Inner Spirit Holdings

Transcription

1 CSE:ISH Inner Spirit Holdings Corporate Presentation November 2018

2 LEGAL DISCLAIMER. The information provided herein is not intended to provide financial, tax, legal or accounting advice. This Corporate Presentation and the contents herein do not constitute or form part of any advertisement, any offer to sell or any solicitation of an offer to buy or subscribe for securities of Inner Spirit Holdings Ltd. (the Company of Inner Spirit or ISH ) or represent an intention to induce any person to make an investment in the Company or to assist any person in the making of an investment decision. This Corporate Presentation and the contents herein shall not form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. This Corporate Presentation includes statistical information that the Company has obtained from independent industry publications, government publications, market research reports and other published independent sources. Such publications and reports generally state that the information contained therein has been obtained from sources believed to be reliable. Although the Company believes these publications and reports to be reliable, it has not independently verified any of the data or other statistical information contained therein, nor has it ascertained or validated the underlying economic or other assumptions relied upon by these sources. The Company has no intention and undertakes no obligation to update or revise any such information or data, whether as a result of new information, future events or otherwise, except as, and to the extent required by applicable securities laws. Readers should also be advised that the watch, sunglasses and related accessories business of the Company is carried out through its wholly-owned subsidiary, WATCH IT! Consolidated Ltd., and any reference herein to WATCH IT! is a reference to such subsidiary. FORWARD LOOKING INFORMATION This Corporate Presentation contains forward-looking statements and forward-looking information (collectively, forward-looking information ) within the meaning of applicable securities legislation. Forward-looking information in this Corporate Presentation include, but are not limited to, statements or information with respect to: the Company s intended strategy; the Company s ability to execute its strategy and ensure success; the expected legalization of recreational cannabis; market expectations; intended products, delivery systems and partnerships; and other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Actual results, performance or achievement could differ materially from that expressed in, or implied by, any forward-looking information in this Corporate Presentation, and, accordingly, readers of this Corporate Presentation should not place undue reliance on any such forward-looking information. Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements and accordingly, should not be read as guarantees of future performance or results. Forward-looking information involves numerous risks and uncertainties including, but not limited to, the ability of management to execute its business strategy, objectives and plans; that the Company will have sufficient capital to fund its business plans; general economic and business conditions; changes to laws, regulations, rules, rulings, policies, procedures and other instruments applicable to the Company and its business; the risk of disruptions to the Company s supply chain; risks associated with the Company s reliance on key personnel; and changing consumer sentiments. Forward-looking information contained in this Corporate Presentation is based on the Company s current estimates, expectations and projections, which the Company believes are reasonable as of the current date. The Company can give no assurance that these estimates, expectations and projections will prove to have been correct. Historical statements should not be taken as a representation that such trends will be replicated in the future. No statement in this Corporate Presentation is intended to be nor may be construed as a profit forecast. FUTURE-ORIENTED FINANCIAL INFORMATION This Corporate Presentation also contains future-oriented financial information and financial outlook information (collectively, FOFI ) including, but not limited to, prospective annual revenue, prospective net profit, prospective system wide sales, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this Corporate Presentation was made as of the date of this Corporate Presentation and was provided for the purpose of providing information about management s current expectations and plans relating to the future, and for certain illustrative purposes. The Company disclaims any intention or obligation to update or revise any forward looking statements or FOFI contained in this Corporate Presentation, whether as a result of new information, future events or otherwise, unless required pursuant to applicable securities law. Readers are cautioned that the forward-looking information and FOFI contained in this Corporate Presentation should not be used for purposes other than for which it is disclosed herein. The forward-looking statements and FOFI contained in this Corporate Presentation are expressly qualified by this cautionary statement. THIS CORPORATE PRESENTATION MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED OR PUBLISHED IN WHOLE OR IN PART WITHOUT WRITTEN PERMISSION FROM THE COMPANY. NOVEMBER

3 The start of something incredible. Inner Spirit Holdings Ltd. is applying a successful franchise and retail model to the recreational cannabis industry. With a group of over 100 franchise partners, corporate retail cannabis locations, and a proprietary brand portfolio under various stages of development, Inner Spirit Holdings is positioned to be an industry leader. NOVEMBER

4 Investment Highlights Leverage to Canadian legal recreational cannabis market. The Canadian adult use market is currently worth up to $5.0B and is expected to grow to $7.0B in FY22 1 Low-cost and highly scalable franchising model to maximise ROI more than 100 corporate and franchise locations under development across Canada Strategic partnerships with premium producers creates a fully integrated business model Proprietary house brands to offer consumers a market-leading retail experience Highly experienced team with significant expertise in the cannabis, branding, consumer retail, real estate and franchising industries NOVEMBER

