TORONTO, May 30, 2024 (GLOBE NEWSWIRE) -- Red White & Bloom Brands Inc. (CSE:RWB) ("RWB" or the "Company") is pleased to report it has filed its Condensed Interim Consolidated Financial Statements ("the Financial Statements"), Management's Discussion and Analysis ("MD&A"), and associated certifications for its first quarter ended March 31, 2024. As a reminder to all of its shareholders, the Company will hold its Annual General Meeting ("AGM") on Friday, June 14th, 2024. President's Commentary Colby De Zen, President, stated, "After significant efforts, the Aleafia transaction was successfully closed in mid-January 2024. With the closing behind us, the RWB management team was finally given the opportunity to begin the process of implementing changes and commencing integration. We attacked the integration with a three-prong approach; The first order of business was to right size Aleafia, which included the complete overhaul of C-Level executives. Our next step was to comprehensively reassess our entire product lineup using a variety of metrics, such as market share, margin analysis, emerging trends, and product formats. This comprehensive review extended throughout the value chain evaluating third-party vendors, as well as making strategic decisions to enhance our in-house capabilities through automation and internal investments, while also capitalizing on procurement synergies across the company. As a result of these efforts, we made the decision to discontinue several SKUs while introducing a range of new and innovative formats. These strategic moves pave the way for Aleafia's Divvy Brand to emerge as the most competitively priced option for consumers seeking both ready-to-use and bulk cannabis products in Canada. Lastly, we've undertaken a campaign to reengage our customers through the development of a collaborative go to market strategy to address their needs. The introduction of our new product formats using this hands-on approach has been very well received. As the first quarter advanced, there was a noticeable improvement in customer growth and market share, with momentum increasing as the quarter drew to a close. The significant operational enhancements implemented in Q1 will manifest through our second quarter and more substantially throughout the remainder of fiscal 2024." Mr. De Zen went on to comment "It is important to note that our increase in general and administrative expenses in Q1 are directly correlated to non-recurring, transitional costs associated with the acquisition and integration of Aleafia which included severance, restructuring, and professional fees. As previously stated, with the Aleafia acquisition now firmly entrenched, RWB can and will remain steadfast in its commitment to profitable growth." Mr. De Zen concluded, "Despite the considerable efforts and focus on swiftly implementing the Aleafia integration, I am pleased to report that the execution of previously defined near-term priorities elsewhere in the Company remain on target. We continue to make progress in finalizing the ongoing restructuring of our financing arrangements, expanding our asset-light approach in the US for our award-winning brands, completing the expansion of our retail footprint in the state of Florida in fiscal 2024, and divesting all non-strategic assets or operations by the close of fiscal 2024". Recent business highlights for the Company's first quarter ended March 31, 2024 and subsequent to March 31, 2024 On January 15, 2024, the Company announced that, in connection with the Aleafia Group's CCAA proceedings, the parties successfully closed the previously announced sale transaction on January 12, 2024 (the "Transaction"). Pursuant to the Transaction, RWB (PV) Canada Inc. (the "Purchaser"), a wholly-subsidiary of RWB, acquired the intellectual property assets of Aleafia Health and subscribed for shares in the capital of each of Emblem Cannabis Corporation ("ECC"), Canabo Medical Corporation ("Canabo") and Aleafia Retail Inc. ("Retail" and collectively with ECC and Canabo, the "Companies"). As a result of the Transaction and Approval and Vesting Order, the Purchaser became the sole shareholder of the Aleafia Purchased Entities. Additional details of the consideration for the Transaction can be found in the Company's 2023 financial statements. On February 27, 2024, the OMMU approved our manufacturing facility in Sanderson, Florida for extraction allowing the Company to in-source distillate production for the first time in Florida which will substantially increase the product mix and SKU selection for our operations in that state. In April 2024, Platinum Vape 5/10 distillate cartridges were approved and debuted at all of our active medical retail locations in Florida. In May 2024, Platinum vape distillate disposables were approved and debuted at all of our active medical retail locations in Florida. As of the date of this release, adult use sales are anticipated to commence in Ohio in the next sixty (60) to ninety (90) days. Platinum Vape products are already well positioned in Ohio as part of an executed licensing agreement with a vertically integrated licensed producer and distributor in Ohio. Ohio is projected to generate adult-use sales in excess of $1.5 billion by 20271. 2024 First Quarter ("2024-Q1") Financial Highlights Revenues were $22.6 million for 2024-Q1, a $2.7 million increase over the previous quarter (2023-Q4); the increase was partially attributable to the closing of Aleafia during the quarter. Revenues for 2024-Q1 were lower by $3.9 million in comparison to 2023-Q1 revenues of $26.5 million primarily due to the targeted divestiture of non-strategic operations. Gross profit, before fair value adjustments, was $7.9 million for 2024-Q1, a $0.5 million increase over the previous Quarter (2023-Q4); the increase was partially attributable to the closing of Aleafia during the quarter. Gross profit, before fair value adjustments for 2024-Q1 was $1.5 million lower than restated 2023-Q1 gross profit before fair value adjustments of $9.4 million primarily due to lower sales volume. Operating expenses were $12.1 million for 2024-Q1, an increase of $2.9 million compared to restated 2023-Q1 operating expenses of $9.2 million; the increase was partially attributable to the closing of Aleafia in the quarter, an increase in non-cash provisions and depreciation and amortization, offset by a reduction in operating expenses elsewhere in the company. Other income was $3.0 million, an increase of $9.6 million compared to restated 2023-Q1 other expenses of $6.6 million primarily due to the gain on investment associated with the closing of the Aleafia acquisition. EBITDA2 for 2024-Q1 was $5.1 million compared to negative EBITDA of $89.7 million for 2023-Q4; an increase of $94.8 million primarily due to the Company having recorded impairments of $85.2 million in 2023-Q4 and the gain on investment of $7.6 million associated with the Aleafia acquisition realized in 2024-Q1. EBITDA for 2024-Q1 was $5.9 million higher than restated 2023-Q1 EBITDA of negative $0.9 million primarily attributed to the gain on investment associated with the Aleafia acquisition. Adjusted EBITDA2 was $0.1 million for 2024-Q1, a decrease of $1.7 million compared to restated 2023-Q1 Adjusted EBITDA of $1.8 million. ____________________________________________ 1 https://www.cannabisbusinesstimes.com/news/ohio-adult-use-cannabis-market-billion-sales-2027-bdsa/2 Refer to Non-IFRS and Supplementary Financial or Operating Measures The following is a condensed summary of the Company's results from operations for 2024-Q1, and restated 2023-Q1 (in thousands of Canadian dollars) 2024-Q1 2023-Q1 restated Variance   $ $ $ Revenue 22,551 26,453 (3,902) Gross profit before fair value adjustments 7,869 9,410 (1,541) Gross profit before fair value adjustments (%) 35% 36% -1% Unrealized changes in fair value of biological assets (3,067) (451) (2,616) Realized fair value amounts included in inventory sold (933)