Mr. Forrest Hoffmaster reports

SCHWAZZE ANNOUNCES PRELIMINARY THIRD QUARTER 2024 FINANCIAL RESULTS

Medicine Man Technologies Inc., operating as Schwazze, today released preliminary financial and operational results for the third quarter ended Sept. 30, 2024.

"We continued to generate momentum from our retail growth and optimization initiatives in Q3, reflected by our ability to outpace two highly competitive markets while generating sequential improvements in profitability and positive cash flow from operations," said Forrest Hoffmaster, interim chief executive officer of Schwazze. "Our efforts to sharpen our pricing and promotional strategy, elevate the in-store experience, and improve product quality, assortment and in-stock positions are yielding positive results. I'm proud of our team's hard work and dedication to drive these improvements in the overall customer experience, which has led to increased store traffic in both Colorado and New Mexico. Over the past year, our focused efforts to optimize our operations have built a solid foundation, setting the stage for sustained growth and enhanced levels of profitability in the year ahead.

"Due to our ongoing rereview process with our new auditor, Baker Tilly, we expect a delay in filing our Form 10-Q for the quarter ended Sept. 30, 2024. Our team, in close collaboration with Baker Tilly, is making every effort to complete this rereview promptly. We expect to release our unaudited third quarter results and host a conference call in the coming weeks to discuss our financial and operational performance in greater detail."

Q3 2024 preliminary financial results

Based on preliminary and unaudited results, the company expects to report the following for the third quarter ended Sept. 30, 2024:

• Revenue of approximately $42-million;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $11-million;
• Cash flow from operations of approximately $200,000.

At quarter-end, the company held cash and cash equivalents of approximately $11-million with principal amount of debt outstanding of approximately $196-million.

Update on delayed filing

As previously announced on April 8, 2024, Schwazze dismissed BF Borgers CPA PC as its independent registered public accountant and engaged Baker Tilly U.S. LLP as its new independent accountant. Subsequent to the transition, on May 3, 2024, the SEC (Securities and Exchange Commission) issued an order against BF Borgers for systemic failures in meeting PCAOB standards, which impacted over 1,500 SEC filings and affected at least 75 per cent of BF Borgers' 369 clients.

As a result of the SEC order, Schwazze's new auditor needs additional time to complete its prior period review, which includes reauditing the company's fiscal year 2023 financial statements and rereviewing the closing of its 2022 balance sheet prior to filing its 2024 annual report. Baker Tilly is actively working to reaudit the company's financial statements for the associated periods.

Due to the continuing rereview process, Schwazze anticipates a delay in filing its quarterly report on Form 10-Q for the three and nine months ending Sept. 30, 2024. Moreover, the company expects to simultaneously file its quarterly report on Form 10-Q for the three months ending March 31, 2024, and June 30, 2024.

About Medicine Man Technologies Inc. (Schwazze)

Schwazze is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take 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.

We seek Safe Harbor.