PEI Cannabis Annual Report 2025

FOR THE YEAR ENDED MARCH 31, 2025 2025 ANNUAL REPORT PEI CANNABIS MANAGEMENT CORPORATION

PEICMC WHAT GUIDES US

CORPORATE VISION To be the preferred source of adult use cannabis.

MISSION STATEMENT To provide customers with a retail experience that exceeds their expectations, foster an internal culture of engagement and wellness, and create value for all stakeholders. STRATEGIC PILLARS Business Results: To become a key contributor to PEI’s general revenue through business excellence and the continuous improvement in operational effectiveness and efficiency. Customer Experience: To achieve and maintain high levels of customer satisfaction through sales channel accessibility, technical innovation, merchandising value, and high responsiveness to customer preferences. Corporate Social Responsibility: To be an excellent corporate citizen with high brand equity achieved through the promotion of responsible cannabis consumption, ongoing stakeholder engagement, and internal Corporate Social Responsibility campaigns. People & Culture: To foster a high-performing, customer-focused culture of engaged employees through open communication, learning & development, safe work environments, and overall wellness.

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CORPORATE VALUES Teamwork: Always succeeding together.

Passion: Having fun going the extra mile.

Accountability: Reliably delivering on our commitments.

Education: Continuously learning.

Empathy: Everyone is important.

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PEICMC 2024-2025 Annual Report

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PEICMC 2024-2025 Annual Report

TABLE OF CONTENTS

PEICMC - What Guides Us

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Table of Contents

3 4 4 5 6 7 7 7 7 7 8

Message from the Minister Message from the Chair Message from the CEO Corporate Governance

Mandate of the PEI Cannabis Management Corporation Board

Accountability to Government and the Public

Appointment of Board Members Responsibilities of Board Members

Audit Committee Organizational Chart Executive Summary

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Sommaire

11

Operational Overview

12 12 16 18

Strategic Target - Business Results Strategic Target - Customer Experience

Strategic Target - Corporate Social Responsibility

Strategic Target - People & Culture

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PEI Cannabis Outlets

21

Featured Producer - Canada’s Island Garden

22 24 25 26 26

Store Of The Year - O’Leary Management’s Report

Appendix

Auditor’s Report and Audited Financial Statements

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PEICMC 2024-2025 Annual Report

MESSAGE FROM THE MINISTER

The Honourable Antoinette Perry Lieutenant Governor of Prince Edward Island 1 Terry Fox Drive Charlottetown, PE C1A 0E8

May It Please Your Honour:

Pursuant to the PEI Cannabis Management Corporation Act and as Minister designate, it is my privilege to submit the 7th Annual Report of the Prince Edward Island Cannabis Management Corporation.

Respectfully submitted,

Honourable Jill Burridge, Minister of Finance

MESSAGE FROM THE CHAIR

The Honourable Jill Burridge Minister of Finance 95 Rochford Street, Charlottetown, PE C1A 3T5

Minister:

In compliance with Section 15 of the PEI Cannabis Management Corporation Act , it is my honour to submit this 7th Annual Report of the Prince Edward Island Cannabis Management Corporation covering the period of April 1, 2024, to March 31, 2025.

Respectfully submitted,

John Abbott, Chair

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PEICMC 2024-2025 Annual Report

MESSAGE FROM THE CEO

Mr. John Abbott, Chair PEI Cannabis Management Corporation 3 Garfield Street Charlottetown, PE C1A 6A4

Dear Mr. Abbott,

It is my honour to present the Annual Report of the Prince Edward Island Cannabis Management Corporation (PEICMC) for the fiscal year ending March 31, 2025. This year has been one of steady momentum, continued innovation, and strong performance, driven by the dedication of our exceptional team and the trust of our customers across the province.

In fiscal 2025, we recorded total sales of $26.4 million, another year of growth that reflects both increasing consumer confidence and our commitment to excellence. Our net income reached $2.5 million, and our contribution of $4.0 million in excise tax revenue to the province once again highlights the important role PEICMC plays in supporting public services and programs. Upholding our mandate under the Cannabis Management Corporation Act and as laid out in the 2024 ministerial mandate letter, continues to be a core priority as we work to ensure legal cannabis is accessed safely and responsibly by islanders 19 years of age and older. Over the past year, we expanded our product offerings to meet diverse consumer needs while continuing to prioritize safety and education. Public awareness campaigns such as “Impaired is Impaired” and “Know Your Source” remain pillars of our social responsibility strategy, promoting safe consumption and reinforcing the importance of purchasing from legal, regulated sources. Our Stratford location, which celebrated its first full year of operation, has been a key part of our growth and our efforts to provide Island-wide access to safe cannabis while countering the illicit market. We continue to optimize our supply chain, strengthen vendor partnerships, and modernize our retail environments to enhance both efficiency and customer experience. Training and development remain core to our approach. Our knowledgeable staff are our most valuable asset, and we are committed to equipping them with the tools and knowledge they need to serve our customers with confidence and care. As we look to the future, our focus remains clear: to be the trusted, preferred source for adult-use cannabis on Prince Edward Island. We will continue to lead with responsibility, integrity, and innovation in everything we do.

