Fluent welcomes rescheduling of cannabis to Schedule 3

Executive Summary

• Fluent Corp. publicly supports the historic federal rescheduling of cannabis from Schedule 1 to Schedule 3 under the Controlled Substances Act, citing it as a landmark policy shift that recognizes medical use and advances regulatory reform.
• The company highlights that Schedule 3 status will reduce federal barriers, improve banking access, and allow for the deduction of ordinary business expenses previously disallowed under IRS Section 280E, thereby freeing capital for innovation and expansion.
• Fluent notes that this rescheduling coincides with recent federal clarifications on hemp-derived intoxicants (passed Nov 12, 2025), which are expected to shut down the market for intoxicating hemp-derived cannabis by November 2026, reducing unlicensed competition and easing pricing pressure, particularly in key markets like Florida and Texas.

Key Details

• Federal Rescheduling: Cannabis is being rescheduled from Schedule 1 to Schedule 3 under the Controlled Substances Act.
• Financial Impact (Section 280E): The shift allows cannabis companies to deduct ordinary business expenses previously disallowed under IRS Section 280E, freeing up capital for patient care, product innovation, and market expansion.
• Hemp-Derived Cannabis Ban: Recent federal clarification passed on November 12, 2025, regarding hemp-derived intoxicants is expected to materially shut down the depth and reach of this market by November 2026.
• Market Impact: The reduction in unlicensed hemp-derived competition is expected to ease pricing pressure enterprise-wide, with the greatest impact anticipated in Fluent's key states of Florida and potential expansion into Texas.
• Company Operations: Fluent operates in Florida, New York, Pennsylvania, and Texas, with 700 employees, 8 cultivation/manufacturing facilities, and 37 active retail locations.
• Trading Symbols: FNT.U (Canadian Securities Exchange) and CNTMF (OTCQB Venture Market).

Notable Quotes

• "Federal rescheduling is a pivotal moment for patients, operators and investors... We applaud the administration for recognizing the therapeutic benefits of cannabis-based medicine and advancing common sense reforms, including 280E relief." — David Vautrin, Interim CEO
• "While rescheduling represents meaningful progress, there remains important work ahead to fully resolve the conflict between state and federal law and to advance broader criminal justice reforms." — David Vautrin, Interim CEO