Better is Possible. Corporate Presentation. Updated: November 28, California Campus, Cathedral City, California CSE: SNN OTCQB: SNNVF

Transcription

1 Better is Possible Corporate Presentation Updated: November 28, 2018 CSE: SNN OTCQB: SNNVF California Campus, Cathedral City, California

2 Disclaimer IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING This presentation is not, and under no circumstances is to be construed as, a prospectus, or advertisement or a public offering of securities of Sunniva Inc. ("Sunniva" or the "Company"). This presentation contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, statements regarding the Company s operations and growth opportunities, the Company s expansion of its footprint in the U.S., the Company s vision to become one of the lowest cost, highest quality vertically integrated cannabis producers in the markets we serve by building large scale purpose-built current cgmp designed greenhouses and expansion of retail locations, offering better quality assurance with cannabis products free from pesticides, providing better customer access to cannabis education and sourcing better therapeutic delivery devices, the profitability of the Company s facilities and operating subsidiaries, the expected dramatic increase in demand for cannabis in Canada following legalization of cannabis, the costs and expected production at the Sunniva California Campus and the Sunniva Canada Campus, the timing and conditions relating to the Spin-Out, the Sunniva California Campus being operational in Q with the first harvest expected in Q , the ability of the Company to launch Sunniva-branded product lines in California and propagate the Sunniva California Campus with clean clones, the conditions of closing for the acquisition of Vision, the conditions of closing for the acquisition of LTYR, the expectation that LTYR will continue to generate revenues and expand its existing relationships with over 120 licensed dispensaries throughout California, the timing of renovations and receipt of licensing requirements for the warehouse in Long Beach, California, the impact of the transaction with LTYR on the Company and LTYR s expected role as the Company s logistics and technology distribution platform, the Company s expectation that there will be no operational delays from the California licensing requirements for the Sunniva California Campus, the Company s anticipated production and brand roll-out at the Extraction Facility, the reduction of reliance on purchases of third-party biomass as production from the Sunniva California Campus becomes available, the Company s goal to pursue other retail acquisitions in California, the Company s shift in focus from becoming a wholesaler of cannabis to the direct to patient medicinal cannabis market in Canada, the expected growth of the number of registered cannabis patients in Canada, the estimated medical sales price for the next three years and average patient spend, the Company s expected use of proceeds from financings, and statements regarding the plans, timing and conditions of the Spin-Out, are forward-looking statements. Forward-looking statements can be identified by the use of words such as plans, expects or does not expect, is expected, estimates, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the risk factors included in the Sunniva s continuous disclosure documents available on These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although Sunniva has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. Sunniva assumes no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, new information or for any other reason except as required by law. The focus of Sunniva's business is the cannabis industry. The production, distribution, sale and use of marijuana and its derivatives are still restricted by law in some of the jurisdictions in which Sunniva intends to operate, including under federal law of the United States despite being legalized under some state law. These laws and their enforcement are in flux and vary dramatically from jurisdiction to jurisdiction. The enforcement of these laws and its affect on Sunniva and its business, employees, directors and shareholders are uncertain and accordingly involve considerable risk. This presentation contains information obtained by the Company from third parties, including but not limited to market data. The Company believes such information to be accurate but has not independently verified such information. To the extent such information obtained from third party sources, there is a risk that the assumptions made and conclusions drawn by the Company based on such representations are not accurate. Cannabis-Related Practices or Activities are Illegal Under U.S. Federal Laws. The concepts of "medical cannabis" and "recreational cannabis" do not exist under U.S. federal law. The U.S. Federal Controlled Substances Act classifies "marihuana" as a Schedule I drug. Accordingly, cannabis-related practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of cannabis are illegal under U.S. federal law. Strict compliance with state laws with respect to cannabis will neither absolve the Company of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against the Company. Any such proceedings brought against the Company may adversely affect the Company's operations and financial performance.

3 Corporate Overview Corporate Summary Consolidated Capitalization (1) Exchange CSE; OTCQB Common Shares 36,623,157 Ticker: SNN; SNNVF Share Price (as of November 27, 2018): CAD $4.51 Options 4,683,880 Warrants 4,247,488 Convertible Debentures (2) 2,139,088 Market Capitalization: CAD $165.2M Fully Diluted Shares 47,693,613 Revenue through Q (Unaudited): $13.37M 1. Common Shares, Options and Warrants outstanding as of November 28, Represents the number of common shares that could be issued upon the conversion of all outstanding debentures as of November 28, 2018.

