PEICMC Annual Report 2026

PEI CANNABIS MANAGEMENT CORPORATION 2026 ANNUAL REPORT FOR THE YEAR ENDED MARCH 31, 2026

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. 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.

PEICMC 2025-2026 Annual Report | 1

TABLE OF CONTENTS

1 3 4 4 5 6

PEICMC - What Guides Us Table of Contents 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

7 7 7 7 7 8 10 11 12 12 15 17 19 21

• Appointment of Board Members • Responsibilities of Board Members • Audit Committee

• Organizational Chart • Executive Summary • Sommaire

Operational Overview

• Strategic Target - Business Results • Strategic Target - Customer Experience • Strategic Target - Corporate Social Responsibility • Strategic Target - People & Culture PEI Cannabis Retail Stores Charity of the Month Local Licensed Producer Performance Management’s Report Appendix • Auditor’s Report and Audited Financial Statements

22 23 25 26 26

PEICMC 2025-2026 Annual Report | 3

MESSAGE FROM THE MINISTER

The Honourable Dr. Wassim Salamoun 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 8th Annual Report of the Prince Edward Island Cannabis Management Corporation.

Respectfully submitted,

Honourable Jill Burridge, Minister of Finance and Affordability

MESSAGE FROM THE CHAIR

The Honourable Jill Burridge Minister of Finance and Affordability 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 8th Annual Report of the Prince Edward Island Cannabis Management Corporation covering the period of April 1, 2025, to March 31, 2026.

Respectfully submitted,

John Abbott, Chair

4 | PEICMC 2025-2026 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 pleasure to present the Prince Edward Island Cannabis Management Corporation’s Annual Report for the fiscal year ended March 31, 2026. The past year has been one of continued progress for PEICMC. In fiscal 2025–26, we achieved total sales of $28.8 million, net income of $2.6 million, and excise tax revenues of $ 3.9 million.

As a provincial Crown corporation, we remain committed to operating with integrity, accountability, and a strong sense of responsibility to Islanders. We continue to provide a safe, accessible, and well-regulated cannabis retail system while delivering valued financial returns to the Province and ensuring Islanders have safe access to legal cannabis products. This year, we focused on strengthening our retail operations, enhancing the customer experience, improving efficiency, and ensuring Islanders have access to a diverse selection of legal cannabis products. Responsible cannabis use and public health also remain central to our mandate, supported through responsible retail practices, education, and collaboration with our partners.

Our employees are at the heart of our success. Their knowledge, professionalism, and dedication are essential to serving Islanders and moving our organization forward.

Looking ahead, PEICMC will continue to build on our progress, embrace innovation, and adapt to an evolving retail environment. Above all, we remain committed to responsible stewardship and delivering a high standard of service to Islanders. I extend my sincere thanks to our employees, Board of Directors, suppliers, and community partners for their continued dedication and support. I am proud of what we have accomplished together and look forward to the opportunities ahead.

Warm regards,

Daniel MacDonald Chief Executive Officer Prince Edward Island Cannabis Management Corporation

PEILCC 2025-2026 Annual Report | 5

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: Ken Mill (Member), Kelly Shea Rayner (Member), Kate Shreenan (Recording Secretary), Brian MacPhee (Member) Seated: Daniel MacDonald (Chief Executive Officer), John Abbott (Chair), Ian Burge (Vice Chair) Absent from Photo: Murray Murphy (Commission Solicitor) EXECUTIVE MANAGEMENT TEAM

Standing: Paul Crabbe (Director, Operations & Strategic Development), Gerald O’Halloran (Director, Supply Chain & Property Management), Aaron Lawlor (Chief Financial Officer) Seated: Kate Shreenan (Corporate Operations Manager), Daniel MacDonald (Chief Executive Officer), Linda Somers (Director, Corporate Affairs & Regulatory Services)

Absent from photo: Kim Nickerson (Director, Human Resource & Employee Wellness)

6 | PEICMC 2025-2026 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 & PUBLIC • 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 Each Board member has individual responsibility for corporate governance including: • 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 consists of three Board Members and the Corporate Operations Manager 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. The PEICMC is held accountable to government and the general public through a range of measures including, but not limited to:

