Toronto, Ontario--(Newsfile Corp. - November 24, 2021) - SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) ("SLANG" or the "Company"), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today released financial results for the three and nine months ended September 30, 2021. All figures in this press release are stated in Canadian dollars unless otherwise noted.

Third Quarter Highlights and Subsequent Events:

• Revenue for Q3 2021 was $10.1 million, compared with $7.9 million in Q3 2020. Upon the completion of the acquisition of High-Fidelity, Inc. ("Hi-Fi") in August 2021, the Company realized approximately $1.1 million in revenue during the third quarter of 2021;
• SLANG's brands continued to earn market-leading positions in its Core Markets of Colorado and Vermont in the third quarter of 2021. Highlights include: O.pen ranked as the #1 vape cartridge in Colorado; Firefly Mini was the #6 and O.pen was the #5 disposable vaporizer in Colorado; Bakked was the #6 dabbable distillate in Colorado; District Edibles was the #12 gummy in Colorado; Pressies was the #6 pill in Colorado (Source: BDSA.)
• Cash and cash equivalents of $3.5 million as of September 30, 2021 as compared to $9.7 million at June 30, 2021. September cash balance is inclusive of $5.0 million of transaction costs paid at closing of the HiFi acquisition;
• In October, SLANG announced it will enter the new markets of West Virginia and Pennsylvania through its strategic partnership with Trulieve Cannabis Corp. ("Trulieve");
• In November, Trulieve, Pura Vida Investments ("Pura Vida") and Seventh Avenue Investments ("Seventh Avenue") and certain other investors provided a term-loan financing for aggregate gross proceeds of $17.3 million USD;
• In November, Drew McManigle was appointed Interim CEO and Chairman of the Board as part of an executive management transition to strategically reposition SLANG for profitable revenue growth.

Drew McManigle, Interim CEO and Chairman of SLANG, said, "With the significant support from our respected strategic and investor partners, I look forward to utilizing my extensive experience in repositioning corporate operations to assist in the transformation of the SLANG operating platform. This transformation will be based on a refined strategy to appropriately position the Company to achieve future sustainable revenue growth."

Mr. McManigle continued, "During the third quarter, SLANG deepened its strategic partnership with Trulieve, expanding product availability into new markets exclusively through Trulieve retail locations, and further securing opportunities for additional revenue over the long-term. In the short time I've been appointed to manage the strategic transition and transformation of SLANG, we've made substantial progress in evaluating the go-forward structure, effectively executing prudent measures beginning with consolidating core market operations and refining our product mix. We are confident in our rightsizing agenda to create a future path to profitability, and ultimately deliver attractive returns to our shareholders."

Operational Highlights and Growth Drivers:

Subsequent to quarter end, SLANG completed a term-loan financing (the "Loan Transaction") agreement with its strategic partner Trulieve, a leading and top-performing cannabis company based in the United States, two existing significant shareholders of the Company, Seventh Avenue and Pura Vida , and certain other investors for aggregate gross proceeds of $17.3 million USD. Under the terms and conditions of the Loan Transaction, the Company is required to allocate a minimum of 50% of the aggregate proceeds to complete the development and integration of the Vermont operations, a Core Market in SLANG's transformational strategic growth plan, ensuring the revamped operational capabilities result in future profitable growth. Further to building out the Vermont operations, the Company will shift its focus to efficiently refining the product mix according to the state's most popular consumer preferences, as well as creating significant efficiencies across the financial and operational cycle.

As part of the financing support provided by the Company's well-respected partners, the Board of Directors appointed Drew McManigle as Interim CEO and Chairman of the Board, to lead the reorganization strategy and transformation of SLANG. The Loan Transaction represents a firm vote of confidence from each of these esteemed partners in the ability of the new leadership team to lead SLANG through successful execution and further development of its re-designed transformational growth strategy. This strategy will be structured to achieve the primary long-term objective to generate profitable revenue growth and create value for all of its stakeholders.

