Rubicon Organics Reports 2024 Financial Results

Highlights for the fourth quarter ended December 31, 2024 and subsequent events:

• Record high net revenue of $14.2 million, an increase of 42% from Q4 2023
• Achieved Adjusted EBITDA¹ of $1.6 million (including $0.25 million of one-time ERP costs)
• Achieved positive operating cashflows of $2.3 million and Free Cash Flows² of $1.8 million
• Secured $10 million credit facilities at interest rate of 6.75% for 5 years
• Entered into purchase and sale agreement for Hope, BC facility, expanding capacity of premium flower by 40%³
• Secured key international certification and delivered first international shipment

Highlights for the year ended December 31, 2024:

• Record high net revenue of $48.7 million, an increase of 21% from 2023
• Adjusted EBITDA¹ of $4.0 million (including $0.9 million of one-time ERP costs)
• Operating cash flow of $3.4 million

VANCOUVER, British Columbia, April 01, 2025 (GLOBE NEWSWIRE) — Rubicon Organics Inc. (TSXV: ROMJ) (OTCQX: ROMJF) (“Rubicon Organics” or the “Company is Canada’s leading premium licensed producer focused on cultivating and selling organic certified, premium and super-premium cannabis products, today reported its financial results for the year ended December 31, 2024 (“Q4 2024”). All amounts are expressed in Canadian dollars.

“2024 marked another record year for Rubicon Organics growing 21% year-over-year, dramatically outpacing market growth. Our vape launch, the fastest and widest in our company history, underscores the strength of our industry leading premium brands and our ability to drive growth through reputation and high-quality innovation.” said Margaret Brodie, CEO.

Ms. Brodie added, “Shifting market dynamics are driving a supply shortage in Canada, creating significant opportunities for established operators. At the same time, international markets are increasingly opening up to top Canadian producers. We are excited to accelerate our expansion strategy and meet the growing demand for our premium brands both at home and abroad.”

“We successfully navigated early 2024 challenges, delivering a strong rebound in the second half,” said Janis Risbin, CFO. “Additionally, refinancing our debt at industry-leading rates reinforces our financial strength as we continue to focus on sustainable, long-term growth.”

2024 Highlights:
For the twelve months ended December 31, 2024

• Net revenue of $48.7 million (21% increase from 2023) for the year ended December 31, 2024
• Gross profit before fair value adjustments of $15.3 million (9% increase from 2023) for the year ended December 31, 2024
• Achieved Adjusted EBITDA¹ gain of $4.0 million for the year ended December 31, 2024 (including $0.9 million of one-time ERP costs)
• Cash provided by operating activities of $3.4 million for the year ended December 31, 2024
• Free Cash Flows² of $1.9 million for the year ended December 31, 2024
• Industry recognition winning 11 prestigious awards⁴ including Budtender Choice and 1964 Supply Co. Brand of the Year
• Wildflower^TM is the #1⁵ topical brand in Canada with market share of 27.1%⁵ for the year ended December 31, 2024
• 2.0%⁶ national market share of flower and pre-rolls for the year ended December 31, 2024
• 26.5%⁷ national market share of premium edibles for year ended December 31, 2024
• Launch of full spectrum extract vapes in Alberta, BC, and Ontario with five SKUs in market, growing our share of the resin vapes category to 13.4%⁸ national market share and 56% distribution within the first 6 months since launch
• Secured $10 million credit facilities at interest rate of 6.75% for 5 years over 10-year amortization period

2024 Results of Operations:

Subsequent Sales & Operational Highlights:

• The Company entered into a purchase and sale agreement of a purpose-built indoor cultivation facility in Hope, British Columbia, spanning 47,500 square feet. The Company plans to use the Hope Facility to expand its production capacity. The transaction is expected to close in the second quarter of 2025.
• The Company’s Delta Facility received its CUMCS Equivalency IMC-G.A.P. certification and executed its first international shipment.
• 1964 Supply Co™ launched two more FSE resin vapes with LA Kush and Stinky Pinky, bringing the total amount of vapes available to 7.

2025 Outlook

Securing Additional Premium Quality Supply

With growing demand for Canadian cannabis from the domestic and international markets, we see that controlling access to premium quality supply is critical to continue to grow our brands and gross revenue. Our Delta Facility is fully operational and has annual production capacity of 11,000 kg. We are continuously evaluating ways to improve both our yield and quality at the Delta Facility and are in the trial stage of evaluating additional lighting at site.

