Entourage Health Reports Q3 Financial Results with $14.9 Million Record Revenue Representing 94% YOY Increase and Fourth Consecutive Quarter of Growth

• Adult-Use net revenue for the quarter increased by 102% compared to last year
• Sales, general and administrative costs decreased by 16% compared to last year
• Strategic acquisition of craft cultivator CannTx will introduce new genetics, IP and cultivars
• Management to host conference call today at 10:00 a.m. Eastern Time

TORONTO, Nov. 16, 2021 (GLOBE NEWSWIRE) -- Entourage Health Corp. (formerly WeedMD Inc.) (TSX-V:ENTG) (OTCQX:ETRGF) (FSE:4WE) (“Entourage” or the “Company”), a Canadian producer and distributor of award-winning cannabis products and brands, announced today its financial results for the three and nine months ended September 30, 2021. The Company recorded third quarter 2021 total revenue of $14.9 million, a 94% increase year-over-year, and net revenue of $10.8 million, up 71% from the prior year and reflecting higher direct-to-consumer and direct-to-patient sales. The Company will host a conference call to discuss its financial and business highlights today at 10:00 a.m. Eastern Time.

“Our third quarter results reflect the advancements we are making in our business transformation as we focus on product quality and craftsmanship, while improving operational efficiencies throughout our organization. With a fourth consecutive quarter of record revenue growth in both adult-use and medical sales, our award-winning products are standing out in the marketplace,” said George Scorsis, Interim CEO and Executive Chair, Entourage. “Additionally, the closing of our CannTx Life Sciences acquisition complements the increasing demand for our products, allowing us to expand our product portfolio into premium markets for both flower and solventless products. CannTx will help elevate our current offerings across our distribution channels and drive further value as we introduce new, consistent quality-produced, craft-grade cannabis cultivars and products into the Canadian market.”

Summary of Results

*Adjusted EBITDA is not a recognized measurement under International Financial Reporting Standards (“IFRS”) and this data may not be comparable to data presented by other companies. Management defines Adjusted EBITDA as EBITDA adjusted to exclude interest, tax, and depreciation, stock compensation, fair value changes and other non-cash items, and non-recurring items. This data is furnished to provide additional information and does not have any standardized meaning prescribed by IFRS. The Company uses this non-IFRS measure 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 this non-IFRS measure in the evaluation of companies, many of which present similar metrics when reporting their results. As other companies may calculate Adjusted EBITDA differently than the Company, this metric 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. See the Company’s management’s discussion and analysis for the three months ended Sept. 30, 2021 (the “Q3 MD&A”) for a detailed reconciliation of Adjusted EBITDA to Net Income / (Loss). The Company’s financial statements for the three months ended Sept. 30, 2021 and the Q3 MD&A are available on SEDAR at www.sedar.com

“In Q3, we realized a reduction in SG&A and recognized inventory adjustments required to recalibrate our inventory. We have also seen improvements in our operating cash flow year-over-year and quarter-over-quarter as we continue to gain traction on our savings initiatives,” said Beth Carreon, CFO, Entourage. “With the addition of CannTx, we expect to deliver synergies, accelerate site optimization initiatives to drive further efficiencies in our production, and introduce higher-margin innovative product formats to support our objective of delivering profitable growth.”

Revenue Highlights

Key Financial Highlights

• For the third quarter ended September 30, 2021, Entourage recorded net revenue of $10.8 million, compared to $10.6 million in Q2 2021 and $6.3 million in Q3 2020.
• Gross loss before changes in fair value was $(4.2) million for Q3 2021, compared to gross profit of $3.1 million for Q2 2021 and $0.1 million in Q3 2020. The decline in Q3 2021 was mainly driven by inventory and packaging write-downs.
• Average yield per plant was 186 grams during Q3 2021 compared to 104 grams in Q3 2020.
• Total dried cannabis sold in Q3 2021 was 4,136 kgs, compared to 2,098 kgs in Q3 2020. The increase was driven by record growth in adult-use and medical channels.
• Weighted average cost per gram of inventory on hand was $0.55 for the three months ending Q3 2021, compared to $2.11 for the same period in 2020.
• As at September 30, 2021, Entourage held $27.6 million in inventory and biological assets with total assets of $151.2 million.
• Selling, general & administrative expenses for Q3 2021 was $4.5 million, compared to $10.4 million in Q2 2021 and $5.3 million in Q3 2020.
• Adjusted EBITDA was $(4.1) million for Q3 2021, compared to $(3.3) million in Q2 2021 and $(1.9) million in Q2 2020.