4 Better is Possible Sunniva, through its subsidiaries, operates in the two largest cannabis markets California and Canada Strategic assets in place to become one of the lowest cost operators, producing pesticide free premium quality cannabis products, and achieving true vertical integration in California by: Leveraging our large-scale mega efficient purpose-built high technology cgmp designed greenhouses Accelerating production within our licenced cgmp volatile and non-volatile extraction facility Producing and stockpiling inventory for Sunniva branded product launches commencing Q Pending acquisition of distribution company (LTYR) for state-wide dissemination of Sunniva branded products Aggressive expansion of our retail dispensary stores throughout California Highly experienced management team assembled in California In a rapidly emerging and transformative industry, our promise is Better is Possible

5 Sunniva California Highlights State-of-the-art, purpose built large scale cgmp greenhouses in California Cathedral City, CA: 489,000 square foot facility with annual capacity of 72,500 kg Phase 1-50,000 kg per year production capacity under construction (operational Q1 2019) Low-cost producer with significant revenue and cash flow growth potential Cultivation facility operations expected to commence in Q Estimated production costs below $1.00/gram at full capacity Operational licensed extraction facility Licensed for both volatile and non volatile extraction processes Commenced operations in Q and currently manufacturing upcoming product lines Aggressively pursuing expansion of upstream verticals in California Distribution secured through pending acquisition of LTYR Logistics Retail expansion throughout California to achieve full vertical integration from seed to sale Near term launch of Sunniva branded product lines in California Stockpiling inventory for Sunniva house of brands product launches commencing in Q1 2019

6 Management Team Dr. Anthony Holler, Chairman, CEO and Director Former CEO and co-founder of ID Biomedical, acquired in 2015 by Glaxo Smith Kline for $1.7 billion Former Chairman of Corriente Resources Inc., sold for approximately $700 million to CRCC-Tongguan Investment Co Current Chairman of CRH Medical Corp. Leith Pedersen, Co-Founder, President and Director Former owner and CEO of Vida Wealth Management Bahamas, former investment advisor at Canaccord Wealth Management Former partner at J.F. Mackie & Company Ltd, a private Alberta brokerage firm managing capital in excess of $3 billion David Negus, Chief Financial Officer Most recently served as the CFO of Luvo, Inc., a food company Prior to Luvo, former Vice President, Corporate Controller at lululemon Holds CPA, CA designation Duncan Gordon, Chief Operating Officer Former head of manufacturing and supply chain management at Kudu Industries With over 25 years experience as a manufacturing and supply chain expert, he has led various teams and large-scale projects focused on engineering, procurement, logistics, production and distribution Kevin V. Wilkerson, Chief Operating Officer, Sun CA Holdings Retired US Army Colonel who served 24 years. Kevin lead the first conventional troops into northern Afghanistan in Awarded the Bronze Star in 2002 Former CEO and Founder of Vail Business Associates a business brokerage and middle market intermediary firm in Georgia Former CEO of LTYR Logistics, LLC, a California cannabis distribution company Experienced entrepreneur having started several successful companies Key Operations Personnel Daniel Vass, President of Natural Health Services Ltd., Director Prior to joining Sunniva that, he was the Vice President of Operations for Contract Land Staff LLC (a provider of land management & right of way services) Former President of Dayzon Energy Solutions Inc. Benjamin Rootman, VP, Legal, Compliance & Regulatory Affairs Previously, General Counsel and Corporate Secretary of Walton International Group Inc. from January 2017 to August 2017 Former Chief Compliance Officer and VP, Law for Walton Capital Management Inc. Before joining the Walton Group, he was an Associate at Burstall Winger Zammit LLP, focusing on corporate and securities law Vinnie Shastry, President, Sun CA Holdings Mr. Shastry worked in private equity and investment banking at TPG Capital and Morgan Stanley, respectively. Former CFO of IDEA Solutions, a software services company headquartered in San Jose, CA. Strong leadership, organizational skills and in depth knowledge of the California cannabis market Rob Culver, Director of Operations Over 14 years of commercial manufacturing experience, including progressive design and packaging, engineering, quality/efficiency control, and logistics and operations management He has successfully managed complex multi-disciplinary projects utilizing design, engineering, LEED project management, accounting, client partnering and leadership skills Jeff Thorne, Cannabis Expert (Canada) Worked in a variety of cultivating and harvesting operations from small enclosures to large commercial warehouses, using a variety of production techniques Experience with growing approximately 100 unique strains of cannabis, as well as identifying which phenotypes have merit, and which are not commercially or medicinally viable Focus is designing and modifying systems to produce high-quality legal medical cannabis

