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 Cresco Labs Announces Third Quarter 2022 Results

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 Company reports $210 million in revenue and continues industry leadership with branded product performance

Company took actions to improve long-term profitability and prepare for the integration of Columbia Care in 2023

CHICAGO–(BUSINESS WIRE)–Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), a vertically integrated, multi-state operator and the No. 1 producer of branded cannabis products in the industry, today released its financial results for the quarter ended September 30, 2022. All financial information presented in this release is reported in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and in U.S. dollars, unless as otherwise indicated.

Third Quarter 2022 Financial Highlights

  • Third quarter revenue of $210 million, down 2% year-over-year. Growth in emerging markets was offset by price compression, increased verticality by retailers, and the Company’s strategic exit of 3rd party distribution in California in Q4 of 2021. Adjusted for change in the Company’s California business, non-GAAP third quarter revenue would have been up over 2% year-over-year.
  • Adjusted gross profit1 of $100 million or 47% of revenue. Third quarter adjusted EBITDA1 of $42 million, or 20% of revenue.
  • Adjusted gross margin1 and adjusted EBITDA margin1 were impacted by actions taken in the quarter to improve long-term profitability, including the closing of under-performing facilities and associated inventory adjustments, causing an approximate 340 bps drag on margins in the quarter. Normalized for these non-cash, non recurring adjustments, adjusted gross margin1 would have been 51% and adjusted EBITDA margin1 would have been 23%.
  • Wholesale revenue of $93 million, which maintained the Company’s position as the No. 1 U.S. seller of branded cannabis products in the industry with leading share positions in the flower, concentrates, and vapes categories2.
  • Maintained market leadership in Illinois, Pennsylvania, and Massachusetts2.
  • Retail revenue increased 11% year-over-year, to $118 million, or an average $2.35 million per store open for the entire quarter.
  • Generated $26 million in operating cash flow and ended the quarter with $130 million of cash on hand.
  • On November 4, 2022, Cresco Labs announced planned divestitures of Cresco and Columbia Care assets in New York, Illinois and Massachusetts to entities controlled by Sean Combs for a total purchase price of up to $185 million; closing is expected to occur concurrently with the closing of the Columbia Care acquisition around the end of the first quarter of 2023.

Management Commentary

“It’s an exciting time for the cannabis industry as we get closer to a clear inflection point. In the face of multiple industry headwinds and an unprecedented macro environment, our team did an incredible job of taking everything that the quarter had to give and maintained our industry position as the No. 1 wholesaler of branded cannabis2 and the No. 1 branded product portfolio chosen by consumers2. In the quarter, we took actions to reduce costs to position ourselves for long-term improvement. This included the closing of underperforming facilities and the sell through of related inventory. While this had a short-term negative impact on gross margin in Q3, it was the right thing to do to align our cost structure and optimize our operations ahead of closing the Columbia Care transaction and in furtherance of our commitment to improved margin growth in the coming quarters,” said Charles Bachtell, CEO and Co-Founder of Cresco Labs.

“We made significant progress toward closing the Columbia Care transaction with the signing of definitive agreements to divest assets in New York, Illinois and Massachusetts for total consideration of up to $185 million. The future is bright for our industry and Cresco Labs. We continue to see legislative and regulatory progress at the state level and we’ve never been closer to achieving federal reform on cannabis than we are today. We continue to lead these efforts in these areas as we understand the legislative process is the ultimate unlock of the potential and value for this industry and our stakeholders,” concluded Mr. Bachtell.

Balance Sheet, Liquidity, and Other Financial Information

  • As of September 30, 2022, current assets were $355 million, including cash and cash equivalents of $130 million. The Company had working capital of $85 million and senior secured term loan debt, net of discount and issuance costs, of $380 million.
  • Total shares on a fully converted basis were 437,484,245 as of September 30, 2022.

