Overview

Target Group Inc. (the “Company”) is a Canadian company engaged in the cultivation, processing, and distribution of curated cannabis products for the medical and adult-use recreational cannabis market in Canada. The company has positioned itself with a focus on wholesale and co-packaging services to accommodate the sophisticated cannabis market in Canada and internationally.

Business and Plan of Operations

Cannabis Business in Canada

• The company sees a shift in the public’s perception of cannabis from prohibition to legalization, with Canada becoming the first major industrialized nation to legalize adult-use cannabis at the national federal level in 2018.
• The Canadian adult-use cannabis market is projected to reach between CAD$1.8 billion to CAD$4.3 billion in 2019, while the medical cannabis industry experienced substantial growth since 2014.
• The company’s product manufacturing will include cannabis flower pods, cannabis extract pods, pre-rolls, infused coffee and tea pods, infused beverages, edibles, topicals, and CBD wellness products.

Agreements

• The company has an exclusive distribution, collaboration, and licensing agreement with Serious Seeds, a Netherlands-based cannabis company, to distribute their proprietary cannabis strains and products in Canada and other legal markets globally.
• The company had a joint venture agreement with Thrive Cannabis to operate and manage the licensed cannabis cultivation facilities in Simcoe, Ontario. This joint venture was terminated in April 2023, and the company now owns 100% of the joint venture.
• The company entered into a debt purchase and assignment agreement with CL Investors in June 2020 to acquire certain debt owed by the company’s subsidiary, Canary.

Intellectual Property

• The company’s subsidiary, CannaKorp, holds several patents and proprietary rights related to cannabis vaporization technology and formulas.

Results of Operations

• The company has not generated significant revenue to date and is still in the early stages of its operations.
• As of March 31, 2025, the company had a working capital deficit of $9,928,112, and is actively seeking financing opportunities to meet its capital requirements.
• The company’s expenses primarily consist of advisory and consultancy fees, management fees, salaries and wages, legal and professional fees, and depreciation.

Liquidity and Capital Resources

• The company has relied on equity financing and related party debt financing for its operations, and anticipates that future operations will generate positive cash flows if it is successful in obtaining additional financing.
• The company’s cash balance decreased from $1,869,767 as of December 31, 2024, to $773,703 as of March 31, 2025, primarily due to loan repayments.

Outlook

• The company is exploring new opportunities at its Simcoe, Ontario cultivation facility to expand its product offerings in other cannabis-related consumer packaged goods (CPG) categories.
• The company is actively seeking joint venture partners and/or licensors to assist in marketing and launching its Wisp Vaporizer and Wisp Pods in the legal cannabis or hemp markets in the US and Canada.