Mr. Forrest Hoffmaster reports

SCHWAZZE ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS

Medicine Man Technologies Inc., operating as Schwazze, has released financial and operational results for the first quarter ended March 31, 2024. Monetary amounts are expressed in U.S. dollars.

"We delivered another period of revenue growth in Q1 as we further refined our retail strategy while contending with the prolonged competitive challenges in Colorado and New Mexico," said Forrest Hoffmaster, interim chief executive officer of Schwazze. "Throughout the quarter, we continued to sharpen our pricing and promotional efforts while enhancing the in-store experience, widening assortment, improving in-stock position, and advancing our loyalty program to attract and retain new customers. We also strengthened our wholesale business with quarter-over-quarter growth while surpassing 30-per-cent total door penetration across both states.

"The Colorado market remains highly competitive with more than 680 active recreational licendes, underscoring the importance of delivering an exceptional customer experience and fully integrated retail support program. Although retail pricing has recently stabilized, Colorado sales in Q1 were down 10 per cent year over year due to lower volumes. Nonetheless, we significantly outpaced the market as our sales were up 9 per cent, demonstrating the effectiveness of our operating playbook to compete in challenging environments. We expect to continue driving improvements in customer acquisition, retention and loyalty as we further increase market share in the state.

"In New Mexico, the proliferation of new licences continued to outpace state cannabis sales as store count in Q1 increased 31 per cent year over year while the market grew only 13 per cent. In addition to pricing and promotional efforts, we've focused on driving traffic into our stores by expanding assortment with high-quality flower and delivering an elevated customer experience. The New Mexico regulatory body has also increased its license enforcement efforts in recent months, contributing to more than 70 store closures and a 33-per-cent sequential decrease in net new store openings in the first quarter. We will continue to support the New Mexico cannabis control division as it develops its regulatory framework.

"Over the past four years, we have rapidly scaled our footprint through 13 acquisitions, building a leading retail presence in both Colorado and New Mexico. We are beginning to see positive momentum from our pricing and promotional strategy, and will remain focused on driving operating efficiencies while further optimizing our assets as we consolidate cultivation facilities and eliminate underperforming stores that do not meet our high-margin thresholds. We believe these initiatives, coupled with our operating playbook and strict cost controls, will enable us to return to stronger levels of profitability moving forward."

Recent highlights:

• Announced the grand opening of a medical and recreational dispensary in March under the Everest Apothecary banner in Las Cruces, N.M., increasing the company's retail footprint to 34 stores across the state;
• Increased wholesale penetration in the first quarter to more than 30 per cent of total doors in Colorado and New Mexico;
• Lowell Herb Co. preroll sales increased more than three times quarter over quarter in Colorado, where it continues to be the No. 1 preroll in the state;
• Wana gummy sales up more than two times quarter over quarter in New Mexico.

Conference call

The company will conduct a conference call today, May 15, 2024, at 5 p.m. Eastern Time, to discuss its results for the first quarter ended March 31, 2024.

Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the company prior to the call by e-mailing ir@schwazze.com.

Date:  Wednesday, May 15, 2024

Time:  5 p.m. Eastern Time

Toll-free dial-in:  888-664-6383

International dial-in:  416-764-8650

Conference ID:  84167910

A webcast will be available.

The conference call will also be broadcast live and available for replay in the investor relations section of the company's website.

Toll-free replay number:  888-390-0541

International replay number:  416-764-8677

Replay ID:  167910

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at 720-330-2829.

About Medicine Man Technologies Inc.

Schwazze (OTCQX: SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico, and will continue to explore taking its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.

Schwazze is anchored by a high performance culture that combines customer-centric thinking and data science to test, measure and drive decisions and outcomes. The company's leadership team has deep expertise in retailing, wholesaling and building consumer brands at Fortune 500 companies, as well as in the cannabis sector.

Medicine Man Technologies Inc. was Schwazze's former operating trade name. The corporate entity continues to be named Medicine Man Technologies Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

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