DEA's Rescheduling of Cannabis will Boost Talarya Brands, which Reports Record Q1 Growth

Talarya Brands, a pioneering leader in the cannabis industry, today highlighted record-breaking financial and operational performance following the recent Drug Enforcement Administration (DEA) decision to reclassify marijuana from a Schedule 1 to a Schedule 3 substance. This pivotal shift in the regulatory landscape opens up substantial growth opportunities for the company.

Talarya Brands reported a record 26% increase in revenue year over year in Q1, with gross margins expanding by 770 basis points quarter over quarter. The company achieved a new sales record with $5.65 million in Q1 and generated $297,000 in positive cash flow from operations in March alone. And in a rarity for a California operator, Talarya has been consistently EBITDA positive, underscoring its strong financial discipline and operational efficiency.

The company's financial tailwinds, combined with its focus on distressed asset consolidation, make it well positioned to take advantage of the DEA's decision. The company expects the change in regulation to lead to a thawing of cannabis capital markets, make banking easier for the industry, and most notably, liberate the sector from the onerous IRS rule 280-E, which has unfairly required cannabis companies to pay a larger proportion of federal income tax than other businesses. The public markets responded overwhelmingly positively on the heels of the DEA news, with almost all cannabis equities trading sharply higher.

"Talarya Brands is uniquely poised to capitalize on the DEA's rescheduling of marijuana, which we view as a historic step forward for the industry," said Dustin Milner, CEO of Talarya Brands. "Our robust Q1 results reflect our strategic agility and our team's relentless focus on capitalizing on emerging opportunities while maintaining rigorous cost control. With the DEA's decision, we expect margins to grow, financing to become cheaper and ubiquitous, and investments in qualified operators to see healthier returns with lower risk."

Talarya operates with minimal financial encumbrance, free from any senior secured debt financing and with less than $1 million in secured equipment financing. The company's vape product line, including the 6th best-selling live resin cartridge in California, saw a 48% increase in sales year over year. This achievement is part of Talarya's broader success in the cannabis market, where it stands out as one of the few companies to be profitable on a pre-tax basis.