Inner Spirit Holdings Announces Year-End 2018 Financial Results and Provides Corporate Update

April 30, 2019

Cannabis retailer making significant progress on national expansion of Spiritleaf brand

CALGARY, Alberta (April 30, 2019) – Inner Spirit Holdings Ltd. (“Inner Spirit” or “the Company”) (CSE:ISH) announced today it has filed its Audited Financial Statements and corresponding Management’s Discussion and Analysis for the year ended December 31, 2018. The filings are available for review on the Company’s SEDAR profile at www.sedar.com as well as on the Company’s website at www.innerspiritholdings.com.

During the year ended December 31, 2018, Inner Spirit achieved the following milestones:

  • Inner Spirit was the first recreational cannabis retail and franchise company to complete an initial public offering and listing in Canada on August 1, 2018.
  • Inner Spirit has entered into more than 100 franchise agreements with franchisees for potential Spiritleaf locations throughout Canada and has established plans to operate complementary corporate outlets in select locations.
  • The Company has formulated strategic partnerships and collaborations with a number of cannabis industry leaders, including Auxly Cannabis Group Inc. (TSX.V:XLY), Newstrike Brands Ltd. (TSX.V:HIP), Tilray, Inc. (NASDAQ:TLRY) and High Times Holding Corp.
  • Following legalization of recreational cannabis sales in Canada on October 17, 2018, the Company opened Spiritleaf franchise stores in Brooks, St. Albert and Lethbridge, Alberta and in Moose Jaw, Saskatchewan.

“The past year has been a momentous one with a number of key achievements. We are excited that our shareholders, franchise partners and employees are at the forefront of the recreational cannabis retail industry in Canada. The progress we made in the past year was based on building the Spiritleaf brand on top of the existing Watch It! retail and franchise organization which gave us stable revenue and an operating infrastructure as the retail cannabis industry was developing in Canada,” said Darren Bondar, President and CEO of Inner Spirit.

To date in 2019, Inner Spirit has accomplished the following:

  • The Company opened a franchise store in Calgary on February 14, 2019 and a flagship location in Kingston, Ontario on April 1, 2019 in partnership with one of the initial retail cannabis license lottery winners in that province. The Kingston store has achieved sales of approximately $700,000 during its first month of operations.
  • All open and operating Spiritleaf stores are recording strong individual store sales in line with Company projections. Inner Spirit’s planning and experience in branding, franchising and retail operations are differentiators for the organization. The Spiritleaf concept will continue to expand as regulations further enable the retail opportunity and additional supply reaches the marketplace.
  • The Company was recently notified that one of its franchisees has received a licence from Alberta Gaming, Liquor and Cannabis (“AGLC”) to operate a retail cannabis store in Edmonton, Alberta, which is expected to open next week. The AGLC also confirmed that the Company’s first two corporate stores, located in Calgary’s Beltline district and on Edmonton’s Whyte Avenue, are in the top 10 of the AGLC’s current licensing queue.

“Our focus for 2019 is to continue opening franchise stores and to add corporate outlets in high-traffic locations to build out Spiritleaf’s national retail footprint. The objective is to open 55 additional franchise locations and 10 corporate stores in Western Canada over the next 12 months to operate along with our franchisees a total of 70 Spiritleaf locations by the end of 2020. We’re getting great support from our customers, investors, franchisees, strategic partners and employees as we continue to build a nationally recognized and financially resilient organization,” said Bondar.

Inner Spirit expects that the pace for licensing will remain unpredictable in the near term although the Company is well positioned with six stores in B.C. in final stages of receiving permits and construction, an additional 44 municipal development permits in Alberta in various stages of development, and has qualified corporately for the next license lottery in Manitoba. The Company also has a well-defined franchise plan for Ontario when licensing re-opens in that province. It is expected that Ontario activity could contribute significantly to the Company’s system-wide sales and bottom line results as the Company has a goal of opening up to the maximum 75 stores allowed under the current regulatory framework in Ontario, which could serve to essentially double Spiritleaf’s Canadian footprint assuming all Spiritleaf stores are opened as planned.

Inner Spirit’s annual general meeting of shareholders will be held in Calgary on May 30, 2019.

About Inner Spirit

Inner Spirit is establishing a network of recreational cannabis stores under its Spiritleaf brand. Supporting local entrepreneurs by applying its award-winning franchise and retail models, Inner Spirit has more than 100 franchise agreements in place for potential Spiritleaf locations and plans to operate corporate outlets in certain jurisdictions. The Company is simultaneously developing a diverse portfolio of proprietary quality and curated lifestyle cannabis products positioning the company to be an iconic Canadian brand and the most trusted source for recreational cannabis. Key industry partners and shareholders include Auxly Cannabis Group Inc. (TSX.V:XLY), Newstrike Brands Ltd. (TSX.V:HIP) and Tilray, Inc. (NASDAQ:TLRY). More information can be found on Inner Spirit’s website at www.innerspiritholdings.com.

Forward-looking statements

This press release contains statements and information that, to the extent that they are not historical fact, may constitute “forward-looking information” within the meaning of applicable securities legislation. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives or economic performance, or the assumption underlying any of the foregoing. In some cases, forward-looking statements can be identified by terms such as “may”, “would”, “could”, “will”, “likely”, “except”, “anticipate”, “believe”, “intend”, “plan”, “forecast”, “project”, “estimate”, “outlook”, “potential”, or the negative thereof or other similar expressions concerning matters that are not historical facts. Examples of such statements include, but are not limited to, statements with respect to the objectives and business plans of the Company; the establishment of recreational cannabis stores in Canada; the receipt of necessary licenses and permits to open recreational cannabis stores and the timing thereof; the improvement in the cannabis supply chain in Canada; the opening of a Spiritleaf retail cannabis store in Edmonton, Alberta; the status of the Company’s corporate retail cannabis stores in the AGLC’s current licensing queue; the objective of the Company to open Spiritleaf franchise stores and Spiritleaf corporate stores in Western Canada over the next 12 months; the objective of the Company to operate along with its franchisees a total of 70 Spiritleaf locations by the end of 2020; the intention of the Company to open up to the maximum of 75 retail cannabis stores allowed under the current regulatory framework in Ontario; and the intention to grow the Company’s business and operations. Actual results could differ materially from those currently anticipated due to a number of factors and risks, including but not limited to, the risk that additional stores may not open due to national retail cannabis supply issues; the risk that the Spiritleaf recreational cannabis store intended to be opened in Edmonton, Alberta does not open as anticipated or at all; the risk that the Company or its franchisees are not able to open additional retail cannabis stores in Canada or in Ontario; and other factors outside of the Company’s control. Readers are cautioned that the foregoing list of factors and risks is not exhaustive. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. The Company’s actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

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