Medical Marijuana A Growing Business

Transcription

1 TSXV:TPI November 2014 Medical Marijuana A Growing Business

2 Forward Looking Statements Certain statements in this corporate presentation constitute 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, are forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties that could cause actual and future events to differ materially from those anticipated in such statements. Forward-looking statements include, but are not limited to, statements with respect to commercial operations, including production and sales of medical marijuana, anticipated revenues, projected size of market, quantities of future medical marijuana production, completion of production facilities and other information that is based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. T-Bird Pharma Inc. (the Company ) does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. These forward-looking statements involve risks and uncertainties relating to, among other things, results of production and sale activities, the Company s historical experience with medical marijuana operations, uninsured risks, regulatory changes, availability of production facilities, timeliness of government approvals and the granting of permits and licenses, changes in prices, actual operating and financial performance of facilities, equipment and processes relative to specifications and expectations. Actual results may differ materially from those expressed or implied by such forward-looking statements.

3 Investment Highlights T-Bird Pharma Inc. (T-Bird) is the first and only publicly listed federally approved licensed producer of medical marijuana from British Columbia (BC). 1 of only 13 Licensed Producers in Canada. A technology driven approach to growing Medical Marijuana and security that is both scalable and efficient. Premium pharmaceutical grade products will be grown in a sterile, dirt free clean room environment. Developing proprietary technology and software which will allow for break-even with 400 patients. Shipments to patients targeted to begin late Focus on premium BC developed strains with a portfolio of over 60 high-grade medicinal strains (including popular named varieties). BC bud is a world renowned global brand. Most undervalued of the 4 publicly traded licensed producers. Experienced and aligned leadership.

4 Financial Summary Go public date September 09, 2014 Stock Listing Market Capitalization * Shares outstanding (b/fd) TSX-V: TPI $25.3 M 46.1 M / 55.0 M Cash position ~$2.6 M Share ownership Rob Gagnon, CEO: 19.3% Insiders: 46.3% Employees / Consultants: 3.6% * As at October 31, 2014

5 New Industry New Era Since April 01, 2014, only Federally Licensed Commercial Producers can supply Medical Marijuana ( MM ) to Patients in Canada (except those on old MMR program under injunction) Eventually, Health Canada intends all current patients migrate to the new commercial program The new licensing requirements emphasize need to ensure Security, Hygiene and Auditability the bar is very high Thunderbird was one of the first Canadian companies (13) to obtain a Federal License (MM ) to produce, dry and store Marijuana Thunderbird estimates the overall Canadian market is estimated at 450,000+ patients (and may be as high as 1,000,000) Health Canada website listing Note: Marihuana is the spelling the Federal Government uses

6 The Purchase Lifecycle Research online Visit Producer Site 70% of Physicians report being asked about Medical Marijuana Product is familiar to almost all public, brand is not relevant at moment Order Product Online Send forms to Producers Take forms to Doctor Pharmaceutical-Grade is finally an actual option, not just a benchmark of strength

7 Business Plan Immediate Service a Portion of the Current Market & Focus on Becoming Cash-flow Break-even Near Term Become Supplier of Premium Medical Marijuana Long Term Leverage Knowledge to Widen Our Industry Footprint

8 How big is this market? The market is new and market data is scarce, but estimates are: 450,000 patients in Canada will have an average daily dose of 2 grams 450,000 patients = 900,000 grams per day Retail price expected to be around $8 - $15 per gram That equates to an estimated Total Addressable Market in Canada of $3.285B/yr (Canada Only) California estimates that 3% of their population hold medical Marijuana Cards. Apply that rate to Canada, that would represent 1,000,000+ patients. Note: California actually has a lower approval rating (amongst general public) for Medical Marijuana than Canada.

9 Our Short Term Market Focus The estimated 30,000 people in Canada who currently hold a prescription for Medical Marijuana Patients must obtain a prescription/authorization from an approved healthcare practitioner which now includes Nurse Practitioners MM is an accepted medical product, understood by both patients and healthcare practitioners At 400 Patients (out of a market of approx. 450,000+) Thunderbird could conceivably be Break-Even

10 Our Long Term Market Objective High Net-Worth / High Disposable incomes Familiar with older brands and loyal. Aging group comfortable with alternative healthcare and treatments Our long term vision is to be the premium MM product on the market

11 Marketing - Lite There are some peculiar aspects of this industry that both make marketing a challenge, but also provide advantages to licenced producers: Canadian law doesn t permit advertising of narcotics thus marketing in the typical sense is not possible However, the Federal Government serves as a marketing channel to Licensed Producers Patients visit the Government s website (sending us unique visits per month) to find licensed producers Once buying from a producer, a patient must cancel/revoke their certificate with that producer in order to move to another makes for sticky customers so long as you service their needs We only need to capture 400 patients (0.13% of the potential market) to potentially be break-even, and the upside of growing the market share is significant

12 Why Us / Why Now? Thunderbird Biomedical has 60 years combined IT, Grow, Mail-order and Pharmaceutical experience. The Scalability of Grow, Inventory and Patient Management is IT driven and we have that experience. For the first time in history, businesses can legally produce Medical Marijuana in large quantities and sell directly to patients (100% vertically integrated). We have both import/export and mail-order experience in controlled substances to take advantage of the opportunity.

