PEICMC Annual Report 2026

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