UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.
| Item 2.02. | Results of Operations and Financial Condition. |
On August 15, 2022, Columbia Care Inc., a British Columbia corporation (“Columbia Care”), issued a press release announcing financial results for the quarter ended June 30, 2022 and provided an investor presentation to accompany the press release. Copies of the press release and investor presentation are being furnished as Exhibits 99.1 and 99.2, respectively, to this Form 8-K, which are incorporated into this item by reference.
The information furnished under this Item 2.02 and in the accompanying Exhibits 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Press Release, dated August 15, 2022 | |
| 99.2 | Investor Presentation, dated August 15, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COLUMBIA CARE INC. | ||
| By: | /s/ Nicholas Vita | |
| Name: | Nicholas Vita | |
| Title: | Chief Executive Officer | |
Date: August 16, 2022
Exhibit 99.1
Columbia Care Reports Second Quarter 2022 Results
Quarterly Revenue of $129.6 Million, an Increase of 5% QoQ and 18% YoY
Gross Profit of $50.8 Million, an Increase of 17% YoY
Adjusted EBITDA1 of $12.0 Million and YTD Adjusted EBITDA Margin1 of 11%
Expected to Be Last Quarterly Results before Announcing Divestitures Related to Combination with Cresco
NEW YORK, N.Y., August 15, 2022 – Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (“Columbia Care” or the “Company”) today reported financial and operating results for the second quarter ended June 30, 2022. All financial information presented in this release is in U.S. GAAP, unaudited and in thousands of U.S. dollars, unless otherwise noted, and comparisons to prior quarter and prior year are made on an as-converted basis under U.S. GAAP, unless otherwise noted.
“In these challenging times, Columbia Care achieved exceptional results in several key markets that serve as meaningful, positive long-term indicators. Despite the economic headwinds and challenges that were particularly impactful in our most mature markets, we saw surprising resilience across the country, in addition to outstanding performance in our highest growth, emerging markets. We delivered solid organic topline growth of 5% sequentially to reach $130 million in revenue for the quarter, an increase of 18% over Q2 2021. New Jersey, the most recent state to launch adult use, was a primary driver in sequential revenue growth, along with Virginia and West Virginia, where we are the number one wholesaler and retailer in these rapidly-expanding medical markets” said Nicholas Vita, CEO of Columbia Care.
Vita continued, “Sixteen of our seventeen U.S. markets generated positive EBITDA in the quarter and twelve markets saw sequential improvement in gross margin. Excluding California and Colorado, our EBITDA margin would have been over 500 basis points higher for the quarter. We continued to drive the organization forward by capitalizing upon growth from emerging markets as they transition to more favorable regulatory environments, leveraging our expanding scale, and implementing strategies in mature markets to consolidate supply and distribution channels.”
“For the remainder of 2022, Columbia Care will execute against our strategic priorities while completing the steps necessary to close the merger with Cresco on time. The integration planning process has brought an overwhelming sense of excitement and momentum. As a founder of Columbia Care, seeing our organizations collaborate so well has been humbling and deeply gratifying. Our shared vision has enabled both organizations to focus on the range of opportunities that lay before us and meet the future with clarity, momentum and capabilities that will drive outsized shareholder value for years to come. The embedded growth and sustainable margin opportunity being unlocked by this combination will be a gamechanger.”
Second Quarter 2022 U.S. GAAP Financial Highlights (in $ thousands, excl. margin items):
| Q2 2022 | Q1 2022 | Q2 2021[3] | % QoQ | % YoY | ||||||||||||||||
| Revenue |
$ | 129,571 | $ | 123,087 | $ | 109,744 | 5.3 | % | 18.1 | % | ||||||||||
| Gross Profit |
$ | 50,848 | $ | 56,627 | $ | 43,339 | -10.2 | % | 17.3 | % | ||||||||||
| Adj. Gross Profit[1,2] |
$ | 55,118 | $ | 56,627 | $ | 47,678 | -2.7 | % | 15.6 | % | ||||||||||
| Adj. Gross Margin[1,2] |
42.5 | % | 46.0 | % | 43.4 | % | -347 bps | -91 bps | ||||||||||||
| EBITDA[2] |
$ | (3,996 | ) | $ | 6,606 | $ | (982 | ) | N/A | N/A | ||||||||||
| Adj. EBITDA[2] |
$ | 12,029 | $ | 16,832 | $ | 16,422 | -28.5 | % | -26.8 | % | ||||||||||
| [1] | See “Non-GAAP Financial Measures” in this press release for more information regarding the Company’s use of non-GAAP financial measures. |
| [2] | Excludes $4.3 million in Q2 2022 related to inventory revaluation adjustments and $1.4 million in Q2 2021 related to the mark-up of inventory acquired in acquisitions. |
| [3] | Figures for Q2 2021 are Combined, including dispensary and manufacturing operations in Ohio, Non-GAAP. Gross Profit is as reported in Q2 2021. |
Top 5 Markets by Revenue in Q2[4]: California, Colorado, Massachusetts, Pennsylvania, Virginia
Top 5 Markets by Adjusted EBITDA in Q2[4]: Maryland, Massachusetts, Ohio, Pennsylvania, Virginia
| [4] | Markets are listed alphabetically |
Operational Highlights for Second Quarter 2022
Building scale with continued retail growth:
| • | In April, launched adult use sales in New Jersey with limited hours; expanded to full adult use hours in June 2022; revenue in New Jersey more than doubled sequentially |
| • | Completed expansion of Jefferson Park dispensary in Illinois, adding more than 1,700 sqft and converted to the Cannabist retail experience |
| • | Celebrated rebrand of Portsmouth, Virginia location to Cannabist, the 31st in the nation |
| • | Retail revenue increased 4% over Q1 2022, led by New Jersey, Virginia and West Virginia |
| • | Wholesale revenue increased 11% sequentially, led by growth in Pennsylvania and West Virginia |
| • | Total of 84 active retail locations in operation; no new locations opened in Q2 2022 |
| • | Additional dispensaries in development include 8 in Virginia, 1 in West Virginia, and 1 in New Jersey |
| • | Expanded Gross Margin sequentially in 12 markets (AZ, DC, DE, FL, IL, MA, MO, NJ, NY, OH, UT, WV) |
| • | Despite a $6 million sequential decline in Colorado EBITDA, EBITDA increased sequentially in ten markets (DC, DE, FL, IL, MO, NJ, NY, OH, UT, WV) |
Proven cultivation expertise and execution:
| • | In Q2, operationalized second cultivation facility in New Jersey, adding approximately 270,000 square feet of cultivation and production capacity, as well as post-harvest automation equipment; first harvest from second cultivation site expected in Q3 2022 |
| • | Continued to drive operational improvements and adherence to national cultivation SOPs, leading to an increase in yield of approximately 10 grams per square foot in finished flower across the cultivation portfolio in Q2, as well as reduction in overall cost per gram of production; achieved record potency across the portfolio, with approximately 100% increase in percentage of finished flower testing 22.5% THC or higher compared to October 2021 |
Sustained momentum on branding initiatives at retail and product levels:
| • | In-house brands reached a record percentage of total revenue; owned brands made up 69% of flower sales at Columbia Care locations |
| • | In Q2, launched Seed & Strain and Classix in Colorado market; Classix is now available in 14 markets and Seed & Strain is now available in 13 markets |
| • | Subsequent to quarter close, launched a new loyalty program and mobile application, Stash Cash, in 14 markets |
Update on Cresco Transaction & Milestones Achieved
| • | Cleared federal Hart Scott Rodino antitrust review in May |
| • | Received overwhelming approval from our shareholders, with over 98% of the votes cast in favor of the transaction in July |
| • | Received approval from the Supreme Court of British Columbia in July |
| • | The asset divestiture process has been progressing as planned in terms of timeline and expectations for gross proceeds; moving through the final negotiations to sign definitive purchase and sale agreements, which we expect to announce in the next 30-45 days |
| • | Submitted regulatory approval/license transfer applications in over half of the jurisdictions that require approval |
| • | All targeted integration milestones are on track, in terms of integration and pre-close workstreams needed to plan for an efficient and effective combination to accommodate a close around the end of the year |
| • | Working with a third-party expert to independently determine any milestone obligation to gLeaf Medical given its potential impact on the exchange ratio |
2022 Outlook
Anticipating business and financial reporting impacts and adjustments from the asset divestitures required for the Cresco transaction, ongoing economic headwinds, and assuming no material improvement in Colorado or California, Columbia Care is forecasting continued sequential top line growth of mid-single digits in every market in each of the next two quarters. In addition, the Company expects sequential improvements in market level EBITDA margin in the range of 150-250 basis points per quarter compared to our YTD results.
