Page 1

ALCANNA.PE Alcanna Inc. Alcanna Reports 7.6 % Growth in Same Store Liquor Sales and Strong Growth in Profitability in the Fourth Quarter 2020 [ FOR IMMEDIATE RELEASE ] EDMONTON , Alberta , March 25 , 2021 ( GLOBE NEWSWIRE ) -- Alcanna Inc. ( the “ Company ” or “ Alcanna " ) ( TSX : CLIQ ) today reported its financial results for the three months and year ended December 31 , 2020 . Fourth Quarter Financial Results and Business Update In Q4 2020 , Alcanna's liquor stores continued the strong performance achieved in the previous three quarters . Gross margin dollars from the Company's core liquor division increased 14.0 % from $ 32.6 million to $ 37.2 million . Same - store sales from continuing operations rose by 7.6 % . The Company believes this is primarily a result of : ( i ) the change in pricing strategy that was implemented in 2019 and continued into 2020 , which was designed to regain lost market share and grow the customer base ; and ( ii ) shifting customer consumption habits due to more people dining and entertaining at home and continuing to stay away from on - premise liquor establishments ( restaurants , bars , lounges , sports venues , etc. ) . The Company believes these new consumer behaviour patterns have become entrenched in people's lifestyle choices and expects consumer behaviour will continue in this manner as long as the COVID - 19 pandemic remains a threat to the health of Canadians and thereafter as well . Alberta and British Columbia both implemented strict lockdowns and a ban on social and household gatherings during the traditional Q4 holiday period , which served to partially moderate the double - digit sales growth experienced in Q2 and Q3 2020 . Over the past fifteen ( 15 ) months , the Company has been implementing a strategy to sell or close low or under - performing convenience - format liquor stores in Alberta . The Company has exited twenty - eight ( 28 ) stores in Alberta during that time frame - which resulted in total sales from continuing operations in the fourth quarter to rise at a more moderate rate to $ 181.6 million from $ 174.5 million in 2019 . • Total gross margin dollars rose 17.4 % to $ 42.5 million for the fourth quarter from $ 36.2 million in the prior year . • Operating profit before amortization , remeasurements and provisions for Q4 2020 rose 122.8 % to $ 13.0 million from $ 5.8 million in the prior year . • Profit before income taxes for Q4 2020 rose to $ 1.5 million , compared to a loss of $ 20.1 million in the prior year . • Total cannabis store sales for the fourth quarter rose 32.8 % to $ 17.3 million from $ 13.0 million in the prior year , and total gross margin dollars grew 48.5 % to $ 5.3 million from $ 3.5 million . The same - store liquor sales increase for January and February 2021 , as compared to the prior year , continued to be strong and was comparable with the same - store liquor sales increases reported by the Company for the second and third quarter of 2020. However , we anticipate that same - store liquor sales over the entire first quarter of 2021 , as compared to the prior year , will be comparable with the increase reported for the fourth quarter of 2020. This is as a result of the significantly higher than normal sales that were recorded by the Company over the last three weeks of March 2020 , starting March 11 , 2020 when COVID - 19 was declared a pandemic by the World Health Organization , when customers were ' stockpiling ' prior to being assured by provincial governments that liquor stores would be classified as essential services and would remain open . The Company's annual audited consolidated financial statements and management's discussion and analysis ( " MD & A ” ) for the year ended December 31 , 2020 will be available in the " Investor Centre - Financial Reports " section of the Company's website at www.alcanna.com and will be filed on SEDAR and available at www.sedar.com . FINANCIAL RESULTS 2020 ( In thousands of Canadian dollars Three months ended December 31 , 2019 $ Year ended December 31 , 2020 2019 $ except per share amounts , unaudited ) Sales 181,588 ( Restated ) ( 1 ) 174,475 ( Restated ) ( ¹ ) 680,291 582,462 Operating profit before amortization , remeasurements and provisions 13,004 5,836 47,196 8,339