CORPORATE PRESENTATION CANADA'S CANNABIS COMPANY

Transcription

1 CORPORATE PRESENTATION CANADA'S CANNABIS COMPANY

2 LEGAL DISCLAIMER NOTICE TO RECIPIENT This investment is suitable only for sophisticated investors for whom an investment does not constitute a complete investment program, who do not require immediate liquidity for their investment and who fully understand and are willing to assume the risks involved. An investment may be considered to involve a substantial degree of risk, and an investor could lose all or a substantial amount of his or her investment. This document is not an offer to sell (or solicitation of an offer to buy) any interest in the Company. These materials may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement. The materials may not be circulated outside of the recipient s organization, publicly referred to, or disclosed, in whole or in part, without express written permission. This presentation does not purport to be all inclusive or contain all the information that a prospective investor may require to fully evaluate an investment in the contemplated transaction. Prospective investors should conduct their ownthorough investigation and due diligence before making aninvestment. DISCLAIMER This Presentation includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws or forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of All statements in this presentation, other than statements of historical facts, including statements regarding future estimates, plans, objectives, timing, assumptions or expectations of future performance, including the potential production capacity of AB Labs, AB Ventures and Acreage Pharms production facilities, the granting of regulatory approval and anticipated timing of AB Labs reaching full production capacity, the granting of a sales license under the ACMPR to AB Ventures and Acreage Pharms, Acreage Pharms receipt of a sales license and the success and timing of Acreage Pharms and AB Labs expansion plans, expected sales of inventory are forward-looking statements and contain forward-looking information. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as intends or anticipates, or variations of such words and phrases or statements that certain actions, events or results may, could, should, would or occur. Forward-looking statements are based on certain material assumptions and analysis made by the Company and the opinions and estimates of management as of the date of this press release, including the assumptions that AB Ventures and Acreage Pharms will satisfy all conditions for, and receive, regulatory approval to sell medical cannabis at their production facilities full capacity, AB Ventures will satisfy all conditions for and be granted a license under the ACMPR and will receive a development permit on the expected terms, AB Ventures is able to successfully build a production facility, Acreage Pharms will satisfy all conditions for and successfully obtain the anticipated sales license and AB Labs and Acreage Pharms will successfully complete their respective expansion plans, the anticipated sales of inventory will take place on the terms and timing expected by management, and that the legalization of recreational use of cannabis in Canada will occur as expected. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Important factors that may cause actual results to vary, include, without limitation, the risk that AB Ventures and Acreage Pharms will not receive regulatory approval to sell cannabis at their production facilities for their full production capacity or at all, that AB Labs, AB Ventures or Acreage Pharms will not reach full production capacity, that AB Ventures will not be granted a license under the ACMPR or will not receive a development permit on the expected terms or at all, that AB Ventures is not able to successfully build a production facility, that Acreage Pharms is not able to obtain the anticipated sales license when expected by management or at all or that Acreage Pharms and AB Labs are not able to successfully complete their respective expansion plans, that the anticipated sales of inventory will not occur on the terms and timing expected by management or at all, and that the legalization of recreational use of cannabis in Canada will not occur at all or as expected. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor. 2

3 Executive Summary Geographically Diversified Acreage Pharms Ltd. Edson, Alberta ACMPR cultivation license, sales license expected Q AB Laboratories Inc. Hamilton, Ontario ACMPR cultivation and sales license AB Ventures Inc. Hamilton Ontario ACMPR license submitted on 100 acres of land Strong Production Profile 24,000 KG planned capacity in ,400 KG planned capacity in ,200 KG current funded capacity Diverse and Experienced Management Team Invictus team is made up of individuals with a wide range of executive level experience, including, agricultural farming, pharmacology, technology, healthcare, marketing and big tobacco/alcohol. Market Opportunity Canada s Cannabis Sales (CAD $B) * Source: Echelon Wealth Partners Feb. 6,

4 Invictus Canadian Footprint 4

5 OUR LICENSED PRODUCERS 5 5

6 Acreage Pharms Ltd. Overview West-Central, Alberta Invictus holds full ownership 100 percent of this West-Central Alberta production facility. Licensed Producer under the Access to Cannabis for Medical Purposes Regulations. Expect sales license in Q Acreage Pharms has 150 acres of buildable land, with potential for millions of square feet of cultivation as demand for high-quality, pharma grade cannabis expands. To date, Acreage Pharms has two facilities totalling approximately 40,000 square feet with further expansion plans. 6