At this time, Columbia Care’s 2022 outlook does not assume any additional changes in the regulatory environment in markets where Columbia Care currently operates. This also excludes potential future market changes where a conversion from medical only to adult use is under consideration by a governor and/or legislature. Finally, although we have seen improvement in both Colorado and California in July and the beginning of August, we are not including any material changes in those markets – either of which would have a significant impact upon financial performance. See “Caution Concerning Forward-Looking Statements” below for further discussion. This new revised outlook replaces all prior outlook and guidance provided by the Company.
Conference Call and Webcast Details
The Company will host a conference call on Monday, August 15, 2022 at 8:00 a.m. ET to discuss financial and operating results for the second quarter.
To access the live conference call via telephone, participants must pre-register at https://register.vevent.com/register/BI0b0158b18e5f49faa0177ac08685119b. After registering, instructions will be shared on how to join the call for those who wish to dial in. A live audio webcast of the call will also be available in the Investor Relations section of the Company’s website at https://investors.columbia.care/ or at https://edge.media-server.com/mmc/p/jctimf4s.
A replay of the audio webcast will be available in the Investor Relations section of the Company’s website approximately 2 hours after completion of the call and will be archived for 30 days.
About Columbia Care
Columbia Care is one of the largest and most experienced cultivators, manufacturers and providers of cannabis products and related services, with licenses in 18 U.S. jurisdictions and the EU. Columbia Care operates 131 facilities including 99 dispensaries and 32 cultivation and manufacturing facilities, including those under development. Columbia Care is one of the original multi-state providers of medical cannabis in the U.S. and now delivers industry-leading products and services to both the medical and adult-use markets. In 2021, the company launched Cannabist, its new retail brand, creating a national dispensary network that leverages proprietary technology platforms. The company offers products spanning flower, edibles, oils and tablets, and manufactures popular brands including Seed & Strain, Triple Seven, gLeaf, Classix, Press, Amber and Platinum Label CBD. For more information on Columbia Care, please visit www.columbia.care.
Non-GAAP Financial Measures
In this press release, Columbia Care refers to certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit and Adjusted Gross Margin. These measures do not have any standardized meaning in accordance with U.S. GAAP and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-GAAP measures to be meaningful indicators of the performance of its business. These measures are not recognized measures under GAAP, do not have a standardized meaning prescribed by GAAP and may not be comparable to (and may be calculated differently by) other companies that present similar measures. Accordingly, these measures should not be considered in isolation from nor as a substitute for our financial information reported under GAAP. These non-GAAP measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our business that may not otherwise be apparent when relying solely on GAAP measures. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented. We also recognize that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of companies within our industry.
With respect to non-GAAP financial measures, the Company defines EBITDA as net income (loss) before (i) depreciation and amortization; (ii) income taxes; and (iii) interest expense and debt amortization. Adjusted EBITDA is defined as EBITDA before (i) share-based compensation expense; (ii) adjustments for acquisition and other non-core costs; (iii) fair value changes on derivative liabilities; and (iv) fair value mark-up for acquired inventory. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Revenue. Adjusted Gross Profit is defined as gross profit before the fair mark-up for acquired inventory. Adjusted Gross Margin is defined as gross margin before the fair mark-up for acquired inventory.
The Company views these non-GAAP financial measures as a means to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure may provide a more complete understanding of factors and trends affecting the Company’s business. The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.
Reconciliations of non-GAAP financial measures to their nearest comparable GAAP measures are included in this press release and a further discussion of some of these items will be contained in our quarterly report on Form 10-Q.
Caution Concerning Forward-Looking Statements
This press release contains certain statements that constitute forward-looking information or forward looking statements within the meaning of applicable securities laws and reflect the Company’s current expectations regarding future events. Statements concerning Columbia Care’s objectives, goals, strategies, priorities, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of the Company are forward-looking statements. The words “believe”, “expect”, “anticipate”, “estimate”, “intend”, “may”, “will”, “would”, “could”, “should”, “continue”, “plan”, “goal”, “objective”, and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward looking statements in this press release include, among others, statements related to: the timing for closing of the Cresco transaction, expectations related to growth and financial numbers including EBITDA, benefits of the Cresco transaction, ongoing business expectations, and timing for signing divestiture agreements.