7 Board of Directors Dr. Anthony Holler, Chairman, CEO and Director Former CEO and co-founder of ID Biomedical, acquired in 2015 by Glaxo Smith Kline for $1.7 billion Former Chairman of Corriente Resources Inc., sold for approximately $700 million to CRCC-Tongguan Investment Co Current Chairman of CRH Medical Corp. Daniel Vass, President of Natural Health Services Ltd., Director Prior to joining Sunniva that, he was the Vice President of Operations for Contract Land Staff LLC (a provider of land management & right of way services) and the President of Dayzon Energy Solutions Inc. Leith Pedersen, Co-Founder, President and Director Former owner and CEO of Vida Wealth Management Bahamas, former investment advisor at Canaccord Wealth Management Former partner at J.F. Mackie & Company Ltd, a private Alberta brokerage firm managing capital in excess of $3 billion Ian Webb, Independent Director Former director of ID Biomedical and current director of CRH Medical Former senior corporate law partner of Borden Ladner Gervais LLP, one of Canada s largest law firms, whose practice encompassed mergers and acquisitions as well as corporate and securities law with an emphasis on the legal requirements of public companies and their boards Todd Patrick, Independent Lead Director President and CEO of C3J Therapeutics, a Los Angeles-based biotechnology company focused on infectious disease drug development. Since joining C3J, Mr. Patrick has raised over $125 million in equity capital for the company. Prior to joining C3J, Mr. Patrick served as President and COO of ID Biomedical after the company elected in 1998 to exit its core diagnostic business to focus exclusively on vaccines Michael Barker, Director Founder of Barker Pacific Group, a firm of experienced real estate professionals active in the acquisition, development, construction management, and asset management of major commercial projects. As a developer, BPG has completed, developed, or redeveloped in excess of $2.5 billion in commercial projects Norm Mayr, Independent Director and Audit Committee Chairman Retired Audit Partner having spent 38 years in public practice with KPMG. He was the Risk Management and Professional Practice Partner for the Greater Vancouver Area practice of KPMG for the most recent 18 years He was a founding member of the CICA Accounting Standards Board, and a member of the Canadian Advisory Group to the International Accounting Standards Committee Luke Stanton Attorney and founder of the Frontera Law Group, a leading firm in the state of California focused on issues related to medical cannabis General partner at Skytree Capital Partners, a Nevada-based private equity firm focused on the legal cannabis space. He has been featured in Financial Times Magazine, the National Marijuana News, mg Magazine, Cannabis Industry Journal, and MJINews Source: Company Filings, Public Disclosure

8 Market Opportunity California Market Current Population ~ 40 Million Current Medical Population 1,000,000+ Peak Market Potential Compliant Producers >US$10 Billion Very Few Recreational Legalization January 2018 Source: Canaccord Genuity Research

9 California Vertical Integration From Seed to Sale CONTROLLING QUALITY AND CAPTURING MARGIN What is Vertical Integration? Region A Cultivation at Scale Extraction Facility House of Brands Licensed Distribution Branded Stores/Clinics Region B Region C Region D Securing cultivation of pesticide-free flower and trim at scale is a significant competitive advantage to successfully developing upstream verticals & brand categories.