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Thank you to all in our organization, board members and our partners for another successful year. It is my privilege to present the 2025 Annual Report on behalf of the PEI Cannabis Management Corporation.

Warm Regards,

Daniel MacDonald, Chief Executive Officer PEI Cannabis Management Corporation

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PEICMC 2024-2025 Annual Report

CORPORATE GOVERNANCE Corporate governance is the cumulative set of mechanisms, processes and relationships by which the Corporation is controlled and operated. It defines the distribution of rights and responsibilities among different Corporation stakeholders (e.g. government shareholder, CMC Board Members, Senior Managers, auditors, regulators, etc.) and details the decision making framework related to the pursuit of corporate and policy objectives.

PEI CANNABIS MANAGEMENT CORPORATION BOARD Standing: Kate Shreenan - Recording Secretary, Ian Burge - Member, Ken Mill - Member

Seated: Daniel MacDonald - Chief Executive Officer, John Abbott - Chair, Nicole DesRoche - Vice Chair

Absent From Photo: Kelly Shea Rayner - Member, Murray Murphy - Commission Solicitor

EXECUTIVE MANAGEMENT TEAM Standing: Gerald O’Halloran - Director, Supply Chain & Property Management, Linda Somers - Director, Corporate Affairs & Regulatory Services, Shawn Alexander - Director, Human Resources & Employee Wellness Seated: Daniel MacDonald - Chief Executive Officer, Paul Crabbe - Director, Retail Operations & Strategic Development Absent From Photo: Matthew McMillan - Acting Chief Financial Officer

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PEICMC 2024-2025 Annual Report

MANDATE OF THE PEI CANNABIS MANAGEMENT CORPORATION BOARD

The duties of the PEICMC Board are to:

• Remain highly-engaged in PEICMC business affairs and evolving industry factors; • Make well-informed decisions in good faith and in a way that is impartial, fair, and ethical; • Manage or supervise the management of the PEICMC’s affairs including guiding policy decisions; • Approve the PEICMC’s budget, business plan, annual report, and financial statements; • Make, amend, or repeal bylaws; and • Exercise any additional responsibilities as defined within the regulations. ACCOUNTABILITY TO GOVERNMENT AND PUBLIC The PEICMC is held accountable to government and the general public through a range of measures including, but not limited to: • The PEICMC Annual Report which is tabled in the legislature and available to the public that includes comprehensive details on the PEICMC’s affairs and financial outcomes during the preceding year; • Annual audited statements by the auditor general or a qualified auditor appointed by the Board to be included in the annual report; • Public access to records under the Freedom of Information and Privacy Protection Act ; and • Publicly-appointed Board Members. APPOINTMENT OF BOARD MEMBERS The Lieutenant Governor in Council, through an Order-in-Council, appoints the members of the PEICMC board, establishes the honorariums, and designates the Chair. The board collectively designates the Vice-Chair from among its members. RESPONSIBILITIES OF BOARD MEMBERS • Acting honestly and in good faith in making decisions with a view to the best interests of the PEICMC and all its stakeholders; • Overseeing the management of the business affairs of the PEICMC; • Avoiding conflicts of interest; • Having adequate knowledge of the PEICMC’s business, how it is organized and how it functions; • Attending Board meetings and seeking professional advice where necessary; and • Providing guidance on policy development. AUDIT COMMITTEE The Audit Committee is elected annually and consists of three Board Members in addition to the Chair and the Executive Assistant as ex-officio. The Committee ensures the reliability and accuracy of the PEICMC’s financial statements, helps co-ordinate and improve internal control functions, and ensures the PEICMC adheres to sound corporate governance principles. Each Board member has individual responsibility for corporate governance including:

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PEICMC 2024-2025 Annual Report

ORGANIZATIONAL CHART * Shared-services agreement with the PEI Liquor Control Commission (PEILCC). ** For the period starting May 14, 2024 *** For the period starting December 19, 2024

HON. JILL BURRIDGE

Minister of Finance

JOHN ABBOTT

Chair

**

NICOLE DESROCHE

IAN BURGE

Member Vice Chair

Member

**

***

KELLY SHEA RAYNER

KEN MILL

Member

Member

*

*

DANIEL MACDONALD

KATE SHREENAN

Chief Executive Officer

Executive Assistant

*

*

Director, Corporate Affairs and Regulatory Services

LINDA SOMERS

MATTHEW MCMILLAN

Acting Chief Financial Officer

*

*

Director, Human Resources and Employee Wellness

Director, Supply Chain and Property Management

SHAWN ALEXANDER

GERALD O’HALLORAN

PAUL CRABBE

Director, Operations and Strategic Development

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PEICMC 2024-2025 Annual Report

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PEICMC 2024-2025 Annual Report

