Toronto, Ontario--(Newsfile Corp. - May 30, 2024) - SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) ("SLANG" or the "Company"), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today released financial results for the three months ended March 31, 2024. All figures in this press release are stated in Canadian dollars unless otherwise noted.

"Our results for the first quarter demonstrated the importance of SLANG's diversified strategy as well as our commitment to our disciplined, efficient business model," commented John Moynan, Chief Executive Officer of SLANG. "While we saw softness in our Core Markets in the first quarter, we mitigated the impact on our business with increased sales in our newer, higher-margin e-commerce channel, our Vermont wholesale channel and across our Emerging Markets, and by reducing operating expenses sequentially and year-over-year, driving operational efficiencies across most segments of our business.

"During the quarter, our new channels continued to increase their contribution to our overall sales. Revenue from our e-commerce business segment increased by approximately 45%, demonstrating the strength of our Alchemy Naturals CBD gummy product line, and our Vermont wholesale sales channel increased by approximately 417% year-over-year. Looking ahead, we believe we will continue to elevate our market position and build our leadership position in these important cannabis product categories."

Moynan continued, "I also want to highlight the recently announced recommendation by the U.S. Department of Justice that cannabis be rescheduled from Schedule I to Schedule III. We are hopeful that the recommendation for rescheduling will be successful and are looking forward to it being finalized as we believe that the rescheduling of cannabis will have a positive impact not just on SLANG but on the industry as a whole."

First Quarter 2024 Financial Summary

• Revenue for the three months ended March 31, 2024, was $7.03 million. Declines in SLANG's Core Markets in Vermont and Colorado were mainly attributable to increased competition in recreational cannabis stores and a difficult year-over-year comparison, offset by increases in its wholesale channel in Vermont, as well as a decline in the overall cannabis market in Colorado. The Core Market declines were offset by the Company's Emerging Markets, with a notable increase in its e-commerce channel.
• Gross profit of $3.36 million (48% gross margin) in Q1 2024, compared with $5.72 million (53% gross margin) in Q1 2023, representing a 41% decrease in gross profit and a 5% decrease in gross margin year-over-year. Gross profit before fair value of biological assets was $3.65 million (52% gross margin) in Q1 2024, compared with $5.68 million (52% gross margin) in Q1 2023, representing a 36% decrease in gross profit before fair value of biological assets, while maintaining a stable gross margin before fair value of biological assets of 52% year-over-year.
• Operating expenses of $5.54 million in Q1 2024, compared with $5.78 million in Q1 2023 and $6.63 million in Q4 2023, representing a 4% decrease year-over-year and 16% decrease quarter-over-quarter. The reduction year-over-year was primarily driven by a decrease in salaries and wages, consulting and subcontractors, general and administrative and insurance. The reduction quarter-over-quarter was primarily driven by a decrease in share-based payments, general and administrative, salaries and wages, professional fees and depreciation and amortization.
• EBITDA¹ of ($1.48 million) in Q1 2024, compared with $0.68 million in Q1 2023. The reduction in EBITDA is primarily attributable to a $2.40 million decrease in gross profit (excluding depreciation costs), offset by a reduction of $0.23 million in operating expenses (excluding depreciation) such as salaries and wages, consulting and subcontractors, general and administrative and insurance.
• Adjusted EBITDA¹ of ($1.06 million) in Q1 2024, compared with $0.74 million in Q1 2023. The reduction in Adjusted EBITDA is primarily attributable to a decrease of $2.07 million in gross profit before fair value adjustments of biological assets (excluding depreciation costs), offset by a reduction of $0.27 million in operating expenses (excluding depreciation expenses, expected credit losses and share based payments).
• $8.32 million in cash and restricted cash on March 31, 2024, compared to $9.04 million on December 31, 2023. Additionally, for the three months ended March 31, 2024, cash flows used in operating activities was ($0.48 million), compared to cash flows from operating activities of $0.37 million for the three months ended March 31, 2023, a reduction of $0.85 million.

First Quarter 2024 Operational Highlights

• Vermont Q1 2024 wholesale sales were $0.31 million, compared to $0.06 million in Q1 2023.
• During Q1 2024, the Company signed an agreement with a new distribution partner to sell its Alchemy Naturals CBD gummies throughout the United States.
• SLANG continues to see growth in its Alchemy Naturals CBD gummies, which contributed $0.46 million in e-commerce sales in Q1 2024 compared to $0.30 million in Q4 2023, representing 53% growth quarter-over-quarter.

First Quarter 2024 Financial Review

The consolidated financial statements were prepared in accordance with IFRS. The following is a selected presentation of the Income Statement for the three months ended March 31, 2024.

See the Company's management's discussion and analysis for the three months ended March 31, 2024 (the "Q1 2024 MD&A"), for a detailed reconciliation of EBITDA and Adjusted EBITDA to Operating Income / (Loss). SLANG's financial statements and the Q1 2024 MD&A are available on SEDAR+ at www.sedarplus.ca, and on the Company's Investor Relations website at www.slangww.com.

Non-IFRS Measures

EBITDA and Adjusted EBITDA are non-IFRS financial measures that the Company uses to assess its operating performance. EBITDA is defined as net earnings (loss) before net finance costs, income tax expense (benefit) and depreciation and amortization expense. Management defines Adjusted EBITDA as EBITDA adjusted for other non-cash items such as the impact of unrealized fair values, share based compensation expense, impairments, one-time gains and losses, and one-time revenues and expenses. This data is furnished to provide additional information and are non-IFRS measures and do not have any standardized meaning prescribed by IFRS. The Company uses these non-IFRS measures to provide shareholders and others with supplemental measures of its operating performance. The Company also believes that securities analysts, investors and other interested parties, frequently use these non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. As other companies may calculate these non-IFRS measures differently than the Company, these metrics may not be comparable to similarly titled measures reported by other companies. We caution readers that Adjusted EBITDA should not be substituted for determining net loss as an indicator of operating results, or as a substitute for cash flows from operating and investing activities.

Conference Call Details

Management plans to host an investor conference call on May 30, 2024, at 10:00 am ET to discuss the results.

Timing: Thursday, May 30, 2024, at 10:00 am ET
Dial In: (888) 440-5983 (US toll-free) or +1 (646) 960-0202 (international)
Conference ID: 6291438
Webcast: A live webcast can be accessed via the Company's website at www.slangww.com or https://events.q4inc.com/attendee/336439517

About SLANG Worldwide Inc.
SLANG Worldwide Inc. is the industry leader in branded cannabis consumer packaged goods, with a diversified portfolio of five distinct brands and products distributed across the U.S. Operating in 13 legal cannabis markets nationwide, SLANG specializes in acquiring and developing market-proven regional brands, as well as launching innovative new brands to seize global market opportunities and match evolving consumer tastes. The Company has over a decade of experience operating in the nascent and highly regulated cannabis sector, and its partners enjoy the benefits of that experience, with access to the SLANG playbook for successful operations, sales and marketing. Its strong product pipeline from uniquely positioned and scalable brands like O.pen, Alchemy Naturals, Ceres, Firefly, and partnerships with brands like Greenhouse Seed Company have a proven track record of success with the brands consistently ranking among the top performers in the states where SLANG operates. Learn more at slangww.com.

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Forward-Looking Statements

This news release contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings "Risk Factors" in SLANG's Q1 2024 MD&A and other disclosure documents available on the Company's profile on SEDAR+ at www.sedarplus.ca. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Reader Advisory

Neither the Canadian Securities Exchange nor the Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

Company Contact
Mikel Rutherford, CFO
833-752-6499

KCSA Strategic Communications
Phil Carlson
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