PEI Cannabis Annual Report 2025

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Notes to Financial Statements Year Ended March 31, 2025

15. FINANCIAL INSTRUMENTS The Corporation applies IFRS 9 when accounting for its financial instruments. IFRS 9 specifies how an entity should classify and measure financial assets and financial liabilities. The carrying amounts presented in the statement of financial position relate to the following categories of financial assets and liabilities: 2025 2024

Financial assets Financial assets measured at amortized cost Accounts receivable

$ 265,698

$ 269,441

265,698

269,441

Financial assets measured at fair value through profit or loss

2,799,275

2,017,293

$ 3,064,973

$ 2,286,734

2025

2024

Financial liabilities Other financial liabilities measured at amortized cost Non-current Lease liabilities

$ 1,287,858

$ 1,468,365

1,287,858

1,468,365

Current Accounts payable and accrued liabilities Current portion of lease liabilities Due to Province of Prince Edward Island

3,197,907 238,800 4,062,277 7,498,984

2,251,228 238,800 4,615,720 7,105,748

$ 8,786,842

$ 8,574,113

16. FAIR VALUE Financial assets and liabilities are measured at fair value on initial recognition except for certain related party transactions. Measurement in subsequent periods is based on fair value through profit and loss or at amortized cost using the effective interest rate method. Financial assets and liabilities recorded in the statement of financial position at fair market value are categorized based on the fair value hierarchy of inputs. The Level 1 hierarchy is unadjusted quoted prices in active markets for identical assets and liabilities. This level of inputs is used to measure the fair value of cash. Fair value for accounts receivable, accounts payable and accrued liabilities, amounts due to/from related parties approximate their carrying amounts due to their short term natures. The fair value of lease liabilities are not materially different from their carrying value as there has not been a significant fluctuation in interest rates.

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PEICMC 2024-2025 Annual Report

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