What you need to know: • LCBO’s interim CEO publicly committed to expanding VQA shelf space and noted Ontario VQA sales rose 63% YoY while overall liquor sales were flat. • Ontario’s 2026 Budget projects LCBO’s net income to fall to ~$1.9B in 2025-26, as sales shift into G&C outlets where DWS has strong shelf space (#3 VQA supplier and #5 agency in G&C). • DWS has made an amendment to its BMO credit agreement, removing the Lassonde guarantee and extending maturity to July 2026. • We are projecting Q4/26 revenue of $4.8M (+15% YoY), gross margin of 56%, and adjusted EBITDA of $0.2M (3% margin). Diamond Estates Wines and Spirits (DWS:TSXV, DWWEF:OTC) is set to report its Q4/26 and FY26 financial results before the end of July (FYE March 31). Several recent industry developments further support our investment thesis, including the LCBO's renewed commitment to VQA shelf space, Ontario's 2026 Budget, and the continued absence of U.S. wines on Ontario shelves. We are maintaining our BUY Rating and target price of $0.30/share on DWS. Recent Industry Developments Reinforcing DWS’ Positioning In early April, the LCBO publicly committed to expanding VQA shelf space during the Ontario Craft Wineries' 2026 Spring Wine Forum, identifying Ontario craft wines as a major driver of traffic. VQA sales rose 63% YoY at the LCBO while overall liquor sales were flat. Executives also noted that the LCBO's wholesale operations have grown from 20% of the business two years ago to 40% today, as sales continue to disperse across grocery, big-box, and convenience channels. As one of Ontario's top VQA producers, #3 VQA supplier to G&C, and #5 agent to G&C, DWS is a direct beneficiary of both the LCBO's continued VQA focus and the ongoing migration into G&C, where Diamond's share is structurally larger. In addition to the news above, Ontario's 2026 Budget projects LCBO net income to fall to ~$1.9B in 2025-26, down from $2.3B previously forecast and $2.6B in 2023-24 ($2.2B in 2024-25), reflecting lower markups, increased support for local producers, the absence of higher-margin U.S. products, and a broader pullback in alcohol consumption. While negative for the LCBO, this is consistent with the thesis laid out in our initiation (see here) that revenue is shifting out of the LCBO and into the channels where DWS is overweight. At the same time, the government continues to redistribute dollars to local producers through tax simplification, markup reductions, and the enhanced VQA Support Program.