The shift in SLANG's Core Markets strategy will represent a significant component of SLANG's transformational strategic growth plan. Under the newly appointed leadership a redirection in the Company's focus on regions within the current platform that display strong consumer demand for the profitable cannabis brands in the Company's product portfolio. As a result, the Company has determined its Core Markets going forward will be tapered to Colorado and Vermont, where a properly executed growth strategy has the potential to produce a sustainable and profitable revenue stream. The ongoing consolidation process of the supply chain in the Core Market of Colorado, where the Company currently recognizes wholesale revenue from sales of its leading brands directly from retail channels, will create synergies and operating efficiencies to contribute to go-forward revenue recognition. As part of this process, SLANG will work toward further consolidating its manufacturing and distribution segments, and divesting several licenses in the state, as well as its cultivation facility. Relative to the Core Market of Vermont, the Hi-Fi acquisition, in conjunction with the significant Loan Transaction led by industry leading strategic partners and noteworthy shareholders, represents a catalyst for considerable growth opportunities as the Company continues its effort to capitalize on an integrated SLANG platform while strictly pursuing highly profitable lines of revenue.

In conjunction with the Core Markets adjustment, the Company has made a strategic pivot and will reduce its largely unprofitable Oregon operations. The Company plans to wind down manufacturing operations of all SLANG branded THC products from the newly re-positioned Emerging Market of Oregon, yet maintains its presence in the state through the commercialization of its popular CBD Gummies, while searching for a strategic partner to license its THC products in this market.

Similarly to the adjustments made to our Core Markets strategy, in order to generate future significant revenue growth, SLANG will review its current footprint of Emerging Markets and only pursue geographies that are expected to provide meaningful and profitable lines of revenue. SLANG's new leadership team will carefully evaluate cannabis market data, consumer demand and unit economics in alternative geographies and take an opportunistic approach to those with attractive performance, in order to realize maximum long-term profitability. In assessing potential entry into new markets, the Company will focus on new and existing strategic partnerships for an asset-light approach producing greater operating efficiency.

A critical factor in SLANG's Emerging Markets adjustment strategy is the notable strategic partnership with Trulieve, which continues to provide the Company with significant growth opportunities in several markets. In addition to SLANG's product and brands available in all Trulieve retail location in the state of Florida during the third quarter of 2021, the Company has announced its expansion to include Trulieve retail locations in Massachusetts in July 2021, as well as additional entrances to the Pennsylvania and West Virginia markets in Q2 2022 and Q3 2022, respectively.

Another element in the strategic transformation of the Company includes the new management team's proven methods to realize profitability. As part of this methodology, management will re-evaluate SLANG's product mix and retain the solid products in leading brands which generate the greatest unit economics. During the re-evaluation process, the Company will undergo an in-depth assessment of the full revenue lifecycle of the current brand and product portfolio, including packaging, raw product costs, distribution and marketing spend. The resulting data will enable the Company to identify opportunities for efficiency in order to streamline or rebuild our product portfolio. The Company's goal remains to ultimately generate profitable revenue dollars and products that generate minimal economics to the Company will be removed.

Key Performance Indicators¹

The Company showed meaningful growth with 896,694 Branded Units sold in the third quarter of 2021, an increase of 50% compared to 597,397 Branded Units sold in Q3 2020; and 70.4 million Branded Servings were sold in Q3 2021, an increase of 23% compared to 57.6 million Branded Servings sold in Q3 2020. Q3 2021 Branded Units and Servings included notable sales from the Emerging Market of California, marking the Company's re-entry into the state through its Strategic Partner, Natura. Branded Units and Branded Servings related to the Core Market of Vermont and the Hi-Fi acquisition are also included in the figures reported for the quarter ended September 30, 2021.

Brand Leadership

SLANG's brands continued to earn market-leading positions in its Core Markets in the third quarter of 2021. Highlights include: O.pen ranked as the #1 vape cartridge in Colorado and #14 in Oregon; Firefly Mini was the #6 and O.pen was the #5 disposable vaporizer in Colorado; Bakked was the #6 dabbable distillate in Colorado; District Edibles was the #12 gummy in Colorado; and Lunchbox Alchemy was the #14 gummy in Oregon; Pressies was the #6 pill in Colorado (Source: BDSA.)

