Investor Presentation Q2 2018

Transcription

1 Investor Presentation Q2 2018

2 2/24 Forward Looking Statement The information contained herein, together with any amendments or supplements and any other information that may be furnished by the company, includes forward-looking information. Such information is based on assumptions as to future events that are inherently uncertain and subjective. The company makes no representation or warranty as to the attainability of such assumptions, including the completion of a financing or as to whether future results will occur as projected. It must be recognized that the projections of the company s future performance are necessarily subject to a high degree of uncertainty, that actual results can be expected to vary from the results projected and that such variances may be material and adverse. Prospective investors are expected to conduct their own investigation with regard to the company and its prospects. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any security.

3 3/24 01 SUMMARY Executive Summary 4 02 INVESTING IN CANNABIS Growing Demand for Medical Cannabis 6 Recreational Cannabis Market 7 Insufficient Supply of Cannabis 8 Table of Contents 03 INDIVA ADVANTAGES Talented and Experienced Team 10 High Quality Products 11 Our Corporate Identity 14 Customer Acquisition Strategies LONDON FACILITY London Facility 17 Production Facility Pictures 19 Path to 40+ Million Grams USE OF FUNDS AND COST BREAKDOWN, LONDON ONTARIO London Operating Expenses 22 Capex/Use of Funds 23 Comparables 24

4 4/24 NEAR TERM CATALYSTS Sales Expansion Processing Facility Executive Summary Sales license is expected as early as Q2 of 2018 and sales expected to start in Q4 of 2018 Fully funded expansion to 40, 000 square feet underway and to be completed in Q4 of STRONG FUNDAMENTALS Award-winning cannabis products State-of-the-art GMP-standard indoor production facility Fully funded expansion Fully funded processing facility planned for Facility to produce INDIVA, Bhang, DeepCell and other cannabis products. Experienced Master Grower with awardwinning strains and loyal patient base. Experienced management team, passionate about helping people and protecting investors

5 Executive Summary Investing in Cannabis INDIVA Advantages London Facility USE OF FUNDS AND COST BREAKDOWN Q Investing in Cannabis

6 6/24 Health Canada s Projected Registered Patients Actual Registered Patients Growing Demand for Medical Cannabis 11,058 physicians have authorized patient access to medicinal marijuana Registered Patients 450, , , , , , , ,000 50,000 GROWTH RATE OF MEDICINAL CANNABIS USERS IS HIGHER THAN EXPECTED Health Canada projected 450,000 patients will be using cannabis at $1.3 billion annual revenue by ,000,000 5,000,000 December 2017: registered patients exceeds Health Canada s 2022 projection At September 2017, there were 269,502 patients registered, which is a 14% quarterover-quarter increase & approximately equal to Health Canada s projection for ,502 registered patients in total to date 11,000 (approx.) new patients per month (~5% monthover-month growth) 4,000,000 3,000,000 2,000,000 1,000,000 POTENTIAL MARKET _ Multiple Sclerosis Epilepsy Cancer Low BMI Severe Pain Risk of Depression Migraine Headaches Insomnia Source: Health Canada, Statistics Canada, Canadian Community Health Survey, medicalmarijuana.ca Anxiety Arthritis Hypertension Life Stress (Elevated)

7 7/24 Daily Weekly Monthly Occasionally Non-Consumers Potential Customer 17% 7% 4% 3% 8% SIZE AND MAKEUP OF THE CANADIAN RECREATIONAL MARKET According to the Deloitte Survey, the size of the Canadian recreational cannabis market could be as much as $8.7 billion per year, or similar to the size of the Canadian spirit market. 61% Recreational Cannabis Market Consumption (Metric Tonnes) 410 Users (Thousands) Source: Deloitte, PBO Once Less than once a month 1-3 Times per month At least once a week Daily ANNUAL CANNABIS USERS AND CONSUMPTION Aged 15 and over, Canada excluding Territories, Mid-point Estimates, 2018

8 8/24 Number of licences issued by province Insufficient Supply of Cannabis YT 0 BC 22 NT 0 AB 5 SK 4 NU 0 MB 2 ON 56 QC 6 NB 3 NS 3 NL 0 PE 1 Current Production 102 existing LPs Current production insufficient to meet demand 45 Sales Licenses issued (37 companies) Health Canada Market Data from Q Dry flowers: 6.3mm grams sold, 38.9mm grams in inventory Oil: 9.3mm grams sold, 11.1mm grams inventory 269,502 registered clients at December 31, 2017 Prices range from $1.75/gram to $15/gram Health Canada Market Data from Q Supplying even the low end of the estimate of the recreational cannabis market would require the production of over 700mm grams of cannabis annually

9 Executive Summary Investing in Cannabis INDIVA Advantages London Facility USE OF FUNDS AND COST BREAKDOWN Q INDIVA Advantages

10 10/24 FINANCE & CORPORATE DEVELOPMENT Niel Marotta President & CEO, Director, Founder Managed over $1 Billion across several industries Involved in capital raises and M&A transactions exceeding $1 Billion CREATIVE Tom Borowicz Chief Brand Officer Over 30 years of experience in marketing, branding, print/digital advertising and design with Fortune 500 companies Talented & Experienced Team LEGAL & BUSINESS DEVELOPMENT Koby Smutylo COO, General Counsel, Director, Founder Koby is a seasoned lawyer and has acted as counsel to private and public companies Helped finance and license an ACMPR LP FINANCE Jennifer Welsh Chief Financial Officer Managed a global finance team for eight years as Corporate Controller of a TSX listed company Former consultant for a publicly traded LP PRODUCTION Pete Young Master Grower, Founder Grow Team: 15+ years of experience producing medicinal strains for hundreds of patients International recognition and multiple product awards PROJECT MANAGEMENT Jose Laurentino Chief Technology Officer 20+ years in agricultural project development including indoor and greenhouse expertise

