SLANG Worldwide Announces Fourth Quarter and Full Year 2021 Financial Results

Toronto, Ontario--(Newsfile Corp. - April 28, 2022) - SLANG Worldwide Inc. (CSE: 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 twelve months ended December 31, 2021. All figures in this press release are stated in Canadian dollars unless otherwise noted.

Key Financial Highlights:

• Revenue from continuing operations for FY 2021 was $37.8 million, compared with $25.5 million in FY 2020, representing a 48% increase year-over-year. The primary driver of the sequential year-over-year growth was due to increased revenues associated with the acquisitions of Allied Concessions Group, Inc. ("ACG") and High Fidelity, Inc. ("HiFi") completed on December 31, 2020 and August 11, 2021, respectively.

• Gross profit of $15.1 million (40% gross margin) in FY 2021, compared with $12.7 million (50% gross margin) in FY 2020, representing a 19% increase year-over-year.

• Adjusted EBITDA of ($4.97 million) in FY 2021, compared with ($5.47 million) in FY 2020. The increase of the Adjusted EBITDA is primarily attributable the increase in revenue and gross profit associated with the acquisition of HiFi in August 2021.¹

• $20.83 million restricted and unrestricted cash balance as of December 31, 2021, compared to $6.61 million at December 31, 2020. This includes the Company's recently completed term-loan financing with participation from Trulieve Cannabis Corp. ("Trulieve"), a leading and top-performing cannabis company based in the United States, and two existing significant shareholders of the Company, Pura Vida Investments and Seventh Avenue Investments, for aggregate gross proceeds of $17.3 million U.S.

Drew McManigle, Interim CEO and Chairman of SLANG, said, "Our dedicated efforts to streamline our operations and redefine our core and emerging markets strategies have already taken hold as we are recognizing stronger opportunities to drive profitable revenue growth in 2022. We are a different SLANG today than we were at the beginning of 2021, strategically expanding our brand and product portfolio while consolidating our supply chain assets, allowing us to effectively meet consumer demand and achieve stronger unit economics in our core and emerging markets."

"Our ability to rapidly eliminate our weaker performing Oregon operations and strategically enter new emerging markets has been integral to our near and long-term growth. In the second half of 2021, SLANG acquired High Fidelity / Ceres, one of Vermont's largest medical cannabis companies, and through our key partnership with Trulieve, we secured our entry into Pennsylvania, West Virginia, Massachusetts and Maryland, providing us with a number of key growth opportunities that we are now advancing upon in 2022. By winding down our Oregon operations, we are recognizing strong cost savings that are already supporting our ability to rapidly and efficiently expand our operational footprint."

"Further supporting our operational transition has been the strengthening of our strategic partnership with Trulieve as we entered into a $17.3 million term-loan with Trulieve and our existing shareholders Pura Vida and Seventh Avenue Investments. This financing shows the confidence and commitment our strategic partners have in the new management team as we execute our growth strategy to drive shareholder value while transforming SLANG into a leading player in the cannabis industry," concluded McManigle.

Operational Highlights and Growth Drivers:

• The Company began sales to new Emerging Markets through its partnerships with Trulieve in Pennsylvania, West Virginia, Massachusetts, and Maryland and with Natura Life + Science in California.

• In August, the Company completed its acquisition of HiFi, one of Vermont's largest medical cannabis companies, adding Vermont as a new Core Market. HiFi is vertically integrated and its operations include a 28,000-square-foot cultivation, production, lab, and retail distribution facility.

• In October, the Company entered the West Virginia and Pennsylvania markets through a strategic partnership with Trulieve. As previously announced, Trulieve obtained exclusive access to the entire SLANG portfolio of products and products, which are already available in all Trulieve locations in the states of Florida and Massachusetts. The solidified partnership provides SLANG with a range of significant growth opportunities in several markets, and the Company expects its products to be available on the shelves in Pennsylvania and West Virginia by Q2 2022 and Q3 2022, respectively.

• In November, SLANG completed a term-loan financing (the "Loan Transaction") agreement with its strategic partner Trulieve, two existing significant shareholders of the Company, Seventh Avenue and Pura Vida, and other investors for gross proceeds of $17.3 million USD. The Loan Transaction represents a pivotal moment for the Company strategic growth strategy, as it furthers its efforts to complete the development and integration of the Vermont operations, improve operational efficiencies, drive future revenues, and reduce capital expenditures. Additionally, Drew McManigle was appointed Interim CEO and Chairman of the Board as part of an executive management transition to strategically reposition SLANG for profitable revenue growth.