The Company has made assumptions with regard to its ability to execute on initiatives, which although considered reasonable by the Company, may prove to be incorrect and are subject to known and unknown risks and uncertainties that may cause actual results, performance or achievements of the Company to be materially different from those expressed or implied by any forward-looking information. Forward-looking information involves numerous assumptions, including assumptions on the satisfaction of the conditions precedent to the closing of the Cresco transaction; the receipt of any necessary regulatory approvals in connection with the Cresco transaction; the impact of the Cresco transaction on the Company’s current and future operations, financial condition and prospects; the value of the Cresco Labs shares; the costs of the Cresco transaction and potential payment of a termination fee in connection with the Cresco transaction; the ability to successfully integrate with the operations of Cresco Labs and realize the expected benefits of the Cresco transaction; the fact that marijuana remains illegal under federal law; the application of anti-money laundering laws and regulations to the Company; legal, regulatory or political change to the cannabis industry; access to the services of banks; access to public and private capital; unfavorable publicity or consumer perception of the cannabis industry; expansion into the adult-use
markets; the impact of laws, regulations and guidelines; the impact of Section 280E of the Internal Revenue Code; the impact of state laws pertaining to the cannabis industry; the Company’s reliance on key inputs, suppliers and skilled labor; the difficulty of forecasting the Company’s sales; constraints on marketing products; potential cyber-attacks and security breaches; net operating loss and other tax attribute limitations; the impact of changes in tax laws; the volatility of the market price of the Common Shares; reliance on management; litigation; future results and financial projections; the impact of global financial conditions and disease outbreaks; projected revenue and expected gross margins, capital allocation, EBITDA break even targets and other financial results; growth of the Company’s operations via expansion; expectations for the potential benefits of any transactions including the acquisition of Green Leaf Medical and Medicine Man; statements relating to the business and future activities of, and developments related to, the Company after the date of this press release, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s business, operations and plans; expectations that planned transactions (including the Cresco transaction) will be completed as previously announced; expectations regarding cultivation and manufacturing capacity; expectations regarding receipt of regulatory approvals; expectations that licenses applied for will be obtained; potential future legalization of adult-use and/or medical cannabis under U.S. federal law; expectations of market size and growth in the U.S. and the states in which the Company operates; expectations for other economic, business, regulatory and/or competitive factors related to the Company or the cannabis industry generally; and other events or conditions that may occur in the future.
Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations. Holders of securities of the Company are cautioned that forward-looking statements are not based on historical facts but instead are based on reasonable assumptions and estimates of management of the Company at the time they were provided or made and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Securityholders should review the risk factors discussed under “Risk Factors” in Columbia Care’s Form 10 dated May 9, 2022, filed with the applicable securities regulatory authorities and described from time to time in documents filed by the Company with Canadian and U.S. securities regulatory authorities.
The purpose of forward-looking statements is to provide the reader with a description of management’s expectations, and such forward-looking statements may not be appropriate for any other purpose. In particular, but without limiting the foregoing, disclosure in this press release as well as statements regarding the Company’s objectives, plans and goals, including future operating results and economic performance may make reference to or involve forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. No undue reliance should be placed on forward-looking statements contained in this press release. Such forward-looking statements are made as of the date of this press release. Columbia Care undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.
Certain information in this press release, including the section entitled “2022 Outlook” may be considered as “financial outlook” within the meaning of applicable securities legislation including the revenue and Adjusted EBITDA guidance. The purpose of this financial outlook is to provide readers with disclosure regarding Columbia Care’s reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.
Investor Contact
Lee Ann Evans
SVP, Capital Markets
ir@col-care.com
Media Contact
Lindsay Wilson
VP, Communications
+1.978.662.2038
media@col-care.com
TABLE 1 - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in US $ thousands, except share and per share figures, unaudited)
| Three Months Ended | ||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | ||||||||||
| Revenue |
$ | 129,571 | $ | 123,087 | $ | 102,387 | ||||||
| Cost of sales |
(78,723 | ) | (66,460 | ) | (59,288 | ) | ||||||
| Cost of sales related to business combination fair value adjustments to inventory |
— | — | (1,352 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Gross profit |
50,848 | 56,627 | 41,747 | |||||||||
| Selling, general and administrative expenses |
(72,956 | ) | (71,292 | ) | (52,503 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Loss from operations |
(22,108 | ) | (14,665 | ) | (10,756 | ) | ||||||
| Other income (expense), net |
(13,445 | ) | (12,609 | ) | (5,051 | ) | ||||||
| Income tax benefit (expense) |
(18,702 | ) | (632 | ) | (2,850 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net loss |
(54,255 | ) | (27,906 | ) | (18,657 | ) | ||||||
| Net loss attributable to non-controlling interests |
(427 | ) | (1,270 | ) | (513 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net loss attributable to Columbia Care shareholders |
(53,828 | ) | (26,636 | ) | (18,144 | ) | ||||||
| Weighted average common shares outstanding - basic and diluted |
394,023,144 | 376,397,260 | 376,484,304 | |||||||||
| Earnings per common share attributable to Columbia Care shareholders - basic and diluted |
$ | (0.14 | ) | $ | (0.07 | ) | $ | (0.05 | ) | |||
TABLE 2 - RECONCILIATION OF US GAAP TO NON-GAAP MEASURES
(in US $ thousands, unaudited)
| Three Months Ended | ||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | ||||||||||
| Net loss |
$ | (54,255 | ) | $ | (27,906 | ) | $ | (18,657 | ) | |||
| Income tax expense |
18,702 | 632 | 2,850 | |||||||||
| Depreciation and amortization |
20,058 | 21,210 | 9,202 | |||||||||
| Net interest and debt amortization |
11,499 | 12,670 | 5,623 | |||||||||
|
|
|
|
|
|
|
|||||||
| EBITDA (Non-GAAP) |
$ | (3,996 | ) | $ | 6,606 | $ | (982 | ) | ||||
| Share-based compensation |
$ | 7,678 | $ | 6,374 | $ | 5,548 | ||||||
| Adjustments for acquisition and other non-core costs |
14,727 | 3,169 | 4,903 | |||||||||
| Fair value changes on derivative liabilities |
(6,380 | ) | 683 | (2,092 | ) | |||||||
| Fair value mark-up for acquired inventory |
— | 1,352 | ||||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EBITDA (Non-GAAP) |
$ | 12,029 | $ | 16,832 | $ | 8,729 | ||||||
TABLE 3 - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in US $ thousands, unaudited)
| Three Months Ended | ||||||||
| June 30, 2022 | March 31, 2022 | |||||||
| Net cash used in operating activities |
$ | (71,961 | ) | $ | (27,822 | ) | ||
| Net cash used in investment activities |
(28,127 | ) | (29,555 | ) | ||||
| Net cash provided by financing activities |
13,454 | 144,253 | ||||||
TABLE 4 - CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (SELECT ITEMS)
(in US $ thousands, unaudited)
| Three Months Ended | ||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | ||||||||||
| Cash |
$ | 81,440 | $ | 168,424 | $ | 148,750 | ||||||
| Total current assets |
256,110 | 323,883 | 292,805 | |||||||||
| Property and equipment, net |
373,877 | 355,968 | 213,138 | |||||||||
| Right of use assets |
254,849 | 250,413 | 229,986 | |||||||||
| Total assets |
1,420,465 | 1,482,443 | 1,393,780 | |||||||||
| Total current liabilities |
138,499 | 222,835 | 216,101 | |||||||||
| Total liabilities |
892,496 | 952,743 | 791,319 | |||||||||
| Total equity |
527,969 | 529,700 | 602,461 | |||||||||
Exhibit 99.2 SECOND QUARTER 2022 INVESTOR PRESENTATION NEO:CCHW | CSE:CCHW | OTCQX:CCHWF | FSE:3LP August 2022
