WILLOW BIOSCIENCES REPORTS SECOND QUARTER 2021 RESULTS

Vancouver, British Columbia – August 9, 2021 – Willow Biosciences Inc. (“Willow” or the “Company“) (TSX: WLLW; OTCQX: CANSF) has released its financial and operating results for the three and six months ended June 30, 2021, reporting significant advancement in its operations and strong liquidity.

“We continued to make substantial strides forward in the second quarter, highlighted by our first commercial agreement for CBG,” said Trevor Peters, Willow’s President and Chief Executive Officer. “As the industry for cannabinoids continues to grow, we are positioning Willow to be a global player with the ability to meet the various demands of all customers. Many groups have identified the global market for biosynthetically derived cannabinoids to be a multi-billion dollar opportunity in the coming years, and by having demonstrated our ability to not only commercially produce, but execute on a multi-year supply agreement, we are set up to take advantage of a large global market as the leader in the space.”

Highlights for the Quarter

  • On April 20, 2021, Willow announced that it completed a series of studies with its development partner, Signum Biosciences, Inc. (“Signum“), that demonstrate the safety and anti-inflammatory, anti-aging, and antimicrobial properties of Willow’s cannabigerol (“Willow CBG“). The studies demonstrate that Willow CBG is safe when applied to skin and eye areas and can act as a more potent antioxidant and anti-inflammatory for certain skin applications when compared to plant derived cannabidiol (“CBD“).
  • On May 7, 2021, Willow announced that Ms. Barbara Munroe has been appointed to the Board of Directors of the Company. Ms. 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.
  • On May 18, 2021, Willow announced that it has been added to “the Cannabis ETF” (NYSE: THCX), an exchange traded fund trading on NYSE Arca.
  • On May 26, 2021, the Company presented on a panel with other industry leaders at SynBioBeta’s “Celebrating Synthetic Biology Breakthroughs in Biopharma”.
  • On June 10, 2021, Willow announced that it signed a multi-year supply agreement with Cellular Goods PLC (“Cellular Goods“), whereby Willow will supply Cellular Goods with its proprietary, ultra-pure, biosynthetically produced, Willow CBG to be used in Cellular Goods’ premium cannabinoid-based skin care products to be launched in autumn of 2021.
  • Willow ended the quarter with strong liquidity, including approximately $40.7 million of cash on hand as at June 30, 2021.

Operational Update

As of the second quarter of 2021, Willow’s lead program cannabigerol (“CBG“), is now at manufacturing scale. Willow has added resources and expertise to manage commercial production and further expand its R&D capabilities to grow its product portfolio. Willow has expanded its Vancouver, British Columbia and Mountain View, California teams to include manufacturing, quality and regulatory groups, along with additional R&D scientists focusing on strain optimization and process development. Willow’s total headcount is now 55 employees, 42 of which are in technical roles.

Willow and Signum evaluated the safety and activity of CBG as an ingredient for cosmetics, which was announced by the Company in April 2021. Willow has also engaged a regulatory consulting group to attain an Independent Generally Regarded as Safe (“GRAS“) conclusion for Willow CBG that is required for use in food and beverage applications.

With Willow’s lead proprietary yeast strain now producing biosynthetic CBG at commercial scale, and agreements in place to generate product revenue, Willow’s R&D teams are now focused on development of CBD and tetrahydrocannabinol (“THC“) programs for commercial manufacture. In addition to Willow’s commercial development programs for CBG, CBD and THC, Willow’s R&D team continues to develop biosynthetic processes for cannabidivarin (“CBDV“), cannabigerovarin (“CBGV“), and tetrahydrocannabivarin (“THCV“), and has added an additional development project for production of cannabinol (“CBN“) from its biosynthetically derived CBD or THC. Early research indicates that CBN may be effective as a sleep aid or sedative, in addition to other potential health benefits. The Center of Disease Control’s Sleep and Sleep Disorder Program states that one in three adults in the United States do not get enough sleep, a crucial component for good health, and CBN is increasingly being incorporated into consumer products designed to improve sleep quality.

Financial Update

Willow ended the quarter in a strong financial position, with approximately $40.7 million in cash on hand.

The Company’s financial results are summarized as follows:

\ As at June 30

\ 2021 2020

Balance sheet ($000’s):

Cash and cash equivalents 40,734 12,244

Total assets 46,422 19,953

Shareholder’s equity 30,024 11,075

Weighted average shares outstanding:

Basic (000’s) 123,507 78,892

Diluted (000’s) 140,715 78,892

Outlook

Willow completed its first commercial scale fermentation run of its first cannabinoid, CBG, in Q1 2021 and signed up its first multi year commercial agreement with Cellular Goods in Q2 2021. This agreement was a significant turning point in the lifecycle of the Company as it demonstrates that Willow has the full technical and business development capabilities to meet customer demands. During the remainder of 2021, Willow plans to continue to optimize its commercial process for CBG, supply product to customers, seed commercial samples to new potential customers, 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 Willow is at the forefront of developing that market.

The industry focus on sustainable and safe manufacturing of cannabinoids is a large opportunity for Willow, and in July 2021, Willow announced the formation of a senior-level Environmental, Social, and Governance (“ESG“) committee to oversee sustainability integration efforts and to provide a direct line from operations to the board of directors on all ESG matters. Many large multi-national players in the consumer-packaged goods space have a mandate to deal with companies that are accretive to their overall sustainability portfolio and Willow is uniquely positioned to help them achieve this.

With $40.7 million of cash on the Company’s balance sheet as at June 30, 2021, favourable regulatory regime changes being discussed in the United States, a first commercial production run completed and first commercial agreement signed, 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 leading biotechnology company that develops and produces high-purity, plant derived ingredients for the consumer care, food and beverage, and pharmaceutical markets. Willow’s biotechnology platform allows creation of a consistent, scalable and sustainable product that benefits both B2B and B2C customers. Willow’s R&D 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 our website at www.willowbio.com or contact:

Trevor Peters

President and Chief Executive Officer

Troy Talkkari, CFA

Vice President, Corporate Development

T: (403) 618-1117

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 of CBG production and revenue generation and commercial manufacturing of CBD and THC; the progress of Willow’s commercial development programs for CBD, THC, CBDV, CBGV, THCV and CBN; the results of negotiations with strategic partners and potential customers, including product orders resulting therefrom; the receipt of a GRAS conclusion in respect of Willow’s CBG; the therapeutic benefits of CBN; global market forecasts for biosynthetically derived cannabinoids and Willow’s ability to capture market share; Willow’s ESG efforts and objectives; 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; the ability of the Company to obtain suitable manufacturing partners and other strategic relationships; and the successful implementation of Willow’s commercialization and production strategy, 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.

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.