Decibel Reports First Quarter 2026 Results: Quarterly Revenue Grows 41% YoY to $30 Million, Issues Q2 2026 Guidance

CALGARY, AB, May 21, 2026 /CNW/ - Decibel Cannabis Company Inc. (the "Company" or "Decibel") (TSXV: DB) (OTCQB: DBCCF), a market leader in Canadian branded cannabis manufactured products and global medical exports, today announced its financial results for the three month period ended March 31, 2026.

"Q1 was a strong start to the year with revenue up 41%, international sales tripling and Adjusted EBITDA doubling year over year. This performance is especially meaningful as we emerge from last quarter's headwinds with a strengthened balance sheet and real momentum heading into the strongest season for our domestic portfolio. The setup for the rest of 2026 is compelling."
Benjamin Sze – Chief Executive Officer

Q1 2026 Highlights

• Net Revenue of $30 million, growth of 41% year over year
• International Sales of $9.6 million, growth of 330% year over year
• Adjusted EBITDA⁽¹⁾ of $6.9 million, growth of 100% year over year

Q2 2026 Outlook⁽²⁾

Financial Outlook

• Net Revenue of $33 to $35 million, implying year over year growth of 14% to midpoint of range

Decibel also reconfirms its previously issued 2026 full year guidance: Net Revenue of $130 to $135 million, and Adjusted EBITDA of $27 to $31 million.

Notes:

¹ Non-GAAP financial measure. Refer to "Cautionary Statements – Non-GAAP Measures" for further details.

² The Company's outlook makes numerous assumptions. Assumptions used for the purposes of outlook may prove to be incorrect and actual results may differ from those anticipated. Refer to "Cautionary Statements – Preliminary Financial Information" for further details.

International Update

Decibel's international sales grew 330% year over year to $9.6 million, despite growth being impacted by delays in German permit timelines. German permit processing time has improved materially in Q2 2026, and management expects Decibel will experience growth through the balance of the year as the Company converts its existing backlog to revenue. AgMedica's EU GMP certified platform continues to perform well above the original underwriting case, validating the international strategy underpinning the acquisition. We continue to believe international sales are positioned for significantly high double-digit growth through 2026, supported by the following Q1 2026 milestones:

• Shipped GMP-extracted product into Germany in Q1 2026, marking the first deliveries into the largest medical cannabis market in the EU
• 16+ international customers with executed supply agreements
• 45+ GACP cultivators onboarded with executed supply agreements
• 60 tons per Annum of flower processing capacity at ~30% utilization based on Q1 2026 results
• Expanding production of EU GMP extracts to meet growing demand, allowing for ease of access into vapes and oils, with ongoing shipments into multiple countries

Domestic Update

Decibel's domestic sales returned to growth at 7% year over year, driven by strong early performance of the new Standard Issue brand and the refresh of General Admission's product portfolio. Management continues to see opportunities to expand the Company's offering and store penetration, particularly given Standard Issue's early momentum. We continue to believe domestic sales are positioned for high single-digit growth through 2026, supported by the following Q1 2026 milestones:

• Overall market share in Q1 2026 grew from 4.1% to 4.4% based on HiFyre data
• Standard Issue launch has continued to grow since launch, now 8th overall in the vape category (2.5% share) and 10th overall in Infused Pre-Roll (2.2%) share based on HiFyre data
• Refreshing General Admission's vape portfolio has helped maintain a leadership position in the fast-growing liquid diamond segment, as the #1 Liquid Diamond 510 brand and #2 Liquid Diamond All-in-One brand. This along with the launch of Standard Issue has helped Decibel increase its vape market share by 1.50% year to date.
• General Admission remains the #1 Infused Pre-Roll brand and has now converted its entire IPR portfolio to diamond-based formulations heading into peak seasonality for pre-rolls this summer.