EXECUTIVE SUMMARY The Prince Edward Island Cannabis Management Corporation (PEICMC) is a crown corporation responsible for the administration of the PEI Cannabis Management Corporation Act and Regulations. The PEICMC operates under the branded name PEI Cannabis. A five-member Board appointed by the Lieutenant Governor in Council is responsible for the Corporation’s activities, and the Chair reports to the Minister responsible for PEI Cannabis. • to establish the necessary framework for socially responsible management of the distribution and sale of cannabis and related products; and • to facilitate and promote the responsible consumption of cannabis and related products in Prince Edward Island. PEI Cannabis expects to become a major force in the provincial economy over the medium to-long term, and during its sixth fiscal year it generated over $26.4M in total net receipts, thus continuing to make gains and disrupting the illicit market. A three-year strategic plan, complemented by an annual business plan, is the key mechanism to ensure PEI Cannabis is meeting its strategic objectives, and aligning itself with the key public policy priorities surrounding cannabis legalization. The mandate under the Cannabis Management Corporation Act has two primary purposes:

PEI Cannabis focuses on the following four (4) strategic areas to measure performance:

1. Business Results 2. Customer Experience 3. Corporate Social Responsibility 4. People & Culture

These strategic pillars, and the tactical initiatives developed within them, serve as a blueprint for incorporating the Vision and Mission Statements into day- to-day operations, the outcomes of which are explained in further detail in this report.

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PEICMC 2024-2025 Annual Report

SOMMAIRE La Société de gestion du cannabis de l’Île-du-Prince-Édouard (SGCIPE) est une société de la Couronne responsable de l’administration de la Cannabis Management Corporation Act (loi sur la Société de gestion du cannabis) de l’Île-du-Prince-Édouard et de son règlement d’application. La SGCIPE est exploitée sous le nom de marque Cannabis Î.-P.-É. Un conseil de cinq membres désignés par le lieutenant-gouverneur en conseil est responsable des activités de la Société. Sa présidente ou son président relève du ministre responsable de Cannabis Î.-P.-É. • établir le cadre nécessaire pour une gestion socialement responsable de la distribution et de la vente de cannabis et de produits connexes; • faciliter et promouvoir la consommation responsable de cannabis et de produits connexes à l’Île-du-Prince-Édouard. Cannabis Î.-P.-É. s’attend à devenir un levier important de l’économie de la province à moyen et à long termes. Au cours de son sixième exercice, il a généré un total de plus de 26,4 millions de dollars en recettes nettes, continuant à réaliser des gains et à perturber le marché illicite. Un plan stratégique triennal ainsi qu’un plan d’affaires annuel sont les mécanismes clés pour veiller à ce que Cannabis Î.-P.-É. atteigne ses objectifs stratégiques et se conforme aux priorités clés des politiques publiques entourant la légalisation du cannabis. Le mandat conféré à l’organisme par la Cannabis Management Corporation Act a deux objectifs principaux :

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Cannabis Î.-P.-É. met l’accent sur quatre domaines stratégiques pour mesurer le rendement :

1. Résultats opérationnels 2. Expérience client 3. Responsabilité sociale 4. Personnes et culture

Ces piliers stratégiques et les initiatives tactiques développées au sein de ceux-ci servent de plan directeur pour incorporer les énoncés de vision et de mission au sein des activités courantes. Les résultats de celles-ci sont décrits de manière détaillée dans le présent rapport.

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PEICMC 2024-2025 Annual Report

OPERATIONAL OVERVIEW PEI Cannabis has a 3-year Strategic Plan which guides its activities through to fiscal 2024-2025. The accomplishment of strategic goals is supported by an annual business plan that detail corporate objectives to be accomplished, and measurable targets used to evaluate the degree to which corporate objectives are being met. The following is an overview of the performance in each of the four (4) strategic pillars. STRATEGIC TARGET • BUSINESS RESULTS STRATEGIC TARGET To become a key contributor to PEI’s general revenue through business excellence and the continuous improvement in operational effectiveness and efficiency. CORPORATE OBJECTIVES 1. Grow sales revenues to continuously grow a top-line base for profitability and government transfers; 2. Grow top-line profitability on cannabis products through tactful pricing and supplier relations; 3. Continuously build on the effectiveness and efficiency of cannabis operations through strategic resource deployment; and 4. Grow output of total kilogram (kg) sales of dried cannabis equivalent weight to displace the illicit market.

