Grew Revenue 13% Sequentially to $32.2 Million Achieved Adjusted Gross Profit of $17.4 Million, Representing 54% Adjusted Gross Margin Conference Call to be Held May 15, 2024, at 6:00 p.m. ET COSTA MESA, Calif., May 15, 2024 /CNW/ - Gold Flora Corporation, ("Gold Flora" or the "Company") (Cboe Canada: GRAM) a leading vertically-integrated California cannabis company, announced its financial results for the three-month period ("Q1 2024"). All amounts are expressed in U.S. dollars. Q1 2024  Financial Highlights: Total revenue was $32.2 million, representing a 13% sequential growth; Q1 2024 gross profit was $10.0 Million, representing a 31% gross margin; Q1 2024 adjusted gross profit1 of $17.4 million, representing a 54% adjusted gross margin. Adjusted gross profit excludes operating expenses (including depreciation and amortization) related to U.S. tax code 280E adjustments, and non-recurring inventory adjustments; Net quarterly loss of $13.7 million; Adjusted EBITDA1 of $(1.8) million for Q1 2024. Cash used in operating activities reduced to $4.4 million from $6.4 million from the fourth quarter of 2023, a sequential improvement of 31.3%; Cash and cash equivalents totaled $14.2 million as of March 31, 2024. Q1 2024 Operating Highlights: With the prior cultivation expansion projects completed at the Company's facilities in Desert Hot Springs and San Jose, Gold Flora has commenced building its inventory and scaling its post-harvest production activities to ensure sufficient supply to meet the high market demand for its latest brand Gramlin, whose new genetic strains are grown in-house. As a result, inventory grew by $1.7 million in the quarter ahead of the late Q1 2024 launch of Gramlin.  The Company incurred additional costs to expand cultivation which compressed the realized Q1 2024 gross margin.   The Company believes it will realize efficiencies from the cultivation expansion over time. Validated the Company's vertical infrastructure with the successful launch Gramlin, a disruptive brand targeted towards high-volume consumers. Gramlin initially launched with an assortment of premium flower products, with vape and pre-rolls expected to be introduced in the coming weeks. Since its introduction in March 2024, Gramlin has been incredibly successful at both the Company's first-party retail chain and in third-party retail through Stately Distribution across California. Continued to focus on refining and optimizing cultivation methods and strains to further enhance both profitability and productivity across the Company's cultivation facility footprint. The active cultivation canopy is now 107,000 square feet, with increased volume and margin expected in the second half of 2024 as a full quarter contribution is realized at each facility. Subsequent to quarter-end, entered into agreements to lease an additional 53,000 square feet of cultivation space at two facilities located near the Company's Desert Hot Springs campus, bringing the active cultivation footprint to 160,000 square feet and adding approximately 25,000 lbs of annual flower production. The turn-key facility will be delivered ready for operations and the lease will commence upon receipt of the necessary state licenses. The Company expanded its production and manufacturing capabilities to capture additional margin across the value chain. This included initiating in-house live rosin production utilizing Gold Flora's own indoor grown cannabis as well as adding increased kitchen resources for the production of the Company's Mirayo and Cruisers gummies. Live rosin products are expected to be introduced to the market in the third quarter of 2024. _______________________________ 1 Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures.  See "Non-GAAP Financial Measures" at the end of this press release for a reconciliation and discussion of non-GAAP financial measures. Management Commentary "Our Q1 2024 results reflect the work we have done to scale our operations to leverage the solid foundation we have built and realize the significant benefits of our vertical integration," said Laurie Holcomb, Chief Executive Officer of Gold Flora. "Our revenue grew 13% sequentially, and we generated $17.4 million in adjusted gross profit, representing 54% adjusted gross margin. We laid the groundwork throughout late 2023, building out the capacity to support future retail, wholesale, and distribution growth, as well as identifying and implementing significant cost savings to optimize our business for future profitability. With our expanded cultivation footprint running successfully, we are now focused on post-harvest production to convert our high-quality flower into high-margin products, as well as further refining our genetics and growing methods for profitability and productivity."  Ms. Holcomb continued, "Our ability to scale and rapidly act on market opportunities is one of our crucial competitive advantages and our latest brand launch, Gramlin, is a tremendous example of its potential. We were able to identify an underserved consumer demographic leveraging our retail insights and rapidly bring Gramlin to market in March at an unmatchable price point utilizing fresh strains grown at our indoor facilities. The initial consumer feedback following its launch has been phenomenal, thanks to both the quality of the products as well as the significant value it offers to consumers. This is all possible thanks to our integrated approach, which enables us to capture margin at every step in our fully owned supply chain, while still offering customers a fantastic price."  Ms. Holcomb concluded, "Our vertical operations are now fully in motion and with our platform scaling up, we anticipate seeing the benefits throughout the remainder of 2024. Our premier indoor cultivation, extraction and manufacturing, statewide distribution and leading retail footprint ensure we capture margin while also de-risking our consolidated operations. We remain strongly positioned to be one of the winners in California, and our existing capital infrastructure, which is already built and paid for, provides substantial operational leverage as we grow and scale. As a result of this strong footing, anticipated future revenue is expected to have a disproportionally positive impact on the bottom line to put us on the path to sustainable positive free cash flow."   Q1 2024 Financial Results (in thousands) Q1 2024 Q4 2023 % Change Total Revenue $                  32,153 $                  28,395 13 % Wholesale Revenue $                    5,236 $                    3,036 72 % Retail Revenue $                  26,917 $                  25,359 6 % Gross Profit $                  10,029 $                  13,174 (24) % Gross Margin 31 % 46 %