7 Acreage Pharms Ltd. Phase 1 & 2 - Existing Phase 1 6,600 square foot purpose-built concrete and steel facility 600 kg per annum production Level 8 vault within facility that can store $31.25MM of product Phase 2 33,000 square foot, purpose-built concrete and steel facility 4,400 kg per annum production Level 8 vault allowing for onsite storage of $31.25MM of product Phase 1 Phase 2 7

8 Acreage Pharms Ltd. Phase 3, 4 & 5 Status Square Feet % Funded KG Capacity Phase 3 Sept , % 14,000 Phase 4 Mar ,000 36% 14,000 Phase 5 Sept ,000 0% 28,000 TOTAL 320,000 56,000 8

9 AB Laboratories Inc. Overview Hamilton, Ontario Invictus currently owns a 50 percent investment stake in AB Laboratories, a 15,600 square-foot production facility and Licensed Producer under the Access to Cannabis for Medical Purposes Regulations. AB Laboratories has its sales license for cannabis under Access to Cannabis for Medical Purposes Regulations. The series of grow rooms for cultivation, trimming and drying in a controlled and regulated environment are critical aspects of our strong production profile. 9

10 AB Laboratories Inc. Phase 1 & 2 Phase 1 Existing Facility 15,600 square foot purpose-built concrete and steel facility 900 kg per annum production Phase 2 Scheduled to complete June 15, ,000 square foot production facility 4,000 kg per annum production Fully Funded project 10

11 AB Ventures Inc. Overview Hamilton, Ontario AB Ventures Inc. is developing its first licensed expansion facility through its co-ownership with AB Labs. Invictus holds a 33 1/3 percent stake in AB Ventures. The company will develop a 100-acre acquisition that closed in May 2017, which once licensed under the ACMPR will be used for additional cannabis cultivation. AB Ventures has submitted its license application to Health Canada as well as its development permit for the initial Phase 1 construction. 11

12 AB Ventures Inc. Phase 1 & 2 Phase 1 Funded Expansion 21,000 square foot facility is part of the initial expansion plan 2,100 kg per annum production Purpose built concrete and steel facility Pre-license project Fully Funded subject to permitting Phase 2 Pre-License 84,000 square foot production facility 8,400 kg per annum production Pre-license project Subject to permitting Phase 1 21,000 sq ft. Future Potential Phase 2 84,000 sq ft. 12

13 Future Harvest Overview Kelowna, British Columbia 82.5 percent ownership There are decades of experience that fill the ranks at Future Harvest, a hydroponics and fertilizer manufacturer and supplier. The Future Harvest team is dedicated to crafting products that benefit soil and plants. According to the Washington Agricultural Board, Future Harvest fertilizer products have lower heavy metal content than its competitors. 13

14 OUR PRODUCTION STRATEGY 14 14

15 Invictus Production Profile Square Feet Status % Funded KG Capacity Forecast Invictus Ownership Invictus KG Funded Capacity Invictus KG Expansion Capacity Acreage Pharms Phase 1 6,600 Complete 100% % Phase 2 33, Jan % 4, % 4,400 4,400 Phase 3 80, Sep % 14, % 14,000 14,000 Phase 4 80, Mar-19 36% 14, % 5,092 14,000 Phase 5 160, Sep-19 0% 28, % - 28,000 Total Acreage Pharms 359,600 61, % 24,092 61,000 AB Laboratories Phase 1 15,600 Complete 100% % Phase 2 40, Jun % 4,000 50% 2,000 2,000 Total AB Laboratories 55,600 4,900 50% 2,450 2,450 AB Ventures Phase 1 21,000 Pre-license 100% 2,100 33% Phase 2 84,000 Pre-license 0% 8,400 33% - 2,772 Total AB Ventures 105,000 10,500 33% 700 3,472 TOTAL 520,200 76,400 27,242 66,922 15

16 OIL AND EXTRACTION STRATEGY 16 16

17 Extraction and Oil Strategy Demand for high-quality cannabis extractions is expected to increase across 2018, and Acreage Pharms is taking important steps to help satisfy consumer demand. Acquired closed-loop C02 extraction system utilizing high-pressure carbon dioxide to extract essential oils from botanicals. The premier system uses specific temperatures and pressures to withdraw powerful components from plants. The innovative process produces the highest-quality cannabis oils in the world. The system is: Non-Toxic/Non-Carcinogenic. Oils extracted using this technology do not contain petroleum particles. Safe. The system does not use potentially flammable or explosive petroleumbased solvents. Carbon-Neutral/Environmentally Friendly. The system does not emit carbon into the atmosphere. Customizable. With a wide range of temperatures, pressures and flow rates to leverage, the system is capable of fully withdrawing the full profiles of natural compounds from cannabis plants. 17

