CORPORATE PROFILE. Nutritional High International Inc. CSE:EAT OTCQB:SPLIF Frankfurt:2NU Q2 2017

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1 CORPORATE PROFILE Nutritional High International Inc. CSE:EAT OTCQB:SPLIF Frankfurt:2NU Q2 2017

2 Forward Looking Statements and Risk Disclosure The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their own analysis and reviews of the Company and of the information contained in this presentation. Prospective investors should consult their own professional advisors to assess their potential investment in the Company. The remarks contained in this presentation ( Presentation ) may contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to the Company s operations or to its business environment. These statements are identified by the use of forward-looking terminology such as believes, plans, intend, scheduled, potential, continue, estimates, hopes, goal, objective, expects, may, will, should or anticipates or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company. The reader is cautioned that no statements contained in Presentation should be construed as a guarantee or assurance of future performance or results. These forward-looking statements involve risks and uncertainties, including those identified within this Presentation. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations, and the Company assumes no obligation to update this information. Readers are urged to carefully review and consider the various disclosures made by the Company in it s reports filed on SEDAR that attempt to advise interested parties of the risks and factors that may affect the Company s business. The information in this current report shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended. The furnishing of the information in this Presentation is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information this current report contains is material investor information that is not otherwise publicly available. This summary has been provided to the recipient for information purposes only and no representation or warranty, express or implied, is made as to the completeness or accuracy of the information contained herein. The contents are not to be reproduced or distributed to the public or press. The information contained herein is not guaranteed as to its accuracy or completeness. Throughout this presentation various logos and trademarks will be used. These trademarks and logos are the property of their respective owners. An investment in the Company's securities should be considered highly speculative. There is no guarantee that an investment in the Company will earn any positive return in the short or long term. An investment in the Company is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment. There are certain risk factors associated with an investment in the Company s securities. Nutritional High International Inc. 2

3 Company Profile Nutritional High is a Canadian public company focused on the U.S. medical and recreational marijuana industries Focus is on the high margin, high growth segments - edibles and oil extracts market Currently have active projects in 4 U.S states: Colorado: Operating one of Colorado s largest and most automated oil extraction and infused edibles facilities: MIPs License secured through agreements with Colorado-based Palo Verde LLC Illinois: One of 52 applicants granted a Medical Marijuana Dispensary License. The only dispensary in ISP District 12. Operating since Sept 2016 Nevada: In a process of acquiring producer & processor licenses Nevada, and a real estate property to which the licenses are attached Oregon: Closed acquisition of property in La Pine, Oregon, and in the advanced stages of an application process to manufacture cannabis concentrates and edibles in Oregon Building a robust production and distribution platform for nationally branded marijuana-infused products First marijuana company to successfully complete an IPO (not an RTO) in the Canadian market, raised over $11 million to date Acquired strategic interest in Aura Health a private company focused on developing medical cannabis clinics in various US states Forming a strategic partnership with Lakeside Minerals Inc. which intends to build cannabis cultivation facilities in NV and CO at NH s properties Pursuing expansion in additional states initially targeting WA, CA, PA, AZ, FL, and MI Nutritional High International Inc. 3

4 Leadership Team Jim Frazier Chief Executive Officer Over 23 years of experience in the food industry and a proven track record of developing and implementing branded and private label programs and driving profits Owns and operates a successful Florida-based candy and chocolate business which has been a well-known manufacturer of confectioneries for over 40 years Managed the expansion of his plant facilities and significantly expanded sales and developed new customer bases across all retail channels David Posner Chairman of the Board and Director Brought Hempen Gold, the first hemp-infused beer to Canada Imported and created marketing and branding initiatives for various other alcoholic products in Canada Acquisitions Manager for Stonegate Properties Inc. where he managed real estate properties and brokered deals in Canada and Oklahoma Amy Stephenson Chief Financial Officer Over 20 years senior management and capital markets experience, 10 of which were spent in the CFO position for various public companies, including Ceres Global Ag Corp., Goldeye Explorations Ltd., Petroworth Resources Inc., and Augen Capital Corp As former CFO of Bedrocan Cannabis Corporation, Ms. Stephenson has a strong familiarity of the cannabis and hemp industries MBA in Finance from California State University, BA from the University of Hong Kong Ms. Stephenson is a CFA Charter holder, a Chartered Professional Accountant (CPA, CMA) and a member of the Financial Executive International (FEI) ` Adam K. Szweras Corporate Secretary and Director Partner with the law firm Fogler, Rubinoff LLP Chairman and Founder of Foundation Markets Inc., a Torontobased investment bank, and Exempt Market Dealer Expertise in recreational and medicinal marijuana laws in the US and Canada Practiced securities law since 1997 Billy Morrison Oil Extraction Consultant and Director Founded Peloton Pharmaceuticals, where he designed, developed, and deployed nearly autonomous grow system that mitigates labor and reduces cost Experience in operating marijuana companies, founding The Union Collective, a successful delivery dispensary; Capstone Analytical, one of the first Bay Area thin layer chromatography testing facilities; and Temez Extracts Pioneered a patented water conserving technology that eliminates water change outs Alex Storcheus SVP, Corporate Development Mr. Storcheus has been involved with Nutritional High since its inception in 2014 and is currently an SVP, Corporate Finance at Foundation Markets - a Toronto-based merchant/invesment bank In his current capacity Mr. Storcheus assists Nutritional High with expansion efforts in various jurisdictions and financial advisory projects Mr. Storcheus has previously worked at the Department of National Defense, holds a BBA from the Schulich School of Business at York University, and is also a CFA Charterholder 4

