Zenabis November 21, 2018

Transcription

1 Zenabis November 21, 2018

2 Disclaimers IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING. The information contained in this document has been prepared by Sun Pharm Investments Ltd. ( Sun Pharm or the Company ). The information contained in this document (a) is provided as at the date hereof and is subject to change without notice, (b) does not purport to contain all the information that may be necessary or desirable to fully and accurately evaluate an investment in the Company, including important disclosures relating to the terms of an investment and risk factors associated with an investment in the Company and (c) is not to be considered as a recommendation by the Company that any person make an investment in the Company. This presentation, and the information contained herein, is not for release, distribution or publication into or in the United States or any other jurisdiction where applicable laws prohibit its release, distribution or publication. This presentation ( Presentation ) is being issued by the Companies for information purposes only. Reliance on this Presentation for the purpose of engaging in any investment activity may expose an individual to significant risk of losing all of the property or other assets invested This Presentation is not a prospectus, offering memorandum or an advertisement and is being provided for information purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or any solicitation of any offer to purchase or subscribe for any securities in Canada, the United States or any other jurisdiction. 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Except as otherwise provided for herein, neither the Company, nor its directors, officers, shareholders, agents, employees or advisors give, has given or has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, currency, reliability or completeness of the information or opinions in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers and liability therefore is expressly disclaimed for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. Except as may be required by applicable law, in furnishing this Presentation, the Companies do not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies or omissions. Information contained in this Presentation is the property of the Companies and it is made available strictly for the purposes referred to above. CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION: This document includes information, statements, beliefs and opinions which are forward-looking, and which reflect current estimates, expectations and projections about future events, including: the completion of the reverse take-over transaction between the Company and Bevo Agro Inc. (or "the Companies") and the timeline for completing such transaction, the holding of a shareholder meeting to approve such transaction and for seeking court approval of such transactions, the anticipated costs per gram of the Companies, the anticipated production capacity of the Companies and its competitors, the receipt of all required licenses to operate, future sales, supply chains and partnerships of the Companies, timeline for the legalization of recreational cannabis; the growth of market efficiencies; the projected size of the cannabis market; the forecasted results of the Companies; an increase in competition in the cannabis market; and other statements that contain words such as "believe," "expect," "project," "should," "seek," "anticipate," "will," "intend," "positioned," "risk," "plan," "may," "estimate" or, in each case, their negative and words of similar meaning. 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These factors and risks include, without limitation: receipt of all approvals to complete the reverse take-over transaction between the Companies, general economic, market and business conditions and industry growth rates; changes in the competitive environment in the markets in which the Companies operate and from the development of new markets for emerging technologies; industry trends, technological developments, and other changing conditions in the Companies industries; the Company s ability to execute its strategic plans; technology, cyber security and reputational risks; opportunities that may be presented to and pursued by the Companies; and changes in laws, regulations and decisions by regulators that affect the Companies or the markets in which it operates. In addition, even if the outcome and financial effects of the plans and events described herein are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. Forward-looking information contained in this presentation is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Companies control. You should not place undue reliance on forward-looking statements, which are based on the information available as of the date of this document. 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3 Zenabis brings together two families rooted in Canadian agriculture for more than 30 years.

4 Combined Business The combination of Zenabis and Bevo brings the best of the cannabis and agriculture industries together to form a business with the third largest available production space footprint 1 with meaningful supply agreements, brand relationships, and partnerships. Available Production Space 0.7m sq. ft. indoor 2.8m sq. ft. of high-tech greenhouse 3.5m sq. ft. Distribution Technology Management + Expertise Regulated businesses E-commerce Agriculture New product development Strongest growing expertise in Canada North America s largest propagation business Experienced management team across international growing, sales, R&D, and distribution Note: 1) After completion of planned expansions. Available production space is defined as operating and in construction (excludes any facility where ground has not yet been broken) cannabis production facilities (excluding outdoor facilities). Production space is allocated pro-rata for any JV or partial ownership. Options on future production space are excluded. 3

5 Available Production Space of Major Global Cannabis Producers Upon completion of the RTO, Zenabis will have the third-largest available global cannabis production space dedicated to cannabis. 1 (millions sq. ft.) Available Total Production Space ($bn) 7.0 $13.0bn 3.5m sq. ft. (3 rd ) $10.4bn $7.5bn $2.5bn Aphria Tilray Zenabis Aurora Canopy - Available Production Space 4 Enterprise Value (RHS) Notes: 1) After completion of planned expansions. Available production space is defined as operating and in construction (excludes any facility where ground has not yet been broken) cannabis production facilities (excluding outdoor facilities). Production space is allocated pro-rata for any JV or partial ownership. Options on future production space are excluded. 2) Enterprise value as of market close on November 19,

6 Cannabis Production Facilities Upon completion of the RTO, Zenabis will own four state-of-the-art facilities coast to coast. Zenabis will also have two additional sites available for cannabis cultivation in the future (an additional 0.7m sq. ft.). Zenabis Langley Zenabis Atholville 2.1m sq. ft. greenhouse 380k sq. ft. indoor facility Zenabis Delta Zenabis Stellarton Add photo once received 25k sq. ft. indoor facility 255k sq. ft. indoor facility Note: After completion of planned expansions. Two greenhouses to the right of the Bevo photo are not part of Bevo facility. 5