11 11/24 INDIVA High Quality Products

12 12/24 Products Powered by INDIVA

13 13/24 Products Powered by INDIVA

14 14/24 Our Corporate Identity POSITIONING At INDIVA, we believe cannabis can add to one s general wellness and we stand for the destigmatization and normalization of cannabis for medicinal and recreational use. INDIVA is an experienced producer of high quality cannabis products designed to contribute to the health and wellness of its clients. Our logo symbolizes experience, strength, know-how practical knowledge, as well as a strong foundation for investment and growth. It is respectful of the cannabis movement without the clichés of cannabis counter-culture. Our clean aesthetic and pallet strike the perfect balance between mature yet accessible, contemporary but still classic enough to be lasting, and holistic without looking like products that only belong in a health food store. Our website and media content features contributors focused not just on cannabis, but wellness (nutrition, fitness, sleep) and culture (dining, events). Our associations with award winning American brands that we will produce and sell in Canada and internationally with our powered by INDIVA logo.

15 15/24 COMPASSION COMMUNITY RELATIONS Established relations with prominent and experienced members of the compassion community We will offer familiar strains and an overall respectful and familiar patient experience Agreement with London Compassion Society to transfer up to 1,200 clients Customer Acquisition Strategies MARKETING SEO, E-shop, blog, and social media campaigns launched in 2017; mailing list of up to 2,000 clients Partnerships with popular social media influencers Packaging developed and focus group tested Engaging events team and keynotes at cannabis, wellness, cultural, and community events across Canada Featured interviews in key publications MEDICAL AND COMMUNITY ENGAGEMENT Strong ties to London s medical community Mandate to support patient networks and societies PROVINCIAL RETAIL STRATEGY Sales teams active in multiple provinces Responding to provincial RFPs Access to award winning US products

16 Executive Summary Investing in Cannabis INDIVA Advantages London Facility USE OF FUNDS AND COST BREAKDOWN Q London Facility

17 17/24 ACMPR License London Facility 40,000 square feet - 10,000 sq. ft. retrofit complete - 8,000 sq. ft. production space - 30,000 sq. ft. expansion planned Adds 21,600 sq. ft. of production space 30 Year Lease with right of first refusal to purchase 2,500-3,000 kgs annual production capacity (dry flowers) Extraction facility to be built on site Ample Power & Water 5 Minutes from Highway 401

18 18/24 Mother Room Oil Extraction Drying Room Trim Room London Facility Packaging Drying Room 2 Trim Room 2 Room Mother Room 2 Oil Extraction Veg Room Dry 2 Trim 2 Mother 2 Storage/Receiving Pump Pack Pump Veg Admin/Call Center/QA Admin Dry Trim Str/Rec Mother Planned Expansion ( Rooms) Existing Fenceline

19 19/24 Production Facility Pictures

20 20/24 Path to 40+ Million Grams Domestic Expansion LARGE SCALE CULTIVATION Currently evaluating 3 large greenhouse facilities in South Western Ontario for production partnerships INDIVA s criteria: newer glass houses, access to infrastructure, experienced production partner, ability to fund retrofit out of existing cash resources, measured expansion over time International Expansion INTERNATIONAL DISTRIBUTION Active negotiations with German distributors for large quantity multi-year supply Agreements with US cannabis products companies to use Canada to produce and export internationally Active negotiations with Polish, Costa Rican and Maltese governments for production partnerships

21 Executive Summary Investing in Cannabis INDIVA Advantages London Facility USE OF FUNDS AND COST BREAKDOWN Q Operating & Capital Costs

22 22/24 1. Power 2. Bulbs 3. Labour 4. Shipping 5. Packaging 6. Materials 7. Contingency London Operating Expenses KEY EXPENSES Cash costs: Power, light bulbs, labour, packaging, shipping, soil & nutrients, composting, QA testing and contingency (20%) G&A: Management, accounting staff/admin, customer service/call center, security, distribution team Rent, insurance & security EMPLOYEES (ESTIMATED) Full production: 47 Senior management (5) Accounting (3) Gardening (10) Security/IT (2) Distribution (5) Customer Service (12) Sales (3) QA (2) Marketing (5) Software

23 23/24 London Capex / Working Capital Building Retrofit and Equipment HVAC, security, fence, electrical Production facility and equipment HID lights, carbon filters Video surveillance, archiving Working Capital and Contingency Inventory build, G&A Total $14.5mm $18.5mm $33.0mm

24 24/24 VALUATIONS OF CANADIAN PUBLIC COMPANIES INDIVA Limited Capitalization: Basic Shares Outstanding mm Warrants: mm Options:...4.3mm Convert:...8.9mm Fully Diluted Shares Outstanding mm Balance Sheet (April 27, 2018): Cash...$33mm Convertible Debenture.$6.7mm Licensed producer Canopy Growth (WEED) Aurora Cannabis (ACB) Medreleaf (LEAF) Aphria (APH) CannTrust (TRST) Organigram (OGI) Cronos Group (MJN) Emerald Health (EMH) CanniMed Therapeutics (CMED) Supreme Pharmaceuticals (FIRE) Hydropothecary (THCX) WeedMD (WMD) Delta9 (NINE) Emblem (EMC) INDIVA (NDVA) Reordered by market cap (C$mm) $5,421mm $4,331mm $2,055mm $2,043mm $1,490mm $745mm $732mm $630mm $549mm $486mm $405mm $187mm $157mm $115mm $63mm Market data as of April 27, 2018

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