5 Oil Extracts and Edibles: High Margin Value Proposition Female Marijuana Plant Grown Indoors The flower of female marijuana or cannabis plant ( bud ) is consumed by smoking, while leafs, nodes and stems ( trim ) are not typically utilized for consuming cannabis through smoking, but are used in production of other products such as oil extracts, which are used to manufacture number of Marijuana-Infused Products Flower is usually sold wholesale to the licensed dispensaries; trim is either discarded or sold at a significant discount to MIP manufacturers Estimated wholesale price for flower is: Bud and trim can be processed into extract and sold to MIP product manufacturers or to dispensaries Estimated wholesale price for oil extracts ranges from: Processed oil extract can be used to make marijuana- infused products such as candies, chocolates, topical creams, tinctures, drink additives, etc. Estimated wholesale price for such products in the recreational market for packages that contain 100mg of THC is: ~$5-$7/g ~$30-$40/g ~$10-$15/g (~$25 retail) 5

6 Our Story April 2014 Company formed Jun 2014 Closing of seed financing and PSA on Pueblo Property Jul 2016 Jim Frazier appointed as CEO Aug 2016 IL license granted; Launch of Jimi Hendrix cannabis products Sept 2016 Grand opening of Clinic Effingham Nov 2016 Closing of Aura Health Acquisition Dec 2016 $5.5m financing, launch of Pueblo Facility Dec 2016 Launch of flagship FLI brand Dec 2016 Aura Acquires 2 nd clinic Jan 2017 Enters into Acquisition for NV licenses Jan 2017 Feb 2017 Mar 2017 April 2017 Acquisition of Dab Stick product I.P Partnership with Lakeside Minerals Inc. Acquisition of Oregon property Commenced retail sales of FLI Cartridges Nutritional High International Inc. 6

7 FLÏ - Our Flagship Premium Product Line Concentrate Products Distillate produced by Palo Verde at Pueblo Facility FLI Vape Pen Cartridges ready for shipment FLI Cartridges on a shelf in CO Edibles Products Chocolate Candy Bar Gummies Lollipop Truffles 7

8 Jimi s Cannabis Collection Product Line Nutritional High has exclusive rights to manufacture and distribute marijuana and hemp oil-infused products bearing the likeness of the legendary guitarist Jimi Hendrix: Gummies Package 5 year term, with an option for renewal for additional 5 years Rights are for images bearing likeness and referencing song names Exclusive rights for gummies, hard candies and health and Vitamin Water style beverage; non-exclusive rights for certain other products A variety of products under the Edibles Experience banner are in development including: The Purple Haze, Orange Sunshine and Blue Passion lines of THC based products Stone Free line of CBD-based, non-psychoactive health products Drinks Hard Candies 8

9 Dab Stick Innovative Delivery System for Oil Consumers The Dab Stick is a dispenser for viscous liquid substances, capable of carrying approximately ½ gram of cannabis oil extract designed with the retail consumer and adult use user in mind The oil vessel is capable of dispensing oil in very small metered doses, which ensures consistency between each dose of oil dispensed and providing desired consumer experience The product is also designed with a view to being able to easily integrate empty vessels into filling equipment A provisional patent application has been filed with the United States Patent and Trademark Office Acquisition terms: CAD $500k in shares upon achieving certain operating milestones (Please see Press Release dated January 30, 2017) 9