2 DISCLAIMER AND FORWARD-LOOKING STATEMENTS Disclaimer Columbia Care Inc. (the “Company” or “Columbia Care”) derives a substantial portion of its revenues from the cannabis industry in certain U.S. states, which industry is illegal under U.S. federal Law. Columbia Care is directly involved in both the adult-use and medical cannabis industry in the states of Arizona, California, Colorado, Illinois, Massachusetts and New Jersey, and in the medical cannabis industry in the states of Delaware, Florida, Maryland, Missouri, New York, Ohio, Pennsylvania, the District of Columbia, Utah, Virginia, and West Virginia, which states have regulated such industries. The cultivation, processing, sale and use of cannabis are illegal under federal law pursuant to the U.S. Controlled Substance Act of 1970 (the “CSA”). Under the CSA, the policies and regulations of the United States Federal Government and its agencies are that cannabis has no medical benefit and a range of activities, including cultivation and the personal use of cannabis, are prohibited. The Supremacy Clause of the United States Constitution establishes that the United States Constitution and federal laws made pursuant to it are paramount and in case of conflict between federal and state law, the federal law shall apply. Until 2018, the federal government provided guidance to federal law enforcement agencies and banking institutions through a series of United States Department of Justice (“DOJ”) memoranda. The most recent such memorandum was drafted by former Deputy Attorney General James Cole in 2013 (the “Cole Memo”). On January 4, 2018, former U.S. Attorney General Jeff Sessions issued a memorandum to U.S. district attorneys that rescinded previous guidance from the U.S. Department of Justice specific to cannabis enforcement in the United States, including the Cole Memo (as defined herein). The former Attorneys General who succeeded former Attorney General Sessions following his resignation did not provide a clear policy directive for the United States as it pertains to state-legal marijuana-related activities. President Joseph R. Biden was sworn in as the 46th President of the U.S. on January 20, 2021. President Biden nominated Merrick Garland to serve as Attorney General in his administration, and he was confirmed on March 10, 2021. It is not yet known whether the Department of Justice under President Biden and Attorney General Garland will re-adopt the Cole Memorandum or announce a substantive marijuana enforcement policy. Attorney General Garland stated at a confirmation hearing before the United States Senate that “It does not seem to me a useful use of limited resources that we have, to be pursuing prosecutions in states that have legalized and that are regulating the use of marijuana, either medically or otherwise. I don’t think that’s a useful use.” Attorney General Garland reiterated this view at a Senate Appropriations subcommittee hearing on April 26, 2022. Nonetheless, there is no guarantee that state laws legalizing and regulating the sale and use of marijuana will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Unless and until the United States Congress amends the CSA with respect to marijuana (and as to the timing or scope of any such potential amendments there can be no assurance), there is a risk that federal authorities may enforce current U.S. federal law. Currently, in the absence of uniform federal guidance, as had been established by the Cole memorandum, enforcement priorities are determined by respective United States Attorneys. Columbia Care makes no medical or treatment claims about our products, implied or otherwise, and each patient should consult their treating physician, explore all options, and discuss their personal health to determine whether he or she may be a potential candidate for medical marijuana or other cannabis-derived products. Our products have not been evaluated by the Food and Drug Administration (“FDA”). In addition, our products have not been approved by the FDA to diagnose, treat, cure, or prevent any disease. In addition, we have not conducted clinical trials for the use of our products. Any references to quality, consistency, efficacy and safety of our products are not intended to imply that such claims have been verified in clinical trials. Non-GAAP Financial Measures In this presentation, Columbia Care refers to certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA and Adjusted Gross Margin. These measures do not have any standardized meaning in accordance with U.S. GAAP and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-GAAP measures to be meaningful indicators of the performance of its business. A reconciliation of such non-GAAP financial measures to their nearest comparable GAAP measure is included in this presentation and a further discussion of some of these items is contained in the Company’s Form 10-Q for the three months ended June 30, 2022. Cautionary Note Regarding Securities Laws This presentation does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities of Columbia Care, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Risk Factors For a detailed description of risk factors associated with Columbia Care, refer to the “Risk Factors” section in Columbia Care’s Form 10-K for the year ended December 31, 2021, and in Columbia Care’s Form 10 dated May 9, 2022, which are available on EDGAR at www.sec.gov and SEDAR at www.sedar.com.
3 DISCLAIMER AND FORWARD-LOOKING STATEMENTS Caution Concerning Forward-Looking Statements This presentation contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Statements concerning Columbia Care’s objectives, goals, strategies, priorities, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of Columbia Care are forward-looking statements. The words “believe”, “expect”, “anticipate”, “estimate”, “intend”, “may”, “will”, “would”, “could”, “should”, “continue”, “plan”, “goal”, “objective”, and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Certain material factors and assumptions were applied in providing these forward-looking statements. Forward-looking information involves numerous assumptions, including assumptions on the satisfaction of the conditions precedent to the closing of the Cresco transaction; the receipt of any necessary regulatory approvals in connection with Cresco transaction; the impact of the Cresco transaction on the Company’s current and future operations, financial condition and prospects; the value of the Cresco Labs shares; the costs of the Cresco transaction and potential payment of a termination fee in connection with the Cresco transaction; the ability to successfully integrate with the operations of Cresco Labs and realize the expected benefits of the Cresco transaction; the fact that marijuana remains illegal under federal law; the application of anti-money laundering laws and regulations to the Company; legal, regulatory or political change to the cannabis industry; access to the services of banks; access to public and private capital; unfavorable publicity or consumer perception of the cannabis industry; expansion into the adult-use markets; the impact of laws, regulations and guidelines; the impact of Section 280E of the Internal Revenue Code; the impact of state laws pertaining to the cannabis industry; the Company’s reliance on key inputs, suppliers and skilled labor; the difficulty of forecasting the Company’s sales; constraints on marketing products; potential cyber-attacks and security breaches; net operating loss and other tax attribute limitations; the impact of changes in tax laws; the volatility of the market price of the Common Shares; reliance on management; litigation; future results and financial projections; and the impact of global financial conditions and disease outbreaks; as well as those risk factors discussed under “Risk Factors” in Columbia Care’s Form 10 dated May 9, 2022, filed with the applicable securities regulatory authorities and described from time to time in other documents filed by the Company with Canadian and U.S. securities regulatory authorities. The purpose of forward-looking statements is to provide the reader with a description of management's expectations, and such forward-looking statements may not be appropriate for any other purpose. In particular, but without limiting the foregoing, disclosure in this presentation as well as statements regarding the Company's objectives, plans and goals, including future operating results and economic performance may make reference to or involve forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. No undue reliance should be placed on forward-looking statements contained in this presentation. Such forward-looking statements are made as of the date of this presentation. Columbia Care undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. This presentation contains future-oriented financial information and financial outlook information (collectively, FOFI ) about Columbia Care’s revenue, gross margins and adjusted EBITDA, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraph. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Columbia Care’s future business operations. Columbia Care disclaims any intention or obligation to update or revise any FOFI contained in this document, whether because of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.
