Cautionary Statement Regarding Forward Looking Statements

When this report uses the words "we," "us," or "our," and the "Company," they refer to TREES Corporation (formerly, "General Cannabis Corp").

Our Products, Services, and Customers

Through our two reporting segments, Retail and Cultivation, we provide products to the regulated cannabis industry and its customers, which include the following:

Through our acquisition of SevenFive Farm in May 2020, we operate a 17,000 square foot licensed light deprivation greenhouse cultivation facility.

Discontinued Operations - Operations Consulting and Products

The following tables set forth, for the periods indicated, statements of operations data. The tables and the discussion below should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto in this report.

The addition of our Retail segment contributed to the significant increase in revenues for the three and six months ended June 30, 2022. See Segment discussions below for further details.

Stock-based compensation included the following:

The decrease in revenues for the three and six months ended June 30, 2022, over prior year is due to the decrease in overall market price of flower. The decrease in gross margin is due to overall increase in expenses due to inflation.

In April 2021, we received $2,300,000 in cash in a private placement with certain accredited investors pursuant to the 10% Notes to be used for the acquisition of dispensaries (See Note 7 of the accompanying unaudited condensed consolidated financial statements).

In February 2021, we received $1,660,000 in cash in a private placement with certain accredited investors pursuant to the 10% Notes (See Note 7 of the accompanying unaudited condensed consolidated financial statements).

Sources and uses of cash

Net cash provided by (used in) investing activities $ (182,792) $

Net cash provided by (used in) financing activities $ (552,873) $ 3,941,709

Net cash used in operating activities decreased in 2022 due to the acquisition of TREES Englewood, Trees Portland, Trees Waterfront and Trees MLK which provides positive operating cash flows and adjustments relating to non-cash activities.

Net cash provided by (used in) financing activities for the six months ended June 30, 2022, related to the payment on notes payable of $552,873.

The following table reconciles Adjusted EBITDA to the most directly comparable GAAP measure, which is net loss.

We currently have no off-balance sheet arrangements.

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