Social Equity and Education Development Program

  • Secured support of the National Black Chamber of Commerce, National Hispanic Cannabis Council, New York New Jersey Minority Development Council, NAACP of New Jersey, New York Urban League and other advocacy organizations urging for critical federal legislation that would enable banking and lending access for cannabis businesses.
  • The Sentence of Michael Thompson, a documentary produced by Cresco Labs, premiered on MSNBC and will be available on XTR’s Streaming Service DOCUMENTARY+. Through the MSNBC and DOCUMENTARY+ agreement, the film will reach over 3 million viewers nationwide.
  • This year’s “Summer of Social Justice” campaign has far surpassed last year’s impact, with the Company’s SEEDTM initiative supporting the record sealing, expungement process and restorative journey recently achieving a milestone of assisting 5,000 individuals nationwide.

Capital Markets and M&A Activity

  • On November 4, 2022, the Company announced a definitive agreement for the divestiture of Columbia Care and Cresco assets in New York, Illinois and Massachusetts for total proceeds of up to $185 million. Please click here for additional details.
  • The asset divestiture process is proceeding as planned in terms of gross proceeds and the Company is working toward final agreements on the remaining assets required to be divested in Florida, Ohio and Maryland. The Company targets closing the transaction around the end of the first quarter of 2023.
  • On September 6, 2022, the Company closed on a sale-and-leaseback transaction with Aventine Property group for its Brookville, PA facility for $45 million. Please click here for additional details.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results on Tuesday, November 15, 2022, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-844-200-6205 (US Toll Free), 1-833-950-0062 (CDN Toll Free), 1-646-904-5544 (US Local), +1 929-526-1599 (Other) providing access code 334786. Archived access to the webcast will be available for one year on the Cresco Labs’ investor relations website.

Consolidated Financial Statements

The financial information reported in this press release is based on unaudited management prepared financial statements for the quarter ended September 30, 2022. These financial statements have been prepared in accordance with U.S. GAAP. The Company expects to file its unaudited interim condensed consolidated financial statements for the quarter ended September 30, 2022, on SEDAR on November 15, 2022. Accordingly, such financial information may be subject to change. All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the consolidated financial statements it files on SEDAR, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company’s filed financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s audited financial statements for the year ended December 31, 2021, previously filed on SEDAR.

Cresco Labs references certain non-GAAP financial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the “Non-GAAP Financial Measures” section below for more detailed information.

Non-GAAP Financial Measures

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”), Adjusted EBITDA, and Adjusted gross profit are non-GAAP financial measures and do not have standardized definitions under U.S. GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with U.S. GAAP and may not be comparable to similar measures presented by other issuers. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the U.S. GAAP financial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

About Cresco Labs Inc.

Cresco Labs is one of the largest vertically integrated, multistate cannabis operators in the United States, with a mission to normalize and professionalize the cannabis industry. Employing a consumer-packaged goods (“CPG”) approach, Cresco Labs is the largest wholesaler of branded cannabis products in the U.S. Its brands are designed to meet the needs of all consumer segments and comprised of some of the most recognized and trusted national brands including Cresco®, Cresco Reserve®, High Supply®, Mindy’s™, Good News®, Remedi™, Wonder Wellness Co.® and FloraCal®. Sunnyside*®, Cresco Labs’ national dispensary brand, is a wellness-focused retailer created to build trust, education and convenience for both existing and new cannabis consumers. Recognizing that the cannabis industry is poised to become one of the leading job creators in the country, Cresco Labs operates the industry’s largest Social Equity and Educational Development initiative, SEED™, which was established to ensure that all members of society have the skills, knowledge and opportunity to work and own businesses in the cannabis industry. Learn more about Cresco Labs at www.crescolabs.com.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). Such forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking statements can be identified by the use of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative of those forms or other comparable terms. The Company’s forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2021, filed on March 25, 2022, other documents filed by the Company with Canadian securities regulatory authorities; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company’s forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco Labs’ shares, nor as to the Company’s financial performance in future financial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Company’s forward-looking statements contained herein, whether as a result of new information, any future event or otherwise. Except as otherwise indicated, this press release speaks as of the date hereof. The distribution of this press release does not imply that there has been no change in the affairs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this press release or otherwise.

