CALGARY, Alberta, March 04, 2021 (GLOBE NEWSWIRE) — Sugarbud Craft Growers Corp. (TSXV:SUGR, SUGR.WT, SUGR.WS, SUGR.DB) (”

Sugarbud

” or the ”

Company

“) is pleased to provide a corporate operating update and comments regarding its outlook for 2021.

Corporate Operating Update

“2020 was a pivotal and productive period for the Company’s overall scale up and growth plans,” stated Sugarbud CEO John Kondrosky. “In addition to receiving our amended sales license for dried cannabis in Q3 2020, the Company formally entered the adult-use recreational cannabis market in earnest in Q4 2020 – after securing important supply agreements with the Provinces of Saskatchewan, Alberta and British Columbia. In the final weeks of the year, we received our first $1.0 million in purchase orders,” continued Mr. Kondrosky.

Subsequent to year end, the Company entered into supply agreements with the Province of Ontario and the Yukon Territory.

With a clear line of sight on revenue generating supply and harvests now occurring once every month and a half at its Stavely cultivation facility, the Company has firmly established steady state commercial operations and is now operating at a level sufficient to meet the Company’s positive revenue and EBITDA objectives for 2021.

“We are pleased with our progress to date after our first full year of operations and believe that we have established a strong platform to rapidly accelerate the Company’s continued growth in 2021,” concluded Mr. Kondrosky.

2021 Outlook – Quality Over Quantity

The Canadian adult-use recreational cannabis market continues to evolve at a rapid pace as consumer buying practices and preferences become more refined and informed.

Despite volatility in the sector, the Company expects that the growth and momentum the recreational cannabis sector saw building in the latter half of 2020 will continue in 2021. The Company believes that the most significant drivers of growth will be a holistic commitment to premium quality and consumer satisfaction over volume.

“Sugarbud puts the consumer at the center of everything we do. Our experience, market data and both retailer and consumer feedback confirm that our focus is both well-aimed and critical to the success of the Sugarbud brand,” stated Mr. Kondrosky.

Rather than focus solely on general categories such as “value priced” or “premium products”, the Company believes that a relentless pursuit and commitment to total value and consumer satisfaction across multiple product and consumer preference attributes is the more prudent pathway forward towards a sustainable and profitable business.

“We are producing exceptional top-quality products for an intelligent consumer,” Mr. Kondrosky notes. “We recognize that our consumers have different interests, diverse hobbies, busy jobs and are pursuing all kinds of things to make their lives even fuller. We understand that we must work hard to find and earn a place in their busy day”, continued Mr. Kondrosky.

“Consequently, we have set a high bar for ourselves and spend a lot of time making sure that what we produce measures up to consumer expectations,” concluded Mr. Kondrosky.

The Company believes that the recent drive to split the market between the binary choice of “price/value” versus “premium”, is short-sighted. Along with a focus on singular product attributes such as potency alone, Sugarbud believes this does a disservice to the consumer.

“As the market continues to mature, we believe that the time and effort we are putting into providing our target consumers with a balanced approach to total product quality at a fair price will drive sustainable growth. This overarching commitment to consumer excellence will play a fundamental role in eliminating the need for consumers to continue to access the black market,” added Mr. Kondrosky.

“Based on positive feedback received from the market to date, we believe that we are well-positioned to continue to expand our market share and accelerate revenue growth in 2021,” concluded Mr. Kondrosky.

Critical Operating Priorities for 2021

Operationally the Company has the existing capacity to achieve its business objectives for 2021 and has the flexibility and agility to rapidly expand capacity within its existing licensed Stavely facility to meet an increase in demand should it be required.

The Company maintains an agile and scalable operating model and has several facility build-out options which it can quickly deploy, when market demand requires.

In order to fully realize significant growth opportunities and continue to expand market share in 2021, the Company will continue to leverage existing operational capacity and expand commercial capacity for growth by:

• Expanding our geographic reach to include new provincial markets including Ontario.
  
  READ: Sugarbud Enters Canada’s Largest Recreational Cannabis Market, Signs Supply Agreement with Ontario
  
• Leveraging the quality of our exceptional dried flower portfolio to expand into Cannabis 2.0 products, such as vapes and inhalable concentrates.
  
