Half Year Report and Financial Results 2023

* 2023 Half Year Review of Operations * 2023 Half Year Financial Statements * 2023 Half Year Results Announcement 29 August 2023 Cannasouth Limited and Group CEO's Review of Operations For the six months ended 30 June 2023 The Cannasouth Group is solidifying its leadership position in the emerging New Zealand medicinal cannabis industry. The merger with Eqalis Group, completed on 31st May, represents a pivotal shift in our collective path. This merger provides the scale and momentum necessary to not only lead the New Zealand industry but also to be a competitive contender on the global stage. The accounting treatment adopted for the merger was a reverse takeover. Eqalis is regarded as the parent for accounting purposes i.e., Eqalis is the accounting acquirer of Cannasouth. The operating loss for the Group for the six months to 30 June 2023 was $3,546,495 (2022: $2,476,560). The result reflects the investment in positioning Cannasouth to be New Zealand's leading medicinal cannabis company. Cash on hand as at 30 June 2023 was $5.32 million (2022:$1.46 million). The board will look to undertake a dual listing on the ASX as a foreign exempt listing in the near term and will keep the market updated. HIGHLIGHTS FOR THE SIX MONTHS FEBRUARY 2023 Cannasouth (NZX:CBD) signed a binding term sheet with Bay of Plenty-based Eqalis Group New Zealand Ltd (Eqalis) to advance a potential 50:50 merger between the two companies. FEBRUARY 2023 Cannasouth settled the sale of non-core liquid filling assets of subsidiary Midwest Pharmaceutics. The investment reduced the need for the company to invest further capex. APRIL 2023 Shareholders of Cannasouth overwhelmingly approved the proposed merger with Eqalis at a Special Shareholder Meeting. MAY 2023 Cannasouth subsidiary Cannasouth Cultivation received its GMP Licence to Manufacture Medicines to produce dried cannabis flower. MAY 2023 Merger related capital raise closed, raising approximately $7.2 million. JUNE 2023 On 1 June 2023 the merger with Eqalis Group was completed. This resulted in Cannasouth having end-to-end GMP certified production, starting with dried cannabis flower, through to the manufacture of cannabis-based ingredients and medicinal cannabis products (oral solutions). JUNE 2023 Cannasouth Bioscience successfully exports its first commercial scale shipment of high-quality dried cannabis-flower to Australia. This signaled the commencement of Cannasouth's export program into Australia. JUNE 2023 Eqalis' first cannabis-based ingredient is successfully verified by the Medicinal Cannabis Agency (MCA) as meeting the NZ minimum quality standard. This achievement allows for local and export ingredient sales and is key to verifying future medicinal cannabis products. SUBSEQUENT ACTIVITY JULY 2023 Cannasouth Bioscience submitted product applications to MCA for Premium Dried Flower for prescription in New Zealand. AUGUST 2023 The MCA obtained approval for a series of modifications to the Misuse of Drugs (Medicinal Cannabis) Regulations 2019. The forthcoming regulatory changes are poised to have a significant impact on Cannasouth's growth trajectory and our industry competitiveness. AUGUST 2023 Cannasouth announces it intends to dual list on the ASX as a foreign exempt listing. This would widen and diversify Cannasouth's shareholder base by enabling Australian and other international investors to participate in the journey via ASX. In June 2023, Cannasouth exported its inaugural commercial-scale dried flower shipment to Australia, marking a pivotal step in our export journey. Following this sale, we secured an additional order for a further 120kg. The customer also holds a first right of refusal for an additional 150kg, expected to be shipped before the end of 2023. These orders underscore that our pathway to the Australian market is firmly established. The CEO Review of Operations covering the following topics is attached: o Capitalising on the Merger Benefits, o Phase Change: From Capability Building to Commercialisation, o Criticality of GMP Certification o Accelerated Commercialisation Journey o Getting Close to the Patient: A Core Strategy o Growth and Development of the Australasian Medicinal Cannabis Industry o A Focus on Innovation o Regulatory Changes o ASX Listing -ENDS- For further information visit www.cannasouth.co.nz or contact: Mark Lucas CEO / Managing Director Email: mark.lucas@cannasouth.co.nz Mobile: 021 484 649 Colin Foster CFO, Cannasouth Limited Email: colin.foster@cannasouth.co.nz Mobile: 027 577 1498 End CA:00417311 For:CBD Type:HALFYR Time:2023-08-29 16:13:04