1 See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP financial measures.

2According to BDSA

Cresco Labs Inc.

Financial Information and Non-GAAP Reconciliations

(All amounts expressed in thousands of U.S. Dollars)

 

 

 

 

 

 

 

Unaudited Consolidated Statements of Operations

For the Three Months Ended September 30, 2022, June 30, 2022, and September 30, 2021

 

 

 

 

 

For the Three Months Ended

($ in thousands)

 

September 30, 2022

 

June 30,
2022

 

September 30, 2021

Revenue

 

$

210,484

 

 

$

218,226

 

 

$

215,483

 

Cost of goods sold

 

 

111,372

 

 

 

105,402

 

 

 

107,162

 

Gross profit

 

 

99,112

 

 

 

112,824

 

 

 

108,321

 

Gross profit %

 

 

47.1

%

 

 

51.7

%

 

 

50.3

%

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

 

76,200

 

 

 

77,912

 

 

 

69,520

 

Share-based compensation

 

 

2,256

 

 

 

6,583

 

 

 

6,083

 

Depreciation and amortization

 

 

4,416

 

 

 

5,652

 

 

 

5,787

 

Impairment loss

 

 

 

 

 

 

 

 

290,949

 

Total operating expenses

 

 

82,872

 

 

 

90,147

 

 

 

372,339

 

Income (loss) from operations

 

 

16,240

 

 

 

22,677

 

 

 

(264,018

)

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

Interest expense, net

 

 

(15,554

)

 

 

(12,016

)

 

 

(13,577

)

Other income, net

 

 

14,797

 

 

 

4,681

 

 

 

1,735

 

Total other expense, net

 

 

(757

)

 

 

(7,335

)

 

 

(11,842

)

Income (loss) before income taxes

 

 

15,483

 

 

 

15,342

 

 

 

(275,860

)

Income tax (expense) recovery

 

 

(18,732

)

 

 

(23,638

)

 

 

12,408

 

Net loss1

 

$

(3,249

)

 

$

(8,296

)

 

$

(263,452

)

1 Net loss includes amounts attributable to non-controlling interests.

Cresco Labs Inc.

Unaudited Reconciliation of Gross Profit to Adjusted Gross Profit (Non-GAAP)

For the Three Months Ended September 30, 2022, June 30, 2022, and September 30, 2021

 

 

 

 

 

 

 

 

 

For the Three Months Ended

($ in thousands)

 

September 30, 2022

 

June 30,

2022

 

September 30, 2021

Revenue

 

$

210,484

 

 

$

218,226

 

 

$

215,483

 

Cost of goods sold1

 

 

111,372

 

 

 

105,402

 

 

 

107,162

 

Gross profit

 

$

99,112

 

 

$

112,824

 

 

$

108,321

 

Fair value mark-up for acquired inventory

 

 

21

 

 

 

123

 

 

 

8,396

 

COGS adjustments for acquisition and other non-core costs

 

 

593

 

 

 

2,657

 

 

 

 

Adjusted gross profit (Non-GAAP)

 

$

99,726

 

 

$

115,604

 

 

$

116,717

 

Adjusted gross profit %

 

 

47.4

%

 

 

53.0

%

 

 

54.2

%

1 Production (cultivation, manufacturing, and processing) costs related to products sold during the period.

Cresco Labs Inc.

