Cannara adds $10-million credit facility with BMO

Mr. Zohar Krivorot reports CANNARA ANNOUNCES AMENDMENT AND UPSIZE OF BMO CREDIT FACILITY TO SUPPORT FACILITY EXPANSION AT VALLEYFIELD Cannara Biotech Inc. has amended its existing credit facility with Bank of Montreal (BMO) acting as administrative agent, lead arranger, syndication agent and sole bookrunner (the restated credit facility), including a $10-million upsize to support strategic capital investments at its Valleyfield facility. "These amendments to our credit facility with BMO reflect the confidence in Cannara's growth strategy and operational performance," said Zohar Krivorot, president and chief executive officer of Cannara. "With improved financial flexibility and reduced financing costs, we are well positioned to execute the expansion of our Valleyfield facility and deliver sustained value to our shareholders. Cannara remains committed to maintaining a strong balance sheet while investing in strategic initiatives that support long-term profitable growth," added Nicholas Sosiak, chief financial officer of Cannara. $10-million capital expenditures facility The restated credit facility includes the addition of a $10-million committed delayed capital expenditures debt facility. The capital expenditures facility is available by way of multiple draws until July, 2026, with a 10-year amortization schedule, repaid in quarterly instalments of unblended payments of principal and interest, with the remaining balance due on Dec. 31, 2027. The new capital expenditures facility will finance the initial phase of Cannara's postharvest expansion at Valleyfield, introducing state-of-the-art hang-drying, freezing, trimming and packaging capabilities, expanded processing and storage areas, and enhanced butane extraction capacity. By enabling upcoming cultivation room activations beyond the current 12 operating zones, this phase lays the foundation for Cannara's next stage of growth and advances the company toward its long-term goal of 100,000 kilograms in annual production capacity. Previously disclosed amendments to the restated credit facility In addition to the capital expenditures facility announced today, the company has previously disclosed the following changes to the restated credit facility. Interest rate reduction: On June 18, 2025, the company announced that it had secured a total 50-basis-point reduction in the interest rate spread under the restated credit facility, achieved in two stages: an initial 25-basis-point decrease through an amendment to the credit agreement and a further 25-basis-point reduction triggered by meeting certain covenant thresholds as of the second quarter of fiscal 2025 (ended Feb. 28, 2025). In Q4 2025, the company achieved an additional 25-basis-point reduction after meeting key covenant thresholds as of Q3 2025, resulting in the full additional savings to be realized in reduced interest expense going forward. As a result, Cannara's overall cost of debt under the credit facility declined from over 8 per cent in 2024 to below 6 per cent, reflecting the company's strong financial performance and disciplined capital management. Removal of limited recourse guarantee: As previously disclosed in Cannara's management's discussion and analysis for the three-and nine-month periods ended May 31, 2025, in March, 2025, the company also successfully met key covenant thresholds under its credit agreement with BMO, eliminating the limited recourse guarantee provided by a related party. This milestone reduced annual interest expense by approximately $375,000, further strengthening Cannara's capital structure. For a full description of the BMO restated credit facility, please refer to the company's annual information form for the fiscal year ended Aug. 31, 2024. A copy of the restated credit facility is available under the company's profile on SEDAR+. About Cannara Biotech Inc. Cannara Biotech is a vertically integrated producer of affordable premium-grade cannabis products for the Canadian markets. Cannara owns two mega facilities based in Quebec spanning over 1.65 million square feet, providing the company with 100,000 kg of potential annualized cultivation output. Leveraging Quebec's low electricity costs, Cannara's facilities produce premium-grade cannabis products at an affordable price. We seek Safe Harbor.