Actual 2023-2024

Target 2024-2025

Actual 2024-2025

Target % 2024-2025

Target 2025-2026

PERFORMANCE MEASURES

Total Net Sales Revenue $24,966,165 $25,900,000 $26,419,622

102% $29,348,000

Gross Margin

27.4%

26.5%

26.9%

101.5%

26.4%

Net (Loss) Income

$3,035,779

$1,470,000 $2,454,995

167%

$2,390,400

General & Administrative Expenses

$5,000,762

$6,379,500 $5,702,603

89%

$6,378,500

Dried Cannabis Equivalent Sales

5,074 kilograms

5,262 kilograms

5,806 kilograms

6,200 kilograms

110%

Application of Net Receipts

Net Receipts

Beverages

Other Income

Accessories

Recognition of Capital Assets

2.05%

2.43%

0.43%

4.04%

Topicals

0.27%

Operating Expenses

Edibles

20.75%

5.79%

Seeds

0.13%

Ingested Extracts

3.28%

Infused Prerolls 5.91%

39.33%

Dried Flower

Concentrates

13.06%

77.20%

Suppliers

25.33%

Pre-Rolled

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PEICMC 2024-2025 Annual Report

Store by Store Net Sales Analysis

PEI CANNABIS STOREFRONT

Total Net Receipts

% of Sales Revenue

Charlottetown

$11,859,926

44.89%

Summerside

$6,455,355

24.43%

Stratford

$3,271,432

12.38%

Montague

$3,288,798

12.45%

O’Leary

$1,448,863

5.48%

Online

$95,248

0.37%

TOTAL

$26,419,622

100%

Average Basket Size by Location

CHARLOTTETOWN $37.87

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SUMMERSIDE

$39.13

O’LEARY

$42.12

MONTAGUE

$39.70

STRATFORD

$35.77

ONLINE STORE

$86.99

TACTICAL SUMMARY

PEI Cannabis acknowledges the continued presence of a well-established and sophisticated illicit cannabis market. This unregulated sector remains a significant part of the PEI landscape and benefits from lower operational costs, largely due to the absence of quality control standards and accountability to consumers and employees. Additionally, the Corporation recognizes the influence of consumer preferences that existed prior to legalization, and how these preferences continue to shape both current and future legal product offerings. To effectively compete with illicit sources, PEI Cannabis implemented strategic initiatives focused on excellence in category management, supply chain optimization, retail expansion, social responsibility, and risk management. PEI Cannabis is proud to have surpassed its sales and profitability targets for fiscal year 2025. More importantly, the Corporation has made meaningful progress in reducing the influence of the illicit market. Nonetheless, several key challenges and opportunities have been identified that will be critical to ensuring long-term sustainability.

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PEICMC 2024-2025 Annual Report

KEY HIGHLIGHTS

Category Management • Sustained strong partnerships with licensed producers ensuring reliable access to a wide selection of products with minimal disruption to retail operations. • Enhanced a competitive pricing strategy that aligns with public policy goals and PEI Cannabis’s corporate objectives, including reducing illicit market activity and promoting responsible sales. Since Legalization, PEI Cannabis expanded its product selection by introducing a diverse array of cannabis including mainstream, value, craft and organic from suppliers across PEI and Canada. • Under a continued formal shared services agreement with the PEILCC, PEI Cannabis upheld a robust supply chain infrastructure, ensuring uninterrupted retail operations. Risk Management • PEI Cannabis effectively managed risks associated with operational and capital expenditures to support the achievement of profitability targets. • Maintained optimal product inventory levels through SKU rationalization, FIFO (First-In, First-Out) inventory practices, and strategic timing of product calls. Supply Chain Management •

KEY OPPORTUNITIES & CHALLENGES

1. PEI Cannabis still has the potential to increase profitability despite competing with an illicit market that operates with significantly lower overhead costs. 2. Opportunities exist for ongoing enhancements in PEI Cannabis’s operations, supply chain, and systems infrastructure.

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PEICMC 2024-2025 Annual Report

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PEICMC 2024-2025 Annual Report

STRATEGIC TARGET • CUSTOMER EXPERIENCE

STRATEGIC TARGET

To achieve and maintain high levels of customer satisfaction through sales channel accessibility, technical innovation, merchandising value, and fast responsiveness to customer preferences.

CORPORATE OBJECTIVES

1. To provide an engaging retail experience that provides value to PEI Cannabis customers; 2. To facilitate ongoing displacement of the illicit market by attracting new customers; 3. To provide customers with a unique and diversified product offering that meets their evolving expectations; and 4. Adopt new merchandising tactics and engage employees in those new strategies to drive transactional sales growth.

Actual 2023-2024

Target 2024-2025

Actual 2024-2025

Target % 2024-2025

Target 2025-2026

PERFORMANCE MEASURES

Customer Experience Score

95%

95%

96%

101%

95%

Customer Counts

622,367

645,295

689,209

107%

725,000

Average SKU Assortment Size

725

725

657

90.62%

675

Customer Counts

% of Units Sold by Category

9.60% Infused Preroll

19.97%

Dried Flower

8.18%

Beverages

7.26%

Concentrates

1.45%

Accessories

28.23%

22.69%

Pre-Rolled

Edibles

April, 2024 • 54,933

May, 2024 • 56,461

June, 2024 • 56,641

July, 2024 • 63,408

August, 2024 • 65,204

September, 2024 • 56,492

October, 2024 • 59,583

November, 2024 • 56,237

December, 2024 • 58,020

January, 2025 • 55,946

February, 2025 • 49,727

March, 2025 • 56,557

2.37%

Clones & Seeds • 0.07% Topicals • 0.18%

Ingested Extracts

% of Cannabis Sales by Quality Type

% of Cannabis Sales by Type

16.02%

Craft

Not Applicable

0.56%

CBD Products

1.33%

0.56%

A/O

Multi Cannabinoid Products

5.74%

50.69%

Mainstream

Value

32.58%

92.37%

Organic • 0.16%

THC Products

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PEICMC 2024-2025 Annual Report

