Tilray Brands, Inc. Reports Third Quarter Fiscal Year 2022 Financial Results

• Profitable Quarter Includes Net Income of $52.5 Million and Adjusted EBITDA of $10.1 Million; 12^th Consecutive Quarter of Positive Adjusted EBITDA

• Net Revenue Increased 23% to $152 Million; Gross Profit Increased 31% to $39.8 Million from the Prior Year Quarter

• Medical Market Share Leader in Europe and #1 Leadership Position in Germany with Revenue Growth of Over 4,000%

• Maintained #1 Leading Marketing Share in Canada

• Achieved $76 Million in Cost Synergies to Date; On-Track to Exceed Original Plan of $80 Million Ahead of Schedule and to Generate Additional $20 Million of Synergies in Fiscal 2023

LEAMINGTON, Ontario and NEW YORK, April 06, 2022 (GLOBE NEWSWIRE) — Tilray Brands, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported financial results for the third fiscal quarter ended February 28, 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, stated, “Our third quarter results reflect progress and momentum across all of our key business segments and geographies, setting the stage to achieve our target for $4B in revenue by the end of fiscal 2024. Tilray Medical – which now operates under a cohesive strategy and mission – has a near 20% share in Germany, providing clear benefits in its own right as well as a first-mover advantage that we will leverage as Germany and the EU move towards broader adult-use and medical use legalization. In Canada, we maintained our leading market share position amid intense competition – and believe that our strong capital position, operational excellence and pricing and marketing adjustments will work in concert to help ensure we reclaim share in the coming quarters. This effort will gain further support from the fundamental appeal of our brands and product innovation which, as stores continue re-opening, will resonate powerfully with consumers. In the U.S., our SweetWater Brewing, Breckenridge Distillery, and Manitoba Harvest businesses are profitable, growing and emerging as nationwide, iconic brands with loyal followings that will be home to THC-based products upon U.S. federal legalization.”

Mr. Simon continued, “We also continued sourcing and executing strategic and shareholder-friendly transactions that provide value with notable upside. Our most recent example is the proposed agreement to purchase the HEXO senior secured convertible notes, which provides a path for meaningful future equity ownership of HEXO as it executes on its transformation. The proposed HEXO transaction is also expected to facilitate complementary commercial and product innovation and drive production and operating efficiencies. As the global economy re-opens, we are confident that the global cannabis powerhouse at the heart of the Tilray Brands’ value proposition will deliver sustained and tangible shareholder value.”

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Financial Highlights – Third Quarter Fiscal 2022

• Net revenue increased 23% to $152 million during the third quarter from $124 million in the prior year quarter. The increase was driven by 32% growth in cannabis revenue to $55 million, 64% growth in beverage alcohol revenue of $20 million and wellness revenue of $15 million.

• Gross profit increased 31% to $40 million from $30 million in the prior year quarter. Gross margin increased to 26% from 25% in the prior year quarter.

• Significant growth in international cannabis with revenue up over 4,000% from the prior year quarter, and 37% increase in revenue in EMEA when compared to the previous quarter

• Maintained #1 leadership position in Canada¹ with 10.2% cannabis market share driven by Tilray’s comprehensive portfolio of adult-use brands, and growth in pre-roll and vape product categories.

• Cost synergies from Aphria-Tilray combination of $76 million achieved on a run-rate basis to date. Expect to reach $80 million synergy target by May 31, 2022, five months ahead of schedule and to generate an additional $20 million in synergies in fiscal 2023.

• Distribution revenue decreased 11% to $63 million during the third quarter from $70 million in the prior year quarter. The decrease was driven by the impact of changes in the exchange rate between the Euro and USD, which led to a $7 million reduction.

¹ Based on Hifyre retail data.

Strategic Growth Actions

• On April 6, 2022 – Manitoba Harvest announced an exclusive partnership with Whole Foods Market launching the brand’s Hemp+ Matcha and Supergreens powders exclusively at Whole Foods across North America.

• On April 5, 2022 – The Brewers Association announced that SweetWater Brewing Co. is now the 10^th largest craft brewer in the U.S.

• On April 5, 2022 – Tilray Brands announced the launch of Solei Bites, the first THC edible available in Quebec, the 2^nd largest market in Canada.

• On March 24, 2022 – Solei, Tilray Brands’ best-selling Canadian wellness brand, announced the launch of Renew Moonlight, CBN vape pen for nighttime use.