Corporate Highlights During Third Quarter 2021 and Subsequent Events

In July 2021, the Company announced a corporate name change and rebrand from “WeedMD Inc.” to “Entourage Health Corp.” The Company’s common shares continue to be publicly traded on the TSX Venture Exchange under the new ticker symbol “ENTG.V” and subsequently announced in September 2021 that it changed the U.S.-based OTCQX ticker symbol from “WDDMF” to “ETRGF”. Other highlights for the period include:

Commercial, Sales and Business Development Highlights

• Introduced Saturday Cannabis 510-vapes in Blood Orange cultivar marking it as one of the most added Entourage SKUs in all markets where available.
  
  
• Pre-Roll products in Mango Haze and Pedro Sweet Sativa continue to be top-sellers in BC with 10-pack pre-roll products a top seller in third quarter.
  
  
• Increase in market share continues in Q3; rising to just under 2% (Buddi Data).
  
  
• Starseed Medicinal referral program realizes 78% conversion rate over last quarter as medical program introduces new SKUs and cultivars that include Mandarin Cookies, Gelato33, Royal Goddess (Crown), and Rockstar Tuna.
  
  
• The Company expanded its Color Cannabis products into the Province of New Brunswick commencing in July 2021 making it accessible to over 95 percent of Canada’s retail market.
  
  
• Entourage confirmed the expansion of its Saturday Cannabis brand into the Province of Quebec, expanding Color and Saturday product SKUs. Quebec market is now the second largest sales market for Color Cannabis, with #3 for top-selling large format in June.
  
  
• In August 2021, the Company announced it had entered into agreements with BBCCC, Inc., a subsidiary of The Boston Beer Company, Inc. and Ontario-based Peak Processing Solutions to launch a new portfolio of non-alcoholic cannabis-infused beverages in Canada.
  
  
• In September 2021, Entourage announced the launch of Fire & Flower-branded CBD softgel product line produced inhouse at the Company's Aylmer-based extraction hub. Products manufactured through this partnership are formulated, processed, packaged and distributed by Entourage using the Company's CBD-rich biomass.
  
• On September 16, 2021, the Company announced the Canadian launch of acclaimed Mary's Medicinals Transdermal Patches. As the exclusive manufacturer and licensed distributor for Mary's suite of products in Canada, Entourage launched patches in CBD, THC and 1:1 formulations that will be available first to the Company’s Starseed patients as of late September 2021 and full release to patient base as of the fourth quarter 2022.
  

Corporate and Liquidity Resources

• On October 15, 2021, the Company announced that, as a result of a continuous disclosure review conducted by staff of the Ontario Securities Commission ("OSC"), the staff of the Corporate Finance Branch requested that the Company refile its management's discussion and analysis ("MD&A") for the interim periods ended March 31, 2021 and June 30, 2021 and its unaudited condensed interim consolidated financial statements for the three months ended March 31, 2021 (collectively, the "Revised Financial Disclosure). The request was for the reclassification of certain loan balances from non-current to current liabilities and to provide additional information in connection with the Company's liquidity, capital resources and its ability to continue as a going concern. No further adjustments were made to the previously released income statement or statement of cash flows.
  
  
• On October 19, 2021 the Company signed an additional amendment to its senior secured credit facility entered into on March 29, 2019 (the "Credit Facility"). The amendments modify the terms under which Entourage secured up to $39 million of debt financing over a three-year term ending in 2022. The Company secured a deferral of certain of its financial covenants to December 31, 2021, including the amendment of Conversion Date from June 30, 2021 to December 31, 2021. Additionally, the Company agreed to a 25 basis point increase in the applicable interest rate margin on the Credit Facility, which continues to provide Entourage with non-dilutive, tier-one bank financing and greater financial flexibility.
  
• On November 1, 2021 the Company confirmed the closing of the previously announced acquisition of CannTx Life Sciences by Entourage (the "Acquisition"). Following overwhelming approval from CannTx shareholders, and satisfaction of closing conditions, the formerly privately owned micro-propagator, which operates out of its licensed production facility in Guelph, Ontario, is now a wholly owned subsidiary of Entourage.
  