  READ: Sugarbud Accelerates Cannabis 2.0 Product Launch Via Purchase and Supply Agreement with CannMart Inc.
  
• Continuing to build product excellence around our genetic portfolio.
• Partnering with leading sales and distribution agencies to maximize the visibility and awareness of the Sugarbud brand within its target markets.
  
  READ: Sugarbud Expands National Distribution Reach, Announces Sales Agency Partnership With Velvet Management Inc
  
  .
• Building Sugarbud’s connection to its retail partners and consumers – to increase the penetration and adoption of its products in current target markets.
• Investing in targeted new product and portfolio development to accelerate growth.
• Continuing to maintain and adhere to strong financial discipline and operating controls that management believes will deliver superior operating results. Instead of focusing on rapid expansion and scale-up, the Company continues to approach future scale using a self-sustaining revenue first model – that both places a priority on a healthy balance sheet and supports controlled future expansion.
  

READ Q1 2021 CORPORATE PRESENTATION HERE

https://www.globenewswire.com/NewsRoom/AttachmentNg/0469cd5f-ada9-4225-bbd4-b030de1b5027

About Sugarbud

Sugarbud is an Alberta-based, consumer-driven boutique craft cannabis company focused on the cultivation and production of superior, select-batch, craft cannabis products. Our vision and mission are to become a trusted and well-respected consumer brand renowned for providing exceptional high-quality craft cannabis products to legal markets by delighting the most discerning of cannabis consumers.

The Sugarbud Craft Cannabis Collection offers consumers “Hand-Crafted Cannabis for a New Era”. The Company is proudly Albertan and is proud to share Western Canada’s long tradition of exceptional craft cannabis with the most discerning of enthusiasts. Sugarbud strives to define the intersection of product craftsmanship, quality, and value for consumers in the Canadian craft cannabis space.

Websites:



http://www.sugarbud.ca/

Address: Suite 620, 634 – 6th Avenue S.W., Calgary, Alberta T2P 0S4

Forward Looking and Cautionary Statements

This news release contains forward-looking statements. More particularly, and without limitation, this news release contains statements concerning: the Company’s business strategy and future operations, including the Company’s expected business objectives for 2021; ability to identify and successfully execute strategic partnerships; the grant of licenses and regulatory approvals to conduct the Company’s cannabis-related activities; ability to cultivate and produce premium cannabis products; the Company’s cultivation methods; the build out of the Company’s cannabis cultivation and processing facility and lands located in Stavely, Alberta; ability to establish and market the Company’s brand within its targeted markets and compete successfully; ability to produce and market additional products as regulations permit; the distribution and sale of Sugarbud’s cannabis products, including in new markets such as Ontario; future product offerings, including the development, commercialization and sale of Cannabis 2.0 products; legislation, regulations and licensing relating to the cultivation, distribution and sale of cannabis products for recreational and medical purposes; and the Company’s expectations regarding its revenues generated from sales of the Company’s product lines in 2021, including self-sustaining revenue. When used in this document, the words “will,” “anticipate,” “believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements.

The forward-looking statements are founded on the basis of expectations and assumptions made by Sugarbud, including, but not limited to: the success of the Company’s business strategy, including organic growth, acquisitions, partnerships and other strategic activities; ability to manage growth in the Company’s business; the ability to maintain licenses and necessary approvals for Sugarbud to cultivate cannabis at the Stavely facility; ability to cultivate premium cannabis products; ability to sell cannabis products; access to market for the Company’s future cannabis products; impact of increasing competition; ability to keep pace with changing consumer preferences; ability to protect the Company’s intellectual property; timing and amount of capital expenditures; operating costs; government regulations, including future legislative and regulatory developments involving recreational and medical cannabis and the timing thereto; changes to laws regarding the recreational and medical use of cannabis and the impact on the Company’s business strategy; demand for cannabis products and corresponding forecasted increase in revenues; size of the recreational and medical cannabis markets in Canada; legislative and regulatory environments of the jurisdictions where the Company carries on business; ability of the Company to obtain qualified staff, services, supplies and equipment in a timely and cost-efficient manner; the Company’s competitive advantages; conditions in general economic and financial markets;

Forward-looking statements are subject to a wide range of risks and uncertainties, and although Sugarbud believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to: the global public health crises in respect of the outbreak of a novel strain of coronavirus (COVID-19), including volatility and disruptions in global supply chains and financial markets, as well as declining trade and market sentiment and reduced mobility of people; success of the operations of the Company; ability of the Company to execute its business strategy; the effect consumer perception of the medical and recreational use of cannabis will have on the market price of cannabis products; the premium segment of the medical and recreational cannabis markets; consumer’s attraction to premium cannabis products and changes in consumer preference; development of the cannabis industry in ways that differ from the Company’s expectations; legislative and regulatory environments of the jurisdictions where the Company carries on business or has operations; ability of Sugarbud to develop or maintain a brand that attracts or retains customers; any failure by the Company to comply with applicable regulations could prevent it from being able to carry on its business, and there may be additional costs associated with any such failure; federal, provincial and municipal government cannabis regulation and changes thereto; actions taken by governmental authorities, including increases in taxes and changes in government regulations; any failure by the Company or its suppliers to comply with supplier standards established by provincial or territorial distributors could prevent the Company from accessing certain markets in Canada; constraints by law in the Company’s ability to market its products in Canada; development of the Stavely facility, including construction delays; availability of sufficient financial resources to fund the Company’s capital expenditures; stock market volatility and market valuations; changes in general economic, market and business conditions; the effect of any future litigation proceedings on the Company’s business; impact of competition and the competitive response to the Company’s business strategy; competition for, among other things, licences, capital, skilled personnel and customers the risks of the cannabis industry, such as regulatory risks and increasing competition; timing and amount of capital and other expenditures; the availability of capital on acceptable terms or at all; cyber-security issues; and, in relation to the Company’s expectations regarding revenues during 2021 and the Company achieving self-sustaining revenue, assumptions relating to production and production capacity, growth in the number of product offerings and store locations in which the Company’s products are sold, growth in total sales, consumer demand for the Company’s products, market pricing of cannabis products, cost of sales, general and administrative expenses (including sales and marketing expenses), the pace of opening of and increase in the total number of recreational cannabis retail stores across Canada, and the total size of the Canadian recreational and medical cannabis markets over that time period. In particular, the Company has assumed and expects that, among other things: (i) its products will meet the specifications of it and its distribution partners, for instance with regard to THC content and other specifications; (ii) the pricing of its products and the product mix of its sales will be consistent with its most recent discussions with its distribution partners; (iii) its Facility will produce between 1,600 kgs and 2,000 kgs in 2021 without additional scale-up, based on the following assumptions: 85 – 100 gram yield per plant; and growing cycle of 10 – 11 weeks per harvest, resulting in 4.75 harvests per year for each room; (iv) the Company will receive an amended sales license from Health Canada prior to the end of Q2 2021, or sell Cannabis 2.0 products pursuant to its existing distribution agreement with a third-party with such license, to permit the Company to sell Cannabis 2.0 products to authorized provincial distributors, retailers and registered medical patients and such products will be developed and move to commercialization by the end of Q3 2021; (v) its cost of sales will be consistent with its current cost of sales throughout 2021; (vi) certain general and administrative expenses are expected to increase if the Company achieves increased sales; and (vii) the total recreational and medical cannabis market in Canada will grow in line with the expectations of the analysts whose reports the Company has reviewed. Please refer to Sugarbud’s most recent annual information form and management’s discussion and analysis for additional risk factors relating to Sugarbud, which can be accessed under Sugarbud’s profile on

www.sedar.com.

Except as required by applicable laws, Sugarbud does not undertake any obligation to publicly update or revise any forward-looking statements.

This news release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about the Company’s reasonably estimated prospective results of operations, cannabis production capacity, revenue, expenses, profit and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs, including with respect to economic conditions and proposed courses of action, based on management’s assessment of the relevant information available as of the date of this news release. Sugarbud disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.