PEICMC 2025-2026 Annual Report | 7

ORGANIZATIONAL CHART

* Shared-services agreement with the PEI Liquor Control Commission (PEILCC). ** For the period starting Dec 16, 2025

Hon. Jill Burridge

Minister of Finance and Affordability

John Abbott

Chair

Brian MacPhee

Ian Burge

Vice Chair**

Member**

Kelly Shea Rayner

Ken Mill

Member

Member

Daniel MacDonald

Chief Executive Officer*

Corporate Operations Manager*

Kate Shreenan

Aaron Lawlor Chief Financial Officer*

Paul Crabbe Director, Operations & Strategic Development

Gerald O'Halloran Director, Supply Chain & Property Management*

Kim Nickerson Director, Human Resources & Employee Wellness*

Linda Somers Director,

Corporate Affairs & Regulatory Services*

8 | PEICMC 2025-2026 Annual Report

PEILCC 2025-2026 Annual Report | 9

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 mediumto long term, and during its eighth fiscal year it generated over $28.8M 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

10 | PEICMC 2025-2026 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 huitième exercice, il a généré un total de plus de 28,8 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 :

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

PEICMC 2025-2026 Annual Report | 11

OPERATIONAL OVERVIEW PEI Cannabis has a 3-year Strategic Plan which guides its activities through to fiscal 2026-2027. 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.

% of Target 2025 - 2026 98.14%

PERFORMANCE MEASURES Total Net Sales Gross Margin Net (Loss) Income General & Admin Expenses Dried Cannabis Equivalent Sales

Actual 2024 - 2025 $26,419,622 26.9% $2,454,995

Target 2025 - 2026 $29,348,000 26.4% $2,390,400

Target 2026 - 2027 $31,377,000 26.68% $2,730,900

Actual 2025 - 2026 $28,802,832 26.9% $2,644,182

101.89% 110.62%

97.85%

$6,241,304

$5,702,603

$6,378,500

$6,771,300

113.71%

7,050 kg

5,806 kg

6,200 kg

7,685 kg

Net Receipts

Dried Flower (33.98%) Pre-Rolled (24.13%) Concentrates (8.36%) Infused Pre-Rolls (11.97%) Other Income (3.8%) Vapes (6.32%) Edibles (5.7%) Ingested Extracts (2.61%) Beverages (2.31%)

Accessories (0.37%) Topicals (0.3%) Seeds (0.14%)

12 | PEICMC 2025-2026 Annual Report

Application of Net Receipts

Suppliers (77.14%) Operating Expenses (21.03%) Recognition of Capital Assets (1.83%)

Store by Store Net Sales Analysis

Total Net Receipts $ 12,632,899

% of Sales Revenue 43.86% 24.90% 13.27%

PEI Cannabis Storefront Charlottetown Summerside Stratford Montague O’Leary Online Cannabis Expo TOTAL

$7,171,298 $3,821,662 $ 3,431,259 $1,627,803 $ 99,538 $18,373 $28,802,832

11.91% 5.65% 0.35% 0.06% 100%

Average Basket Size by Location

Charlottetown

$39.38

Summerside

$40.16

O’Leary

$42.82

Montague

$40.62

Stratford

$37.91

Online

$89.93

PEICMC 2025-2026 Annual Report | 13

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 effectively compete with illicit sources, PEI Cannabis continues to implement strategic initiatives focused on excellence in Category Management, Supply Chain Optimization, Retail Expansion, and Risk Management. PEI Cannabis is proud to have surpassed its sales and profitability targets for fiscal year 2026. 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.

KEY HIGHLIGHTS

Category Management • Sustained strong partnerships with a diverse group of suppliers, ensuring reliable access to a wide selection of products. • Regularly review the product assortment to ensure it meets the evolving needs of our customers and reflects current market trends. • 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. Supply Chain Management • 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. Retail Expansion • PEI Cannabis remains committed to exploring retail expansion opportunities to improve safe access to regulated cannabis products and further reduce the influence of the illicit market. 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. 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.

14 | PEICMC 2025-2026 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.