First Quarter Highlights

• Net Revenue was $29.8 million, a year over year increase of 41%. Net revenue growth was driven by continued growth in international demand and success with recent domestic sales launches.
• Domestic Sales were $20.3 million, a year over year increase of 7%. The Company saw strong traction on new products and its new Standard Issue brand with market share gains during the quarter.
• International Sales were $9.6 million, a year over year increase of 330%. The increase in international sales was driven by strong volume growth and high demand for the Company's products, partially offset by the impacts of delayed permitting timelines in Germany.
• Gross Margin Before Fair Value Adjustments was 51% in the first quarter of 2026, compared to 50% in the first quarter of 2025.
• Adjusted EBITDA⁽¹⁾ of $6.9 million, a year over year increase of 100%. The increase in Adjusted EBITDA for the quarter was primarily driven by international sales.
• Free Cash Flow⁽¹⁾ of ($14.6) million, reflecting a $13.2 million one-time reduction in payables settled in connection with the Company's February 2026 debt refinancing. This represents a shift in the form of obligation rather than an operating use of cash, with the related amount refinanced under the new credit facility. Excluding this item, Free Cash Flow for the quarter would have been meaningfully positive and consistent with the Company's underlying operating performance.
• Adjusted Net Income⁽¹⁾ of $3.1 million, a year over year increase of $3.2 million. 
• ATB Credit Facility. Decibel closed a new $61 million credit facility with ATB Financial and ATB Cormark Capital Markets that extends Decibel's debt maturities out to 2030, reduces 2026 payment obligations by $5 million and provides up to $10 million in undrawn available capital. The Company's pro forma Trailing Twelve Month Total Debt to EBITDA is expected to remain below 2.0x. The Company has a $10 million revolver which is currently undrawn and available and the Company intends to keep the facility undrawn.
• Creston Facility Sale. Decibel announced a conditional agreement for the sale of its cultivation property located in Creston, British Columbia. The agreed sales price is $2.5 million. The sale reflects further optimization of Decibel's operating footprint, having no impact to the Company's revenue outlook while anticipated to save $4 million annually. The sale remains subject to satisfaction of certain conditions.  Decibel expects to complete the sale before June 30, 2026.

Note:

¹ Non-GAAP financial measure. Refer to "Cautionary Statements – Non-GAAP Measures" for further details.

Summary Highlights

				Three months ended
				March 31
			2026	2025
(thousands of Canadian dollars, except where noted)
Gross Canadian recreational sales ^1			$32,040	$29,390
Net Canadian recreational sales ^1			$20,258	$19,011
International sales ^1			$9,582	$2,227
Total
Gross revenue			$41,622	$31,617
Net revenue			$29,840	$21,238
Gross profit before fair value adjustments			$15,175	$10,589
Gross margin before fair value adjustments			51 %	50 %
Adjusted EBITDA^3			$6,917	$3,456
Loss and comprehensive loss			($2,177)	($1,901)
Adjusted net income (loss)^3			$3,070	($149)
Cash flow from continuing operations			($13,938)	($711)
Free cash flow^2, 3			($14,632)	($1,229)
Per Share Metrics
Loss per share			($0.00)	($0.00)
Adjusted EPS ^3			$0.01	-

¹ Supplementary financial measure. Refer to "Cautionary Statements – Non-GAAP Measures" for further details.

² Non-GAAP financial measure. Refer to "Cautionary Statements – Non-GAAP Measures" for further details.

³ Non-GAAP ratio.  Refer to "Cautionary Statements – Non-GAAP Ratios" for further details

Decibel's consolidated interim financial statements for the three months ended March 31, 2026, and 2025 (the "Financial Statements") and related MD&A are available on SEDAR+ under the Company's profile at www.sedarplus.ca.

The Company will host a live conference call to discuss the results at 10:00 a.m. MST today. To instantly join the conference call by phone, please use the following link to easily register close to the call start time. After registering, the system will call you instantly and connect you into the conference call automatically:

https://registrations.events/easyconnect/2917219/rec4ETEMWtBBxnYLB/

Alternatively, you may dial in to the conference call to be connected by an Operator by calling  1-647-932-3411 for local participants, 1-800-715-9871 for Canadian participants, or 1-(888)-880-3330 for U.S. participants, referencing conference ID 2917219.

www.decibelcc.com

About Decibel

Decibel is a consumer-focused cannabis company with a strong foundation in the Canadian adult-use market, built on leading brands including General Admission, Qwest and Standard Issue. The Company focuses on disciplined innovation, consistent product quality and strong brand execution. Alongside its leadership position in Canada, Decibel is a significant and growing participant in international cannabis markets. Decibel operates a processing and manufacturing facility in Calgary, Alberta, a cultivation facility in Battleford, Saskatchewan, and an EU GMP licensed cultivation and processing facility in Chatham, Ontario.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Statements

