• $1.7M First quarter 2022 revenue, 225% increase in corporate store retail revenue compared to the same period of the previous year, delivery of 31% corporate store gross margin;1
  • $2.8M system-wide retail sales2, a 369% increase over the same period a year ago with a system-wide retail gross margin of 32%; and
  • 267% increase in the number of stores system-wide, from 3 stores in Q1 2021 to 11 stores in Q2 2022 (7 companies and 4 licensed brands).

TORONTO, May 16, 2022 /CNW/ – Trees Corporation (NEO: TREE) (the “Company” or “Trees“), a new cannabis company at the intersection of community, content and commerce, is pleased to report its first quarter financial results for the three months ended March 31, 2022 and 2021.

“The Trees team has done an exceptional job in executing our business plan,” said Jeff HolmgrenChairman and Chief Financial Officer of Trees, further adding “Trees has made great strides in recent months to strengthen the balance sheet through substantial debt settlements reducing corporate debt. Trees is well positioned to move forward with confidence as it continues to execute its growth strategy.”

Summary of first quarter financial results

In the three months ended March 31, 2022 (“Q1 2022“), the Company generated revenue of $1.7 million compared to $0.5 million in the first quarter of 2021 (the “prior year”), an increase of 225%. Revenue growth was driven by an increase in the number of company-owned stores from 2 stores in Q1 2021 to 7 stores in Q1 2022, including the acquisition of Metro Cannabis in May 2021which added 4 stores and $0.9 million of Q1 2022 revenue.

Trees’ retail gross margin of 31% for the first quarter of 2022 was down from the gross margin of 36% recorded the previous year, reflecting increased price competition driven by the entry of retailers in multiple stocks at the start of 2021 that have significantly reduced their margins in an effort to increase their market share. Trees demonstrated its resilience to these competing factors through exceptional customer service, product selection and convenience, successfully mitigating the margin reduction to just 14% from the same period a year earlier.

Like a March 31, 2022the Company had a cash balance of $210,333 (December 31, 2021: $1,316,517) and a net working capital deficit of $3,776,672 (December 31, 2021: $765,973), a decrease of $3,010,698 from December 31, 2021 for March 31, 2022, largely due to the use of cash for operations and growth initiatives and the reclassification of shareholder loans to current period. However, following March 31, 2022Trees succeeded in significantly strengthening its balance sheet through the combined initiatives of debt settlement negotiations and a previously announced private placement financing.

Selected financial information

For the three months ended March 31,









Retail sales revenue


518 456



Accessory Wholesale Revenue





Council income




interest income




Total revenue


530 813



Total gross profit

542 537




Gross profit margin from product sales





Operating Expenses


137 205



General and administrative expenses



387 477


Operating loss





Loss per share (basic)





Loss per share (diluted)





Consolidated financial statements and management report

The results discussed herein are a summary and are qualified in their entirety by reference to the Company’s unaudited condensed interim consolidated financial statements and accompanying notes for the three months ended March 31, 2022 and 2021, as well as the related MD&A and discussion of financial condition and results of operations, copies of which are available under the Company’s profile on SEDAR and on the Company’s Investor Relations website. Company at

About trees

Trees is a cannabis company at the intersection of community, content and commerce. Publicly listed, Trees offers a differentiated retail experience, combined with digital platforms that aim to educate and amplify, unlock emerging consumer segments and states of need that allow Trees to uniquely engage the consumer. of cannabis at 360°. The company has 11 Trees-branded storefronts in Canadaincluding seven (7) stores owned and operated in Ontario and four (4) stores operated in British Columbia, subject to the closing of the acquisition of the assets of 101 pursuant to the terms of the Third Amended and Restated Asset Purchase Agreement between Trees and 1015712B.VS. ltd. (the “PAA“). The closing of the transactions contemplated by the APA is subject to certain conditions precedent, including the receipt of certain license approvals and related regulatory consents. Until the closing of the acquisition of the assets under the ‘APA, BC stores are subject to a brand license agreement and are included in system-wide retail sales reporting2

Non-IFRS Financial Measures

In this press release, the Company reports “system-wide retail sales” and “retail gross margin”, financial measures that are not determined or defined in accordance with International Financial Reporting Standards, such as that they are published by the International Accounting Standards Board (“IFRSThese financial measures do not have any standardized meaning prescribed by IFRS and Trees’ methods of calculating these financial measures may differ from the methods used by other companies. Accordingly, these non-IFRS financial measures may not be comparable to similarly titled measures presented by These measures are provided as supplemental information to supplement IFRS by providing a better understanding of operations from a management perspective and should not be considered in isolation or in conjunction with a substitute for performance measures prepared in accordance with IFRS.

System-wide retail sales represent the sum of revenue reported to Trees by (i) brand-licensed cannabis retail stores, which are subject to a brand license agreement granting Trees a royalty , and (ii) Company-owned cannabis retail stores. Management believes this metric is useful to the investment community in assessing brand scale and market penetration and is used by Trees management to assess the company’s financial and operational performance and strength of position. of the company’s market compared to its competitors.

Caution Regarding Forward-Looking Statements

This press release contains statements that constitute “forward-looking information” (“forward-looking information“) within the meaning of applicable Canadian securities laws. All statements, other than statements of historical facts, are forward-looking information and are based on expectations, estimates and projections as of the date of this press release. Any statement that discusses predictions, expectations, beliefs, plans, projections, goals, assumptions, future events or performance (often but not always using expressions such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budgets”, “expects”, “forecasts”, “estimates”, “believes” or “intends” or variations of these words and expressions or indicating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be expected to occur or be achieved) are not statements of historical fact and may be forward-looking information ives.

Forward-looking statements contained in this document include, among other things, statements relating to Trees’ expectations regarding the closing of transactions contemplated by the APA and the receipt of regulatory approvals in this regard, expectations regarding the Company’s ability to unlock and to capture emerging consumer segments across its platforms, expectations regarding the Company’s ability to engage its customers and new consumer segments and needs statements, the expectation that the Company will be successful in its growth strategy, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or other future events, to be materially different from the results, performance or future achievements expressed or implied by such forward-looking statements. These factors and risks include, among others: (a) the Company may need additional funding from time to time in order to continue its operations which may not be available when needed or on acceptable terms; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company’s business and results of operations; (d) stock markets have experienced volatility that has often been unrelated to business performance and such fluctuations may adversely affect the price of the Company’s securities, regardless of its operating peers; e) adverse changes in public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.

The forward-looking information contained in this press release represents the Company’s expectations as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely on such information as of any other date. The Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change.

The NEO Exchange has neither approved nor disapproved of the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release.


1 Gross margin is a non-IFRS financial measure. See “Non-IFRS Financial Measures” below.

2 System-wide retail sales is a non-IFRS financial measure. See “Non-IFRS Financial Measures” below.

SOURCE Tree Society

For further information: Trees Corporation, Jeffrey Holmgren, President and Chief Financial Officer, Email: [email protected]


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