Summarized Unaudited Consolidated Statements of Financial Position

As of September 30, 2022 and December 31, 2021

 

 

 

 

 

($ in thousands)

 

September 30, 2022

 

December 31, 2021

Cash and cash equivalents

 

$

130,042

 

$

223,543

Other current assets

 

 

225,159

 

 

198,212

Property and equipment, net

 

 

377,941

 

 

369,092

Intangible assets, net

 

 

431,446

 

 

437,644

Goodwill

 

 

448,376

 

 

446,767

Other non-current assets

 

 

143,327

 

 

105,205

Total assets

 

$

1,756,291

 

$

1,780,463

 

 

 

 

 

Total current liabilities

 

 

270,560

 

 

288,394

Total long-term liabilities

 

 

714,284

 

 

694,333

Total shareholders’ equity

 

 

771,447

 

 

797,736

Total liabilities and shareholders’ equity

 

$

1,756,291

 

$

1,780,463

Cresco Labs Inc.

Unaudited Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP)

For the Three Months Ended September 30, 2022, June 30, 2022, and September 30, 2021

 

 

 

 

 

 

 

 

 

For the Three Months Ended

($ in thousands)

 

September 30, 2022

 

June 30,

2022

 

September 30, 2021

Net loss1

 

$

(3,249

)

 

$

(8,296

)

 

$

(263,452

)

Depreciation and amortization

 

 

13,395

 

 

 

13,113

 

 

 

10,486

 

Interest expense, net

 

 

15,554

 

 

 

12,016

 

 

 

13,577

 

Income tax expense (recovery)

 

 

18,732

 

 

 

23,638

 

 

 

(12,408

)

Earnings before interest, taxes, depreciation, and amortization (EBITDA) (Non-GAAP)

 

$

44,432

 

 

$

40,471

 

 

$

(251,797

)

 

 

 

 

 

 

 

Other income, net

 

 

(14,797

)

 

 

(4,681

)

 

 

(1,735

)

Fair value mark-up for acquired inventory

 

 

21

 

 

 

123

 

 

 

8,396

 

Adjustments for acquisition and other non-core costs

 

 

9,093

 

 

 

7,231

 

 

 

3,830

 

Impairment loss

 

 

 

 

 

 

 

 

290,949

 

Share-based compensation

 

 

2,995

 

 

 

7,449

 

 

 

6,806

 

Adjusted EBITDA (Non-GAAP)

 

$

41,744

 

 

$

50,593

 

 

$

56,449

 

1 Net loss includes amounts attributable to non-controlling interests.

Cresco Labs Inc.

Unaudited Summarized Consolidated Statements of Cash Flows

For the Three Months Ended September 30, 2022, June 30, 2022, and September 30, 2021

 

 

 

 

 

 

 

 

For the Three Months Ended

($ in thousands)

 

September 30, 2022

 

June 30,

2022

 

September 30, 2021

Net cash provided by (used in) operating activities

 

$

25,604

 

 

$

(7,076

)

 

$

7,075

 

Net cash provided by (used in) investing activities

 

 

23,484

 

 

 

(13,388

)

 

 

(43,449

)

Net cash (used in) provided by financing activities

 

 

(9,112

)

 

 

(69,135

)

 

 

155,864

 

Effect of foreign currency exchange rate changes on cash

 

 

10

 

 

 

13

 

 

 

74

 

Net change in cash and cash equivalents and restricted cash

 

$

39,986

 

 

$

(89,586

)

 

$

119,564

 

Cash and cash equivalents and restricted cash, beginning of period

 

 

92,334

 

 

 

181,920

 

 

 

135,233

 

Cash and cash equivalents and restricted cash, end of period

 

$

132,320

 

 

$

92,334

 

 

$

254,797

 

 

Contacts

Media
Jason Erkes, Cresco Labs

Chief Communications Officer

press@crescolabs.com
312-953-2767

Investors
Megan Kulick, Cresco Labs

SVP, Investor Relations

investors@crescolabs.com

For general Cresco Labs inquiries:
312-929-0993

info@crescolabs.com

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Business Wire

WeighPack Introduces High Precision Check Weigher for Tightest Tolerances

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LAS VEGAS–(BUSINESS WIRE)–#automation–WeighPack Systems’ WeightCheQ 0-250 features high precision electromagnetic force restoration (EMFR) weigh cell technology to achieve the highest tolerances possible while reading in three decimal points.