• In conjunction with the Loan Transaction, SLANG has made a strategic pivot in its Core Markets and Emerging Markets strategy to pursue geographies that are expected to provide meaningful and profitable lines of revenue. In regard to its Core Markets, the Company has decided to wind down manufacturing operations of all SLANG branded THC products in Oregon, focusing its future efforts to the profitable Core Markets of Colorado and Vermont. As for Emerging Markets, the Company maintains capital light strategic partnerships in 12 markets, allowing SLANG one of the largest U.S. distribution footprints in cannabis.

• Post quarter-end, the Company announced several changes to its Management Team and Board of Directors. The changes include the enhancement of the Board of Directors through the appointment of Kevin K. Albert, a seasoned professional with significant knowledge and expertise in the cannabis industry, a deep and fundamental understanding of finance and management, and a successful track record in M&A, as an Independent Member of the Board. Mr. Albert's appointment succeeded Matt Fraser's resignation from the Board. As a result of the steps taken to restructure the sales and marketing departments, SLANG announced the elimination of the position of Chief Revenue Officer. In addition, the Company is in the process of adding a new sales manager for its Colorado operations and recently selected a new COO to manage its emerging position in Vermont and New Jersey.

• Post quarter-end, SLANG has implemented a consolidation (the "Consolidation") of its outstanding common shares ("Common Shares") and its outstanding restricted voting shares ("Restricted Shares", and together with the Common Shares, the "Shares") on the basis of one new Share for every six outstanding Shares at the time of the Consolidation. The effective date of the Consolidation was February 28, 2022.

Fourth Quarter 2021 Highlights

• Revenue from continuing operations for Q4 2021 was $8.84 million, compared to Q4 2020 revenue of $8.29 million, representing a 7% increase.

• Gross profit of $4.1 million (46% gross margin) in Q4 2021, compared with $3.03 million (37% gross margin) in Q4 2020, representing a 35% increase. The increase in margin is largely in relation to the acquisition of HiFi in August 2021 bringing higher margin sales.

• Adjusted EBTIDA of ($2.13 million) in Q4 2021, compared with ($1.05 million) in Q4 2020. The Company remains committed to prudently managing its operating expenses on its mission to further improve the efficiency of operations. The Company believes it will continue to see an improvement in this metric as it recognizes greater high-margin revenue from its operations.

• As part of the process of evaluating the viable entities in the Company's business, SLANG completed the wind down of all manufacturing THC activities in Oregon. By discontinuing these plant touching sales and listing various Oregon assets for sale, the Company will be recognizing a reduction in operating expenditures of over $2 million annually related to those operations.

• The Company made progress throughout the quarter in implementing a strategic growth plan to focus on its Core Markets of Vermont and Colorado with special attention to streamlining operations, developing new products and branding and investigating opportunities to reduce manufacturing costs, including manufacturing outsourcing and enhanced logistics.

• In Q4 2021, 717,126 SLANG Branded Units were sold across The SLANG Network with Colorado generating approximately 51% of SLANG's total Branded Units volume.¹ The Company's Core Markets of Colorado and Vermont saw sequential improvements in Q4 2021 when compared to Q4 2020, with Massachusetts and Washington showing increases due to the Company having entered those markets in 2021.

• SLANG's brands continued to earn market-leading positions in its core markets in Q4 2021. Highlighted by O.pen maintaining its #1 ranking in the vape cartridge category In Colorado, according to BDSA.

Full Year 2021 Financial Review

The consolidated financial statements were prepared in accordance with IFRS. The following is selected presentation of the Income Statement for the year end December 31, 2021.

See the Company's management's discussion and analysis for the three and twelve months ended December 31, 2021 (the "Q4 2021 MD&A") for a detailed reconciliation of EBITDA and Adjusted EBITDA to Operating Income / (Loss). SLANG's financial statements and the Q4 2021 MD&A are available on SEDAR at www.sedar.com, and on the Company's Investor Relations website at www.slangww.com.

The Company reported $20.83 million of combined restricted and unrestricted cash and cash equivalents at December 31, 2021, compared to $6.61 million at December 31, 2020, and $3.5 million at September 30, 2021.

Non-IFRS Measures

EBITDA, Adjusted EBITDA and Branded Unit volume 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. See the heading "Key Performance Indicators" in the Q4 2021 MD&A for a description of how each of Branded Unit volume is calculated. 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 today, April 28, 2022, at 11:00 am ET to discuss the results.

About SLANG Worldwide Inc.

SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. SLANG specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. For more information, please visit www.slangww.com.

To be added to SLANG's email distribution list, please email SLNG@kcsa.com with "SLNG" in the subject.

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 the COVID-19 global pandemic, 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 the Q4 2021 MD&A and other disclosure documents available on the Company's profile on SEDAR at www.sedar.com. 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.

Third Party Information

This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.