Non-GAAP Measures

This news release contains certain financial performance measures, namely Adjusted EBITDA, Adjusted Net Income and Free Cash Flow, that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, these Non-GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Adjusted EBITDA is a non-GAAP financial measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based compensation, other income, finance costs, foreign exchange loss, non-cash production costs and severance payments. Non-cash production costs relate to amortization expense allocations included in production costs. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

				Three months ended
				March 31
			2026	2025
(thousands of Canadian dollars)
Loss and comprehensive loss			(2,177)	(1,901)
Unrealized gain on changes in fair value of biological assets			(4,608)	(3,987)
Change in fair value of biological assets realized through inventory sold			5,793	5,739
Depreciation and amortization			1,640	1,642
Share-based compensation			781	187
Other (income) loss			(123)	293
Finance costs			971	689
Foreign exchange loss			167	196
Non-cash cost of goods sold^1			362	598
Other adjustments^2			4,111	-
Adjusted EBITDA^3			6,917	3,456

Adjusted Net Income is a non-GAAP financial measure that is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold. 

				Three months ended
				March 31
			2026	2025
(thousands of Canadian dollars)
Loss and comprehensive loss			(2,177)	(1,901)
Unrealized gain on changes in fair value of biological assets			(4,608)	(3,987)
Change in fair value of biological assets realized through inventory sold			5,793	5,739
Other adjustments			4,062	-
Adjusted net income^1			3,070	(149)
Weighted average number of shares outstanding			577,010,931	576,848,521
Adjusted EPS			$0.01	-

These measures are intended to provide a proxy for the Company's net income (loss) and comprehensive income (loss) and are used to compare Decibel to its competitors and derive expectations of future financial performance of the Company and should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations less cash provided by (used in) investing activities. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management. 

				Three months ended
				March 31
			2026	2025
(thousands of Canadian dollars)
Cash used in continuing operating activities			(13,938)	(711)
Cash used in investing activities			(694)	(518)
Free cash flow^1			(14,632)	(1,229)

Free Cash Flow is a non-GAAP financial measure that is calculated as cash flow from operations plus cash provided by (used in) investing activities, changes in non-cash working capital, less repayment of long-term debt. This non-GAAP financial measure should be considered together with other financial information prepared in accordance with IFRS to enable investors to evaluate Decibel's operating results, underlying performance and prospects in a manner similar to Decibel's management.

Non-GAAP Ratios

Adjusted EPS, or adjusted earnings per share, is a non-GAAP ratio, does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EPS is calculated as net income (loss) and comprehensive income (loss) excluding unrealized gain on changes in fair value of biological assets and change in fair value of biological assets realized through inventory sold, divided by the weighted average common shares outstanding.  The Company believes that adjusted earnings per share is a useful metric to normalize net income for biological asset accounting impacts.

Supplementary Financial Measures

International Sales is a supplementary financial measure intended to provide a more accurate depiction of international sales earned by the Company's wholesale operations.

Gross Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of gross revenue earned by the Company's wholesale operations.

Net Canadian Recreational Sales is a supplementary financial measure intended to provide a more accurate depiction of net revenue earned by the Company's wholesale operations.

Forward-Looking Statements

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release.

Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this news release, forward-looking statements relate to, among other things: expectations relating to the scaling of international sales and management's belief that significant opportunity lies ahead for Decibel's operations, expectations that demand for Decibel's products will grow; the ability of Decibel to extend its product offering to new countries and create a global footprint, including anticipation of incremental international volumes, new contracts, new GACP cultivators onboarded, increasing value-add services, and the anticipated contributions from these activities, and the timing thereof; Decibel's expectations relating to completion and timing of the Creston Facility sale; statements relating to the expansion of production of EU GMP extracts to meet increasing demand; statements relating to Decibel's expectations that demand will increase generally; Decibel's expectation and belief that international sales are positioned for significantly high double-digit growth through 2026; the Company's marketing efforts and brand expansion, and the expected benefits therefrom; and its other business plans and expectations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections or other factors should they change, except as required by law.

