Langley, British Columbia--(Newsfile Corp. - March 2, 2026) - Adastra Holdings Ltd. (CSE: XTRX) (FSE: D2E0) ("Adastra" or the "Company") announces that Adastra Labs Inc. ("Adastra Labs"), a wholly-owned subsidiary of the Company, has entered into an asset purchase agreement dated February 27, 2026 with an arm's length purchaser (the "Purchaser"), pursuant to which Adastra Labs has agreed to sell certain cryoethanol and hydrocarbon extraction and processing equipment as well as packaging and labelling machinery (collectively, the "Assets") to the Purchaser in consideration for $166,225 (the "Sale").

In connection with the Sale, the Purchaser and Adastra Labs have agreed to enter into a lease agreement pursuant to which the Purchaser agreed to lease the Assets back to Adastra Labs in consideration for an annual fee of $25,000 plus GST (the "Lease", and together with the Sale, the "Transactions").

The Transactions align with the Company's strategy to strengthen its balance sheet and reduce debt, while avoiding any material impact or disruption to its operations. The Transactions are expected to be completed shortly and remain subject to customary closing conditions.

The Company also announces that Mark Qvist has tendered his resigned as a director of the Company, effective February 28, 2026. The Company thanks Mr. Qvist for his contributions and wishes him the best in his future endeavors.

About Adastra Holdings Ltd.

Adastra has become one of Canada's leaders in the supply and manufacturing of ethnobotanical and cannabis products for lawful adult-use. It serves medical markets and engages in forward-looking therapeutic applications. With cannabis concentrate products sold through retailers at more than 2,000 locations across Canada, Adastra's Phyto Extractions and Endgame Extracts brands are now well established with a growing distribution presence. As a Health Canada licensed facility, it specializes in extraction, distillation and manufacturing of a range of cannabis-derived products. Adastra partners with healthcare professionals and practitioners within the regulated environment to create products suitable for the medical cannabis market, with the ultimate aim of addressing the needs of patients. For more information, visit: www.adastraholdings.ca.

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "expected," "anticipated," "will," or similar expressions. Forward-looking statements in this press release include but are not limited to the Company or its subsidiary entering into a lease agreement, the Company strengthening its balance sheet, reducing debt, and continuing operations without any material impact, and the Transactions completing shortly. These forward-looking statements are made as of the date of this press release. Such forward-looking statements reflect current estimates, beliefs and assumptions, which are based on management's perception of current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Although the Company believes the forward-looking statements in this press release are reasonable, it can give no assurance that the expectations and assumptions in such statements will prove to be correct. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others, the ability to satisfy customary closing conditions and obtain any necessary regulatory approvals. Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect management's expectations only as of the date of this press release. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The Canadian Securities Exchange has not reviewed this press release and does not accept responsibility for the adequacy or accuracy of this news release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/285873

Source: Adastra Holdings Ltd.