Climate Change Data

Environmental Metrics

Governance Achievements

• Established a Corporate Governance and Nomination Committee, a Compensation Committee, and an Audit Committee. All members of the Compensation Committee and the Audit Committee are independent.

Climate Goals & Targets

Environmental Challenges

• Compliance with applicable regulatory requirements in a highly regulated industry.
• Maintaining de facto control over Focus in accordance with IFRS 10.
• Maintaining government-issued cannabis licenses for various subsidiaries.
• Unexpected changes in governmental policies and regulations.
• Possible exposure to liability from litigation.
• Ability of third-party cultivators, suppliers, and distribution partners to fulfill obligations.
• Securing new supply and distribution partners.
• Maintaining sufficient insurance for operations.
• Implementing effective product security and storage measures.
• Raising additional funds.
• Managing cash flows.
• Inflation risks.
• Anti-money laundering laws and regulation risks.
• Operational impacts of the COVID-19 pandemic.
• Increasing competition.
• Inconsistent public opinion and perception regarding cannabis.
• Engaging in activities considered illegal under relevant laws, including U.S. federal law.
• Political instability and conflict in the Middle East.
• Conflict between Russia and Ukraine.
• Adverse market conditions.
• Competition from the illegal cannabis market.
• Industry consolidation.
• Uncertainty of production and cost estimates.
• Potential for future impairment losses.
• Currency and interest rate fluctuations.
• Global and local economic conditions.
• Costs of inputs.
• Reliance on management.

Mitigation Strategies

• Implementation of strict health and safety policies.
• Cost saving plan including reduction in payroll, compensation, and capital expenditures.
• Securing revolving credit facilities.
• Global supply chain development.
• Focus on brand recognition and vertical integration.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: EU-GMP

Third-party Assurance: Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global

Awards & Recognition

• German Brand Award 2021

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Negative cash flows from operating activities.
• Intense competition from other companies.
• Restrictions on promotion, marketing, and advertising.
• Rapid growth and substantial change in the cannabis industry.
• Vulnerability to political, economic, legal, social, regulatory, and military conditions affecting Israel and the Middle East.
• Doubt about the Company’s ability to continue as a going concern.
• Reliance on Israeli and German licenses.
• Reliance on licensed facilities in Israel and Germany.
• Reliance on various supply and distribution agreements with third-parties.
• Potential for contravention of Israeli cannabis regulations.
• Delays in obtaining regulatory approvals.
• Risks inherent in the agricultural business.
• Illegal market competition.
• Reputational risk to third parties.
• Failure of IT systems.
• Cybersecurity risks.
• Theft of personal information.
• Fluctuations in the price of cannabis products.
• Fraudulent or illegal activity.
• Corruption and anti-bribery law violations.
• Intellectual property infringement.
• Compliance with Canadian Stock Exchange and Nasdaq Capital Market rules and regulations.
• Significant sales of the Company’s listed securities.
• Potential dilution of shareholder holdings.
• Dependence on the earnings of subsidiaries and investees.
• Lack of dividend payments.
• Fluctuations in the market price of Common Shares and warrants.
• Failure to maintain effective internal controls.
• Lack of liquidity of securities.
• Potential debtor defaults.
• Inherent liquidity risk.
• Exposure to market risk (exchange rate and interest rate risk).
• Dependence on global capital markets to raise capital.
• Potential for judgments exceeding insurance coverage.
• Product liability claims.
• Litigation.
• Failure of quality control systems.
• Product recalls.
• Inaccuracies in forecasting market conditions.
• Impact of catastrophic events.
• Anti-money laundering compliance.
• Inability to effectively enforce security over underlying assets.
• Potential conflicts of interest.
• Loss of foreign private issuer status.
• Loss of emerging growth company status.
• Currency fluctuations.
• Price fluctuations in shareholdings in other entities.
• Political and social instability in Israel related to judicial and legislative reforms.
• Inability to successfully manage growth and integrate acquired businesses.

Mitigation Strategies

• Cost saving plan implemented to reduce expenses and improve efficiencies.
• Focus on growth in highest value markets (Israel and Germany).
• Exit from Canadian cannabis market.
• Implementation of security measures to mitigate inventory theft.
• Ongoing monitoring of developments and policies in foreign markets.
• Due diligence efforts in acquisitions and investments.
• Diversification of investments to manage price risk.
• Daily cash flow management and search for external funding.
• Compliance with applicable laws and regulations.
• Vigorous defense against legal claims.
• Implementation of preventative measures to minimize fraud and illegal activities.
• Maintenance of various types of insurance.
• Detailed procedures in place for testing finished products.
• Ongoing review of capital requirements.
• Implementation of a disciplined approach to spending and cost efficiencies.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: EU-GMP

Third-party Assurance: Kost Forer, a member of Ernst & Young Global

Awards & Recognition

• German Brand Award 2021

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Liquidity concerns due to operating losses and working capital deficit.
• Impact of the Israel-Hamas war on operations.
• Uncertainty surrounding the recoverability of assets and liabilities due to going concern issues.

Mitigation Strategies

• Cost-saving plan implemented in 2023, including workforce reduction and discontinuation of loss-making activities.
• Exploration of additional capital and financing sources.
• Focus on growth in Israel and Germany markets.

Supply Chain Management

Responsible Procurement

• Strategic alliances with Canadian suppliers.
• EU-GMP certified suppliers for German operations.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: EU-GMP (Adjupharm)