% of Target 2025 - 2026

PERFORMANCE MEASURES Customer Experience Score

Actual 2024 - 2025

Target 2025 - 2026

Target 2026 - 2027

Actual 2025 - 2026

101.05%

96%

95%

95%

96%

Customer Counts

99.89%

689,209

725,000

753,000

724,170

Average SKU Assortment Size

81.48%

657

675

550

550

% of Units Sold by Category

Customer Counts

26.32% Pre-Rolled

3.42% Vapes

1.54% Ingested Extracts

22.53% Edibles

1.45% Accessories

17.69% Dried Flower

0.17% Topicals

11.76% Infused Pre-Roll

56,701

59,902

59,888

66,561

67,399

59,709

64,376

58,454

61,484

58,206

52,787

58,703

8.57% Beverages

0.12% Clones & Seeds

May

July

April

June

March

August

January

October

February

December

November

September

6.43% Concentrates

PEICMC 2025-2026 Annual Report | 15

Sales

Sales

% of Cannabis Sales by Quality Type

% of Cannabis Sales by Type

Craft (14.72%) Mainstream (59.04%) A/O (0.38%)

Balanced (3.2%) CBD Dominant (0.66%) CBD Only (1.03%) Multi Cannabinoid (1.66%) A/O (0.38%) THC Dominant (93.07%)

Organic (1.16%) Value (24.69%)

Cra ft

Mainstream A/O Organic Value

Balanced CBD Dominant

CBD Only Mul ti Cannabinoid A/O THC Dominant

TACTICAL SUMMARY

To position itself as the preferred source for adult-use recreational 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 designed to deliver an educational and engaging retail experience. 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. Customer Experience • PEI Cannabis exceeded its customer count forecast for eighth 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. With the introduction of Cannabis Vapes in November 2025, it reflects our commitment to enhancing our assortment and the overall customer experience. 2. New product categories and innovations present an opportunity for PEI Cannabis to meet evolving customer preferences and continue displacing the illicit market.

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

16 | PEICMC 2025-2026 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. CORPORATE OBJECTIVES 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.

% of Target 2025 - 2026

PERFORMANCE MEASURES

Actual 2024 - 2025

Target 2025 - 2026

Target 2026 - 2027

Actual 2025 - 2026

Retail Responsible Service Score

102%

87%

84%

85%

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—providing 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 Corporation 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.

PEICMC 2025-2026 Annual Report | 17

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. Social Responsibility The PEICMC is mandated to dedicate 3% of the combined net profits of both the PEILCC and PEICMC to social responsibility initiatives. This initiative generated contributions of $524,366 from the PEILCC and $223,870 from the PEICMC, for a total of $748,236. Through this commitment, the PEICMC supported a variety of community organizations and programs, including Kari ride share initiatives, social responsibility messaging and campaigns, UPEI, Holland College, Credit Union Place, and T3 transit ads. In July 2025, PEICMC in conjunction with PEILCC launched its Go Easy Campaign with the Slogan “Make Informed Choices When Consuming Alcohol and Cannabis” at the Cavendish Beach Music Festival, engaging Islanders and visitors with responsible cannabis consumption messaging. The campaign’s visibility was further enhanced through transit bus wraps and bus shelter advertisements. Since its launch, the message has been incorporated into a variety of promotional and awareness channels, including billboards, branded merchandise, and advertising campaigns, helping to reinforce responsible consumption messaging across the province. The Department of Health and Wellness received $25,000 in funding to support its "Just the Facts" initiative, which delivers public education and awareness campaigns on the health impacts of cannabis use, helping Islanders make informed decisions and encouraging responsible consumption. 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 Shopper Program – a program that monitors compliance of responsible sales and a range of service factors related to the customer experience. Stakeholder Engagement 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.

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 impartial mystery shoppers will be a key priority for fiscal 2027.

18 | PEICMC 2025-2026 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.