The WeightCheQ 0-250 is engineered with a weight range of 0 – 250 grams and will weigh product accurately and consistently to +/- 0.01 gram. This tight tolerance level makes it the perfect choice for check weighing pharmaceuticals, cosmetics, precious metals, cannabis pre-rolls and more.

This high-performance weigher will automatically reject product that is outside of the user’s set tolerance level and deposit it into a convenient accumulation drawer for reuse. An easy-to-read visual operation interface notifies the user when product is within the targeted weight by illuminating a green light and then changing to a red light when the target weight is out of tolerance.

The 0-250 includes a large color touchscreen, does not require compressed air and easily integrates into existing packaging lines for an immediate improvement in any quality assurance process.

This compact, modular check weigher also features heavy-duty stainless steel frame construction, food-grade belts, upstream and downstream data links, 20-recipe storage and does not require changeover parts to move between product lines.

See video of this system in action at www.weighpack.com/primary-packaging-video-library/.

For product inquiries, visit www.weighpack.com/weighpack-sales-inquiries/.

Paxiom is the national sales, system integration and service provider for the state-of-the-art packaging machine technology manufactured by WeighPack, ValTara and EndFlex. From weighing, filling, bagging and wrapping to cartoning, tray forming, case packing and palletizing, Paxiom has delivered over 7,000 packaging solutions to over 30 countries. Customers can see these solutions in person by visiting an Xperience Center in Las Vegas, Miami, Milwaukee, Montreal, Toronto or Schio, Italy.

Contacts

David Morgan, Director of Marketing, dmorgan@weighpack.com, 702-450-0808 x625

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IGC Commences Phase 2 Clinical Trials Evaluating Drug Candidate IGC-AD1 for the Treatment of Agitation in Dementia From Alzheimer’s Disease

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Company To Host Conference Call on Friday, December 2 at 11 a.m. ET

POTOMAC, Md.–(BUSINESS WIRE)–#IGC–India Globalization Capital, Inc. (NYSE American: IGC) (“IGC” or the “Company”), announced that it has begun “A Phase 2, Multi-Center, Double-Blind, Randomized, Placebo-Controlled, Trial of the Safety and Efficacy of IGC-AD1 on Agitation in Participants with Dementia due to Alzheimer’s Disease”.

The Company has commenced the Phase 2 study at two U.S. sites with plans to add between three to five additional sites in the United States, Canada, and possibly South America to increase population diversity, promoting both the inclusion of underrepresented populations and helping the Company to better understand the impact of IGC-AD1 on the population of the Americas. The trial will enroll 146 patients with one half, the treated group, receiving IGC-AD1, and the other half, the control group, receiving a placebo. The goal of the trial is to evaluate and establish the efficacy of IGC-AD1 in helping patients with Alzheimer’s dementia reduce neuropsychiatric symptoms (“NPS”) such as agitation, which affects 76% of individuals with Alzheimer’s (Mussele et al., 2015). Currently, there is no Food and Drug Administration (“FDA”) approved drug for treating agitation in dementia related to Alzheimer’s (Jones et al., 2021).

“We believe that IGC-AD1 has the potential to revolutionize the treatment of Alzheimer’s Disease as the first and only low-dose natural THC-based formulation candidate currently undergoing FDA trials,” commented Ram Mukunda, CEO of IGC. “Approximately 8 million people are affected by Alzheimer’s in North America and over 55 million worldwide. We believe the diverse population we have selected for this study will allow us to accurately look at both the impact of variations of the gene CYP2C9 that metabolizes THC, as well as APOE e4 a gene that increases the risk of developing Alzheimer’s. This data will help us to further understand the metabolism of IGC-AD1 for a diverse population, which is important in treating a disease that has a global impact like Alzheimer’s. Through these and further trials, we look forward to establishing IGC-AD1’s efficacy in treating the symptoms related to Alzheimer’s Disease.”

