Herbal Dispatch Reports 2026 Second Quarter Financial Results

Vancouver, British Columbia--(Newsfile Corp. - September 1, 2026) - Herbal Dispatch Inc. (CSE: HERB) (OTCQB: LUFFF) (FSE: HA9) ("Herbal Dispatch" or the "Company"), a cannabis commerce and international distribution platform, today reported financial results for the three and six months ended June 30, 2026, highlighted by strong growth in its medical and international businesses, a 74% increase in quarterly gross profit, and an expansion in gross margin to 28.8%.

The results reflect the continued transformation of Herbal Dispatch toward higher-margin medical cannabis and international export channels, with the Company increasingly focused on the veteran medical market as a key driver of recurring revenue and future profitability.

CORPORATE HIGHLIGHTS

• Medical sales more than doubled in Q2 2026 to $0.9 million, driven primarily by rapid growth in the Company's veteran medical channel, which has reached a current annualized sales run rate of approximately $2.2 million.
• Export sales increased 45% year-over-year to $0.7 million in Q2 2026, reflecting continued growth in international markets and progress in the Company's global expansion strategy.
• Gross profit increased 74% to $0.75 million in Q2 2026, despite lower overall revenue, demonstrating the financial impact of Herbal Dispatch's shift toward higher-margin sales channels.
• Gross margin expanded to 28.8%, compared with 15.7% in Q2 2025 and 20.0% for the first six months of 2025.
• Entered into an exclusive strategic supply agreement with an EU-GMP licensed cannabis processor in Portugal, expanding Herbal Dispatch's capabilities and positioning the Company to pursue additional European market opportunities.
• Veteran medical remains a key growth engine, with the Company continuing to expand its customer base and associated recurring medical sales.
• The Company expects to begin generating positive quarterly adjusted EBITDA and operating cash flow on a consistent basis beginning in Q3 2026, assuming current medical and export growth targets are achieved.

FINANCIAL PERFORMANCE

The first six months of 2026 continues to mark an important transition period for Herbal Dispatch as the Company refocuses its business strategy on higher-margin medical cannabis, particularly the veteran channel, and international exports across existing and new markets.

As this transition progressed, direct-to-consumer medical net revenue increased to $0.9 million in Q2 2026, compared with $0.4 million in the prior year, representing growth of more than 100%. The increase was driven primarily by the veteran medical channel, which the Company believes represents its strongest near-term opportunity to grow revenue and improve gross margin. Year-to-date medical sales net revenue also more than doubled, increasing to $1.5 million from $0.75 million last year.

Export sales also grew in Q2 2026, increasing to $0.7 million from $0.5 million in the prior year. For the six months ended June 30, 2026, export sales were $0.8 million, compared with $1.0 million in the same period last year.

Growth in medical and export sales was offset by a reduction in recreational cannabis revenue and packaging and processing services. The Company reduced third-party branded consignment sales, which have historically generated Herbal Dispatch's lowest gross margins.

Overall revenue declined modestly as Herbal Dispatch deliberately reduced exposure to lower-margin recreational and third-party consignment sales. Despite lower revenue, gross profit increased to $0.75 million in Q2 2026 from $0.4 million in the prior year, representing a 74% increase. This improvement reflected stronger gross margin, which rose to 28.8% from 15.7% last year. For the six months ended June 30, 2026, gross margin also improved to 24.2% from 20.0%, driven by the sales mix shift toward higher-margin channels.

The Company's net loss was $0.7 million for Q2 2026, consistent with Q2 last year. However, Q2 2026 general and administrative expenses included $0.4 million of non-recurring investor relations costs related to a program completed during the quarter, which the Company had previously committed to following its Q4 2025 equity private placement. Excluding the $0.4 million non-recurring investor relations expense, interest expense and non-cash expenses including share-based compensation and depreciation, Herbal Dispatch was approximately break-even on an adjusted basis in Q2 2026.

VETERAN MEDICAL CHANNEL EMERGING AS A CORE GROWTH ENGINE

The Company's veteran medical channel continued to demonstrate strong momentum in Q2 2026, contributing to more than a doubling of medical sales year-over-year. Medical net revenue reached $0.9 million in Q2 and $1.5 million for the first six months of 2026, compared with $0.4 million and $0.75 million, respectively, in the prior-year periods.

With medical sales now representing an increasingly important component of the Company's revenue mix, Herbal Dispatch believes the veteran channel provides a significant opportunity to build recurring, higher-margin revenue while expanding its customer base within an established and growing market.

OUTLOOK

Herbal Dispatch enters the second half of 2026 with a business increasingly weighted toward higher-margin medical and international sales. The Company expects continued growth in its veteran customer base, expansion of associated medical sales, and further development of its export business to drive revenue and margin improvement.

With the Company's Q2 gross margin reaching 28.8%, medical sales exceeding $2.2 million on an annualized run-rate basis, and the non-recurring investor relations program completed, Herbal Dispatch believes it is approaching an important financial inflection point.

Once current medical and export growth targets are achieved, the Company expects to begin generating positive adjusted EBITDA and operating cash flow on a consistent quarterly basis in Q3 2026.

CONSOLIDATED FINANCIAL STATEMENTS

The Company's consolidated financial statements and management's discussion & analysis for the three and six months ended June 30, 2026 are available on the Company's profile on SEDAR+ at www.sedarplus.ca and will also be posted on the Company's website at www.herbaldispatch.com.

ABOUT HERBAL DISPATCH INC.

Herbal Dispatch Inc. is a leading operator of cannabis e-commerce platforms in Canada, delivering quality medical and recreational products to discerning consumers at competitive prices. Its flagship marketplace has earned trust as a premier destination for exclusive access to small-batch craft cannabis and a wide selection of curated cannabis products. The Company is also actively expanding through exports to international markets, positioning it for sustained growth and new revenue opportunities. The Company's common shares trade on the Canadian Securities Exchange under the symbol "HERB".

For further information:
Philip Campbell, CEO and Director
Email: [email protected]
Telephone: 1-833-432-2420

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this news release, including statements or information containing terminology such as "anticipate", "believe", "intend", "expect", "estimate", "may", "could", "will", and similar expressions constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, that address activities, events, or developments that the Company or a third party expect or anticipate will or may occur in the future, including the Company's future growth, results of operations, performance, and business prospects and opportunities are forward-looking statements.

These forward-looking statements reflect the Company's current beliefs and are based on information currently available to the Company. These statements require the Company to make assumptions it believes are reasonable and are subject to inherent risks and uncertainties.

Actual results and developments may differ materially from the anticipated results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond the Company's control. These risk factors are interdependent and the impact of any one risk or uncertainty on a particular forward-looking statement is not determinable. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected effects on the Company. These forward-looking statements are made as of the date of this news release. Except as required by applicable securities legislation, the Company assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.

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