% of Target 2025 - 2026 108.9%

PERFORMANCE MEASURES Staff Retention Rate

Actual 2024 - 2025 84.1%

Target 2025 - 2026 95%

Target 2026 - 2027 95%

Actual 2025 - 2026 103.5%

136.60%

Training Hours per Employee

11.78

10

10

13.66

97.5%

Employee Wellness Rate

95.43%

98%

98%

95.55%

TACTICAL SUMMARY During the 2025-2026 fiscal year, the CMC demonstrated strong performance in employee retention and workforce development while maintaining a high level of employee wellness. Overall results reflect the organization's commitment to creating a stable, skilled, and supportive workplace environment. KEY HIGHLIGHTS Staff Retention The organization achieved a staff retention rate of 103.5%, exceeding the target of 95%. This exceptional result indicates strong employee engagement and organizational stability, reflecting the success of recruitment, retention, and employee-support initiatives. Maintaining a highly stable workforce contributes to operational consistency, knowledge retention, and the continued delivery of quality services. Learning & Development Investment in employee learning and professional development remained a key focus throughout the year. Employees completed an average of 13.66 training hours per employee, surpassing the target of 10 hours. This achievement demonstrates the organization's commitment to building workforce capacity, enhancing employee skills, and supporting ongoing professional growth. Increased participation in training opportunities helps ensure employees are equipped to meet current and future organizational needs. Employee Wellness The employee wellness rate was 95.55%, slightly below the target of 98%. Despite not fully reaching the target, the result reflects a strong overall level of employee well-being across the organization. CMC continued to support employee health through workplace wellness initiatives and programs designed to promote physical and mental well-being. Ongoing efforts will focus on strengthening wellness supports and identifying opportunities to further enhance employee health outcomes.

PEICMC 2025-2026 Annual Report | 19

Overall Performance

The 2025-2026 fiscal year was marked by positive outcomes in key workforce indicators. Staff retention and training participation exceeded organizational targets, demonstrating success in attracting, developing, and retaining employees. While employee wellness results fell slightly below target, performance remained strong and will continue to be a focus area for improvement in the coming year. These results position the organization well to maintain a capable, engaged, and high-performing workforce. 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.

20 | PEICMC 2025-2026 Annual Report

PEI CANNABIS RETAIL STORES

Charlottetown 85 Belvedere Ave Charlottetown, PE C1A 6B2 902-569-7758 cmccharlottetown@peicannabiscorp.com Montague 509 Main St, PO Box 1601, Montague, PE C0A 1R0 902-838-0924 cmcmontague@peicannabiscorp.com Summerside 447 Granville St Summerside, PE C1N 3C4 902-438-4989 cmcsummerside@peicannabiscorp.com

O’Leary 478 Main St, O’Leary, PE C0B 1V0 902-859-0392 cmcoleary@peicannabiscorp.com Stratford 9 Kinlock Road, Unit 310 Stratford, PE C1B 1LB 902-370-9333 cmcstratford@peicannabiscorp.com

PEICMC 2025-2026 Annual Report | 21

CHARITY OF THE MONTH The PEI Cannabis Management Corporation (PEICMC), in partnership with the PEI Liquor Commission (PEILCC), continued their Charity of the Month Campaign donating to several charitable organizations across the province. Funds for this initiative are raised through an in store program where the customer is asked if they would like to round up their purchase amount to the nearest dollar with the difference being donated to that months designated charity. This initiative was successful once again in its second year generating a combined $498,680 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.

FULL LIST OF CHARITIES:

• • • • • •

Canadian Red Cross ALS Society of PEI MADD Canada Island Shelters (5)

• • • • • •

Canadian Mental Health Association of PEI

Local Youth Initiatives (6) Island Food Banks (7) Special Olympics of PEI

QEH/PCH/IWK Foundations Alzheimer’s Society of PEI

Diabetes Canada PEI Humane Society

22 | PEICMC 2025-2026 Annual Report

LOCAL LICENSED PRODUCER PERFORMANCE Sales of products from local licensed producers continued to demonstrate strong growth in 2026, reaching nearly $8.2 million, a 30.2% increase over 2025. Unit sales also experienced significant growth, increasing 31.2% year over year to 291,164 units. The continued growth in both sales and unit volumes reflects strong consumer demand for locally produced cannabis products and the important role Prince Edward Island producers play in the legal retail market. Since 2024, sales of local products have increased by 67.3%, while unit sales have grown by 49.2%, highlighting sustained momentum and increasing customer support for locally produced offerings.

The 2026 results reinforce PEICMC’s ongoing commitment to supporting Prince Edward Island producers while providing customers with a diverse selection of high-quality local products.