10 California Verticals In Place Strategic Pillars In Place 1 Purpose-built, large scale, state-of-the-art cgmp-designed Greenhouse ensures supply of premium cannabis First harvest Q Operational Extraction Facility Vision Facility, Oakland 3 House of Brands - Launching Products Q Distribution- Pending acquisition of LTYR Flagship Retail Dispensary and Expansion Long Beach Distribution (proposed) California Campus, Cathedral City

11 Sunniva California Campus - Low Cost, High Quality Cultivation at Scale State-of-the-art, Purpose Built, cgmp Designed Greenhouse (1) Located in Cathedral City, California Current Status: Phase 1 In Construction (financed via 30 yr leaseback) Initial harvest from Phase 1 anticipated in Q Licenced Facility (2) 489,000 sq. ft facility (256,000 sq. ft canopy) 72,500 kg per year dried flower production at peak capacity with ~10,000 kg per year of associated trim. Phase 1: 324,000 sq. ft (50,000 kg/year flower capacity) Phase 2: 165,000 sq. ft (22,500 kg/year flower capacity) Low-cost (< $1/g), pharma-grade, pesticide-free producer Automation, robotics, segregated grow bays, microclimatic controls, customized nutrients schedules 100% water recirculation and zero drain to waste 1. Purpose built automated greenhouses offer significant advantages over indoor light facilities and retrofit greenhouses with lower estimated production costs and quality. 2. Sunniva s annual state license applications will be completed and submitted per the state s regulatory mandate.

12 Pending Acquisition - Oakland Vision Production Facility LOI to acquire entities that own and operate a cultivation and genetics facility (1,2) On-site Genetics Lab Operational licensed facility located in Oakland, CA Proven cannabis cultivation team to manage all Sunniva s cultivation operations in California Currently producing premium quality flower and trim Currently production capacity of ~1,600 lbs/year Plans to scale production to ~8,000 lbs/year Low-cost (< $1.00/g) producer Pharma-grade, pesticide-free cannabis High Quality Indoor Cultivation Clones for the Sunniva California Campus Library of 20+ proven clean genetic cannabis strains On-site genetics lab for development of future strains 1. Acquisition subject to closing conditions including, among others: negotiation and execution of definitive agreement, completion of due diligence and receipt of regulatory approvals including CSE approval 2. Vinayak Shastry, Sunniva s President of US Operations, is a co-owner of the companies that comprise the Oakland Vision Project

13 Sunniva Extraction Facility and Onsite Dispensary Sun-Oil Extraction Facility (Cathedral City, CA) Sunniva Flagship Onsite Dispensary (California Campus) Revenue generating Q Located one mile away from the greenhouse Licensed for both volatile and non-volatile extraction Product suite includes vape oil-distillate, concentrates, fresh frozen, capsules, sprays, tinctures, edibles Proprietary formulations designed for Sunniva brands High-end retail dispensary showcasing Sunniva brands Operational Q Destination attraction with large viewing windows into greenhouse canopy Delivery license Plans to expand retail locations throughout California

14 House of Brands Strategy We are developing a suite of products and brands to match customer needs Anticipated product launches commencing in Q Planned Sunniva Product Categories Flower Pre-Rolls Concentrates Extracts Vaporizers Edibles Vape Cartridges Beverages

15 Sunniva Brands Initial Brand Offerings Vapor Connoisseur Hardware Brand Illustrative. Final design may change. House of brands to be launched in Q Product SKUs will cover all major product categories In-house marketing team assembled Brands to be showcased in our flagship retail dispensary DBA Vapor Connoisseur Brand manufactured through wholly owned Full- Scale Distributors, LLC Custom, private-label vaporizers and accessories Proprietary vaporizer line and vape cartridges for Sunniva brands Year to date revenue: $5.0 million (9 months ended Sept. 30, 2018)

16 State-Wide Distribution- Pending Acquisition LTYR Logistics LTYR to form Sunniva s in-house distribution platform (1) Highly skilled management and sales team Sorting and Batching Equipment (2) Retail network of more than 120 licensed retail dispensaries across California Compliance with track and trace regulations to be implemented in January 2019 In house distribution will drive sales from Sunniva s large-scale cannabis production facilities Compliant Transportation Fully automated sorting, weighing, packaging equipment for large-scale distribution Developing additional distribution platform for real-time delivery solutions Acquiring 4,200 square foot warehouse in Long Beach, California to serve as additional distribution hub 1. Acquisition subject to closing conditions including, among others: negotiation and execution of definitive agreement, completion of due diligence and receipt of regulatory approvals including CSE approval. 2. GreenBroz TM Precision Batcher and Sorting Machine in operation in Sonoma, CA