During Q3 2021, SLANG's Gross Merchandise Value⁽¹⁾ ("GMV"), representing the total retail dollar value of SLANG branded products sold through all existing SLANG sales channels, whether directly by SLANG or by one of SLANG's strategic partners, totaled $39,014,679. SLANG's Q3 product and licensing revenue of $10,073,442, as reported in its Q3 2021 financial statements, represents 25.8% of GMV.

GMV is calculated by multiplying SLANG's number of branded products sold in a period by the MSRP of those products sold. Furthermore, the total percentage of GMV captured by SLANG is an important metric in assessing brand performance as it determines SLANG's proportion of total retail revenue captured. The Company will continue to focus on GMV going forward and initiatives that will help increase SLANG's percentage of GMV. Management expects the acquisition of HI-FI and a continued focus on ecommerce channels will have a meaningful impact on SLANG's percentage of GMV in the remainder of 2021 and in 2022. HI-FI's four retail locations in Vermont and direct to consumer sales via ecommerce will allow SLANG to recognize 100% of GMV on products sold via those channels.

Third Quarter 2021 Financial Review

The consolidated financial statements were prepared in accordance with IFRS. The following is selected presentation of the Income Statement for the quarter end September 30, 2021

The Company reported $3.5 million of cash and cash equivalents at September 30, 2021, compared to $6.5 million at December 31, 2020, and $9.7 million at June 30, 2021.The decrease in cash and cash equivalents as of September 30 is primarily due to $5 million of transaction expenses related to the Hi-Fi acquisition.

Non-IFRS Measures

EBITDA, Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Profit Margin, Gross Merchandise Value, Branded Unit volume and Branded Servings volume are non-IFRS financial measures that the Company uses to assess its operating performance. EBITDA is defined as net earnings (loss) before net finance costs, income tax expense (benefit) and depreciation and amortization expense. Management defines Adjusted EBITDA as EBITDA adjusted for other non-cash items such as the impact of unrealized fair values, share based compensation expense, impairments, one-time gains and losses, and one-time revenues and expenses. Management defines Adjusted Gross Profit and Adjusted Gross Margin as gross profit and gross margin adjusted for inventory fair value adjustments and fair value changes of biological assets. Gross Merchandise Value is defined as the total retail dollar value of SLANG branded products sold through all existing SLANG sales channels, whether directly by SLANG or by one of SLANG's strategic partners. See the heading "Key Performance Indicators" in the Company's management's discussion and analysis for the three months ended September 30, 2021 (the "Q3 2021 MD&A") for a description of how each of Branded Unit volume and Branded Servings volume is calculated. This data is furnished to provide additional information and are non-IFRS measures and do not have any standardized meaning prescribed by IFRS. The Company uses these non-IFRS measures 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 these non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. As other companies may calculate these non-IFRS measures differently than the Company, these metrics 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 Q3 2021 MD&A for a detailed reconciliation of EBITDA and Adjusted EBITDA to Operating Income / (Loss). SLANG's financial statements and the Q3 2021 MD&A are available on SEDAR at www.sedar.com, and on the Company's Investor Relations website at www.slangww.com.

Conference Call Details

Management plans to host an investor conference call today, November 24, 2021, at 10:00 am EST to discuss the results.

Grant of Stock Options

The Company also announces that it has granted stock options to acquire up to 1,230,000 common shares to certain employees, 250,000 of which were granted to a director of the Company. The stock options are exercisable at a price of $0.12 per common share until November 24, 2026.

About SLANG Worldwide Inc.

SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. The Company specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. For more information, please visit www.slangww.com.

To be added to SLANG's email distribution list, please email SLNG@kcsa.com with "SLNG" in the subject.

Forward-Looking Statements

This news release contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements included in this news release include, but are not limited to, statements in respect of the manufacture and distribution of SLANG branded products in our Core Markets and Emerging Markets and the anticipated use of proceeds from the Loan Transaction.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to the COVID-19 global pandemic, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings "Risk Factors" in SLANG's annual information form dated April 29, 2021 and other disclosure documents available on the Company's profile on SEDAR at www.sedar.com. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Third Party Information

This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.

Media and Investor Inquiries
Investors@SLANGww.com

KCSA Strategic Communications
Phil Carlson
SLANG@kcsa.com

¹ Please see Non-IFRS Measures

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