$8.2M Total Local Sales

↑31.2% Increase vs 2025

↑30.2% Increase vs 2025

291,164 Total Local Units Sold

PEICMC 2025-2026 Annual Report | 23

24 | PEICMC 2025-2026 Annual Report

MANAGEMENT’S REPORT

Mr. John Abbott, Chair PEI Liquor Control Commission 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.

Respectfully submitted,

Aaron Lawlor, Chief Financial Officer

Daniel MacDonald, Chief Executive Officer

PEICMC 2025-2026 Annual Report | 25

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, 2026, 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, 2026, 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)

26 | PEICMC 2025-2026 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.

MRSB CHARTERED PROFESSIONAL ACCOUNTANTS INC. Charlottetown, PE June 25, 2026

PEICMC 2025-2026 Annual Report | 27

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Statement of Financial Position Year Ended March 31, 2026

2026

2025

ASSETS

Current

Cash Accounts receivable (Note 5) Inventory (Note 6) Prepaid expense

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

$1,632,193 273,694 2,961,836 1,865 4,869,588 3,137,968

5,214,422 3,593,385

Property and equipment (Schedules 1 and 2)

$8,807,807

$8,007,556

LIABILITIES

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

$2,625,389 25,909

$3,197,907 20,965 4,062,277 238,800

4,016,710 238,800

6,906,808 1,100,748

7,519,949 1,287,858

Lease liabilities (Note 9)

$8,007,556

$8,807,807

Contractual obligations (Note 10)

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

28 | PEICMC 2025-2026 Annual Report

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Statement of Financial Position Year Ended March 31, 2026

2026

2025

ASSETS

Retained earnings - beginning of year Net income (Statement 5)

$

- $2,644,182 2,644,182 (2,644,182)

$

- $2,454,995 2,454,995 (2,454,995)

Annual income distribution to Province of Prince Edward Island

Retained earnings - end of year

$

-

$

-

Notes 1 - 18 are an integral part of these financial statements

PEICMC 2025-2026 Annual Report | 29

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Statement of Profit or Loss Year Ended March 31, 2026

2026

2025

Revenues Sales

$28,802,832

$26,419,622

Cost of sales (Note 6)

21,055,806

19,314,191

Gross margin

7,747,026

7,105,431

Expenses Amortization of property and equipment (Schedules 1 and 2) Amortization of right-of-use assets (Schedules 1 and 2) Insurance and property taxes (Note 11)

304,798 195,595 104,579 51,690 207,605 5,987 276,087 4,611,582 381,402 7,827 94,152

317,313 195,595 105,906

Interest on lease liabilities (Note 9) Other operating expenses (Note 12) Rent Repairs and maintenance Salaries and benefits (Notes 11, 13) Store and office supplies Travel Utilities

58,292 261,091 3,952 288,289 4,049,632 303,840

27,244 91,449

6,241,304

5,702,603

Income from operations Other revenues (Note 14)

1,505,722 1,138,460

1,402,828 1,052,167

Net income

$2,644,182

$2,454,995

30 | PEICMC 2025-2026 Annual Report

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Statement of Cash Flow Year Ended March 31, 2026

2026

2025

Cash flows from operating activities Net income Items not affecting cash:

$2,454,995

$2,644,182

317,313 195,595

Amortization of property and equipment Amortization of right-of-use assets

304,798 195,595

2,967,903

3,144,575

Changes in non-cash working capital: Accounts receivable Inventory Prepaid expense

3,743 177,608 (3,847) 946,679 4,730

(7,996) (816,734) 2,482 (572,518) 4,944

Accounts payable and accrued liabilities Deferred revenue

1,128,913

(1,389,822)

4,096,816

1,754,753

Cash flows from investing activities

(125,888)

Purchase of property and equipment

(44,976)

Cash flows from financing activities Advances from the Province of Prince Edward Island Annual income distribution to Province of Prince Edward Island Repayment of lease liabilities

(553,443) (2,454,995) (180,508)

(45,567) (2,644,182) (187,110)

(3,188,946)

(2,876,859)

