WILLOW BIOSCIENCES REPORTS FIRST QUARTER 2021 RESULTS, AN OPERATIONAL UPDATE AND THE ADDITION OF A NEW BOARD MEMBER

Vancouver, British Columbia – May 7, 2021 – Willow Biosciences Inc. (“Willow” or the “Company“) (TSX: WLLW; OTCQX: CANSF) has released its financial and operating results for the three months ended March 31, 2021, reporting significant advancement in its operations and strong liquidity.

“The first quarter represented another significant move forward for us, as we completed our first commercial scale fermentation run and strengthened our balance sheet for success,” said Trevor Peters, Willow’s President and Chief Executive Officer. “We are entering the next phase for the Company, which is creating new markets for our ultra-pure, sustainably made, cannabinoids, and our world class team has allowed us to be at the forefront of the industry. As the industry continues to move towards increased regulation from a health and safety perspective, there is a need now more than ever for Willow’s consistent and safe manufacturing process. We are excited to continue to deliver value for all Willow stakeholders.”

Highlights for the Quarter

  • On January 13, 2021, Willow announced the appointment of Dr. Mathias Schuetz to Vice President, Plant Science. Dr. Schuetz was previously Vice President, Research & Development. The Company also announced the promotion of Dr. Trish Choudhary to Vice President, Research & Development to lead the Company’s yeast strain engineering efforts. Dr. Choudhary has been with Willow since April 2019 in the role of Senior Director, Strain Engineering.
  • On January 19, 2021, the Company announced that it had advanced its work on its proprietary yeast strain producing Tetrahydrocannabinol (“THC”) and plans to commercially launch in the Canadian market.
  • On February 19, 2021, Willow announced the closing of a bought deal public offering of common shares of the Company (“Common Shares”) for gross proceeds of approximately $28.75 million (the “Bought Deal“). Under the terms of the Bought Deal, the Company issued 17.4 million Common Shares at a price of $1.65 per Common Share.
  • On March 3, 2021, Willow announced that the accelerated expiry of approximately 9.3 million Common Share purchase warrants resulted in cash proceeds of approximately $7.9 million.
  • On March 31, 2021, the Company announced that it had completed the first commercial scale fermentation run of its first cannabinoid for market, cannabigerol (“CBG“).
  • Willow ended the quarter with strong liquidity, including approximately $46.4 million of cash on hand as at March 31, 2021.

Highlights for the Quarter

During the first quarter of 2021, Willow continued to optimize its yeast strain, fermentation process, and downstream purification process for production of CBG, and it successfully scaled the process to commercial scale fermenters at its first selected contract manufacturing organization (“CMO”) facilities based in Europe. Ongoing optimization of the scaled process to further improve production yields will continue in 2021 along with qualification of additional CMOs as required.

The Company continued to work with Signum Biosciences, Inc. to evaluate the safety and activity of its CBG as an ingredient for cosmetics. The Company anticipates completion of the lab-based and clinic-based safety work in the second quarter of 2021. The Company also engaged a regulatory consulting group to attain an Independent Generally Regarded as Safe (“GRAS”) conclusion for CBG that is required for use in food and beverage applications.

Willow continued to advance its THC strain and process for production in the Canadian market. The Company will continue strain and process optimization with production of research samples for Canadian partners expected in the second half of 2021. The Company also continued to make progress to increase production of cannabidiol (“CBD”) and the “Varin Cannabinoids” at lab scale through application of its proprietary strain engineering technologies. In-house strain and process optimization will continue through 2021.

Financial Update

Willow ended the quarter in a strong financial position, with approximately $46.5 million in cash on hand.

New Board Member

Willow is pleased to announce that Ms. Barbara Munroe has been appointed to the Board of Directors of the Company.

“I am pleased to welcome Ms. Munroe to the Board. Her extensive skillset and expertise will further complement our current Board members, and we are confident she will provide valuable perspectives as we continue to execute on our strategy, drive growth and build long-term shareholder value,” said Dr. Peter Seufer-Wasserthal, Chairman of Willow.

Ms. Barbara Munroe has more than 25 years of experience as a lawyer and executive in diverse industries. In addition to serving as the current Chair of the Board of Crescent Point Energy Corp., Ms. Munroe has served as an executive in several customer-centric and diverse industries, as EVP, Corporate Services and General Counsel for WestJet Airlines Ltd., the Assistant General Counsel, Upstream at Imperial Oil Ltd., and the Senior Vice President, Legal/IP & General Counsel, Corporate Secretary for SMART Technologies Inc.