10 Geographic Footprint Successfully staked out footholds in 4 U.S states Colorado: Successfully established one of Colorado s largest and most automated oil extraction and infused edibles facilities: MIPs License secured through agreements with Colorado-based Palo Verde LLC Illinois: Own 50% of The Clinic Effingham a thriving medical cannabis dispensary in Effingham, Illinois Nevada: Finalizing the acquisition of producer & processor licenses and real estate to which the licences will be attached with a view to commence build-out of MIPs facility in Q States with Active Projects States with Prospective Projects Oregon: Closed acquisition of property in La Pine, Oregon and in the advanced stages of an application process to manufacture cannabis concentrates and edibles in Oregon 10

11 Colorado Project Metal Sheds and Garages for Misc. Storage ~2 acres of vacant land for Outdoor Greenhouse Cultivation Large Warehouse (10,000sf) for Indoor Cultivation Small Warehouse (5,000sf) for Indoor Cultivation Main Building (11,000sf) for MIPs Manufacturing (Phase I and Phase II) Phase I Phase II Phase III Phase I construction and equipment installation is complete Palo Verde is currently operational Phase II development is underway Palo Verde is finalizing the permitting process with technical personnel and local authorities to expand the product offering to include edibles Aiming to complete Phase II by mid 2017 Lakeside Minerals Inc. intends to begin construction of cannabis cultivation facilities in Q st crop expected to be planted in Q Nutritional High International Inc. 11

12 Palo Verde LLC Colorado Licensed Producer Palo Verde LLC private Colorado company, which holds license to manufacture marijuana-infused products Principal of Palo Verde is an established Colorado lawyer Palo Verde entered into: A lease agreement for a 26,000 sq ft at an annual rate of US$15/sq ft An unsecured loan agreement in the amount of US$500,000 for a period of 1 year, with up to 5 extensions at a rate of 12% with Nutritional High Palo Verde and the Company are finalizing a recipe & IP licensing agreement and branding and packaging supply agreement Nutritional High International Inc. 12

13 Illinois Dispensary Roll Out One of the 52 applicants to receive a medical marijuana dispensary license in the state, and the only dispensary license in ISP District 12 Experiencing strong month-to-month sales growth and stable gross margins attributed to an expanding patient count and a strong patient and physician outreach program Achieves a monthly returning patient rate of over 90% demonstrating a strong and loyal customer base The Illinois Department of Public Health has approved applications for approx. 18,300 qualifying patients and approx. 21,300 individuals have submitted a complete application Total retail sales of medical cannabis in the State of Illinois for March totaled $6.4 Total retail sales for 2016 were just over $36 million and almost $54 million since the program's inception in November 2015 Nutritional High International Inc. Dispensary location in Effingham, IL 13

14 Nevada Project In the process of acquiring and transferring provisional producer and processor licenses Intention to move the licenses to a 17,500 ft 2 industrial building, with approximately 15,500 ft 2 of warehouse space Building to be remodeled for the purpose of developing an extraction and MIPs manufacturing facility, using the same technology and processes developed in Pueblo, CO Target Facility to Be by Acquired Nutritional High in Henderson, NV Partnered with Lakeside Minerals Inc. (to be renamed GroBright Inc.) to build a cannabis cultivation and extraction facility in Henderson, NV A portion of the building will be acquired by GroBright, with a view of constructing a cannabis cultivation facility 14

15 Oregon Project In the process of finalizing local permitting for recreational processor license Signed a purchase and sale agreement to acquire a property in La Pine, OR for USD $399,000 Construction is expected to start in May 2017 Permits are being secured and land-use compatibility survey has been completed 15

16 Proprietary Product Development Approach Nutritional High has developed a proprietary approach to establishing MIPs operations: Developed proprietary techniques of infusing products with THC and CBD extracts on a semiautomatic basis Exploring potential patents on the processes it has developed NH composed a database of various extraction and testing techniques to suit the needs of Licensed Producers in both medical and adult recreational state Working with a consultant who has over 30 years of experience in establishing confectionary manufacturing facilities for Fortune 500 companies Efforts led by Billy Morrison an experienced oil extractor with extensive expertise in the marijuana industry and manufacturing marijuana and hempinfused products NH brings a nation-wide network of experts, specialized in every aspect of the seed-to-sale industry, able to assist with rolling-out the company s operations 16

