Item 9 Labs Corp. Executes Major Restructuring to Pave the Way to Profitability - Seite 2

Item 9 Labs Corp. Chief Operating Officer Chris Wolven said, “Our success in the Arizona market comes largely from our brand name and reputation for delivering consistent, high-quality cannabis products that consumers can rely on. Our solid operations are a testament to our cultivation and manufacturing teams' tight-knit processes and ability to creatively navigate the challenges of a fast-evolving industry.”

Wolven added, “We expect the combination of refined systems at our cultivation & manufacturing facility and reductions in the cost of outsourced materials will result in higher gross profit margins. As we continue to decrease our cost of goods sold, we are driving increased volumes of our most popular products. Securing our first positive Adjusted EBITDA in months demonstrates the productive shifts we’ve made to bolster our entities for growth.”

Beyond enhancing current cultivation and production in Arizona, the Company is focused on expanding the Item 9 Labs brand to new state markets through various capital light models.

“We’ve always had our eyes set beyond the Arizona market for Item 9 Labs,” Wolven added. “Through our new development approach, we will be able to move more quickly into new markets without the significant capital expenditure that often comes with it.”

In addition to domestic expansion, the Company is continuing to work toward closing its proposed acquisition of Sessions Cannabis, which would bring its Unity Rd. cannabis franchise to Canada.

Bowden continued, “We were at the finish line of this [Sessions Cannabis] transaction when the recent bank collapse sent ripples through multiple markets. Since then, we have been working diligently with our finance partner to see this acquisition through but may have to source other capital to close the transaction.”

Jeffrey Rassás, director and strategic advisor of Item 9 Labs Corp., commented, “Although the Company previously announced a strategic initiative to streamline operations back in December, we needed to make more aggressive reductions now to manage our cash. With the rightsizing of our overall business, we are seeking new opportunities for funding and look forward to providing updates over the next few weeks.”

On May 17, 2023, Mr. Michael Weinberger voluntarily resigned as Chief Executive Officer and member of the Board of Directors of Item 9 Labs Corp. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices. Mr. Weinberger will remain with the Company as a Strategic Advisor.