IGC-AD1 relies on low-doses of THC, a psychoactive cannabinoid, and another compound as active agents in trials for Alzheimer’s. The formulation has recently completed Phase 1 of clinical trials required by the FDA and demonstrated in Alzheimer’s cell lines the potential to be effective in suppressing or ameliorating a key protein that is responsible for Aβ plaques; a key hallmark of the disease.

For further information, please visit https://clinicaltrials.gov/ct2/results?cond=&term=IGC-AD1&cntry=&state=&city=&dist=

Conference Call Details

Management will host a conference call and webcast with an accompanying slide presentation on Friday, December 2, 2022, at 11:00 a.m. ET.

Interested investors may participate via the webcast using the following link: https://www.webcaster4.com/Webcast/Page/2938/47255

To participate via conference call, please use the following dial-in numbers and use access code 638516 when prompted by the operator.

  • (888) 506-0062 (Domestic)
  • (973) 528-0011 (International)

A replay of the call will also be available at the above link.

About IGC

India Globalization Capital Inc. develops advanced cannabinoid-based formulations for treating diseases, including but not limited to Alzheimer’s disease, Parkinson’s disease, chronic pain, and pet seizures. The Company’s leading drug candidate, IGC-AD1, has demonstrated, in Alzheimer’s cell lines, the potential to be effective in suppressing or ameliorating a key protein responsible for Aβ plaques and has recently entered Phase 2 clinical trials for agitation in dementia from Alzheimer’s. The Company also has lines of various CBD-based consumer products such as Holief, which includes gummies and pain relief creams for women experiencing premenstrual syndrome (“PMS”) and dysmenorrhea (“period cramps”), and Sunday Seltzer, which includes a CBD-infused energy beverage – all currently available for purchase. The Company operates facilities in the US under GMP certification (Good Manufacturing Practices). The Company also operates an Infrastructure business based in India. The Company is headquartered in Maryland, U.S.A.

Forward-looking Statements

This press release contains forward-looking statements. These forward-looking statements are based largely on IGC’s expectations and are subject to several risks and uncertainties, certain of which are beyond IGC’s control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, the Company’s failure or inability to commercialize one or more of the Company’s products or technologies, including the products or formulations described in this release, or failure to obtain regulatory approval for the products or formulations, where required; general economic conditions that are less favourable than expected, including as a result of the ongoing COVID-19 pandemic; the FDA’s general position regarding cannabis- and hemp-based products; and other factors, many of which are discussed in IGC’s U.S. Securities and Exchange Commission (“SEC”) filings. IGC incorporates by reference the human trial disclosures and Risk Factors identified in its Annual Report on Form 10-K filed with the SEC on June 23, 2022, as if fully incorporated and restated herein. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this release will occur.

Contacts

IMS Investor Relations

Walter Frank

igc@imsinvestorrelations.com
(203) 972-9200

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Marshall Farrer, President, Europe, Expands Leadership Role and Adds Chief Strategic Growth Officer Responsibilities

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LOUISVILLE, Ky.–(BUSINESS WIRE)–Brown-Forman Corporation (NYSE:BFA,BFB) announced today that Marshall Farrer, President, Europe, will expand his leadership responsibilities and be named Executive Vice President, Chief Strategic Growth Officer, effective January 1, 2023.


In addition to stewarding Brown-Forman’s European business, Farrer, in his new role as Chief Strategic Growth Officer, will work closely with Lawson Whiting, President and CEO, and the entire Brown-Forman Executive Leadership Team, on developing key partnerships and new growth opportunities to achieve the company’s short-term objectives and long-term ambitions.

“Marshall’s understanding of our consumers, the spirits industry, and the global market trends will help unlock new pathways to growth for Brown-Forman,” said Whiting. “His expertise at advancing strategic initiatives, opportunities, and relationships, coupled with 24 years of global spirits knowledge, make Marshall the ideal person to not only lead our European business, but also take on this important corporate development work.”