Forward-looking statements and FOFI (as defined herein) are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to delays, regulatory changes and impacts; capital requirements; the ability to obtain and maintain licences to retail cannabis products; the ability to successfully market and sell its products domestically and internationally; the ability for the Company to continue successful relationships with international customers and GACP cultivators; review of the Company's production facilities by Health Canada and maintenance of licences (including any amendments thereto) from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; including the imposition of levies and tariffs, and the general impact of such policies on the broader economy; the risk that the Company may not be able to meet consumer demand; the risk that the Company may not improve its operational capacity when anticipated or at all; the risk that Decibel may not remain in compliance with its financial covenants for the remainder of its twelve-month forecast period; the risk that the Creston Facility sale is delayed or is not completed; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSX Venture Exchange, as applicable. Many of these risks and uncertainties and additional risk factors are described in the Company's MD&A for the year ended December 31, 2025, which is available under the Company's profile at www.sedarplus.ca.

With respect to forward-looking statements and FOFI contained in this news release, Decibel has made assumptions regarding, but not limited to: growth of the brand and recognition in Canada will lead to growth internationally; demand for Decibel's products; Decibel's ability to enter new markets and industry verticals; Decibel's ability to attract, develop and retain key personnel; Decibel's ability to raise additional capital and to execute on its expansion plans; the timelines for new product launches; Decibel's ability to continue investing in infrastructure and implement scalable controls, systems and processes to support its growth; the impact of competition; the changes and trends in Decibel's industry or the global economy; the Company's ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or at all; the general economic, financial market, regulatory and political conditions in which the Company operates; the ability of the Company to ship its products and maintain supply chain stability; the continued relationships with the Company's international customers and GACP cultivators, and the successful expansion of EU GMP extracts and related growing demand for such extracts; consumer interest in the Company's products; anticipated and unanticipated costs; government regulation of the Company's activities and products; the timely receipt of any required regulatory approvals; the Company's ability to conduct operations in a safe, efficient and effective manner; the Company's construction plans and timeframe for completion of such plans; and the changes in laws, rules, regulations, and global standards.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date hereof and Decibel does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

Preliminary Financial Information

Any financial outlook or future oriented financial information (in each case "FOFI") contained in this news release regarding the Company's prospective financial position, including, but not limited to Net Revenue, international sales and Adjusted EBITDA projections relating to Q2, 2026 and full year 2026 guidance in this news release, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of Company of the relevant information that is currently available.

The Company's anticipated financial results, including, but not limited to, Net Revenue, international sales and Adjusted EBITDA (see "Non-GAAP Financial Measures" above) assumes, among other things: (i) relative stability in interest rates; (ii) limited relative deterioration in foreign exchange rates due to ongoing and evolving trade and tariff policies; (iii) limited overall impact to the Company's costs resulting from trade and tariff policies and from other geopolitical factors, including conflict in the Middle East; (iv) limited overall impact to domestic and international demand for our products resulting from the broader economic impacts from trade and tariff policies, and related uncertainty; (v) the Company's ability to strengthen its domestic competitive position; (vi) the growth of domestic sales for the Company's products, including, but not limited to, the Standard Issue brand, refreshed vape portfolio, and reinvigorated flower offering; and (vii) the Company's international outlook, including, but not limited to, its ability to maintain its international customers, GACP cultivators, flower processing capacity, and EUGMP extract demand. The actual results will likely vary from the amounts set forth herein and such variations may be material.

The Company's anticipated financial results are unaudited and preliminary estimates that: (i) represent the most current information available to management as of the date of this news release; (ii) are subject to completion review and audit procedures that could result in significant changes to the estimated amounts; and (iii) do not present all information necessary for an understanding of the Company's financial condition as of, and the Company's results of operations for, such periods. The anticipated financial results are subject to the same limitations and risks as discussed under "– Forward-Looking Statements" above. Accordingly, the Company's anticipated financial results for such periods may change upon the completion and approval and audit of the financial statements for such periods and the changes could be material.

SOURCE Decibel Cannabis Company Inc.

For More Information Contact: Decibel Cannabis Company Inc., [email protected], 1-844-993-4769