In order to increase our supply of premium flower, we plan to acquire the Hope Facility that will significantly expand our annual production capacity, adding an annual production capacity of 4,500 kg, representing an over 40% increase over our current annual production capacity from the Delta Facility, bringing total annual production capacity to 15,500 kg of premium cannabis. This acquisition is planned to close in Q2 2025 with certain incremental capital to meet our requirements completed by mid-summer. Pending licensing timing expected sometime in the summer, we expect to be running at full capacity by the end of the year but not contributing to our revenue until 2026. We expect to incur additional debt financing related to the Hope Facility.

Our 2024 net revenue growth has been driven through strategic partnerships with co-manufacturers and contract growers and these arrangements are expected to provide up to 2,000 kgs of incremental biomass to our business in 2025. We plan to continue to collaborate with our trusted partners and explore additional partnerships as we strive to meet the growing demand for our high-quality premium products.

Building Trust with our Customers in Canada

We are committed to the growing Canadian cannabis market and dedicated to being a trusted partner for our customers—including provincial distributors, retailers, and consumers. As the Canadian customers face increasing competition from international demand, we have seen many mainstream and premium licensed producers shifting their sales abroad. We see this as a prime opportunity to strengthen our brand presence in Canada.

With SKU rationalization underway across several provinces, suppliers are being evaluated on reliability and sales performance. This shift is raising the bar for market entry, making it increasingly challenging for new brands and products to secure shelf space. At the same time, Canadian consumers are becoming more brand-loyal, prioritizing trust and value in their purchasing decisions. We believe our award-winning brands and diverse product portfolio will continue to resonate with them.

Looking ahead, we anticipate a more competitive retail landscape. However, Rubicon’s strong brand recognition, consumer loyalty, high supplier ratings, and strategic positioning provide a solid foundation for long-term success in Canada.

Genetics

We possess valuable and unique intellectual property in cannabis genetics, which we consider a critical asset in maintaining our position as a leading innovator within the industry. Our extensive genetics library is central to our strategy of delivering consistent, high-quality genetics and new product offerings for the premium and super-premium markets. While we maintain confidentiality around our specific genetics strategy, we view this as a significant competitive advantage and anticipate introducing exciting new genetic launches in 2025.

International

Our strong reputation in Canada has attracted an increasing number of inquiries from international medical cannabis buyers. The international cannabis market has experienced significant growth in recent years, with continued expansion anticipated. While the market is still in the early stages of adopting premium cannabis products, we aim to meet small amounts of the international demand with a test and learn strategy in 2025 making sure to meet our Canadian customer needs as a priority. The Company holds the necessary certifications for international exports and made its inaugural international shipment in the first quarter of 2025.

Financial Growth

For 2025, we are forecasting growth in both net revenue and Adjusted EBITDA, excluding acquisition-related and start up operational costs associated with the Hope Facility (the “Hope Costs”), driven by our ongoing expansion and strategic initiatives. While we anticipate strong performance in 2025, we expect the Hope Costs will impact our overall financial results. Despite the potential short-term impact of the Hope Costs on profitability, we are confident that our continued growth in net revenue and improved like-for-like Adjusted EBITDA will position us for long-term success and value creation.

Conference Call

The Company will be hosting a conference call to discuss Q4 2024 results on Wednesday, April 2, 2025. Conference call details are as follows:

ABOUT RUBICON ORGANICS INC.

Rubicon Organics Inc. is the global brand leader in premium organic cannabis products. The Company is vertically integrated through its wholly owned subsidiary Rubicon Holdings Corp, a licensed producer. Rubicon Organics is focused on achieving industry leading profitability through its premium cannabis flower, product innovation and brand portfolio management, including three flagship brands: its super-premium brand Simply Bare™ Organic, its premium brand 1964 Supply Co™, and its cannabis wellness brand Wildflower™ in addition to the Company’s mainstream brand Homestead Cannabis Supply™.

The Company ensures the quality of its supply chain by cultivating, processing, branding and selling organic certified, sustainably produced, super-premium cannabis products from its state-of-the-art glass roofed facility located in Delta, BC, Canada.

