Corporate Overview beyond pioneering
Who We Are Bruining Erkelens DROge (= dry ) CANnabis 1 st 5 Standardized Cultivars 18 Jurisdictions served Five (5) unique cultivars have been standardized and commercially accepted as raw material for the production of Active Pharmaceutical Ingredients ( API ); Standardized placebo is also available for clinical and scientific trials; Patients, researchers, and pharmaceutical partners in over a dozen countries and jurisdictions count on Bedrocan s products; Governments, corporates, and research institutions (NGOs, CROs, etc.) favor the Bedrocan product suite 30 Years experience Established 1984 Preferred provider to the Office of Medicinal Cannabis ( OMC ) in the Netherlands since 2003, ten (10) years prior to the establishment of the MMPR in Canada 2
Facts and Figures Operating Statistics Select Financial Statistics* 40 Grow Rooms worldwide 62% Kgs Sold CAGR 2013-2017 53% Revenue CAGR 2013-2017 18 Jurisdictions where Bedrocan products are available 80% Production Capacity CAGR 10 Years Fiscal Growth *O rganic C AG R s defined as w ithout M &A activity 3
Once upon a time 4
Corporate Timeline Start Founding of Bedrocan as an agricultural company Program Dutch Health Minister starts medicinal cannabis program Start Official start under the Dutch medicinal cannabis program Expansion Start USA team and start new production facility in Czech Republic GMP Good manufacturing practice (GMP) and opening new Dutch facility Expansion Capital BI prepares for global expansion and large equity infusion 1984 1999 2003 2015 2017 2018 1992 2002 2014 2016 2017 Seeds First production of cannabis seeds License Bedrocan is awarded 1 st license to grow medicinal cannabis Canada New facility under Canada Health and opening new Dutch facility Australia Start Bedrocan Brazil and plans for Australia become reality Outside Investment Bedrocan accepts its first funds from an outside investor 5
Global Market for Cannabis and Market Environment Current Regulation Legality of Possession of Small Amounts of Cannabis As of the date of this publication, medical use of cannabis is legal in Canada, Israel, Belgium*, Austria* Netherlands, Czech Republic, Denmark (4-year pilot project), Estonia, Spain, Greece, Portugal, Croatia, Mexico, Chile, Uruguay, Poland, Finland, Norway, Macedonia, Germany, Jamaica, Australia, Italy, Colombia, Slovakia, Lesotho and Switzerland; Cannabis is classified as a Schedule IV drug in the UN Single Convention on Narcotic Drugs (the Convention ); the Convention, however, allows independent nation states the choice of establishing cannabis for medical and scientific purposes. Legal or Essentially Legal Ille g a l * Only with prescription of specialist doctor Regulatory Outlook The US does not show a sign of uniform legislation on the near term, although states are increasingly moving toward recreational use and Ille g a l b u t d e crim in a lize d No information Ille g a l b u t u n e n fo rce d Exemptions for Medical Use robust medical use programs. The preponderance of states have legalized cannabis in some capacity, and only a single digit few still enforce misdemeanor possession laws on the books; In Canada, legislation allowing for national adult use is set to take effect on October 17, 2018, with nationwide dispensaries and other distribution outlets set to open to an eager adult use population; Experience in the US and Canada suggests that, once in place, medical cannabis laws are difficult to repeal, which may be due to a multitude of factors such as acceptance by the population at large, increased tax revenues, lower healthcare spending, and other social and economic considerations. Medical Use Laws in Place Sources: UNODC, DEA, Frontier Financials Global Legal Cannabis Report. 6
The Dutch Model The Office of Medicinal Cannabis ( OMC ) Established 2000; Part of the Dutch Health Ministry; Responsible for production, distribution (export) and quality; Mandator of Bedrocan Nederland (Dutch licensee of Bedrocan International); Monopoly on trade of all raw cannabis (similar to production of poppies); www.cannabisbureau.nl (EN pages too). 7
