its capital and management resources on organic growth, brand licensing, and the acquisition of existing scaled businesses, while continuing the integration of the recently acquired Ayurcann business.

Management commentary

Colby De Zen, president of Red White, commented: "This transaction fundamentally reshapes RWB's financial profile. By eliminating an estimated $123-million of liabilities from our balance sheet and removing ongoing funding requirements, we have materially strengthened the company and significantly reduced our financial risk."

Mr. De Zen further added: "Our focus is now squarely on expanding our brand portfolio, further strengthened by the addition of the Fuego, XPLOR, and Happy & Stoned brands through the Ayurcann acquisition, as we continue executing on our long-term growth strategy. We believe we now have a stronger operating platform, improved financial flexibility and a clear path towards sustained profitable growth and shareholder value."

Financial impact -- upon deconsolidation, Red White expects to:

• Derecognize approximately $140.9-million of assets;
• Derecognize approximately $123.2-million of liabilities;
• Record an estimated non-cash gain of approximately $47.7-million;
• Eliminate all future funding obligations relating to the Florida business, including obligations that historically gave rise to annual interest expense of approximately $10.0-million (FYE2025).

The disclosures associated with the deconsolidation transaction, including the non-cash gain, remain subject to the completion of the company's Q2 2026 condensed interim consolidated financial statements and the final vetting of the deconsolidation transaction by the company's auditor as part of its 2026 year-end financial reporting.

The company will reflect the deconsolidation of RWB Florida LLC and Red White & Bloom Florida Inc. (RWB Florida) in its condensed interim consolidated financial statements for the three and six months ended June 30, 2026, in accordance with IFRS (international financial reporting standards) 10, consolidated financial statements. Management has determined that control of RWB Florida, within the meaning of IFRS 10, transferred to M&V effective April 1, 2026, being the date on which M&V assumed responsibility for directing the relevant activities and funding RWB Florida, and became exposed to the variable returns of the business. Legal closing was conditional upon receipt of The Office of Medical Marijuana Use (OMMU) approval, which has now been obtained. The company does not retain a continuing obligation to finance RWB Florida's operations, nor will it retain any equity interest in RWB Florida.

Transaction summary

Debt purchase. M&V completed the acquisition of a senior secured promissory note and related security interests held by RGR in respect of RWB Florida, together with all intercompany debt instruments issued by RWB Florida and held by the company and its affiliates.

Equity transfer. The company has completed the transfer of all its majority equity interests in RWB Florida to M&V. The transaction was completed with the primary economic benefit to the company consisting of the releases from liabilities and guarantees described below. The OMMU has granted regulatory approval of the change of control as it relates to the licensed RWB Florida operations. OMMU's approval was granted in the exercise of its sole regulatory discretion.

Licensed operations conducted by RWB Florida have continued uninterrupted throughout the regulatory review process. As a condition of closing, M&V has assumed the obligations underlying all guarantees previously provided by the company and its affiliates on behalf of RWB Florida, and the company and its affiliates have obtained full and unconditional releases from those guarantees from the applicable counterparties. These include guarantees relating to indebtedness incurred in connection with the company's acquisition and subsequent funding of the Florida operations, certain retail lease guarantees and the surety bond related to the Florida MMTC licence.

About Red White & Bloom Brands Inc.

Red White & Bloom Brands is a publicly listed multijurisdictional cannabis company with operations across Canada and the United States. The company is listed on the Canadian Securities Exchange under the symbol RWB.

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