781,982 2,017,293 2,799,275

Increase (decrease) in cash Cash - beginning of year Cash - end of year

(1,167,082) 2,799,275 $1,632,193

Cash consists of: Cash on hand

$44,782 2,754,493

$44,782 1,587,411

Cash in financial institutions

$2,799,275

$1,632,193

Cash flow supplementary information Interest received Interest paid

$100,718 $58,292

$52,724 $51,690

Notes 1 - 18 are an integral part of these financial statements

PEICMC 2025-2026 Annual Report | 31

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Notes to Financial Statements Year Ended March 31, 2026

1. DESCRIPTION OF BUSINESS Prince Edward Island Cannabis Management Corporation (the "Corporation") is a wholly-owned Crown corporation of the Province of Prince Edward Island and is responsible for the distribution and sale of adult use cannabis throughout Prince Edward Island. The head office is located at 3 Garfield Street in Charlottetown with five retail outlets located across the province. 102173 P.E.I. Inc. was incorporated as a private company under the Companies Act of Prince Edward Island on December 28, 2017. This company was dissolved when the Cannabis Management Corporation Act was proclaimed on August 20, 2018, at which time all property of 102173 P.E.I. Inc. became the property of the Corporation and the claims, rights, liabilities, obligations and privileges of 102173 P.E.I. Inc. were transferred to and became vested in the Corporation. 2. BASIS OF PRESENTATION The financial statements have been prepared in accordance with, and are in compliance with, International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The principal accounting policies applied in the preparation of the financial statements are set out in Note 4. These financial statements were authorized for issuance by the Board of Directors on June 25, 2026. The Board of Directors have the power to amend the financial statements after issue. 3. BASIS OF MEASUREMENT The financial statements have been prepared on a historical cost basis and are presented in Canadian dollars, which is the functional currency of the Corporation. 4. SIGNIFICANT ACCOUNTING POLICIES Changes in accounting standards These financial statements have been prepared in accordance with IFRS, issued and in effect as of March 31, 2026. The significant accounting policies used in the preparation of these financial statements are summarized below. An overview of the standards, amendments, and interpretations on the conversion to IFRS, those adapted in the current year, and those which are issued but not yet in effect are presented below. Cash Cash is comprised of cash on hand and amounts on deposit with financial institutions. Accounts receivable Accounts receivable arise from trade sales and miscellaneous receivables. Amounts deemed uncollectible are written off and deducted from the carrying value of the receivable. Amounts subsequently recovered from accounts previously written off are credited to the allowance account in the period of recovery.

(continues)

32 | PEICMC 2025-2026 Annual Report

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Notes to Financial Statements Year Ended March 31, 2026

4. SIGNIFICANT ACCOUNTING POLICIES (continued) Inventory

Inventories are stated at the lower of cost and net realizable value on a first-in, first-out basis. Cost includes the costs to purchase, duty and excise taxes, and standard freight rates for goods received. Net realizable value represents the amount that may be realized from the sale of an inventory item under normal business conditions. When inventories are sold, the carrying amount of those inventories are recognized as an expense in the period in which the related revenue is recognized. The amount of any write-down of inventories to net realizable value and all losses of inventories shall be recognized as an expense in the period the loss or write-down occurs. The amount of reversal of any write-downs, arising from an increase in net realizable value, shall be recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs. Property and equipment Property and equipment is stated at cost less accumulated amortization and any impairment losses. All capital asset additions over $1,000 are capitalized. Property and equipment are broken down into components when the components are significant and have differing useful lives than the rest of the asset. Amortization is calculated on a straight-line basis at the following rates: Equipment 20% Computer equipment 20% Information systems 20% Computer software 50% Leasehold improvements 5% and 10% Right-of-use assets term of the lease One-half of the annual rate is recorded in the year of acquisition; no amortization is recorded in the year of disposal. Leases The Corporation recognizes right-of-use assets and lease liabilities for its leases except for certain classes of underlying assets in which the lease terms are 12 months or less or for low valued assets. Right-of-use assets are included in property and equipment on the statement of financial position. The amortization expense on right-of-use assets is based on amortization of the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Impairment The Corporation assesses, at each reporting date, whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired, and impairment losses are recorded, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event") and the loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

(continues)

PEICMC 2025-2026 Annual Report | 33