17 CWEB-CNQ LHS-CNQ GTII-CNQ TRUL-CNQ IAN-CNQ Average MMEN-CNQ OH-CNQ SNN-CNQ CWEB-CNQ MMEN-CNQ LHS-CNQ GTII-CNQ IAN-CNQ Average OH-CNQ TRUL-CNQ SNN-CNQ TRUL-CNQ CWEB-CNQ GTII-CNQ IAN-CNQ LHS-CNQ Average SNN-CNQ MMEN-CNQ OH-CNQ MMEN-CNQ GTII-CNQ CWEB-CNQ LHS-CNQ Average OH-CNQ IAN-CNQ MPX-CNQ CNNX-CNQ TRUL-CNQ PLTH-CNQ SNN-CNQ CNNX-CNQ TRUL-CNQ CWEB-CNQ SNN-CNQ Average PLTH-CNQ MPX-CNQ IAN-CNQ GTII-CNQ LHS-CNQ OH-CNQ MMEN-CNQ Exp. EBITDA Growth x 27.2x 23.3x 19.7x 17.3x 17.2x 12.0x 10.1x 7.2x 6.5x 2.7x 65.4x Compelling Valuation Relative to US Based Peers Valuation vs. Growth Expectations 250% 200% 150% GTII-CSE CURA-CSE Average OH-CSE ACRG.U-CSE 100% IAN-CSE SNN-CSE 50% PLTH-CNQ 0% 0.0x 5.0x 10.0x 15.0x 20.0x 70.0x 60.0x 50.0x 40.0x 30.0x 20.0x 10.0x 0.0x EV/C2019E EBITDA 70% 60% 50% 40% 30% 20% 10% 2019E EBITDA Margins 63% 45% 35% 32% 29% 29% 26% 26% 24% 23% 14% 6% EV/C2020 EBITDA EV/C2020E Sales EV/C2020E EBITDA 2020E EBITDA Margins 6.0x 5.0x 4.0x 3.0x 2.0x 1.0x 0.0x 5.6x 3.2x 3.0x 2.6x 2.5x 2.5x 2.1x 1.4x 0.5x 18.0x 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x 15.7x 10.7x 10.4x 8.6x 7.8x 8.3x 7.6x 5.7x 1.6x 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 45% 35% 35% 32% 31% 30% 29% 19% 19% Source: Beacon Securities, November 28, 2018

18 California Summary and Strategic Initiatives Experienced Management 459,000 sq ft cgmp Purpose-built Greenhouses in California Cultivation Capacity ~75,000 kg* Near-term Revenue and Cash Flow Sunniva House of Brands Launch Vertical Integration Expansion Proven and committed management and operational team with a track record of success and capital markets sophistication California Campus operational Q (Phase 1 50,000 kg per year) Phase 1 funded via 30 year leaseback agreement Oakland Vision Facility will provide immediate access to high-quality flower production and experienced cultivation team Production & revenues from large cultivation facilities commencing in 2019 Full capacity expected to be reached in 2021 following expansion development Sunniva California Campus greenhouse first harvest Q Extraction facility operational since Q Launch of Sunniva House of Brands in all product categories including flower, pre-roll, vape cartridges, premium concentrates, edibles and beverages Initial brands to be launched in Q Distribution secured through LTYR acquisition Aggressively pursuing expansion of retail dispensaries * Includes production capacity from the full build out of Phase 1 and Phase 2 of the California Campus and completion of the development plans to scale production at the Oakland Facility to ~8,000 lbs/yr

19 Canadian Operations Overview

20 Sunniva s Canadian Strategy Sunniva intends to spin out their Canadian assets into new entity (1) Sunniva Medical Inc. and Natural Health Services ( NHS ) Plan to apply to the TSX Venture Exchange in Q Focussed on high margin medicinal cannabis market Direct distribution from Licensed Producer to patient (2) Medicinal patients forecast to exceed 2 million in the next 3 years Insurance companies and unions providing medical cannabis coverage under group benefit plans Target to capture 20,000 patients in 2019; 50,000+ patients in 2020 Estimated $8.50/g medical sales price for the next 3 years with the current average patient spend of $2,000/year (3) Sunniva Canada has the infrastructure to capture significant market share Additional patient capture through 100% ownership of NHS cannabis clinics and technology platform Physicians are the gatekeepers to achieving market share Planned collaboration with universities for research and development 1. Several conditions will require satisfaction before the Spin-Out can proceed including, but not limited to, Company shareholder approval, court approvals, CSE approval and other stock exchange approvals, none of which can be assured 2. Subject to receipt of cannabis sales license 3. Source: BMO Capital Markets, May 2018