18 Extraction and Oil Strategy Developed team of agriculture and pharmaceutical veterans to craft, implement and oversee ambitious extractions program. Team includes: Chris Kooner, RPh, a registered pharmacist with years of executive experience in pharmacy production labs, has dedicated much of his career to building safe, efficient production protocols at large pharmacies and then managing all aspects of production within pharmacies. With such broad experience in both the pharmaceutical and now cannabis industries, Chris has the full scope of knowledge. Chris will take over as Responsible Person in Charge (RPIC). Dr. Dejun Cui, a plant scientist and horticulture researcher with more than 30 years of high-level experience, is an integral part of the quality assurance team. Among other things, Dr. Cui has more than 25 years experience in Integrated Pest Management, with specialties in biological control agents, physical control, botanical/bio-pesticides, entomology, plant pathology, agronomy and greenhouse and growth chamber management. He also has extensive experience working with the Cannabis sativa plant in professional settings 18

19 REGULATORY LANDSCAPE 19

20 Provincial Regulatory Landscape Province / Territory Price Distribution Model Retail Storefront Model Other Key Highlights Ontario TBD Government-run (Liquor Control Board, LCBO) Government-owned Government targeting 40 stores open by July 2018, 80 by July 2019, and 150 stores by Online distribution controlled by government to be available by July Quebec $7-8 Government-run (Société Québécoise du Cannabis or SQC, subsidiary of SAQ) Government-owned Government targeting 15 stores opened by July 2018, with 150 stores in two years. Personal grow for recreational purposes will be prohibited. British Columbia TBD Government-run (BC Liquor Distribution Branch, LBD) Mix of Governmentowned and Private Retail Online sales to the recreational market will be handled exclusively by the government, and evaluation of potential e-coerce models are underway. No co-location with other products. Alberta TBD Government-run (Alberta Gaming and Liquor Commission, AGLC) Private Online sales will be government-operated, reportedly based on concerns around age verification. Additional detail on private retail operations, including provincial licensing requirements, expected in early Manitoba TBD Government-run (Manitoba Liquor and Lotteries, BLL) Private Personal grow for recreational purposes will be prohibited. Municipal governments will be able to prohibit retail cannabis sales within their boundaries by holding a plebiscite. 84 municipalities have planned to allow sales. Only 13 municipalities said they will not allow cannabis sales. Saskatchewan TBD Private Private Up to 60 retail storefront locations for municipalities over 2,500 people. Municipalities can opt out. Online sales an option, once retail licenses is secured and storefront established. *Source: Pricing information obtained from Maple Leaf Strategies, Government Relations. All other information obtained from Echelon Wealth Partners Feb. 6,

21 Provincial Regulatory Landscape Province / Territory Price Distribution Model Retail Storefront Model Other Key Highlights Nova Scotia TBD Government-run (Nova Scotia Liquor Corporation) Government-owned Store fronts will be co-located with existing Nova Scotia Liquor Corporation stores. 9 retail stores planned, 8 of which will be alongside existing liquor store locations. Online sales will offer home delivery. New Brunswick TBD Government-run (NB Liquor) Government-owned Up to 20 stores planned. Newfoundland and Labrador $10 Government-run (Newfoundland and Labrador Liquor Corporation, NLC) Private Private retailer operations to be established via RFP process. Prince Edward Island TBD Government-run Government Owned Four government-owned retail locations, with e-coerce same day delivery. Currently reviewing public engagement findings. Legislation expected in winter/spring Northwest Territories TBD Government-run (the NWT Liquor Commission) Government-owned Plan articulated in The Way Forward report. Cannabis will initially be sold through liquor stores, given storefront retail experience in controlled substances. The government will review its approach following legalization. Formal legislation is in development. Yukon TBD Government-run Government-owned Based on Proposed Framework published November 20, Private retail may be introduced later. Nunavut TBD Pending Pending Legalization survey closed September 22, *Source: Pricing information obtained from Maple Leaf Strategies, Government Relations. All other information obtained from Echelon Wealth Partners Feb. 6,