4 4 COMPANY OVERVIEW Building Scale, Improving Efficiency and Growing Profitability Across Strategic National Platform 32 18 $36B+ 99 (1) US Cultivation & Jurisdictions in 2026 TAM in Licensed US Retail Locations (1) (2) Manufacturing Facilities US & Europe US States 18% +2M 150+ $130M YoY Topline Revenue Sqft Cultivation & Acres Outdoor Q2 2022 Revenue (3) (3) Growth Production Capacity Cultivation Capacity Increased footprint and profitability since reported results of Q2 2019, which included: 43% $55M▪ 63 facilities (retail & cultivation) in 15 jurisdictions Q2 2022 Adj. Gross Q2 2022 Adj. Gross Profit ▪ ~550,000sqft cultivation & production capacity Margin (4) ▪ $19.3M in Revenue, $5.2M in Gross Profit and 27% Gross Margin 1) Pro forma facilities either open or under development; includes facilities where Columbia Care provides consultative services pursuant to the terms of a management services arrangement 2) Estimated Sales figures from BDSA Market Forecast as of March 2022, broker research, company estimates 3) Total capacity under existing licenses - additional development may be required to achieve 4) Excluding changes in fair value of biological assets and inventory sold, under IFRS. See Q2 2019 Results.
5 5 VERTICAL INTEGRATION ON NATIONAL SCALE PENNSYLVANIA NEW YORK MASSACHUSETTS 1 3 2 8 1 3 Vertically Integrated UTAH COLORADO OHIO from Coast to Coast 1 5 26 1 5 NEW JERSEY 2 3 Wholesale Distribution in 14 Markets DELAWARE 1 3 MARYLAND 32 Cultivation and MISSOURI ILLINOIS WEST VIRGINIA 2 4 Manufacturing 1 1 1 2 1 5 Facilities WASHINGTON DC 2 1 CALIFORNIA ARIZONA FLORIDA 2 6 2 2 4 14 99 Retail Locations* VIRGINIA (84 Active / 15 In Development) 12 2 Locations in development in 2022: VA - 8, WV - 1, NY - 4, NJ - 1, MD - 1 In Development Operational Wholesale Cultivation and Manufacturing Retail Locations * Open or under development; includes facilities where Columbia Care provides consultative services pursuant to the terms of a management services arrangement; as of August 15, 2022
6 6 ONE OF THE MOST STRATEGICALLY POSITIONED MSOs (1) Addressable market is >53% of the U.S. population with significant upside potential (2) Columbia Care U.S. Footprint Columbia Care Addressable Market Pursuit Activity Adult Use Anticipated Medical Only State Population (M) Est 2022 Sales (US$M) Est 2026 Sales (US$M) Status Licenses Adult Use & Medical Pursuit Activity California 39.6 Both Unlimited $ 4,188.2 $ 6,547.5 Florida 21.3 $ 2,318.8 $ 3,356.9 Medical Limited Colorado 5.7 $ 2,124.6 $ 2,395.0 Both Unlimited Illinois 12.7 Both Limited $ 2,048.4 $ 2,545.2 Massachusetts 6.9 $ 1,845.3 $ 2,343.8 Both Limited Pennsylvania 12.8 Medical Limited $ 1,607.7 $ 2,197.8 $36B+ Arizona 7.2 $ 1,485.9 $ 1,838.6 Both Limited Projected 2026 TAM in Licensed US (2) New Jersey 8.9 $ 792.2 $ 3,000.0 Both Limited (2) States Maryland 6 Medical Limited $ 609.6 $ 1,275.1 Ohio 11.7 $ 507.5 $ 1,374.8 Medical Limited (3) Missouri 6.1 $ 361.4 $ 934.9 Medical Limited (2) New York 19.5 Both* Limited $ 189.2 $ 5,000.0 Conversion to Medical and Adult-Use Offers Significant Upside Utah 3.2 $ 132.3 $ 311.7 Medical Limited ▪ Columbia Care has experienced 3x-4x top-line revenue growth in states that (2) Virginia 8.5 Both* Limited $ 78.5 $ 3,000.0 have already converted from medical-only to medical and adult-use Washington DC 0.7 $ 64.2 $ 237.0 Medical Limited ▪ Adult-use sales launched in New Jersey in April 2022 and are expected in Delaware 1 $ 42.3 $ 132.9 Medical Limited New York in 2023 and Virginia in 2024 West Virginia 1.8 $ 18.1 $ 51.8 Medical Limited ▪ Columbia Care’s expansive footprint is well positioned for the anticipated *Adult-use sales pending conversion of additional markets TOTAL 173.6 $ 18,414.2 $ 36,543.0 1) US Census Bureau, Company estimates, Gallup poll, as of Nov 2020 2) Estimated Sales figures from BDSA Market Forecast as of March 2022, broker research, company estimates 3) Consultative services provided pursuant to terms of a management services arrangement
7 Q2 2022 BUSINESS HIGHLIGHTS Improving efficiencies and scaling across national portfolio Revenue +5% QoQ and +18% YoY driven by outperformance in select markets and strong 1 momentum in retail and wholesale revenues 16 out of 17 markets were EBITDA positive during the quarter; 12 out of 17 markets showed a 2 sequential improvement in gross margin Performance Opened 1 and rebranded 2 locations to our award- Highlights winning Cannabist retail experience and experienced sequential increases in retail revenue, 3 same-store sales and revenue per square foot Generated Revenue of $130 Continued to drive operational improvements and million, 43% Adj. Gross Margin adherence to national cultivation SOPs, leading to (1) an increase in yield of ~10g per sqft in finished 4 and Adjusted EBITDA of $12 flower across the cultivation portfolio in Q2 million Improvement of retail share of internal brand sales; Columbia Care flower brands now represent 69% of 5 sales in own dispensaries 1) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP figures
8 REVENUE AND GROSS MARGIN EXPANSION From Q2 2020 to Q2 2022, Columbia Care has averaged ~18% sequential revenue growth and increased Adj. Gross Margin by ~650 basis points $160.0 60% $140.0 50% 49% 46% 43% 45% 43% $120.0 40% 42% Q2 2022 Adj. 40% $139 39% $130 $100.0 Gross Profit of 36% $123 $132 $55M $80.0 30% $110 Q2 2022 Adj. $60.0 Gross Margin of $93 20% 43% $82 $40.0 $54 10% $20.0 $33 $0.0 0% Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022 Note: For the first six months of 2021, revenue includes Ohio dispensary operations prior to close of the CannAscend transaction
9 PROFITABILITY TRENDS BY MARKET Profitability metrics throughout national portfolio Top 5 Markets by Revenue Top 5 Markets by Adj. Gross Margin Top 5 Markets by Adj. EBITDA Top 5 Markets by Adj. EBITDA Margin Q2 2022 Q2 2022 Q2 2022 Q2 2022 Maryland Delaware Delaware California 54% 62% 69% 49% Maryland Massachusetts Maryland Colorado Of Total Revenue for Average Q2 2022 Adj. Of Total Adj. EBITDA Average Q2 2022 Adj. Ohio New Jersey New Jersey Massachusetts Q2 2022 Gross Margin for Q2 2022 EBITDA Margin Virginia Pennsylvania Virginia Pennsylvania Virginia West Virginia West Virginia Virginia Note: Markets listed alphabetically Average Adj. Gross Margin* by Length of Market Operations Margin Improvement Highlights 73% 70% 68% ✓ Utah, Missouri, Virginia, West Virginia – newest markets open <15 Months are ramping, with Virginia and West Virginia already top 5 markets by Adj. GM 57% ✓ New Jersey – adult-use ramping, 1 retail location under development and Vineland II 51% 49% 48%45% cultivation site operationalized, adding additional cultivation square footage to the portfolio 46% 45% 45% 43% 41% 41% 43% 43% 40% ✓ Florida – continued scale and yield improvements and discounting discipline drove 37% 35% sequential improvement in basket size ✓ California – cultivation upgrades to increase yield, efficiency and quality of product in light of wholesale market softness and pricing pressure are nearly complete 16% ✓ Colorado – cultivation improvements to increase yields, quality and utilization of manufacturing capacity; introduction of in-house brands subsequent to quarter end ✓ Pennsylvania – additional cultivation capacity and bringing in-house brands into market to improve margin and generate additional wholesale opportunities Overall 24+ Months 15-24 Months <15 Months Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 * Excludes changes in fair value of biological assets and inventory sold for all periods presented, as well as $1.4 million in Q3 2021and Q2 2021 and $0.1 million in Q1 2021 related to the mark-up of inventory acquired in acquisitions
10 GROWTH TRAJECTORY & 2022 CATALYSTS 46% 45% 140,000 50 43% 45 38% 120,000 40 117,506 27% 100,000 35 77,445 30 80,000 25 CapEx spend on purpose-built 60,000 20 42,885 infrastructure generates returns as 15 CAPEX spend continues to generate 40,000 29,511 29,162 markets come online and assets 10 returns as infrastructure comes online 20,000 begin to generate revenue. 5 in operational markets, driving increasing gross margin 0 0 FY 2019 FY 2020 FY 2021 Q1 2022 Q2 2022 $Th % CAPEX Adj. Gross Margin* % *Excludes changes in fair value of biological assets and inventory sold for all periods presented, including $1.4 million in Q3 2021 and Q2 2021 and $0.1 million in Q1 2021 related to the mark-up of inventory acquired in acquisitions; Excludes $4.3 million in Q2 2022 related to inventory revaluation adjustments Multiple Catalysts Propelling Growth in 2022 Ramping cultivation & Canopy expansion of 10x and Expanded product offerings Tripling canopy capacity in production capacity in ~1M 8 additional retail locations to with focus on CO2 and edibles Vineland & adding 1 retail sqft greenhouse in New York open in growing Virginia & operational improvements to be low-cost flower producer location in New Jersey as medical program, in advance will continue to drive growth and major supplier to adult use ramps in 2022 of adult use transition and profitability in Florida wholesale market Launched the state’s largest Increased product offerings Expanding branded product Ramping in newly opened and expanded cultivation in wholesale operation and distribution and Cannabist markets of Missouri, Utah & Ohio (4x canopy expansion) & opened 4 retail locations, with retail network, expanding West Virginia, will contribute 1 additional in development in Pennsylvania (adding ~170k product distribution in to margin expansion in 2022 West Virginia sqft total capacity) wholesale channels Steele, CO
11 11 PRIORITY GROWTH MARKETS Columbia Care in New York Columbia Care in New Jersey Columbia Care in Virginia $5B+ $3B+ $3B+ (1) (1) (1) Projected TAM Projected TAM Projected TAM 8 Retail Locations (4 Active, 4 In development) 12 Retail Locations (4 Active, 8 In Development) ~90k sqft Existing Cultivation & Production in Rochester ~147,765k sqft Existing Cultivation & Production 3 Retail Locations (2 Active, 1 In Development) and Phase 1 of Long Island greenhouse Capacity ~320k sqft Existing Cultivation & Production Capacity in ~910k sqft Additional Cultivation & Production Capacity Vineland, NJ ~30k sqft Additional Cultivation & Production Capacity in Riverhead, NY; First Harvest Completed in Dec 2021 MARKET UPDATES MARKET UPDATES MARKET UPDATES • On March 31, 2021 Legislation (S.854-A/A.1248-A) was signed, • New regulations in effect July 1, 2022 that will remove the state • Adult-use began at two Cannabist locations in April 2022, on the first legalizing adult-use cannabis and expanding medical marijuana; adult registration card process. Patients will be able to bring written day of New Jersey adult use sales in the state use expected in 2023 and regulator communicated the intent for certifications directly to dispensary, which is expected to facilitate a • Columbia Care is among the existing medical operators able to medical companies to wholesale to initial social equity retailers growth in rate of patient registrations operate up to 3 co-located retail locations, 2 cultivation facilities • Access to the medical cannabis program has expanded; whole • Adult-use sales awaiting final legislation with an official start date. providing up to 150k sqft of cultivation canopy cannabis flower entered market in October 2021 Legalizing possession and personal cultivation without providing for • Columbia Care recently expanded canopy with second cultivation legal commerce is increasing pressure on lawmakers to work across • Columbia Care is among existing Registered Organizations that will facility in Vineland and will open 1 additional retail location the aisle to put forth a plan for a retail market be able to operate up to 8 retail locations (5 medical + 3 co-located medical/adult-use) and remain vertically integrated• Flower introduced to the medical market in September 2021 1) Estimated Sales figures from BDSA Market Forecast as of March 2022, broker research, Company estimates
12 12 EXPANSIVE RETAIL OPERATIONS (1) Active Retail Locations by Quarter 84 84 90 79 75 73 80 69 67 70 59 60 50 35 34 40 25 18 30 16 13 20 10 0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Retail Highlights • Retail revenues increased 4% from Q1 2022• Completed Cannabist rebrand for our Chicago, IL, Vineland, NJ and Portsmouth, VA retail • Retail share of Columbia Care-house brand locations sales have increased to 49% of sales • 15 additional retail locations in development in • In April 2022, adult-use sales began at our New 2022 - VA: 8, WV: 1, NY: 4, NJ: 1 and MD: 1 Jersey retail locations 1) Active implies first sale made Note: Acquisition of Medicine Man closed November 1, 2021; Dispensary count as of August 15, 2022
13 13 CULTIVATION HIGHLIGHTS 56K+ 693K+ +10g Incremental Sqft Total Planned Sqft Increased Average Yield Added in Q2 2022 Incremental Capacity per Sqft (DWE per harvest) in Q2 Key Cultivation Upgrades & Expansions Market Status Notes Aurora, IL Steele, CO AZ Complete Polycarbonate panels on roof replaced for increase light efficiency LED installation to increase yield and efficiency 100% complete, awaiting approval for additional CA Complete cultivation capacity Completed all planned CAPEX spend/capital improvements in indoor Steele, CO facility. CO Complete Improvements to outdoor grow materializing with harvest that began in late Q3 MA Complete Upgrades to manufacturing and processing equipment, evaluating options for additional canopy Complete Cultivation operations for Phase I complete, subsequent phases ongoing in 2022 under review NY Phase I for construction of 50K sqft of second cultivation facility in Vineland II. First harvest expected Complete NJ in Q3 2022 Complete Phase I of incremental canopy construction completed Q1 2022 OH Complete Expansion of gLeaf cultivation facilities for 2022 phased approach PA VA Complete Construction of cultivation expansion to complete 1H 2022 WV Complete Cultivation operations began in July 2021 Arcadia, FL
