Decibel Cannabis Q2 2026 Update – $DB.v

Disclosure: I own shares in DB. I am not a professional. Please do your own due diligence.

Decibel Cannabis is a consumer-focused cannabis company with leading Canadian brands including General Admission, Qwest and Standard Issue. The company operates a processing and manufacturing facility in Calgary, a cultivation facility in Battleford, Saskatchewan, and an EU-GMP licensed cultivation and processing facility in Chatham, Ontario, with a growing international export business.

Price: $0.125 CAD

MC: ~76.3 million CAD (diluted)

EV: ~120.6 million CAD

1 year performance: -3.8%

Decibel reported Thursday before market open. Results were ahead of my expectations, and the stock was up approximately 8.7% to $0.125 today.

all numbers in CAD unless stated otherwise

• Revenue: $35.6M vs $29.8M (+19.3% YoY)

• Gross Profit: $18.1M vs $14.0M (+28.7% YoY)

• Gross Margin: 50.7% vs 47.0% (+370 bps YoY)

• Adjusted EBITDA: $7.8M vs $6.3M (+23.7% YoY)

• Adjusted EBITDA Margin: 21.9% vs 21.1% (+80 bps YoY)

• Revenue: $65.4M vs $51.1M (+28.1% YoY)

• Gross Profit: $33.2M vs $24.6M (+35.0% YoY)

• Gross Margin: 50.8% vs 48.2% (+260 bps YoY)

• Adjusted EBITDA: $14.7M vs $9.8M (+50.7% YoY)

• Adjusted EBITDA Margin: 22.5% vs 19.1% (+340 bps YoY)

• Canadian recreational sales (net of excise tax): $25.0M vs $23.7M (+5.6% YoY)

• Canadian recreational sales YTD (net of excise tax): $45.3M vs $42.7M (+6.0% YoY)

• International sales: $10.6M vs $6.1M (+72.1% YoY)

• International sales YTD: $20.2M vs $8.4M (+140.7% YoY)

• Decibel has exported to customers in seven international countries: Australia, Germany, United Kingdom, Israel, Spain, Denmark and Norway

• Germany: Received reorders for EU-GMP extracted products

• United Kingdom: Added multiple finished vape SKUs for customers

• International customers with executed supply agreements: 16+

• GACP cultivators with executed supply agreements: 50+

• International flower processing capacity: 60 tonnes per year

• International processing utilization: approximately 34%

• Potential international processing capacity: 120 tonnes per year

• Overall Canadian market share: 4.3%

• Decibel recreational cannabis market-share ranking: #6 at approximately 4.2% on a trailing basis

• Infused pre-rolls: General Admission remained the #1 infused pre-roll brand in Canada

• Pre-rolls: Decibel was the #3 LP overall

• Vapes: Decibel remained the #4 LP nationally

• Vape market share increased approximately 0.9 percentage points YTD

• Standard Issue vape market share: 2.9%, ranking #6 overall

• Standard Issue infused pre-roll market share: 2.8%, ranking #7 overall

• General Admission liquid-diamond 510 cartridges: #2 position

• General Admission liquid-diamond AIO products: #2 position

• Standard Issue 1g 510 distillate: #2 position

• AgMedica processing capacity is approximately 60 tonnes per year at 34% utilization

• Capacity can be expanded to approximately 120 tonnes with minimal capital expenditure

• Cultivation operations have been consolidated into Battleford and Chatham

• Creston is carried as an asset held for sale at $2.4M after a $3.4M impairment

• The original approximately $2.5M Creston property sale was terminated after quarter-end and they have re-listed Creston

• The company announced a 15:1 share consolidation that would reduce approximately 577.0M shares outstanding to approximately 38.5M shares

• Trading on a post-consolidation basis is expected on or around September 1, 2026, subject to TSXV approval

• Decibel is considering launching an NCIB following Q2 results and the share consolidation

  • No details yet on how much stock they might actually buy.

• International

  • International sales increased 72% to a record $10.6M and were up 141% YTD to $20.2M.

  • Improved German permit timelines allowed backlog to start converting into revenue, with further conversion expected through H2.

  • Decibel has 16+ international customers and 50+ GACP cultivators under executed agreements.

• International capacity

  • AgMedica has approximately 60 tonnes of annual processing capacity and was about 34% utilized in Q2.

  • Capacity can be expanded to approximately 120 tonnes with limited additional capital.

  • Decibel is expanding EU-GMP extract production for vapes and oils.

• Germany and UK

  • Germany reordered EU-GMP extracted products as permit timelines improved.

  • Multiple finished vape SKUs were added for UK customers.

• Domestic

  • Domestic sales increased 6% to $25.0M while overall market share remained around 4.3%.

  • Growth was driven by Standard Issue and the refreshed General Admission portfolio.

• Capital allocation

  • Shawn Dym was appointed Executive Chairman with a larger role in capital allocation, M&A and strategy.

  • Decibel is considering an NCIB after the 15:1 share consolidation, but no size or commitment has been announced.

• FY2026 guidance

  • Revenue guidance increased to $132M–$137M from $130M–$135M.

  • Adjusted EBITDA guidance increased to $28M–$32M from $27M–$31M.

  • The new revenue midpoint of $134.5M implies approximately 19% growth over 2025.

• International

  • Expect high-double-digit international growth through 2026.

  • Faster German permits should help them work through the backlog in H2.

  • AgMedica remains only about 34% utilized, with capacity expandable from 60 to approximately 120 tonnes per year.

• Domestic

  • They still expect high-single-digit domestic growth, helped by Standard Issue, General Admission and the refreshed vape and flower lineup.

I have DB at 4.3x EV/ttm EBITDA and about 7x EV/ttm FCF (excluding working-capital movements). These numbers get better looking forward from here. It goes without saying that DB isn’t expensive.

Decibel put up a better quarter than I was expecting, mainly driven by International revenue. I’m less worried about the balance sheet than I was before. Execution and what they do with the cash matter more to me now. I think the risk here has come down quite a bit.

The guide for the rest of year looks good from here. I imagine there will be some lumpiness to their international revenue, so that’s something to keep in mind from here. International is doing most of the heavy lifting on growth now, and that comes with a different set of risks.

The NCIB comments are encouraging, but I’m not counting on it yet. I have found that many management teams will anchor to a specific price, rather than the value added to shareholders. If their stock was trading at 4x FCF and had balance sheet issues, then it makes sense to repair the balance sheet. If the balance sheet issues are resolved and it’s trading at 10x FCF, then it still makes sense to repurchase shares even at a much higher share price. Time will tell if that is something Decibel is willing to do.

I continue to hold my position here. And look to add on weakness.

Thanks for reading my work.

Dean

long DB