5 Meet the Team Darren Bondar President & CEO Chris Gulka CFO Cecil Horwitz Business Development Jeremy Lee Controller 20 years experience in retail and franchise industries Previously founded WATCH IT! in 1999 Bachelor of Arts from Western Ontario University and MBA from University of Alberta CPA and CFA with > 26 years business experience President of Working Capital Corporate since 1999 Founded Passport Energy Ltd., and was the CFO of Rochester Energy Corp. Extensive experience in retail sales since beginning of WATCH IT! in 1999 Founder and clinical director of Whole Family Health Cannabis advocate for both health and recreational use Experience across financial reporting, controlling and finance functions Previously at Big 4 accounting firms and in industry roles Chartered Accountant designation in 2000 Robert Verbuck Legal & Capital Markets Christine Kitz Operations Alisa Kuzmina Creative Director Corporate securities lawyer with 20 years experience Oversees business systems and operations at ISH Overseas ISH s commitment to creative excellence Since 2014, actively involved in advising businesses in the cannabis industry Previously held financial, strategic and human resources positions within the retail sector Significant experience working within the retail and franchise industries Law degree from the University of Toronto Degree in Communications with a Major in Information Design NOVEMBER

6 Board of Directors Darren Bondar President & CEO Chris Gulka CFO David Margolus Director Jeff Tung Director 20 years experience in retail and franchise industries Previously founded WATCH IT! in 1999 Bachelor of Arts from Western Ontario University and MBA from University of Alberta CPA and CFA with > 26 years business experience President of Working Capital Corporate since 1999 Founded Passport Energy Ltd., and was the CFO of Rochester Energy Corp. Former Managing Partner of Witten LLP Served on boards of Edmonton Regional Airports Authority, Liquor Stores N.A. Ltd., PowerComm Inc. and The XS Cargo Income Fund Bachelor of Arts and Law from the University of Alberta CFO & COO of Auxly Cannabis Formerly co-founder of CPS Management Partners MBA from the Richard Ivey School of Business, Bachelor of Computer Engineering from the University of BC Larry Wosk Director Craig Steinberg Director 15 years experience at the Sauder School of Business Former partner at Miller Thomson LLP 27 years in sernior manageent positions President and CEO of companies across retail, real estate development, hospitality and consulting >10 years experience as a private mortgage banker and corporate counsel Law Society of Alberta, Canadian Bar Association and Real Estate Council of Alberta NOVEMBER

7 Corporate Highlights March 16, 2017 June 16, 2017 January 8, 2018 January 29, 2018 February 6, 2018 ISH Formed CFA Membership Granted Auxly Retail Store Concept 100th Franchise and $4.5M Equity Inner Spirit Holdings Ltd. was founded in Calgary, AB. Spiritleaf is first and only cannabis company granted entry into CFA. ISH announces cross-investment and strategic alliance with Auxly (TSXV:XLY), which closes on February 6, Spiritleaf unveils its concept retail store design. ISH grants its 100th franchise and completes its $4.5 million private placement equity financing.* May 23, 2018 June 4, 2018 July 31, 2018 November, 2018 November 28, 2018 Newstrike Inner Spirit Holdings Ltd. is Honored to Support the Gord Downie & Chanie Wenjack Fund Inner Spirit Holdings Ltd. Closes IPO Franchise Store Openings Tilray Newstrike Brands Ltd. (TSXV:HIP), formerly Newstrike Resources Ltd. announces cross-investment and strategic alliance with ISH. ISH announces its support of the Gord Downie & Chanie Wenjack Fund (DWF) via a fiveyear charitable commitment and the establishment of a DWF Legacy Room. This support is part of an ongoing agreement to collaborate with Newstrike Brands Ltd. & Up Cannabis. ISH closes IPO on maximum gross proceeds of $3,750,000 and issued 25,000,000 Units. Its common shares began trading on August 1, 2018 on the CSE under the symbol ISH. ISH opens first 4 franchise locations in Brooks, Lethbridge, St. Albert & Moosejaw. ISH announced investment by Tilray, Inc. and formation of strategic partnership. (NASDAQ: TLRY) * Includes Auxly s $350,000 equity investment on January 8, 2018, Auxly s additional $150,000 equity investment on February 6, 2018, and Grenville s $1M equity investment on January 18, NOVEMBER