22 Provincial Regulatory Landscape Legal Minimum Age % of population by strategy 3% Retail Storefront Model % of population by strategy 13% 1% 35% 20% 62% 66% 18+ years 19+ years Pending Government-owned Private Mix of Government-owned and Private Retail Pending *Source: Echelon Wealth Partners Feb. 6,

23 THE TEAM 23

24 Our Team DAN KRIZNIC CPA/CA, CHAIRMAN, CEO, FOUNDER & DIRECTOR GEORGE KVETON DIRECTOR TREVOR DIXON DIRECTOR AARON BOWDEN CPA/CA, DIRECTOR JOSEF HOCHER DIRECTOR PAUL SPARKES DIRECTOR DYLAN EASTERBROOK CPA/CA, CHIEF FINANCIAL OFFICER LARRY HEINZLMEIR MBA, VICE PRESIDENT, MARKETING & COUNICATIONS NATASHA COLLINS CPA/CA, DIRECTOR OF FINANCE 24

25 APPENDIX 25

26 Our Team DAN KRIZNIC CPA/CA, CHAIRMAN, CEO, FOUNDER & DIRECTOR Dan Kriznic founded Invictus in June 2014 with a vision to create Canada s Cannabis Company to meet the significant legal demand. He has been responsible for incubating companies in a variety of industries including Cannabis, Education, Real Estate, Resources and Senior Care Facilities. Through his strategic direction and execution, these companies have grown from a nominal amount to over a billion in enterprise value. Prior to this, he was a Senior Manager at Deloitte where he served in leadership roles in its Assurance and Advisory group, advising public and privately held companies for a period of 10 years. TREVOR DIXON DIRECTOR Trevor Dixon founded Acreage Pharms Ltd in 2013 and with his sister Brenda Dixon, Chief Science Officer, submitted a successful ACMPR application. Prior to that, Trevor founded a company that specialized in niche home renovations where he developed a franchise system. Within a decade, the company was serving customers in more than 50 cities across Canada. His philosophy of customer value, quality, and excellent service has been carried over into the design and operational strategy of Acreage Pharms Ltd. AARON BOWDEN CPA/CA, DIRECTOR Mr. Aaron Bowden specializes in taxation and currently manages all areas of taxation for a large Canadian public company with over 12,000 employees and $4 billion in sales. Prior to this, Mr. Bowden worked at Deloitte advising clients on assurance and tax matters and has been involved in various forms of financing, mergers, acquisitions, and divestitures. GEORGE KVETON DIRECTOR George is a founding partner of LOGSCALE Venture Partners, focused on capitalizing early and growth stage companies in healthcare. He has in-depth strategic and corporate development experience in fast moving consumer goods. As VP at Japan Tobacco, he led M&A transactions valued at US $1.5B, expansion into in the US and Latin America, and deal origination and execution for emerging products. At Philip Morris, he led two major acquisitions (up to US$1B), readied businesses in central and eastern European for EU accession, and facilitated new market entries into Croatia and neighboring countries. His multi-billion dollar private and public company deals are global spanning five continents. He s a grad of Queen s University and completed executive studies at Berkeley Haas and Harvard Business School. JOSEF HOCHER DIRECTOR Josef W. Hocher was a founder of Buried Hill Energy, an international oil and gas company, where he acted as co-chief executive in creating, developing and implementing the organization s strategic direction. He continues to serve as the Senior Independent Director and is also either a Chair or a member of various committees. Joe also founded Hitic Energy Ltd., and was a partner at Osler, Hoskin & Harcourt LLP. Joe currently serves as Chairman of Orthoshop Geomatics Ltd., a geomatics services company; holds the position of Chief Commercial Officer at Field Upgrading Limited and Western Hydrogen Limited and since 2016, has been a Partner at Cassels, Brock & Blackwell LLP. 26