• Upon closing of the Acquisition, Entourage issued an aggregate of 57,352,488 Entourage common shares ("Common Shares") to CannTx shareholders of which an aggregate of 3,571,429 of such Common Shares will be held in escrow to secure indemnification and other obligations undertaken by certain vendors.
  
• Under the terms of the Acquisition, certain former CannTx shareholders entered into agreements pursuant to which an aggregate of 14,685,278 Common Shares are subject to a post-closing lock-up arrangement whereby one quarter of such Common Shares shall be released from lock-up in equal installments at end of each six (6) month period, post-closing.
  
• On November 1, 2021 the Company announced it had signed an amendment to its second secured credit facility entered into on September 30, 2020 (the "Second Credit Facility"). The amendments to the Second Credit Facility modify the terms under which Entourage secured up to $30 million of debt financing over a two-year term ending in 2022.
  
• Under the terms of the amendment, the Company secured a deferral of certain of its financial covenants to December 31, 2021, including the amendment of Conversion Date from June 30, 2021 to December 31, 2021. The Company also agreed to a 25 basis point increase in the applicable interest rate margin on the Second Credit Facility, and retains the option, at the Company's discretion, to capitalize interest in lieu of cash payments of interest - providing Entourage with non-dilutive financing and greater financial flexibility.
  
• On November 3, 2021 the Company announced it has strengthened its executive team with key strategic appointments in the areas of commercial sales, marketing, and business development as well as product development, cultivation and supply chain.
  

Conference Call Details:

A conference call will be hosted by Mr. Scorsis and Ms. Carreon with management available for questions following opening remarks as follows:

Visit Entourage Health’s newly launched website here. To access our corporate video, visit us here and to access our latest investor presentation and corporate deck here.

About Entourage Health Corp.

Entourage Health Corp. (formerly WeedMD Inc.) is the publicly traded parent company of WeedMD RX Inc. and CannTx Life Sciences Inc., licence holders producing and distributing cannabis products for both the medical and adult-use markets. The Company owns and operates a 158-acre state-of-the-art greenhouse, outdoor and processing facility located in Strathroy, ON as well as a fully licensed 26,000 sq. ft. Aylmer, ON processing facility, specializing in cannabis extraction. With the addition of Starseed Medicinal, a medical-centric brand, Entourage has expanded its multi-channeled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with employers and union groups complements Entourage’s direct sales to medical patients. In October 2021, Entourage closed the acquisition of craft cultivator CannTx Life Sciences Inc. which operates out of its state-of-the-art micropropagation and specialty extraction facility in Guelph, Ontario. Craft brand Royal City Cannabis was added to Entourage’s elite product portfolio that includes adult-use brands Color Cannabis and Saturday Cannabis – sold across eight provincial distribution agencies. The Company also maintains strategic relationships in the seniors’ market and supply agreements with Shoppers Drug Mart. It is the exclusive Canadian producer and distributor of award-winning U.S.-based wellness brand Mary’s Medicinals sold in both medical and adult-use channels. Entourage recently announced an exclusive collaboration with The Boston Beer Company subsidiary to launch cannabis-infused beverages in Canada.

For more information, please visit us at www.entouragehealthcorp.com

Follow Entourage and its brands on LinkedIn

Twitter: Entourage, Color Cannabis, Saturday Cannabis, Starseed & Royal City Cannabis Co.

Instagram: Entourage, Color Cannabis,  Saturday Cannabis, Starseed & Royal City Cannabis Co.

For further information, please contact:

For Investor Enquiries:
Valter Pinto
Managing Director
KCSA Strategic Communications
1-212-896-1254
entourage@kcsa.com

For Media Enquiries:
Marianella delaBarrera
SVP, Communications & Corporate Affairs
416-897-6644
marianella@entouragecorp.com

Forward Looking Information This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation which are based upon Entourage's current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may", "would" or "will" happen, or by discussions of strategy. The forward-looking information in this news release includes, but is not limited to, statements in respect of the Company’s projected revenue for the three months ended June 30, 2021.

The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of Entourage to implement its business strategies; the COVID-19 pandemic; competition; crop failure; and other risks.

Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, Entourage does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Entourage to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in Entourage’s disclosure documents filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE