LEEF Brands Reports Strongest Quarter in Company History With Record Gross Profit, Margins, and Adjusted EBITDA

VANCOUVER, British Columbia, May 06, 2026 (GLOBE NEWSWIRE) -- LEEF Brands, Inc. (CSE: LEEF) (OTCQB: LEEEF) (“LEEF” or the “Company”), a rapidly growing cannabis company, today reported financial results for the first quarter ended March 31, 2026.

First Quarter 2026 Financial Highlights

• Revenue: $9.4 million, consistent with $9.4 million in Q1 2025, reflecting a 60% increase in unit volumes, offset by pricing pressure in the California distillate market.
• Gross Margin: 49%, compared to 22% in Q1 2025. Margins more than doubled due to lower input costs from increased use of in-house biomass from Salisbury Canyon Ranch and increased output from our higher-margin hydrocarbon line.
• Gross Profit: $4.6 million, compared to $2.1 million in Q1 2025, driven by significant margin expansion as the Company scaled its vertically integrated operating model.
• Adjusted EBITDA: $2.4 million, compared to $(0.7) million in Q1 2025, driven by higher gross margins and a 16% year-over-year decline in operating expenses.
• Operating Cash Flow: $0.4 million, compared to $(1.8) million in Q1 2025. Operating cash flow included approximately $1.2 million of California Department of Cannabis Control (DCC) licensing fees and other seasonal startup costs paid in cash during the quarter; excluding this timing impact, the Company would have generated approximately $1.6 million in operating cash flow and positive free cash flow.
  

“Q1 2026 is further validation of the model we’ve been building,” said Micah Anderson, Chief Executive Officer of LEEF Brands. “As we scale Salisbury Canyon Ranch toward its full 180-acre permitted capacity by year-end and continue integrating our platform, we see a significant opportunity to expand into higher-value channels — including interstate and global export. We have engaged Shane Pennington, a leading expert on DEA licensing, and have submitted applications for multiple DEA licenses. While these pathways are still developing, they have our full attention and are a top priority for the Company. With our low-cost, clean inputs and growing product portfolio, we believe we are uniquely positioned to compete and capture that opportunity.”

“This was the strongest operating quarter in LEEF's history, and we delivered it into the most challenging wholesale concentrate market in the country," said Kevin Wilson, Chief Financial Officer of LEEF Brands. "Per-gram pricing in California continues to compress, yet we grew unit volumes by 60% on our core extraction lines and expanded gross margin to 49%. The cost structure we've built — anchored by in-house biomass from Salisbury Canyon Ranch — would produce significantly stronger economics in any other state. The fact that it's working in California is what gives us confidence in the platform we're building and ensures we're ready for federal reform."

Operational Highlights
Mindset Capital Investment Supports Growth: During the quarter, the Company closed the initial US$4.5 million tranche of its previously announced financing of up to US$8 million led by Mindset Capital and its founder, Aaron Edelheit. The financing reflects strong investor confidence in LEEF’s operating model and is primarily being deployed to expand Salisbury Canyon Ranch and strengthen the Company’s infrastructure. The remainder of the round is expected to close on May 8, 2026.

Salisbury Canyon Ranch Expansion Underway: Following the initial US$4.5 million investment from Mindset Capital, LEEF has begun expanding Salisbury Canyon Ranch toward its full 180-acre permitted capacity. The Company added 14 DCC licenses this spring and commenced planting, with the first 2026 harvest expected in June and a second harvest planned for later in the year. LEEF expects to add additional acreage this fall and have the full farm completed by year’s end. This expansion is expected to significantly increase in-house biomass production and further improve margins over time.

Himalaya Acquisition Adds Branded Platform: On April 28, LEEF announced the acquisition of Himalaya, a leading California concentrates brand. The acquisition marks a key step in LEEF’s evolution toward a more vertically integrated model, enabling the Company to capture higher-margin retail opportunities alongside its wholesale business.

Outlook
LEEF is closely tracking ongoing federal rescheduling developments and actively preparing for potential interstate and international market opportunities. The Company has submitted applications for DEA licenses to support future domestic and export capabilities.

LEEF expects to begin processing its first 2026 harvest in June, with meaningful volumes entering production in early Q3. As additional acreage comes online throughout 2026, the Company expects to significantly increase in-house biomass production, further reducing reliance on third-party sourcing and driving more consistent, high-margin performance over time.

Conference Call Details
Date: Wednesday, May 6, 2026
Time: 5:00 p.m. Eastern Time
Webcast: To listen via webcast, please use the following link: https://edge.media-server.com/mmc/p/cc98s8zk
Replay: A replay will be available for one year using the same link

Adjusted EBITDA Reconciliation

About LEEF Brands, Inc.
LEEF Brands, Inc. is a leading California and New York-based extraction and manufacturing cannabis company. With a comprehensive supply chain, innovative manufacturing processes, a dynamic bulk concentrate portfolio, and a growing line of branded products, LEEF powers some of the largest cannabis brands in the United States. For more information, visit www.LeefBrands.com.

Forward-Looking Statements
This news release contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively, “forward-looking statements”), including, but not limited to, statements regarding the anticipated benefits of the acquisition of HIMALAYA, including expected margin improvements, integration of operations, expansion of distribution, and entry into new markets.

Forward-looking statements reflect current expectations or beliefs regarding future events or the Company’s future performance or financial results. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “estimates”, “continues”, “projects”, “intends”, “anticipates”, “targets” or “believes”, or variations of, or the negatives of, such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved.

Although the Company believes that the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the statements.

There are certain factors that could cause actual results to differ materially from those in the forward-looking information, including, but not limited to, the risks disclosed in the Company’s public filings on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca. Accordingly, readers should not place undue reliance on forward-looking statements.

LEEF Brands, Inc.
Per: Jesse Redmond, Chief Strategy & Investor Relations Officer
Phone: +1 (805) 717-9327
Email: ir@leefca.com

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