27 Our Team PAUL SPARKES DIRECTOR Paul Sparkes sits on several public and private boards in Canada, the US and Europe, including Thunderbird Entertainment, Bluedrop Performance Learning, Inc., and is a former board member of the Liquor Control Board of Ontario (LCBO). Prior to joining Bell Globemedia in 2001 as Group Vice-President, Public Affairs, Mr. Sparkes held senior positions in public service, with the Governments of Canada, and Newfoundland and Labrador. As Executive Vice Chair, Director and co-founder of Difference Capital Financial, a TSX-listed specialty finance company that invested in media, technology, health care and US real estate, he helped raise over $200 million for investment purposes in under a year. DYLAN EASTERBROOK CPA/CA, CHIEF FINANCIAL OFFICER Dylan Easterbrook is a seasoned accounting and financial professional, who most recently was controller of a publicly traded global fibre optic connectivity solution provider. Prior to that role he was with Ernst & Young, one of the largest global professional services firms, where he led audit engagements for both public and privately held companies from a variety of industries, including the emerging markets. Dylan is a Canadian Chartered Professional Accountant (CPA, CA), and also holds a Bachelor of Science in Life Sciences degree from the University of British Columbia. LARRY HEINZLMEIR MBA, VICE PRESIDENT, MARKETING & COUNICATIONS Larry Heinzlmeir brings over twenty-five years of executive level experience in sales and marketing with several of the largest publicly traded companies in the for-profit higher education sector, namely DeVry and EDMC, that had a combined market cap in excess of $7B. He was Vice President, Marketing and CMO of a growth-oriented organization that was Canada s largest private, for profit, education company and was responsible for the aggressive growth of seven brands growing revenue ten-fold in four years. He has extensive experience in developing marketing strategies, multi-brand development, product management, communications, creative and content development, and leveraging digital marketing across multiple platforms and technologies including web, mobile and social. NATASHA COLLINS CPA/CA, DIRECTOR OF FINANCE Natasha is a Chartered Professional Accountant with over 10 years of experience in financial management and accounting. Prior to joining the Invictus team, Natasha held management positions at Deloitte, a global professional service firm and Mr. Lube Canada, one of Canada s largest oil change franchisors. In these roles, she gained valuable leadership experience and well-rounded financial skillset, including auditing, reporting, planning and analysis. Natasha holds a bachelors degree in accounting from British Columbia Institute of Technology and received her CA designation in

28 STRAINS OVERVIEW AB Labs is the second CraftGrow partner to successfully transfer cannabis products to be sold through Canopy's Tweed Main Street e-commerce platform. AB Labs cannabis should be available to Tweed Main Street customers Q AB Labs grows a variety of strains, including: Blue Cheese Shark Shock Sour Kush Shark Attack Super Critical Fog Acreage Pharms began cannabis production with two award-winning strains: All Kush Sensi Star Acreage Pharms plant genetics are not constrained by contractual agreements, and we are able to set our own prices. Acreage Pharms' team of horticultural experts, with degrees in horticulture and other plant-oriented degrees, have combined more than 20 years of experience growing cannabis. The team works closely with an entomologist to ensure that Acreage Pharms is 100 percent pesticide-free at all times. Our pollen-based breeding program is on target to add more than 25 strains to the portfolio through a close relationship with an exclusive breeder and elite seeds from the Netherlands. In addition to the wide range of THC-forward strains, Acreage Pharms anticipates developing more strains, such as Shark Shock, that are high in CBD and a variety of other desirable cannabinoids to satisfy mounting demand among patients. 28

29 Strains - Sensi Star Sensi Star is an Indica style of cannabis, and thus is part of the family of cannabis plants that are widely used for pain management, anxiety relief, appetite and improving sleep. Sensi Star, is a very thick stout Indica that performs accordingly. Our Sensi Star is a grower's dream it is not fussy, and easy to nurture to abundance and extremely attractive to patients and consumers due to its sheen of gorgeous crystals and earthy aroma and flavor. Sensi Star THC levels have consistently registered at approximately 20 percent. 29

30 Strains - All Kush All Kush offers Acreage Pharms a potent Indica/Sativa hybrid to introduce to the legal cannabis marketplace. Our All Kush registers roughly 20 percent THC, compared to versions of All Kush found elsewhere, which more frequently contain about 15 percent THC. The earthy, honey-flavored strain offers patients and consumers uplifting moods combined with pleasing sedation throughout the body. For people suffering from depression, anxiety and sleep disorders, All Kush is a frequent choice. With traditional uplifting cerebral elements and a pleasant sedation on the body, All Kush shines on patients seeking relief from sleep disorders, anxiety, and depression. 30

31 Other Strains Super Critical. THC tested at 12.3 percent, CBD N/A Blue Cheese. THC tested at 14.2 percent, CBD tested at percent Shark Shock. THC tested at 3.9 percent, CBD tested at 7.8 percent Sour Kush. THC tested at 17 percent, CBD tested at percent Shark Attack. THC tested at 16 percent, CBD tested at percent 31

32 Invictus Contact Larry A Heinzlmeir Vice President, Marketing & Communications larry.heinzlmeir@invictus-md.com Released: February 9, 2018