14 14 LOW-COST CULTIVATION, EFFICIENT & SCALABLE PRODUCTION 32 facilities with +2 million sq. ft of cultivation and manufacturing capacity Jurisdiction Facility Count Total Size (sqft) Status Arizona 2 34,800 Operational California 2 81,600 Operational Colorado 6 185,253 Operational Delaware 1 20,000 Operational Florida 4 105,373 Operational Illinois 1 32,802 Operational Maryland 2 59,040 Operational Massachusetts 1 38,890 Operational (1) Missouri 1 12,630 Operational New Jersey 2 320,724 Operational 148,346 Operational New York 2 (2) 650,000 Under development Ohio 2 117,722 Operational 230,500 Operational Pennsylvania 1 43,500 Under development Virginia 2 147,765 Operational Washington DC 2 16,591 Operational West Virginia 1 39,293 Operational Total 32 2,284,379 1) Consultative services provided pursuant to the terms of a management services arrangement 2) Phase I of Riverhead, NY greenhouse facility is operational; first harvest was completed in December 2021
15 15 FINANCIAL HIGHLIGHTS (in US$ thousands) FY 2021A Q3 2021A Q4 2021A Q1 2022A Q2 2022A 2022 Outlook P&L / Cash Flow Revenue 460,080 132,322 139,276 123,087 129,571 Topline: Adj. EBITDA 57,852 24,771 20,592 16,832 12,029 Mid-single digit growth Interest Expense 30,014 8,057 11,314 11,244 11,484 EBITDA Margin: Capital Expenditure 117,506 40,062 45,183 29,511 29,162 150-250bps growth per quarter Balance Sheet Cash 82,198 116,931 82,198 168,424 81,440 PP&E 339,692 258,885 339,692 355,968 373,877 Total Assets 1,376,512 1,372,490 1,376,512 1,482,443 1,420,465 Total Liabilities 825,689 810,784 825,689 952,743 892,496 Shareholder's Equity 550,823 561,706 550,823 529,700 527,969 Note: Results are reported in US GAAP
16 16 SECOND QUARTER 2022 STATE HIGHLIGHTS Top 5 Markets by Revenue: California, Colorado, Massachusetts, Pennsylvania, Virginia Top 5 Markets by Adjusted EBITDA: Maryland, Massachusetts, Ohio, Pennsylvania, Virginia Market Commentary • Experiencing high-quality product with exceptional yields and potency results: averaging potency over 30% THC, with some strains testing over 36% THC and 38% TAC California • Still experiencing a YoY decline in wholesale pricing, with abundance of wholesale material in the market • Together with Colorado, major driver for sequential decline in EBITDA margin • $6 million sequential decline in EBITDA in Q2, with wholesale under significant pressure; leveraging scale with market rationalization underway Colorado• Cultivation improvements generated 25% QoQ increase in g/sqft of useable flower, while costs decreased for harvested and packaged flower • Reduction of SKUs in effort to focus production on high demand / high margin products and increase throughput • Revenue +12% sequentially, Adj. EBITDA Margin increased ~300bps sequentially, with new product introductions and increased transactions Florida• Gross margin increased 200bps QoQ; additional initiatives underway to improve gross margin through the end of the year • 19% QoQ growth in g/sqft of useable flower • Jefferson Park expansion and Cannabist rebrand occurred during the quarter Illinois• Adult-use revenue continues to increase; ~400bps improvement in gross margin QoQ • Recent approval of 185 social equity dispensary licenses should spur growth of wholesale opportunity • Gross margin improved ~200bps sequentially; trendline for increasing cultivation productivity is intact; strong automation and process throughout Massachusetts the manufacturing facility • New product introductions in Boston and launch of additional brands to benefit retail and wholesale
17 17 SECOND QUARTER 2022 STATE HIGHLIGHTS Top 5 Markets by Revenue: California, Colorado, Massachusetts, Pennsylvania, Virginia Top 5 Markets by Adjusted EBITDA: Maryland, Massachusetts, Ohio, Pennsylvania, Virginia Market Commentary • Adult-use sales began on 4/21/22 at two existing dispensaries; Vineland II cultivation approved May 2022 • Revenue +300% vs 2021, +100% vs Q1 2022, as adult-use ramps and wholesale market develops, with new supply coming online soon New Jersey • Phase 1 of Vineland II expansion is complete and being populated; first harvest is expected in Q3 2022 • Ramp up of cultivation at Riverhead cultivation facility; approximately 300bps improvement in gross margin sequentially • Demand for distillate driving wholesale expectations for the remainder of the year New York • Launched pre-rolls in August 2022, the first medical cannabis provider to offer pre-rolls in the state • Monthly dispensary transactions up YoY, attributed to growth of state program Ohio• New equipment installed in Mt. Orab facility during Q2 allowed for maximum available biomass to be processed • Mt. Orab expansion completed, allowing the introduction of new cultivars and the capacity to support production of new brands • Strong wholesale sales in Q2, contributed to 11% increase in Company wholesale in Q2 Pennsylvania• Additional 174K sqft of cultivation capacity under development, expected to be completed in 2022 • Launched Tyson 2.0 and Classix brands in market • Revenue +12.5% QoQ, and nearly 200% YoY; continued growth in number of transactions Virginia• Automated flower packaging established, which will allow for up to 30x packaging speed for flower • New regulation changes will allow for better formulated products in Q3 2022 and the addition of new SKUs, as well as new patient growth • Revenue +300% QoQ, gross margin increased significantly; Columbia Care is largest wholesale provider in the state • Began R&D and production of concentrates, expected to launch in Q3 2022 West Virginia • Patient count currently growing at ~1,000 patients per month
18 Tempe, AZ
19 CANNABIST EXPANSION Columbia Care’s new retail storefront experience is centered on making shopping simple and approachable for the vast range of experience levels as cannabis use is normalized and legalized across the U.S., with knowledgeable staff and technology-enhanced interaction. 31 Cannabist Locations Open to Date • Tempe, AZ• Deptford, NJ• Brooklyn, NY • San Diego, CA• Hermann, MO• St. Albans, WV • Villa Park, IL• All 14 FL locations• Morgantown, WV • Lowell, MA• Virginia Beach, VA• Chicago, IL • Springville, UT• Williamstown, WV• Vineland, NJ • Boston, MA• Beckley, WV• Portsmouth, VA Near-term Pipeline 1 West Virginia location Early Insights - Cannabist Rebrand Impact (1) Villa Park, IL Case Study • +15% increase in revenue • +19% increase in number of transactions • Top 3 all-time highest weekly sales occurred since rebrand 1) Comparison of first 7 full weeks of operation as Cannabist to prior 7 weeks of operation prior to rebrand