17 Cold Ethanol Distillation Extraction Process and Economics STEP 1: Semi Automated Mechanical Separation using screens to remove Kief STEP 2: Rotary Evaporator used for removing residual solvents STEP 3: The oil is distilled using short path apparatus to remove the terpenes and purify the product FINAL PRODUCT: Distillate Oil Product Economic Parameters The current process is able to process up to 50 lbs 1 of trim/shake per day, estimated to cost ~US$400/lb in Colorado The extraction yield is expected to be 10% Good quality oil extract sells for ~US $30/g on the wholesale market ("Clear" typically goes for higher) 2 Overhead cost to operate the facility is estimated at US$30,000 per month Potential to increase margins by infusing the oil extract into gelatin caps, vape pens and tinctures, which are higher value add products and where the "effective" value per gram is significantly higher than US$25/g. Eg. a disposable vape pen with 250mg of THC content is sold for US$10-15/item on the wholesale market The margins for edibles are even higher, as the average price for a package with 100mg, sells for $10-15/piece on the wholesale market 1 Subject to availability for purchasing from growers; 2 Subject to ability to place the product with dispensaries; 17

18 Strategic Partnership with GroBright Key Deal Terms Partnering with GroBright to establish cannabis cultivation & extraction facilities Starting with an initial grow facilities in Nevada & Colorado GroBright to Finance the partnership by Issuing C$2,500,000 of secured Convertible Debentures GroBright will acquire a Nevada Provisional Cultivation License from Nutritional High for US$500,000 GroBright will acquire a 50% interest in a property in Henderson Nevada acquired by Nutritional High for USD$1,100,000 GroBright will lease land and a building from Nutritional High in Pueblo, Colorado and sublease to Palo Verde Nutritional High will enter into a long term purchase agreement with GroBright to buy trim Strategic Vision for GroBright Disrupt & Consolidate the Cannabis Industry: develop facilities across N.A with the most competitive cultivation model Data-Driven and Fully-Automated: apply data-collection, automation, machine learning and advanced cultivation methodologies Standardize -> Replicate -> Consolidate: Utilize proof-of-concept projects to refine SOPs and replicate model across N.A COLLECT DATA ESTABLISH INDUSTRY LEADING GROW MODEL STANDARDIZE SOPs DEPLOY SOPs ACROSS THE INDUSTRY 18

19 Corporate Strategy Nutritional High is seeking to expand nationally by either pursuing organic growth strategies or pursuing acquisition opportunities focused on: Cole Memo Compliant Operations Only Our focus is only on the operations which operate within adequate licensing frameworks and are in compliance with the requirements of the Cole Memo. High Growth Potential States Nutritional High selects the states which have a high growth potential. While the U.S. states which have legalized marijuana for adult recreational use are the primary focus, Nutritional High will take steps to expand into the states which have legalized marijuana for medical use with significant population base, or have potential for legalization for adult recreational use in the near to medium term. Focus on High-Margin Segments Nutritional High is focused on the edibles and oil extracts segment of the marijuana industry, which it believes to have the highest margin potential and provide an opportunity for rapid scaling. The Company may work in other value chain segments (such as cultivation or retail dispensaries) in the jurisdictions which have implemented a "seed-to-sale" regulatory licensing model, or where a focus solely on edibles or oil extracts is too prohibitive on stand-alone basis. Compliant Structure and Transparency with the Regulators In the U.S. States with residency requirements, the Company will work exclusively with Licensed Operators to provide a suite of services (such as providing real estate, financing, brands and expertise) to facilitate expansion of the Licensed Operator s business in the edible MIPs and oil extract markets. In the states without the residency requirements the Company may also apply for licenses directly or enter into JV arrangements with other companies. Creating Leading Products Manufacturing high quality products with consistent THC levels has been one of the dominant problems faced by the industry. Nutritional High aims to manufacture products that can become industry leading in terms of quality, THC levels and have appealing packaging design in each market from day one. Nutritional High International Inc. 19