CONTACT INFORMATION

Margaret Brodie
CEO
Phone: +1 (437) 929-1964
Email: ir@rubiconorganics.com

The TSX Venture Exchange or its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) does not accept responsibility for the adequacy or accuracy of this press release.

Non-GAAP Financial Measures

This press release contains certain financial performance measures that are not recognized or defined under IFRS (“Non-GAAP Measures”) including, but not limited to, “Adjusted EBITDA”. As a result, this data may not be comparable to data presented by other companies.

The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company as well as its liquidity. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. For more information, please refer to the “Selected Financial Information” section in the MD&A for the year ended December 31, 2023, which is available on SEDAR+ at www.sedarplus.ca.

Adjusted EBITDA

Below is the Company’s quantitative reconciliation of Adjusted EBITDA calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. The following table presents the Company’s reconciliation of Adjusted EBITDA to the most comparable IFRS financial measure for the three months and year ended December 31, 2024.

^{*Included in Adjusted EBITDA in the year ended December 31, 2024 is $0.9 million of one-time costs incurred for the ERP implementation project}

Free Cash Flow

Free Cash Flow is a non-GAAP measure used by management that is not defined by IFRS and may not be comparable to similar measures presented by other companies. Management believes that Free Cash Flow presents meaningful information regarding the amount of cash flow required to maintain and organically expand our business, and that the Free Cash Flow measure provides meaningful information regarding our liquidity requirements.

Free Cash Flow is calculated as net cash provided by (used in) operating activities, less purchases of and deposits on property, plant and equipment.

Cautionary Statement Regarding Forward Looking Information

This press release contains forward-looking information within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, statements regarding Rubicon Organics’ goal of achieving industry leading profitability are “forward-looking statements”. Forward-looking information can be identified by the use of words such as “will” or variations of such word or statements that certain actions, events or results “will” be taken, occur or be achieved.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward looking statements. The forward-looking information in this press release is based upon certain assumptions that management considers reasonable in the circumstances, including the impact on revenue of new products and brands entering the market, and the timing of achieve Adjusted EBITDA¹ profitability and cashflow positive. Risks and uncertainties associated with the forward looking information in this press release include, among others, dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing federal, provincial, local or other licenses and any inability to obtain all necessary governmental approvals licenses and permits for construction at its facilities in a timely manner; regulatory or political change such as changes in applicable laws and regulations, including bureaucratic delays or inefficiencies or any other reasons; any other factors or developments which may hinder market growth; Rubicon Organics’ limited operating history and lack of historical profits; reliance on management; and the effect of capital market conditions and other factors on capital availability; competition, including from more established or better financed competitors; and the need to secure and maintain corporate alliances and partnerships, including with customers and suppliers; and those factors identified under the heading “Risk Factors” in Rubicon Organic’s annual information form dated April 1, 2025 filed with Canadian provincial securities regulatory authorities.

These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although Rubicon Organics has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. Rubicon Organics assumes no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, new information or for any other reason except as required by law.

We have made numerous assumptions about the forward-looking statements and information contained herein, including among other things, assumptions about: optimizing yield, achieving revenue growth, increasing gross profit, operating cashflow and Adjusted EBITDA¹ profitability. Even though the management of Rubicon Organics believes that the assumptions made, and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. Investors are cautioned against undue reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management’s current views of our near and longer term prospects and may not be appropriate for other purposes. Rubicon Organics assumes no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, changes in assumptions, new information or for any other reason except as required by law.

¹ Adjusted EBITDA is a non-GAAP measure that is calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. See Non-GAAP Financial Measures for details on the Adjusted EBITDA calculation.
² Free Cash Flow is a non-GAAP measure that is calculated as net cash provided by (used in) operating activities, less purchases of and deposits on property, plant and equipment.
³ Purchase of the Hope Facility is expected to close in the second quarter of 2025
⁴ 2024 KIND Magazine’s (“KIND”) awards
⁵ Hifyre data for topical products covering twelve months ended December 31, 2024
⁶ Hifyre data for flower & pre-rolled products covering twelve months ending December 31, 2024
⁷ Hifyre data for premium edible products covering twelve months ending December 31, 2024
⁸ Hifyre data for resin vapes products covering three months ended December 31, 2024