Regulatory and Commercial Landscape United States Canada Netherlands Europe Federal Regulation / Enforcement Policy Schedule 1 Narcotic in the CSA; Adverse Executive branch & enforcement policy; Scale & interstate commerce prohibited Schedule 2 Narcotic in the CSA Medical use legalized since 2002 / recreational use allowed from October 17 2018 Non-compliant with UN treaties Government as counterparty creates partnership & legitim acy; Gov t to Gov t ( G2G ) supply chain; Nine (9) states have passed federal legislation for medical cannabis consumption (BI has long standing relationships with each jurisdiction); Public / Private partnerships Access to Banking / Depository Services Limited and incongruent access (often at considerable premia) between / among the states Full depository, wire, treasury services by multiple global investment and merchant banks; Revolving, project finance, and real estate facilities available at commercial rates; Full depository, wire, treasury services by multiple global investment and merchant banks; Revolving, project finance, and real estate facilities available at commercial rates; Full depository, wire, treasury services by multiple global investment and merchant banks; Revolving, project finance, and real estate facilities available at commercial rates; Tax Considerations 280E Deduction Limitation No adverse tax Access to agricultural, biotech, and pharma No adverse tax Access to agricultural, biotech, and pharma No adverse tax Access to agricultural, biotech, and pharma subsidies and grants subsidies and grants subsidies and grants Licensing Disparate licensing regimes between / among states +118 Licenses Issued free m arket policy; strict regulations to prohibit diversion and to guarantee minimum quality; No strict separation medical/recreational Preferred provider to O M C for fifteen (15) years; Public tender disbursed every 3-5 years; Separate tenders for medical & recreational use to be ratified in 2019 Limited licensing Indoor Cultivation; 3+ year history of CO As; Chemical profiles similar to BI Cultivars; Quality and standardization Requirements Com passionate Use (no standardization regulation) Non-pharmaceutical regulation (ACMPR) For medicinal and recreational use Strict Standardization to GACP and GMP (Non-conforming crops destroyed) Strict standardization as medical cannabis viewed as a pharmaceutical product in EU; GACP and GMP standardization Total Addressable Market (Population) 330 million* 37 million 17 million 750 million Total Addressable Market ($) $50-55 billion(1) $ 4.3 7.5 billion (2) $1.5 3.0 billion(3) $100-125 billion(4) (1) Marijuana Business Daily Estimated Demand, legal and black market. (2) BNN Bloomberg; Canada s legal cannabis market by the numbers (3) Open Society Foundation estimates >$400 million in tax receipts by Dutch Authorities in 2013 from coffee- shops.. (4) Industry estim ates based on population, geography, and proprietary m arket research. 8
Views on European Cannabis Market European cannabis market Select Forecast Europe is destined to become the world s largest medical cannabis market because the Continent will require fully registered cannabis medicines in its market, and will hold those medicines to pharmaceutical and GMP standards throughout. Driven in large part by pharmacies and physicians, European cannabis agencies will enforce Good Manufacturing Practices ( GMP ) and public healthcare coverage policies that will ensure high standards from the cannabis industries. Only companies that are able to meet and maintain these high standards, will survive in the European cannabis industry. Recreational cannabis is very unlikely to become widely regulated in Europe as it is in the US and Canada, as the compassionate use systems of the Western Hemisphere are unlikely to cross the ocean to Europe. Unique position Bedrocan is likely to become the key-cultivator because: Nearly three decades of experience in cultivating top-quality medical cannabis in the most scrutinized government-to-government supply chain on the planet; Assisted governments around the world in understanding the Dutch Framework of cannabis regulation, and seeks to export regulatory influence and commercial discipline in every new market it enters; Acquired GMP certification for its whole cultivation process. 9
30 years in business 10
Global presence (Office or facility) USA 2015 *Canada 2014 Netherlands 1984 Czech Rep 2014 *Brazil 2016 Australia 2016 Bedrocan current presence *Jurisdiction subject to moratorium between Canopy and Bedrocan 11
Exportation to the world *Brazil *Canada Netherlands Italy Poland Israel Denmark Finland Austria Germany Macedonia Norway Sweden Czech Rep United Kingdom Switzerland Australia Malta Bedrocan current presence *Jurisdiction subject to moratorium between Canopy and Bedrocan 12
Corporate Partnerships Pharma Research Organizations Governments Academic 13
Professional Team and Industry Advisors Legal Financial Consulting Other 14
Questions? 15
Corporate Overview Tjalling Erkelens Founder, Chairman, and CEO t.erkelenes@bedrocan.com Mauricio Agudelo, JD CFA Chief Financial Officer m.agudelo@bedrocan.com 16