Stem Holdings, Inc. d/b/a Driven By Stem Announces Record Sales and Gross Margin for the Third Quarter

Gross Sales Increase of 104% to US$12.4 Million Year-over-Year

Net Sales Increase of 103% to US$10.6 Million Year-over-Year

Gross Margin Improved 7.6% Year-over-Year

BOCA RATON, Fla., Aug. 16, 2021 (GLOBE NEWSWIRE) — Stem Holdings, Inc. d/b/a Driven by Stem


(OTCQX: STMH) (CSE: STEM) (the ”

Company

” or ”

Stem

“), the first multi-state, vertically integrated Farm-to-Home



(F2H) cultivation and technology omnichannel cannabis company featuring a proprietary Delivery-as-a-Service (DaaS) marketplace platform, today reported results for the third fiscal quarter ended June 30, 2021. Stem reported third quarter record gross sales of US$12.4 million and net sales of US$10.6 million, a 104% increase and 103% increase, respectively, over the prior year’s US$6.1 million gross sales and US$5.2 million net sales. Gross margin improved 7.6% to 41.8%, reflecting improvements in productivity, mix, and synergies from the Company’s acquisition of Driven Deliveries, Inc.

“I am proud of our results, and of our team which is executing our robust four-point plan for growth,” stated Adam Berk, Chief Executive Officer. “We are building our footprint with a strong ongoing focus on cost reductions, operational excellence, and customer acquisition and retention to drive topline sales and margin improvement as we did this quarter,” he continued. “Most importantly, we are uniquely connecting our brands, products and delivery services with the cannabis community from Farm to Home™ for long-term stability. We expect to achieve longer-term benefits that will build value for our shareholders as we invest in organic and acquisitive growth,” Berk concluded.

Stem is also reporting a 19% increase in total dispensary sales, a significant outperform to market particularly in Oregon which grew at 7% in the same period. This reflects continuous improvement initiatives and emphasis on customer service. This effort dovetailed with the launch of the company’s Budee™ delivery platform in Oregon which occurred on August 9, 2021. A customized app was built from front-to-back for this official launch, and Budee™ is now anchored by Stem’s

TJ’s on Powell

dispensary servicing the Greater Metro Portland area. The Company expects that Budee™ will expand to cover the majority of Oregon beginning with the Eugene metro in October 2021. In addition, Budee™ continues to increase its penetration of the California delivery market where it originated. It now covers 92% of that state’s population particularly in areas where there is high demand and a low density of dispensaries.

Stem also expects to launch its first dispensary in Michigan in September 2021, which will be coupled with Budee™ delivery, as the next step in the Company’s “Get Ready” retail expansion strategy.

As Stem builds its Farm-to-Home™ infrastructure with vertical integration from cultivation to delivery, the Company has also invested in expanding its canopy for high-quality cannabis growth, particularly at its Mulino, Oregon farm and its newest facility in Springfield, Oregon. All five Stem cultivation facilities in Oregon are growing core and new genetics to delight customers and build loyalty. Stem’s extraction lab which now includes solventless extraction is supporting both Stem’s edibles and concentrates, two sectors that are both growing and margin-accretive. Stem’s products are now sold in over 240 dispensaries outside of Stem branded stores.

Stem will host a conference call to discuss the financial results on Tuesday, August 17, 2021 at 8:00 am as previously announced.


Conference Details

Management plans to host a conference call to discuss the financial results on Tuesday, August 17, 2021 at 8:00 a.m. EDT.



Date:

Tuesday, August 17, 2021


Time:

8:00 a.m. EDT


Dial-in:

1-877-425-9470 (U.S. Toll Free) or 1-201-389-0878 (International)


Conference ID:


13722361


Webcast:


A live webcast can be accessed via the following link:

http://public.viavid.com/index.php?id=146252

A replay of the webcast will be archived on the Company’s website for one year.


About Stem Holdings

Stem Holdings is a leading omnichannel, vertically-integrated cannabis branded products and technology company with state-of-the-art cultivation, processing, extraction, retail, distribution, and delivery-as-a-service (DaaS) operations throughout the United States. Stem’s family of award-winning brands includes TJ’s Gardens™, TravisxJames™, and Yerba Buena™ flower and extracts; Cannavore™ edible confections; Doseology™, a CBD mass-market brand launching in late 2021; as well as DaaS brands Budee™ and Ganjarunner™ through the acquisition of Driven Deliveries. Budee™ and Ganjarunner™ e-commerce platforms provide direct-to consumer proprietary logistics and an omnichannel UX (user experience)/CX (customer experience).


Forward-Looking Statements


This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company’s current expectations.  When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release includes information relating to: (i) the implementation of the Company’s business plan; (ii) the expansion of Stem’s brands, retail footprint, delivery services and products into other markets, including Michigan; (iii) expected impact of the Company’s extraction lab; (iv) the expected launch of new brands and products by Stem; and (v) expected organic and acquisitive growth.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, among others, the following risks: risks associated with the implementation of the Company’s business plan and matters relating thereto, risks associated with the cannabis industry, competition, regulatory change, the need for additional financing, reliance on key personnel, the potential for conflicts of interest among certain officers or directors, insurance, intellectual property and reliable supply chains; and risks related to the Company and its business generally. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change.  Investors are cautioned against attributing undue certainty to forward-looking statements.


Stem Holdings




Investor Relations Contact:

KCSA Strategic Communications

Valter Pinto or Elizabeth Barker

+1 212.896.1254 or +1 212.896.1203



[email protected]




or


[email protected]

Media Contact:

Mauria Betts

Director of Branding and Public Relations

971.266.1908



[email protected]



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