TACTICAL SUMMARY

To position itself as the preferred source for adult-use cannabis, PEI Cannabis has developed an accessible sales network and a well-curated product offering. This approach is guided by in-depth analysis of customer insights and is designated to deliver an educational and engaging retail experience. Store network design is informed by active stakeholder engagement, with careful consideration given to minimizing potential community impacts – such as youth exposure to cannabis. To maintain long-term interest and trust in its brand, PEI Cannabis has continued to implement strategic initiatives focused on sales channel design and customer service. While the organization has seen meaningful short-term progress in these areas, it has also identified key challenges and opportunities related to sustaining and deepening customer engagement and satisfaction over the medium to long term.

KEY HIGHLIGHTS

Sales Channel Design

• PEI Cannabis retail stores are designed to create a welcoming environment that provides a positive and enjoyable atmosphere.

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Customer Experience

• PEI Cannabis exceeded its customer count forecast for a seventh consecutive year, which is thought to be a positive measurement of the Corporation’s ongoing ability to compete and displace the illicit market. • PEI Cannabis staff receive regular training to keep pace with the ever changing cannabis industry in order to provide high quality customer service in our retail stores.

KEY OPPORTUNITIES & CHALLENGES

1. PEI Cannabis has observed substantial growth in the volume of total dried cannabis equivalency of products sold, which it feels represents ongoing opportunities for growth in the domestic market share. 2. New product classes present an opportunity for PEI Cannabis to meet evolving customer preferences and continue displacing the illicit market.

Stash your Stash. If you have a cannabis clone at home or are growing a cannabis plant in your home, always remember to pet proof your plants! Some pets love to play with or eat plants so that’s why it’s extremely important to always keep your plants out of reach of your furry friends.

3. There is a short product life cycle due in part to frequent rotation of new product innovations.

Stash your Stash. If you have a cannabis clone at home or are growing a cannabis plant in your home, always remember to pet proof your plants!

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PEICMC 2024-2025 Annual Report

STRATEGIC TARGET • CORPORATE SOCIAL RESPONSIBILTY STRATEGIC TARGET To be an excellent corporate citizen with high brand equity achieved through the promotion of responsible cannabis consumption, ongoing stakeholder engagement, and internal CSR campaigns. 1. To build mutually beneficial stakeholder partnerships that align with the PEICMC’s objectives; 2. Ensure cannabis is retailed in a responsible fashion that is educational in nature and aligns with the promotional restrictions; 3. Continuously improve the PEICMC’s reputation as an excellent corporate citizen among stakeholders; and 4. Adopt a rigid internal control framework for inventory management to ensure inventory shrinkage and potential diversion to the illicit market are mitigated as much as possible. CORPORATE OBJECTIVES

Actual 2023-2024

Target 2024-2025

Actual 2024-2025

Target % 2024-2025

Target 2025-2026

PERFORMANCE MEASURES

Retail Responsible Service Score

87%

85%

84%

98.8%

85%

Corporate Citizenship Survey Score 83.58%

85%

86.03% 101.2%

85%

TACTICAL SUMMARY

Demonstrating strong corporate citizenship through ethical and transparent business practices remains a core strategic priority for PEI Cannabis. The Corporation’s business strategy is firmly rooted in ongoing alignment with the key public policy objectives underpinning cannabis legalization which provides a shared foundation with its stakeholders. To be recognized as the preferred cannabis provider by the public, regardless of differing views on cannabis use, PEI Cannabis has implemented targeted initiatives in branding, social responsibility, and stakeholder engagement. While these efforts have yielded positive short-term results, the PEICMC has also identified important challenges and opportunities related to enhancing its reputation as a responsible corporate citizen that delivers long-term value for all stakeholders.

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PEICMC 2024-2025 Annual Report