Farrer has served on the Executive Leadership Team since 2020. In his role as President, Europe, he leads Brown-Forman’s operations in the owned distribution markets of the United Kingdom, Germany, France, Poland, Spain, Czechia, Belgium, and Luxembourg as well as the remaining developed markets in Europe utilizing partners for distribution. He is also a member of the Brown-Forman Board of Directors, joining in 2016, and a fifth-generation Brown family shareholder.

Farrer is based in Amsterdam, Netherlands. He serves as an executive sponsor for SEED, Brown-Forman’s first employee resource group established outside of the United States, which endeavors to challenge stereotypes as well as inspire, empower, and educate employees about the unique experiences of different racial groups and ethnicities.

About Brown-Forman:

For more than 150 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine quality beverage alcohol brands, including Jack Daniel’s Tennessee Whiskey, Jack Daniel’s Tennessee RTDs, Jack Daniel’s Tennessee Honey, Jack Daniel’s Tennessee Fire, Jack Daniel’s Tennessee Apple, Gentleman Jack, Jack Daniel’s Single Barrel, Woodford Reserve, Old Forester, Coopers’ Craft, The GlenDronach, Benriach, Glenglassaugh, Slane, Herradura, el Jimador, New Mix, Korbel, Sonoma-Cutrer, Finlandia, Chambord, Fords Gin, and Gin Mare. Brown-Forman’s brands are supported by approximately 5,200 employees globally and sold in more than 170 countries worldwide. For more information about the company, please visit brown-forman.com. Follow us on LinkedIn, Instagram, and Twitter.

Important Information on Forward-Looking Statements:

This press release contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws, including statements regarding executive responsibilities and strategic actions. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections.

These risks and uncertainties include, but are not limited to:

  • Our substantial dependence upon the continued growth of the Jack Daniel’s family of brands
  • Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets or distribution networks
  • Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs
  • Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers
  • Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of marijuana; shifts in consumer purchase practices; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation
  • Production facility, aging warehouse, or supply chain disruption
  • Imprecision in supply/demand forecasting
  • Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor
  • Impact of health epidemics and pandemics, including the COVID-19 pandemic, and the risk of the resulting negative economic impacts and related governmental actions
  • Unfavorable global or regional economic conditions, particularly related to the COVID-19 pandemic, and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations
  • Product recalls or other product liability claims, product tampering, contamination, or quality issues
  • Negative publicity related to our company, products, brands, marketing, executive leadership, employees, Board of Directors, family stockholders, operations, business performance, or prospects
  • Failure to attract or retain key executive or employee talent
  • Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value
  • Risks associated with being a U.S.-based company with a global business, including commercial, political, and financial risks; local labor policies and conditions; protectionist trade policies, or economic or trade sanctions, including additional retaliatory tariffs on American whiskeys and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and distributors; compliance with local trade practices and other regulations; terrorism; and health pandemics
  • Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations
  • Fluctuations in foreign currency exchange rates, particularly a stronger U.S. dollar
  • Changes in laws, regulatory measures, or governmental policies – especially those that affect the production, importation, marketing, labeling, pricing, distribution, sale, or consumption of our beverage alcohol products
  • Tax rate changes (including excise, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur
  • Decline in the social acceptability of beverage alcohol in significant markets
  • Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products
  • Counterfeiting and inadequate protection of our intellectual property rights
  • Significant legal disputes and proceedings, or government investigations
  • Cyber breach or failure or corruption of our key information technology systems or those of our suppliers, customers, or direct and indirect business partners, or failure to comply with personal data protection laws
  • Our status as a family “controlled company” under New York Stock Exchange rules, and our dual-class share structure

For further information on these and other risks, please refer to our public filings, including the “Risk Factors” section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.

Contacts

Elizabeth Conway

Director

External Communications

502-774-7737

elizabeth_conway@b-f.com

Sue Perram

Vice President

Investor Relations

502-774-6862

sue_perram@b-f.com

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