20 BUILDING NATIONAL BRAND AND PRODUCT PORTFOLIO Growing our proprietary brand footprint through expanded market penetration and wholesale reach In-house brands accounted for 69% of all flower sold at Columbia Care owned dispensaries in Q2 Wholesale SKU distribution expanded to 14 markets in 2021 Columbia Care house brands are currently available in 16 markets, expected to reach all operational markets by Q3 2022 Columbia Care currently has 55 different product categories across its house brands
21 21 AWARD-WINNING PRODUCTS & SERVICES High Times Cannabis Cup Illinois 2021 st • Hybrid Flower 1 Place: Triple 7, Rainbow Runtz nd • Indica Flower 2 Place: Seed & Strain, Velvet Glove • Pre-Roll 2nd Place: Seed & Strain, Cherry Chem rd • Sativa Flower 3 Place: Triple 7, Tropical Runtz High Times Cannabis Cup California 2022 nd • Sativa Flower 2 Place: Triple 7, Super Boof rd • Indica Flower 3 Place: Triple 7, Pancakes #7 Clio Cannabis Awards 2021 • Clio Cannabis Bronze Award: Forage, Digital/Mobile E-Commerce Category WEEDCon 2021 Harvest Cup • Best Flower - Hybrid: Triple 7, Peanut Butter Breath MarCom 2021 MarCom 2021 • Gold Award: Forage, Mobile Buying Experience Category • Gold Award: Forage, Mobile Buying Experience Category • Platinum Award: Cannabist, Branding Refresh Category • Platinum Award: Cannabist, Branding Refresh Category
22 ROOTED IN LAND & HARVESTED BY HAND Upscale yet accessible, Seed & Strain is the most widely distributed brand across the entire portfolio Seed & Strain demonstrated a 28% QoQ increase across all categories and a 4% increase QoQ among all brands of all flower brands sold at Columbia Care affiliated retail locations. In Q2 2022, Seed & Strain entered MO, UT and CO, bringing its total state footprint to 13 markets By year-end 2022, Seed & Strain will be available in 15 markets
23 Our Cannabis is at the uppermost end of the quality spectrum, and our strains are unwavering in consistency. We’ve gone above and beyond the highest industry standards to cultivate the best strains that deliver every time. Our ultra-premium brand has national penetration and is now available in 6 markets with 3 additional planned by Q3 2022 In the markets where available, 6 of the top 10 flower products sold by revenue are Triple Seven Triple Seven has won multiple awards in the Illinois High Times Cannabis st rd Cup, including 1 Place Hybrid Flower and 3 Place Sativa Flower, and the nd California High Times Cannabis Cup, including 2 place Sativa Flower and rd 3 Place Indica Flower
24 AMPLIFY TODAY Classix is our every day, timeless lifestyle brand that celebrates incredible cannabis moments shared with friends Classix is now available in 14 markets, with additional states expected in 2022. Classix successfully launched in 5 markets (AZ, MA, IL, DE, & NJ), and represented the single largest launch week for a brand in Columbia Care history totaling 12% of all sales on day 1, and 14% of all sales after the first week*. The launch of Classix also marked industry's widest multi- state flower brand launch in a single day In Q2 2022, Classix generated 38% revenue growth QoQ *Note: For markets in which the product is available
25 TYSON IS BACK. Tyson 2.0 is an extraordinary balance of premium and affordable, full-spectrum cannabis flower, concentrates, and consumables available at retailers nationwide. Tyson 2.0 launched with Columbia Care as its exclusive national cultivation and manufacturing partner Tyson 2.0 currently offers 3.5g flower, a 0.5g pre-roll and 28g flower and is sold through both our wholesale and retail channels Tyson 2.0 launched in December 2021 and is currently available in 10 Columbia Care markets: AZ, CA, CO, DE, DC, MD, PA, IL, MA and OH. We expect to introduce Tyson 2.0 to additional markets in 2022 In Q2 2022, Tyson 2.0 saw 15% revenue growth QoQ, with whole flower accounting for 86% of Q2 sales
26 Formulations crafted by connoisseurs Vibes crafted by you AMBER is now available in seven markets (AZ, CA, CO, MA, NJ, DE and DC), and accounted for 60% of vape sales and 40% of concentrate sales in Q2 2022 California launched AMBER Diamonds and Live Sauce, two elevated concentrates that will situate AMBER as a sophisticated concentrates brand Our customers have nominated AMBER for San Diego’s Best Concentrate 2022. We expect to release AMBER in additional markets in 2022
27 BRAND PARTNERSHIPS Launching new product lines and strategic partnerships • Committed to partnering with brands that have built engaged communities and loyal customer bases, we have product lines and strategic partnerships with Pitbull and Mike Tyson, as well as partnerships with the Professional Fighters League (PFL) and UFC Champion Julianna Peña • 2022 marks Columbia Care’s second year as the exclusive Cannabis / CBD sponsor of the PFL, which is aired in prime time in the U.S. on ESPN and ESPN+
28 A RETAIL PLATFORM BUILT FOR CONTINUOUS INNOVATION How do you want to feel today? Technology and efficiency innovation will continue to heighten the in-store and at-home shopping experience at Cannabist and create an all-encompassing ecosystem from home to dispensary and online Forage is our award-winning online cannabis discovery tool that matches strain and product recommendations to how you want to feel. We are the first cannabis company to bring a technology solution like this to the market that offers a truly unique consumer experience Since the launch of Forage in June 2021, we have seen increased adoption on mobile and in the way the product is being leveraged in stores. We are continuing to explore opportunities around branded advertising and engaging content Footnote
29 Stash Cash app offers a streamlined shopping experience to build and track loyalty rewards, shop from anywhere and discover new products. Stash Cash has features that allow Earn rewards for enjoying cannabis. The Stash Cash app is a platform for users to set their favorite dispensary and It doesn’t get any simpler than that. customers to build loyalty rewards, shop shop, earn and redeem points for Build your stash, save your cash from anywhere and discover new purchases made, discover new products products using Forage, connect via social media CANNABIS REWARDED and much more Footer
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