KEY HIGHLIGHTS

Branding •

PEI Cannabis has built on its brand equity and remains firmly aligned with the public policy priorities of protecting youth, educating the public, and displacing the illicit market. • A key focus of PEI Cannabis’s branding strategy continues to be the enhancement of consumer education regarding the consumption of cannabis. In 2024, the PEICMC was directed to create a plan to dedicate 3% of the combined net profits of both the PEILCC and PEICMC to social responsibility initiatives, starting in the 2024–2025 fiscal year. This initiative generated contributions of $600,092 from the PEILCC and $213,666 from the PEICMC, for a total of $813,758. As part of this commitment, the PEICMC supported a variety of community organizations and programs, including Kari ride sharing initiatives, social responsibility radio campaigns, UPEI, Holland College, Credit Union Place, and T3 transit ads. • PEI Cannabis continued to participate on a national committee promoting responsible cannabis consumption, called the Canadian Cannabis Jurisdictional Leadership – Social Responsibility Subcommittee. • PEI Cannabis continues to build upon its Mystery Shop Program – a program that monitors compliance of responsible sales and a range of service factors related to the customer experience. Stakeholder Engagement • A sixth Corporate Citizenship Survey was initiated by PEI Cannabis to seek and obtain valuable feedback from its full range of external stakeholders. • Through positive relationships with supplier partners and fellow jurisdictional leadership groups, PEI Cannabis constantly contributes toward fostering an effective national cannabis industry focused on the public policy priorities that ushered in legalization. Charity of the Month Campaign The PEI Cannabis Management Corporation (PEICMC) presented donations to several charitable organizations as part of its new Round Up Campaign where the PEICMC would donate to a different charity each month. At the cash, customers are given the option to round up to the nearest dollar on their purchases to generate funds in support of a variety of charities. This initiative was very successful in its first year generating over $37,000 in total donations. PEICMC is committed to the communities it serves, and this campaign gives back to organizations that provide important support and assistance to Islanders. Social Responsibility •

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Full List of Charities:

• Canadian Mental Health Association of PEI • Santa’s Angels • Island Food Banks • Special Olympics of PEI • PEI Cancer Treatment Centre (via QEH Foundation) • PEI Humane Society

• Diabetes Canada • ALS Society of PEI • Make a Wish Foundation Canada • Island Shelters • QEH/PCH/IWK Foundations • Alzheimer’s Society of PEI

KEY OPPORTUNITIES & CHALLENGES

1. There are continued opportunities for PEI Cannabis to enhance public awareness and educational campaigns related to the risks and laws associated with cannabis use. 2. The continuation of a responsible service score conducted by mystery shoppers will be a key priority for fiscal 2026. 3. Through its Corporate Citizenship Survey, PEI Cannabis has various opportunities to ensure it can create value for its full range of stakeholders.

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PEICMC 2024-2025 Annual Report

STRATEGIC TARGET • PEOPLE & CULTURE STRATEGIC TARGET

To foster a high-performing, customer-focused culture of engaged employees through open communication, learning & development, safe work environments, and overall wellness.

CORPORATE OBJECTIVES

1. Always recruit, develop and retain the best people through fair labour relations and mobility opportunities; 2. Foster a culture of performance, communication, and engagement; 3. Establish and continuously promote a healthy, safe, and respectful workplace; and 4. Increase investment in employee training to always ensure a knowledgeable and confident workforce.

Actual 2023-2024

Target 2024-2025

Actual 2024-2025

Target % 2024-2025

Target 2025-2026

PERFORMANCE MEASURES

Staff Retention Rate

89.1%

95%

84.1%

88.5%

95%

Training Hours per Employee

N/A

80%

N/A

N/A

80%

Employee Wellness Rate

96.91%

98%

95.43%

97.4%

98%

TACTICAL SUMMARY

PEI Cannabis firmly believes that high-performing, knowledgeable, and engaged retail teams are essential to success in the adult-use cannabis market. Competing effectively with the illicit market requires delivering a superior retail experience – an effort that begins with investing in the PEICMC’c people. To support this, PEI cannabis continues to implement initiatives centered on Workplace Wellness, Employee Engagement, and Professional Development. These efforts have produced positive short-term results, most clearly reflected in the customer-focused service delivered by teams across PEI Cannabis retail locations.

KEY HIGHLIGHTS

Workplace Wellness • PEI Cannabis achieved 97.4% of its strategic target related to absenteeism due to injury or illness, which is viewed to be a top corporate success and one to build on through fiscal 2026.

Engagement •

PEI Cannabis partnered with PEI Liquor, the PEI Public Service Commission and external training providers through fiscal 2025 to facilitate comprehensive training programs for its retail teams. • Store managers continued to be provided with leadership training to ensure that they could foster engagement and continued success within their retail teams. • PEI Cannabis had continued success utilizing corporate performance planning, evaluation and coaching programs in fiscal 2025. Professional Success • Excellent outcomes around minimal staff turnover over fiscal 2025 is interpreted to be a good sign of a satisfied workforce that continues to view PEI Cannabis as a valued opportunity. • PEI Cannabis administers a corporate Development & Training fund available to all employees which seeks to foster mutual growth in its people and the organization. Also available to employees is the Public Service Commission/UPSE Development & Training fund. KEY OPPORTUNITIES & CHALLENGES 1. PEI Cannabis must continue to manage absenteeism due to injury or illness so it can preserve the health of its employees and effectiveness and efficiency of its operations. 2. The Corporation must continuously provide staff with educational support and growth opportunities to ensure a flexible, scalable, and engaged workforce.