8 Canada s New Growth Industry Substantial Market Size 1 X X = $5.0B in FY18 $7.0B in FY22 Population of Adult Consumers Annual Consumption Volume in Grams per Consumer Price per Gram of Marijuana Estimated Total Adult Use Market Size Shift Towards Legal Consumption 2 Current consumers are expected to buy nearly two-thirds of products from legal retailers Legalization expected to attract a more conservative experimenter typically one who is aged 35-54, has a university education, and has family or other responsibilities After legalisation, current frequent cannabis consumers expect to buy products more often Demand For Retail Experience 3 Current and likely consumers expect to purchase the majority of products at physical retail locations Consumers to demand high quality products at a range of competitive price points Privacy and security when purchasing are key considerations for consumers 1. GT Research, Canadian Legal Recreational Cannabis Market, Deloitte, A society in transition, an industry ready to bloom 2018 cannabis report NOVEMBER AUGUST

9 The Inner Spirit Strategy Build an iconic Canadian brand and a chain of recreational dispensaries across Canadian jurisdictions where private distribution of cannabis is legal. Sell select brands together with our proprietary licensed brands through our own retail network and other distribution channels. Utilize a low CAP X franchise and streaming strategy to maximize ROI and scalability. Franchising to maximize ROI $25,000 upfront franchise fee 5% royalty on gross sales 1% of gross sales allocated to Spiritleaf s advertising fund NOVEMBER

10 110 franchise agreements executed with [25] locations expected to open in Q NOVEMBER

11 The Space Open spaced opportunity to reimagine the typical retail environment of a dispensary. The Retail Brand Stores will offer an impressive selection of products, knowledgeable staff and a welcoming and comfortable environment. NOVEMBER

12 Retail & Franchise First Cannabis company to receive membership in the Canadian Franchise Association Best in class retail experience Over 100 franchise partnerships entered into with local entrepreneurs Corporate stores and joint ventures ISH utilising existing WATCH IT! infrastructure platform Current ISH team has significant retail and franchising experience at WATCH IT! WATCH IT! Has $10m+ existing system wide sales with 8 stores across Canada NOVEMBER

13 FLOWERS / PRE-ROLLS / OILS & EXTRACTS We Source, Create and Curate Quality Cannabis Brands The Spirit Joint Disposable Vaporizer nticipated to be one of the most discreet, disposable vaporizers on the recreational cannabis market. 150 puffs of pure CO2 cannabis oil. No smell, no lighter, no charging, no prep, no hassle. NOVEMBER

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15 Tilray announced its newly-formed partnership with Inner Spirit s retail network Key Terms Tilray to subscribe for $4,500,000 of ISH shares, comprised of $2,250,000 in cash and $2,250,000 in Tilray common shares On [X], 2018 ISH and Tilray completed the cash tranche at price of [] per ISH share. Second tranche to complete 6 months after closing of first tranche. ISH and Tilray have entered into a collaboration agreement which includes, among other things: (i) guidance for promoting High Park s products, for each retail location of Spirit Leaf which, will represent 20% of the retail space at each Spirit Leaf location; and (ii) general terms for Tilray to support the charitable endeavours of ISH and Spirit Leaf. About Tilray and High Park Tilray is a global pioneer in cannabis research, cultivation, processing and distribution with operations in 12 countries spanning 5 continents High Park is a wholly owned subsidiary of Tilray, Inc. (NASDAQ: TLRY), and is led by a team with deep experience in cannabis and global consumer brands NOVEMBER

16 Strategic Partnership Collaboration on retail initiatives including product acquisition and in-store marketing and branding TSX.V: XLY Auxly currently holds ~15% of the outstanding ISH common shares Retail distribution of Up Cannabis products, and the creation of Up Cannabis-branded customer lounges in Spirit Leaf stores Newstrike holds ~9% of the outstanding ISH common shares TSX.V: HIP ISH licensed to distribute and sell all High Times magazines in corporate & retails stores ISH holds 11,000 shares of class A common stock of High Times Holding Corp. NOVEMBER

17 Where we ve come from, where we re going. Experience comes with time. Success comes with passion. Bringing 20 years of franchise, branding, retail, marketing & real estate experience to the recreational cannabis market -- Opportunity to participate in Canada s emerging recreational cannabis market -- Platform to invest in a proven revenue-generating business model NOVEMBER

18 Trading commenced on August 1, 2018 (CSE:ISH) Capital Structure (November 26, 2018) Basic Shares Outstanding Recent Share Price (Nov. 26, 2018) $ million Top 5 shareholders own ~45% Current Market Capitalization $38.5 million Capital light business model Warrants and Options Outstanding 42.0 million Weighted Average Strike Price $0.24 No debt on balance sheet NOVEMBER

19 Headquarters #102, nd Street SW Calgary, AB T2H 1Y6 Contact