• On March 17, 2022 – Tilray Medical launched the first medical cannabis oil products in Malta.

• On March 8, 2022 – Good Supply, Tilray Brands’ best-selling Canadian cannabis brand, announced the launch of Hash Bats, its new fastest growing infused pre-rolls.

• On March 3, 2022 – Tilray Brands announced a proposed strategic alliance with Hexo Corp. to bring together Canada’s top two cannabis market share leaders to strengthen operational efficiencies and product innovation to benefit consumers, shareholders, and the cannabis industry.

• On March 2, 2022 – Manitoba Harvest announced its new lineup of superfood products.

• On February 22, 2022 – SweetWater Brewing Company launched across Oregon and Washington, marking the brand’s expansion into their 39^th and 40^th states.

• On February 17, 2022 – Tilray Medical announced its first shipment of medical cannabis products to Malta.

• On February 10, 2022 – Breckenridge Distillery launched its second (sold-out) series of ‘Super’ Sexy Motor Oil, a limited-edition Bourbon aged in beer barrels for over a year.

• On February 9, 2022 – SweetWater Brewing Company announced its West Coast expansion into California and a partnership with the largest beer distributor in the U.S.

• On February 8, 2022 – Tilray Brands launched Tilray Medical, a new comprehensive global division focused on international medical cannabis advocacy and a portfolio of EU GMP-certified medical brands and products.

• On January 25, 2022 – Tilray Brands announced an expanded medical cannabis product offering in Australia and the launch of a new online medical cannabis education platform for healthcare professionals in Australia and New Zealand.

• On January 20, 2022 – Manitoba Harvest introduced new hemp recipes compatible with Vegan, Keto, Paleo, and Gluten-Free Diets.

• On January 10, 2022 – Tilray announced a new parent name, Tilray Brands, Inc., reflecting the Company’s evolution from a Canadian LP to a global consumer packaged goods company powerhouse with a market leading portfolio of cannabis lifestyle and CPG brands.

• On December 21, 2021 – SweetWater Brewing Company acquired award-winning craft-beer brands, Alpine Beer and Green Flash Brewing.

• On December 8, 2021, Tilray acquired Breckenridge Distillery, strengthening its strategic position in the U.S.

• On December 2, 2021, Manitoba Harvest introduced Hemp Hearts health hacks for the holidays.

Growth and High Potential Across Key Markets

#1 Market Leading Position in Germany and Poised to Accelerate Strategic Growth Initiatives Upon Adult-Use Legalization – Today, Germany remains the largest medical cannabis market in Europe and is expected to also be one of the largest adult use markets as well upon legalization. We are already the leader in medical cannabis within Germany with a market share of approximately 20% with our whole flower, extracts and Dronabinol products and, this, together with our investments in infrastructure, brands and people, positions us exceptionally well for adult-use cannabis legalization.

Strategic Expansion Across the EU – Tilray Brands’ success across the EU, a powerful growth market worth potentially $1 billion for the Company, is backed by its two state-of-the-art cultivation facilities in Portugal and Germany that provide EU GMP certified pharmaceutical-grade medical cannabis across the region. This unparalleled production capability coupled with Tilray Brands’ sales arrangements through major distribution channels in Germany, the UK, and other key markets, coupled with the strong relationships with local governments and the trust of our patients, gives Tilray Brands the ability to drive accelerated growth.

#1 Leading Cannabis Market Share in Canada – Amid an intensely competitive and over-saturated market, Tilray Brands remains the market leader in the CAD$4.26 billion Canadian cannabis market, driven by a portfolio of carefully curated brands across all consumer segments; medical, wellness, innovative cannabis 2.0 products across concentrates, edibles, and drinks; processing capacity; and distribution. In order to address the saturated marketplace, Tilray Brands has implemented strategic price adjustments, expanded distribution through its coast-to-coast agreement with Rose Life Sciences and Great North Distributors, and increased our focus on and accelerated product innovation. Proposed alliance with Hexo Corp. (Nasdaq: HEXO) (TSX: HEXO) would bring together Canada’s top two cannabis market share leaders to strengthen operational efficiencies and product innovation to benefit consumers, shareholders, and the cannabis industry.

A Leading U.S. CPG Platform with Operational Strength, Leadership Expertise, and Optionality to be Immediately Leveraged for Cannabis Products Upon Federal Legalization – In the U.S., Tilray Brands’ operating…