21 Natural Health Services Founded in 2015, Natural Health Services ( NHS ) is Canada s largest referral network of medical cannabis patients to Licensed Producers acquired by Sunniva in February 2017 NHS Business Focus on Education NHS provides an anchor for Sunniva Medical Inc. - once licensed to capture significant market share within the medicinal cannabis market in Canada (1) Owns and operates 7 patient-centric clinics and education centers across 4 provinces: AB, SK, MB and ON 105,000 patients registered Experienced physicians, proprietary integrated software and education know-how to aggregate a large patient network Canadian Facilities Overview (Cultivation & Clinics*) Physicians are the gate-keepers to the Canadian medicinal market Comprehensive cannabis patient data set Physician recruitment program and leading scientific advisory board already established Year to date revenue: $8.4 million (9 months ended Sept. 30, 2018) Sunniva Canada Campus NHS Clinic Locations* 1. Subject to receipt of cannabis sales license Clinic locations in Calgary (head office), Edmonton, Lethbridge, Medicine Hat, Saskatoon, Winnipeg and Windsor

22 NHS Business Model Leveraging experienced physicians, clinics, proprietary software and education for patient aggregation Seven brick and mortar specialized cannabis clinics 18 health care professionals (GP s, Specialists) and 2 nurse practitioners Creating an online virtual e-commerce clinic platform: education plus telemedicine to aggregate patients Current education centre space can be repurposed for pharmacy operations if future licensing permits Platform provides access to trusted cannabis products, research, and education for patients and physicians Natural Health Services (NHS) Clinics Clinics Total Size (sqft) Clinic Size (sqft) Education Centre (sqft) (1) Comments Calgary 5,900 3,800 2,100 NHS s largest facility with 10 exam rooms, 70 person waiting room, 2 full time and 1 part time physicians Medicine Hat 2,400 1, Run by local internal specialist that has been practicing medicine locally for 25+ years Edmonton 2,182 1, Serves the largest patient volume in the country. Can serve up to 38 patients per hour. Waitlist of 10,000 Saskatoon 2, ,875 Located centrally in heritage building. 2 doctors Lethbridge 3,750 1,875 1,875 7 exam rooms that can support 1 full time doctor Windsor 4,291 3,218 1,073 8 exam rooms, located in high traffic area that can support 2 full time doctors or nurse practitioners Winnipeg 5,764 2,882 2,882 Serves a large volume of patients, with capacity for 2 full time doctors Total 26,787 15,509 11, Source: Company Filings, Public Disclosure, Management Estimates 2. Represents potential retail expansion opportunity used for education centers

23 The Sunniva Canada Campus acres in OK Falls, BC Sunniva Medical Inc. Received Confirmation of Readiness for a License under ACMPR from Health Canada May Sunniva s application is approved and subject to phased build and readiness Phase 1 Modular Cultivation Pods (1) Phase 1 Modular facility (~5,000 kg/year flower capacity) Fast-track to production and licensing Cultivation pod delivered to site - January 2019 Submit for cultivation license approval - January 2019 Commence operations in Q with first harvest in Q Low capital cost Initial cash outlay ~ CAD $1.5 million to begin production Additional cultivation pods to be vendor financed Low cost < $2.50 per gram pharma-grade, pesticide-free producer Cannabis genetics sourced for production Future cgmp Greenhouse - Phases 2 & 3 Future State-of-the-art, Purpose Built, cgmp Designed Greenhouse To be built in phases Estimated production costs of <$1.00/gram Phase 2 458,000 sq. ft (50,000 kg per year flower capacity) (2) Phase 3 301,000 sq. ft (50,000 kg per year flower capacity) (2) 1. For illustrative purposes only. Actual pods to be installed may not be exactly as shown and will be installed outdoors. 2. Subject to receipt of cannabis sales license and financing

24 Better is Possible