Ms. Munroe is a member of the Institute of Corporate Directors and has extensive corporate governance experience. She holds a Bachelor of Commerce, Finance degree and a Bachelor of Laws degree, both from the University of Calgary. Ms. Munroe was admitted to the Law Society of Alberta in 1991 and holds the ICD.D designation.

Outlook

Willow completed its first commercial scale fermentation run of its first cannabinoid, CBG, in Q1 2021 with first sales expected to occur in Q2 2021. While the product volumes are expected to be small to start, this is a significant turning point in the lifecycle of the Company. During the remainder of 2021, Willow plans to optimize its commercial process for CBG, supply product to customers, seed commercial samples to larger organizations, and build out a robust order book for 2022, which the Company expects to be its first full year of commercial production and sales. CBG is a rare cannabinoid and thus Willow is at the forefront of developing that market.

Using the CBG producing yeast strain as a platform cannabinoid to build upon, Willow is working on a number of other cannabinoids and plans to update the market on which cannabinoid it intends to commercialize next later this year and into 2022.

With $46.5 million of cash on the Company’s balance sheet as at March 31, 2021, favourable regulatory regime changes being discussed in the United States, a first commercial production run completed and first sales expected in Q2 2021, the Company is in a position of strength to execute on its business plan. While the market for biosynthetically produced cannabinoids is new, Willow is at the forefront of this industry and will continue to demonstrate itself as a market leader.

About Willow Biosciences Inc.

Willow is a Canadian biotechnology company based in Vancouver, British Columbia that develops and produces high-purity, plant derived ingredients for consumer care, food and beverage, and pharmaceutical products. Willow’s manufacturing process creates a consistent, scalable, and sustainable product that benefits industry and consumers. Willow’s team has a proven track record of developing and commercializing bio-based manufacturing processes and products for both the consumer and pharmaceutical industries.

For further information, please visit Willow’s website at www.willowbio.com or contact:

Trevor Peters
President and Chief Executive Officer
T: (403) 669-4848
E: t.peters@willowbio.com

Troy Talkkari
CFA Vice President, Corporate Development
T: (403) 618-1117
E: t.talkkari@willowbio.com

150, 2250 Boundary Road\ Burnaby, BC V5M 3Z3

Forward-Looking Statements

This news release may include forward-looking statements including opinions, assumptions, estimates and the Company’s assessment of future plans and operations, and, more particularly, statements concerning: Willow’s milestone projections, including the timing and quantity of development scale-up of THC, commercialization scale-up of CBG and THC and the completion of safety work on Willow’s CBG; timing of revenue generation; discussions with consumer-packaged goods entities and other potential customers; the demand and market size potential of the synthetic cannabinoid industry; Willow’s entry into new global markets, including Europe; regulatory changes effecting the cannabinoid industry; and the business plan of the Company, generally, including cannabinoid research and production. When used in this news release, the words “will,” “anticipate,” “believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Company which include, but are not limited to: the success of Willow’s strategic partnerships, including the development of future strategic partnerships; the financial strength of the Company; the ability of the Company to fund its business plan using cash on hand and existing resources; the market for Willow’s products; the ability of the Company to obtain and retain applicable licences; and the successful implementation of Willow’s production, commercialization and sales strategies, generally. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, risks associated with: the cannabinoid industry in general; the success of the Company’s research and development strategies; infringement on intellectual property; failure to benefit from partnerships or successfully integrate acquisitions; actions and initiatives of federal and provincial governments and changes to government policies and the execution and impact of these actions, initiatives and policies; import/export and research restrictions for cannabinoid-based operations; the size of the medical-use and adult-use cannabinoid market; competition from other industry participants; adverse U.S., Canadian and global economic conditions; adverse global events and public-health crises, including the current COVID-19 outbreak; failure to comply with certain regulations; departure of key management personnel or inability to attract and retain talent; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Please refer to the AIF and the MD&A for additional risk factors relating to Willow, which can be accessed either on Willow’s website at www.willowbio.com or under the Company’s profile on www.sedar.com.

Any financial outlook and future-oriented financial information contained in this document regarding prospective financial performance, financial position, cash balances or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action based on management’s assessment of the relevant information that is currently available. Projected operational information contains forward-looking information and is based on a number of material assumptions and factors, as are set out above. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. Actual results will vary from projected results. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein.

The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

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Focused on identifying and deploying additional genetic elements and solutions to further enhance production of our yeast strains and processes. This state-of-the-art R&D facility includes high-throughput molecular biology and screening technologies, high-end analytical instrumentation and fermentation capabilities along with systems to rapidly evaluate high volumes of data and results.