13 Maximum Security Grow Facility We have: An approximately 3,200 square foot secure processing and grow facility in Victoria, British Columbia Our current license permits us to produce 243Kg of Marijuana 4 grow rooms ready now, 1 more in plan for 1 st Facility Targeted first commercial shipment from 1 st Facility is late 2014 A 500 sq. ft. room can produce approximately 72,000gr/yr for a gross value of $720,000

14 Barriers to Entry? Only licensed producers can produce product (other than those under injunction from old MMRA program) After April 01, 2014, new producers must obtain starting materials from existing licensed producers Security/Setup costs prevent individuals /small organizations from being successful All directors of licensees must pass 10 year Security Background Check (similar to DND or CISIS work) Health Canada licencing is getting tougher and the bar is being raised for new entrants

15 Comparables Company Shares outstanding Shipping Status Market cap * Tweed Inc. (TSX-V: TWD) 40.0M shipping $73.0M Bedrocan (TSX-V:BED) 67.5M shipping $47.9M Organigram (TSX-V:OGI) 51.6M shipping $59.8M Mettrum Health Corp. (TSX-V:MTI) 33.7M shipping $53.2M T-Bird PharmaInc. (TSX-V:TPI) 46.1M late 2014 $27.6M * As at October 31, 2014

16 Growth Potential! We invested in becoming a Processing Facility, over simply a grow facility - there are others who just wish to be growers with less security requirements Software/Technology being developed internally has industry applicability R&D underway is leading to a highly scalable, replicable way to increase capacity on demand

17 Industry Risks The medical marijuana industry is a relatively new industry in Canada. New industries have growing pains associated with the maturation of the industry, both regulatory and commercial risks. We will use processes to control and Insurance to mitigate company risks where possible and use associations and lobby organizations to mitigate legislative risks. Use of proceeds includes significant expenditures on preventative legal services. Regulatory Risks Federal Changes to legislation, court challenges, bureaucracy and Taxation Provincial ALR (Agricultural Land Reserve)/ALC Provincial Taxation Local Zoning (Varied/Changing/not nationally consistent) Police/Fire Security Risks Premises High Value Product (Theft) Public Controversy (Damage) Operational Theft of goods (internal/external) and Risk to Staff Legal Risks This is a Natural Health Product (Claims/Liability) High perceived Cash Value Industry (Litigation)

18 Financial Metrics Production Rooms and plant development geared to 8 week turnaround time on crops Targeting avg. 25 gr/plant Estimated annual revenue from 4 rooms = $1M (current facility has 1 additional room for expansion). Low Burn Rate approximately $150K/month (2014) not including capital expenditures Assuming expansion into a 2 nd facility and no revenue, cash requirement for next six months and twelve months (Opex+Capex) is $2,237,539, and $4,067,776 respectively Low number of customers to reach break even: 400 out of a market of estimated 450,000+ in Canada

19 Business Not Lifestyle Management team is dedicated to production of a pharmaceutical grade medicinal product to consumers. Government License has ongoing and significant requirements of conduct and operations. Security of product requires discretion, anonymity and layers of physical, electronic and process security. Federal Government has been clear in it s high exceptions for maintaining a license.

20 Future wide open Estimated $3.285B Canadian Marketplace for Medical Marijuana (dried flowers), and possibly more with future licensed extracts There are spin off Technology/Software, Merchandise, IP and related opportunities for Thunderbird that keep ahead of this expanding North America wide industry Opportunities in non-product aspects of US marketplace (Colorado/WA + 14 pondering legalization) Legislation permits import/export of dried marijuana and plant tissue opening opportunities in the future

21 Use of Proceeds Existing working capital and net proceeds from $3.0M Private Placement to Accredited Investors and other exempt market investors, will be used for commercialization, expansion & general corporate purposes. 4% 21% USE OF PROCEEDS Capital expenditures: $ 1,590,429 Production costs: $ 275,076 Sales and marketing: $ 48,652 Research & development: $ 21,640 General and administrative (legal, rent, salaries, etc.): $ 317,715 Est. financing closing costs: $ 110,000 Unallocated working capital: $ 651,488 Total proceeds: $ 3,015,000 53% 10% 1% 9% 2% Capital expenditures: Production costs: Sales and marketing: Research & development: General and administrative (legal, rent, salaries, etc.): Est financing closing costs Unallocated, addition to working capital:

22 Milestones Sept 2014 Second Facility Secured up to 43,500 sq. ft. Late 2014 First Patients/Sales Targeted Jan 2015 Second Facility targeted to open May 2015 Break even targeted

23 The Team Executive Robert Gagnon Co-Founder, CEO & Director Chris Taylor, CPA, CA Co-Founder, CFO & Director Karen Parent, BSc, MSc, MPA, PHd(C) VP Quality Assurance David Raffa, BSc (Biology), LLB Executive Chairman Dr. Essam Hamza, MD Director Frank Barr, FCA Director Experience 20+ year technology and software CEO Background in security, systems design and infrastructure History of successful exits (1998 and 2013) 15 Years of CFO experience Extensive startup experience (10+ years) Former CFO, Pure Edge Systems (acquired by IBM) Nursing and Epidemiology background 20+ years Extensive Healthcare Management experience Former CEO Winoperations (Healthcare Software) Over 30 years experience in start-ups and venture capital with strong public company legal and governance expertise Led multiple successful M&A transactions (buy/sell side) Former partner of Lions Capital Corp and BC Advantage Fund, a $100M venture capital fund 15 Years experience as a Family Physician in BC and AB Successful start-up and micro-cap investor Board and advisory experience with TSX-V companies Former Asst. Auditor General of BC Series Board Member (including Chairman of Fincad) Former Chairman, Consumer Protection Branch of BC

24 Contact Us CEO & Founder, Robert A. Gagnon Mobile CFO, Chris Taylor Mobile Chairman, David Raffa Mobile Facebook: /thunderbirdmedical