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PEICMC 2024-2025 Annual Report

PEI CANNABIS OUTLETS

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PEI CANNABIS RETAIL STORES

ADDRESS

PHONE

O’Leary

478 Main St., O’Leary, PE C0B 1V0

902-859-0392

Summerside

447 Granville St., Summerside, PE C1N 3C4

902-438-4989

Charlottetown

85D Belvedere Ave., Charlottetown, PE C1A 6B2

902-569-7758

Stratford

9 Kinlock Road, Unit 310, Stratford, PE C1B 1L8

902-370-9333

Montague

509 Main St., Montague, PE C0A 1R0

902-838-0924

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PEICMC 2024-2025 Annual Report

WHAT IS CANADA’S ISLAND GARDEN’S COMPANY CULTURE LIKE?

to long-term careers—not just jobs. To foster transparency and teamwork, we host initiatives like “Coffee with the CEO,” where team members can learn more about the business, ask questions, and share ideas. We truly believe that it’s our people—and their collective contributions—that make us great. Canada’s Island Garden is more than a workplace. It’s a community, and we’re proud of the one we’ve created. TELL US ABOUT THE BRANDS UNDER CANADA’S ISLAND GARDEN. We’re proud to house three distinct brands under the Canada’s Island Garden umbrella—each with its own identity and audience. • FIGR is our flagship brand, which stands for Fresh Island Grown . It appeals to the traditional flower based consumer, with a strong focus on premium dried flower and pre-rolls in their true, uninfused form. This brand is rooted in our passion for cultivating clean, consistent, high-quality flower. • Riptides is our newest and boldest brand. Built around big flavour and big effects, it features both infused pre-rolls and vape products. Riptides was created for consumers looking for elevated potency

At Canada’s Island Garden, we take tremendous pride in the team we’ve built and the culture we’ve cultivated. As we emerge from what has been a challenging period for the cannabis industry overall, we’re proud to be growing sustainably and offering new roles and opportunities for advancement—especially for Islanders. Our culture is grounded in kaizen (constant improvement), respect, collaboration, and celebrating our shared success. We are proud to have over 170 full-time employees, which includes over 150 at our facility in PEI and a 20-person commercial team that spans across the country. We host monthly “Go Connects,” where our team gathers over food and drinks from local restaurants and breweries to connect outside the day-to-day. We also prioritize giving back—supporting local charities and events like Motionball, Moo! Let’s Talk, Santa’s Angels, and various golf tournaments throughout the year. Every permanent staff member receives year-round employment and access to a paid benefit plan and gym memberships for team members and their families. We also support a number of training and educational opportunities for our team—reflecting our commitment

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PEICMC 2024-2025 Annual Report

WHAT R&D OR TECHNOLOGY IS CANADA’S ISLAND GARDEN INVESTING IN FOR THE FUTURE? Our R&D efforts are focused on continuous improvement in both cultivation and operations. Each year, we expand capacity by 20–30%—but equally important is the work we do to optimize performance within our existing footprint. We’re constantly fine tuning environmental conditions—like lighting, humidity, and airflow—and improving cultivation methods to maximize plant health and yield. These refinements have allowed us to increase production without compromising sustainability or product quality. It’s this mindset—always striving to do better—that has helped drive our growth. HOW DOES CANADA’S ISLAND GARDEN ENSURE CONSISTENCY AND QUALITY IN ITS PRODUCTS? We control every aspect of our growing and production process in-house, using strict quality management protocols at every step. Throughout the plant’s lifecycle, we ensure consistent growing conditions, maintain rigorous environmental monitoring, and conduct comprehensive batch testing for cannabinoid content, purity, and terpene profiles. We pair experience with data to ensure repeatable excellence across our product lines. Our team is passionate about the products that we make and the culture of kaizen that we have built. Our commitment to quality is foundational, and it shows in the trust we’ve built with consumers nationwide. WHAT DOES IT MEAN TO BE AN INDEPENDENTLY OWNED COMPANY IN PEI? Being independently owned and operated in PEI means everything to us. We’re deeply rooted in this community, and we believe in building something that reflects our values as proud Islanders. Our decisions are made locally, by people who care—not in corporate boardrooms thousands of miles away. We’re proud to provide meaningful employment to Islanders and to represent our province on the national and international stage. As Canada’s Island Garden continues to grow, we remain grounded in our identity as an Island business, and proud of what we’ve achieved together.

and unique sensory experiences.