20 Expansion Opportunities Overview California Opportunity With state regulation being introduced in California, the company is developing a potential strategies to secure a license and enter the edibles market Some studies estimate that California accounts for as much as half of total legal cannabis sales in the United States, est. at $2.7 billion in 2014 In Sept 2015, the legislature introduced regulations contemplating 17 license categories, expected to be implemented by different state departments by Jan 1, 2018 Proposition 64 has legalized cannabis for adult recreational use Arizona Opportunity NH is considering an application for a processing license once the licensing becomes available In discussions with several potential acquisition targets Michigan Opportunity Voters approved the Michigan Medical Marihuana Act on Nov 4, 2008 Application submissions after Dec 15, ,000 estimated patients Washington Opportunity In discussions with several parties holding Tier 2 or 3 Producer and/or Processor Licenses regarding a potential transaction with Nutritional High Several potential revenue streams: Acquire real estate to lease to a licensed entity Acquire equipment to lease to a licensed entity Provide management services and licensing through a contract Pennsylvania Opportunity In January 2017, Pennsylvania s Medical Marijuana Department of Health announced applications for medical marijuana grower/processors and dispensaries will be accepted from February 20, 2017 until March 20, 2017 In discussions with several prospective real estate property owners in consideration of submitting an application for grower/processor license Currently the products permitted under the regulations exclude flower and edibles and only permit extracts, pills, topicals, tinctures or liquid Canada Opportunity In discussions with several ACMPR LP s regarding a potential transaction with Nutritional High With the recently announced federal legislation to legalize recreational cannabis, Canada presents a tremendous growth opportunity 20

21 Company Shapshot Exchange/Symbol Canadian Securities Exchange OTCQB Frankfurt EAT SPLIF 2NU Market Info as of Feb 1, 2017 Basic Common Shares Outstanding 248,980,734 Warrants (CN $ ) 37,270,606 Options (CN $ $0.30) 16,742,500 Fully Diluted Common Shares Outstanding Non-Convertible Debt Cash Balance 294,329,655 US $0.8 M CAD $4.7 1 M Stock Price $ Market Cap $37 M 1 Includes amounts in escrow account for Nevada acquisitions 2 Price of most recent financing Nutritional High International Inc. 21

22 Jim Frazier Chief Executive Officer T: (321) E: David Posner Chairman of the Board and Director T: (647) E: Adam Szweras Director, Corporate Secretary T: (416) E: 22

23 Risk Disclosure The Company is seeking to establish new business lines, which inherently contains a high degree of risk. The subscribers in the Offering are cautioned to review the following risk factors in addition to those contained in public disclosure record of the Company (available on relating to the Company: (1) The Company has a very limited operating history in an emerging area of business and had negative cash flows from operations in its most recently completed financial year. (2) Non-compliance with federal, provincial or state laws and regulations, or the expansion of current, or the enactment of new laws or regulations, could adversely affect the Company's business. (3) The Company may become subject to additional government regulation and legal uncertainties that could restrict the demand for its services or increase its cost of doing business, thereby adversely affecting its financial results. (4) The Company may be required to obtain and maintain certain permits, licenses and approvals in the jurisdictions where their products are licensed, although the Company does not anticipate such approvals will be necessary. (5) As a manufacturer and distributor of products designed to be ingested by humans, the Company faces an inherent risk of exposure to product liability claims, regulatory action and litigation, if its products are alleged to have caused significant loss or injury. (6) Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. (7) The Company may not be able to accurately predict its future capital needs and it may not be able to secure additional financing. (8) The market price of the Common Shares could be subject to significant fluctuations in response to various factors, many of which are beyond the Company's control. (9) The Company is currently in the early development stage. There is a risk that the additional resources will be needed and milestones will not be achieved on time, on budget, or at all, as they can be adversely affected by a variety of factors. (10) The Company may face intense competition and expects competition to increase in the future, which could prohibit its development of customer base and generating revenue. (11) The Company's operations are subject to environmental and safety laws and regulations concerning, among other things, emissions and discharges to water, air and land, the handling and disposal of hazardous and non- hazardous materials and wastes, and employee health and safety. (12) The Company must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the industry in the U.S. (13) The Company may be subject to growth-related risks including capacity constraints and pressure on its internal systems and controls. (14) The Company has no earnings or dividend record, and does not anticipate paying any dividends on the Common Shares in the foreseeable future. Dividends paid by the Company would be subject to tax and, potentially, withholdings. (15) Exchange rate fluctuations may adversely affect the Company's financial position and results. (16) In the event of a dispute arising from the Company's foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of courts in Canada. (17) Officers and directors of the Company own significant shares and can exercise significant influence. (18) Sales of a large number of Common Shares in the public markets, or the potential for such sales, could decrease the trading price of the Common Shares and could impair the Company's ability to raise capital through future sales of Common Shares. (19) Volatile global financial and economic conditions may negatively affect the Company's operations. Nutritional High International Inc. 23