7 Company Highlights Strong production network Four planned production facilities 1 / 0.7m sq. ft. indoor / 2.8m sq. ft. greenhouse / 3.5m sq. ft. total Multiple distribution channels Supply to four provinces and one territory, two medical agreements in Canada, and international partnerships Stakeholders, investors and innovative partnerships Venture investments in cannabis; three First Nations and Opportunities New Brunswick as equity investors Well positioned for global growth Will be constructing an extraction facility in Malta; current supply agreements or LOIs in the EU, Panama and Malta Note: 1) After completion of planned expansions. Four production facilities are Zenabis Langley, Zenabis West, Zenabis East and Zenabis Stellarton. This excludes Bevo Pitt Meadows and Bevo Topgro. 6

8 Corporate Social Responsibility Teamwork is a focus of ours across all departments. When we care for our communities, our environment, our children, our employees, and all other stakeholders, we do it together. Commitment to Community Safety Keeping children safe Education Research Involvement Volunteerism Charitable giving Inclusion Commitment to Environment Sustainable Power Solar Wind Cogeneration Recycling Water Packaging Construction methods Commitment to People Customers Education Safe, clean, pure product Responsible marketing 7 Employees Health & safety Job creation Skills training

9 Management Team The Zenabis management team has experience in large agriculture operations, corporate finance roles, and the cannabis space. Zenabis has a team of medical experts to lead the development of medicinal initiatives. Management Team Highlights Rick Brar Co-Founder and Chief Executive Officer John Hoekstra Chief Financial Officer Karen Parent Chief Quality and Compliance Officer Leo Benne Chief Growing Officer Mike McGinty Chief Administrative Officer Medical Team Dr. Natasha Ryz Chief Science Officer Dr. Zeid Mohamedali Chief Medical Officer 8 Dr. Oliver Corea Head Scientist Dr. Kyle Boniface Lead Scientist

10 Global Cannabis Market The global legal cannabis market is expected to reach USD146bn by the end of , with medical cannabis as the largest segment. Canada Total: USD14bn by , 67% CAGR Europe Medical: USD63bn by United States Total: USD52bn by , 25% CAGR Global Total: USD146bn by , 36% CAGR Medical: USD100bn by , 33% CAGR South America Medical: USD9bn by , 52% CAGR 9 Notes: Estimates are obtained from independent sources and may not corroborate exactly. CAGR is between 2016 and 2025 for global, United States, and Canada, and between 2018 and 2028 for South America. Sources: 1) Grand View Research April ) Prohibition Partners The European Cannabis Report 3 rd Edition July ) Prohibition Partners The LATAM Cannabis Report October 2018.

11 Partnerships and Distribution Channels Zenabis has developed a diverse set of partnerships and relationships with provinces, distributors, First Nations, start-ups, and other cannabis businesses and brands. Industry Groups Canada-wide Partnerships and Distribution Channels Brands for All Markets Member Member Definitive Agreement Primarily for Oil LOI for Exclusive Supply Agreement as Referral Partner Recreational Brand Medical Brand Brand in Development Purchase Orders Received VENTURES Investment Platform Brand in Development Brand in Development Brand in Development Supply Agreement Investor Investment Joint Venture LOI for Kombucha Partnership Purchase Orders Received Investor Supply Agreement Supply Agreement Investor Investor 10

12 Medical Strategy It is legal to use cannabis for medical purposes in 35 countries, with individual rules governing each. Zenabis has developed a wide range of medical products for distribution in these legal markets. Zenabis Zenabis Differences Patient Support Education Clinical Trials Chief Medical Officer is a doctor and active clinician Medical advisory board GMP Certification Research and Development Zenabis Delta Zenabis Atholville Oral Oil Drops Oil Soft Gels Oral Sublingual Oil Spray EU GMP compliant CBD Oils and Capsules Beverages Zenabis Delta site expects GMP certification in Q Vapes & Concentrates Edibles 11

13 Latin America Zenabis intends to capitalize on the opportunity to establish cost effective cannabis cultivation and relationships with distribution partners in the Latin America region. Opportunity Overview Cultivation Population 650 million 1 Projected Size USD9bn 1 in medical cannabis sales by 2028 Best cost per gram in the global market ($ ) Legal Status Industrial cannabis being legalized in 5 of 11 key markets Perfect climate for cannabis growing Low labour costs ($1.64/hr 2 compared to $14.00/hr) Permitted Exports Colombia Low construction costs (80% lower than North America and Europe) Strategy Establish footprint in key growing regions within Colombia such as Medellin and Cali Legalized medical cannabis Sources: 1) Prohibition Partners The LATAM Cannabis Report October ) 12 Find and develop relationships with leading pharma distributors in Latin America

14 Europe Zenabis intends to supply the European market with high quality medical cannabis products for sale in a variety of forms. All products will be produced in EU GMP certified facilities. Population 742 million 1 Opportunity Overview Projected Size USD63bn 1 in medical cannabis sales by 2028 Legal Status Medical cannabis legalized in over 20 countries in Europe Current Presence Strategy Enter into strategic partnerships with highly reputable third parties Sources: 1) Prohibition Partners The European Cannabis Report 3 rd Edition July Legalized medical cannabis 13 Embark on broad educational programs targeting doctors and pharmacists

15 Thank You Government of Malta Forefront of Innovation Agile and Responsive Government Regulated, Trusted Business Environment Landmark Partnership to Construct Post Production Facility Ministry for Economy, Investment and Small Business Parliamentary Secretary for Consumer Protection Malta Enterprise Malta Medicines Authority 14

16 Contact Us zenabis.com