4Front Announces Fiscal Year 2019 Fourth Quarter and Year End Financial Results, Preliminary First Quarter 2020 Results and Business Update.

PHOENIX: 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) ("4Front" or the "Company") today announced its audited financial results for the fourth quarter and Fiscal Year 2019 and preliminary results for the First Quarter of 2020.

The Company's 2019 financial statements consolidate results from 4Front Holdings LLC ("4Front Holdings") and Cannex Capital Holdings, Inc. ("Cannex"), which completed a merger on July 31, 2019. Cannex operations are included from July 31, 2019, through December 31, 2019.

Fourth Quarter and Fiscal 2019 Financial Results Highlights

Total Systemwide Pro Forma Sales, a non-IFRS measure, for the fourth quarter 2019 increased 525% year-over-year and 4% quarter-over-quarter to $17.5m. Total Systemwide Pro Forma Sales for 2019 increased 786% year-over-year to $63.5m.

IFRS Sales for fourth quarter 2019 increased 361% year-over-year and 6% quarter-over-quarter to $12.9m.

Adjusted EBITDA, a non-IFRS measure, for the fourth quarter was a loss of $5.4m. Adjusted EBITDA for 2019 was a loss of $20.9m.

The Company ended the fourth quarter of 2019 with $8.1m of cash and $87.3m in long-term and convertible debt.

Fourth quarter results include a non-cash impairment charge of $146.3m related to timing of the closing of the Cannex transaction. Higher industry stock prices at the date of the merger compared to stock prices at December 31, 2019 was the primary driver in the impairment of goodwill. The impairment is not reflective of any change to the Company's expectations for increased revenue and improved profitability.

First Quarter 2020 Preliminary Financial Results Highlights

Preliminary Total Systemwide Pro Forma Sales for the first quarter 2020 increased 36% quarter-over quarter to $23.8m.

Preliminary IFRS Sales for the first quarter of 2020 increased 37% quarter-over-quarter to $17.6m.

Gross profit, less the impact of adjustments for biological assets, for the first quarter was $9.7m.

Adjusted EBITDA for the first quarter was a loss of $3.8m.

Business Update

Robust consumer demand continues across all operating markets despite COVID-19. All states where the Company operates has deemed cannabis operations as "essential businesses" during the pandemic.

Company reaches a conditional resolution, subject to final commission approval, with the Massachusetts Cannabis Control Commission with respect to legacy regulatory issues. The Company expects the agreement, if approved, will clear the path for recreational licensing of its...