• Piper’s Punch is our value brand, specializing in high-quality, pre-milled flower blends. These curated blends are made from our own in-house flower, offering great taste, convenience, and affordability—making it easy for consumers to enjoy great product at a great price point. Each brand plays a key role in our portfolio, allowing us to connect with a broad range of consumers across Canada—and now globally. HOW HAS CANADA’S ISLAND GARDEN CHANGED/GROWN IN THE LAST FIVE YEARS? Over the past five years, Canada’s Island Garden has experienced remarkable transformation. Originally founded by Edwin Jewell as a locally owned company in Prince Edward Island, we were later acquired by a U.S.-based publicly traded company that invested significantly in our facility. When that parent company encountered financial difficulties in late 2020, a group of island-based entrepreneurs worked collaboratively with senior leadership to bring the company back to local, independent ownership. With a deeply committed and passionate team behind us, we have since rebuilt and redefined ourselves—growing sustainably and scaling with intention. Today, Canada’s Island Garden products are available in every single province and territory across Canada, and we’re proud to be a Top 10 company in some of the country’s largest cannabis categories. We’ve also entered the international market with monthly product shipments to Germany, marking our evolution into a global cannabis company, based right here in PEI. HOW DO YOU SEE THE CANNABIS INDUSTRY EVOLVING IN THE NEXT 3–5 YEARS? We see continued consolidation across the industry as operators look to become more efficient and competitive. At the same time, the demand for high-quality products—both domestically and internationally—is only growing. Canada is well positioned to lead on the global stage, and we’re already participating in that opportunity. With our recent entry into the German market, we’re excited about continued expansion and see global markets as a major growth frontier for the Canadian cannabis industry. Companies that focus on quality, consistency, and strong brand differentiation will thrive.

PLEASE CONSUME RESPONSIBLY

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PEICMC 2024-2025 Annual Report

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PEICMC 2024-2025 Annual Report

MANAGEMENT’S REPORT

Mr. John Abbott, Chair PEI Cannabis Management Corporation 3 Garfield Street, Charlottetown, PE C1A 6A4

Dear Mr. Abbott:

The preparation of financial information is an integral part of management’s responsibilities, and the accompanying Financial Statements are the responsibility of PEI Cannabis Management Corporation. This responsibility includes the selection of appropriate accounting policies and making judgments and estimates consistent with International Financial Reporting Standards. • PEI Cannabis maintains an accounting system and related controls providing: • Reasonable assurance that transactions are executed and recorded as authorized; • That assets are properly safeguarded and accounted for; and • That financial records are reliable for the preparation of financial statements in accordance with International Financial Reporting Standards (IFRS). Financial information presented elsewhere in this Annual Report is consistent with that in the financial statements.

PLEASE DON’T DRIVE IMPAIRED

Respectfully submitted,

Daniel MacDonald, Chief Executive Officer

Matt McMillan, Acting Chief Financial Officer

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PEICMC 2024-2025 Annual Report

INDEPENDENT AUDITOR'S REPORT

To the Directors of Prince Edward Island Cannabis Management Corporation Opinion

We have audited the financial statements of Prince Edward Island Cannabis Management Corporation (the Corporation), which comprise the statement of financial position as at March 31, 2025, and the statements of changes in equity, profit or loss and cash flow for the year then ended, and notes and schedules to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as at March 31, 2025, and the financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Corporation's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Corporation's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. (continues)

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PEICMC 2024-2025 Annual Report

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: � Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. � Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. � Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. � Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Corporation to cease to continue as a going concern. � Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

PLEASE CONSUME RESPONSIBLY

MRSB CHARTERED PROFESSIONAL ACCOUNTANTS INC.

Charlottetown, PE June 27, 2025

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PEICMC 2024-2025 Annual Report

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Statement of Financial Position March 31, 2025 PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Statement of Financial Position March 31, 2025

2025

2024

2025

2024

ASSETS

ASSETS

Current Cash Current Cash

$ 2,799,275

$ 2,017,293

$ 2,799,275 265,698 2,145,102 265,698 2,145,102 4,347

Accounts receivable (Note 5) Accounts receivable (Note 5) Inventory (Note 6) Prepaid expenses Inventory (Note 6) Prepaid expenses

$ 2,017,293 269,441 2,322,711 269,441 2,322,711 500

4,347

500

5,214,422 3,593,385

4,609,945 3,980,406

Property and equipment (Schedules 1 and 2) Property and equipment (Schedules 1 and 2)

5,214,422 3,593,385

4,609,945 3,980,406

$ 8,807,807

$ 8,590,351

$ 8,807,807

$ 8,590,351

LIABILITIES

Current Accounts payable and accrued liabilities (Note 7) Current Accounts payable and accrued liabilities (Note 7) Deferred revenue Due to Province of Prince Edward Island (Note 8) Current portion of lease liabilities (Note 9) Deferred revenue Due to Province of Prince Edward Island (Note 8) Current portion of lease liabilities (Note 9)

LIABILITIES

$ 3,197,907

$ 2,251,228

20,965

16,238

$ 3,197,907 4,062,277

$ 2,251,228 4,615,720

20,965 4,062,277 238,800 7,519,949 1,287,858

16,238

238,800

238,800

4,615,720 238,800 7,121,986 1,468,365

7,519,949 1,287,858

7,121,986 1,468,365

Lease liabilities (Note 9)

$ 8,807,807

$ 8,590,351

Lease liabilities (Note 9)

$ 8,807,807

$ 8,590,351

Contractual obligations (Note 10)

Contractual obligations (Note 10)

On behalf of the Board _____________________________ Chair _____________________________ Director Notes 1 to 18 are an integral part of these financial statements 3 On behalf of the Board _____________________________ Chair _____________________________ Director Notes 1 to 18 are an integral part of these financial statements 3

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PEICMC 2024-2025 Annual Report