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c a n a d a h o u s e wellness group inc. Investment Summary CSE: - - PowerPoint PPT Presentation

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c a n a d a h o u s e wellness group inc. Investment Summary CSE: CHV April 2019 canadahouse.ca DISCLAIMER This presentation contains historical and forward-looking statements. The forward- looking statements involve risks and

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Investment Summary

CSE: CHV April 2019 canadahouse.ca

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DISCLAIMER

This presentation contains historical and forward-looking statements. The forward- looking statements involve risks and uncertainties. Forward looking statements appearing in this presentation represent management’s current estimates and these may change significantly as new information comes to hand. The information contained in this presentation has been obtained by Canada House Wellness Group Inc. from its own records and from other sources believed to be reliable, however no representation or warranty is made as to its accuracy or

  • completeness. Reference should be made to the Company’s most recent annual

audited Financial Statements and Management's Discussion and Analysis for the Year Ending April 30, 2018 as well as more recent quarters in Fiscal 2019, as filed with Canadian securities regulatory authorities (and available at www.sedar.com) for a description of the major risk factors.

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WHO WE ARE

Canada House Wellness Group (“CHV” trading on the Canadian Securities Exchange under ticker “CHV”) delivers quality cannabis and care to discerning consumers in global medical and recreational markets. It is a Veteran-founded, experienced medical cannabis group providing patient-specific cannabinoid therapy products and services through its clinics and licensed producer. It also leverages its indoor grow expertise to provide premium craft cannabis to the adult use market.

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CLINICS LICENSED PRODUCER

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We Help Renew LivesTM through patient-specific cannabinoid therapy and the production of the highest quality cannabis-based medication. We curate premium craft cannabis for discerning adult use with our specialized, quality-focused, indoor grow production.

OUR MISSION

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Canada is the strongest cannabis market in the world:

THE MARKET

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See references in Appendix on slide 29. Blue Sky in C$ bns Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Medical Canada Canada US Germany Canada US EU-28 Canada US EU-28 Canada US EU-28 LATAM Adult-use Canada Canada US Canada US Canada US EU-28 Canada US EU-28 TAM $5.9 $79 $104 $172 $194

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  • First G7 nation to legalize cannabis
  • World-class framework for cannabis production standards
  • Canadian medical market ($2.8B)1
  • EU medical market (€3.4B)2
  • Total Canadian adult use ($3.1B)3
  • Global total addressable market (TAM) exceeding $100B4:

Market value:

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CULTIVATION Produce top quality medical cannabis strains for our patients and offer advanced consulting to the industry using:

  • Industry-leading cultivation methodologies and regulatory

expertise

  • Highly educated and experienced cultivation staff
  • Access to 800+ cannabis strains

CLINICS Continue to provide leading cannabinoid therapy services to retain and grow our valuable patient base via:

  • An expert team of healthcare professionals
  • Patient-specific treatment protocols
  • Prescription and LP registration services

RECREATIONAL / HEALTH & WELLNESS Distribute craft cannabis products to recreational market:

  • Oil and edibles lab being built with strategic partner
  • First dispensary to open in Edmonton, Alberta

Grow Retail

OUR INTEGRATED STRATEGY

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READY TO GROW

PATH TO PROFITABILITY CLINICS

  • Grow national patient base
  • Expand and physician referrals
  • Leading custom-built Cannabis

Patient Management EMR platform

CULTIVATION & PROCESSING

  • Cultivate premium craft cannabis focused
  • n medical patients using proprietary

growing methodology

  • Extraction lab for oils, edibles, and health &

wellness products

  • Provide consulting services for micro-growers

HOUSE OF BRANDS

  • Leverage our cultivation and processing

to develop House of Brands for distribution in medical, recreational, and health & wellness segments globally

  • Brands will be developed in-house,

acquired, or through licensing or JV partnership opportunities

GENETICS

Supply recreational and medical markets with premium seeds from top international breeders and premium genetics from the in-house breeding program.

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Canada House Clinics (CHC) is the leading provider of specialized cannabinoid therapy services to patients suffering from common to complex medical conditions.

CLINICS

  • f annual

managed cannabis consumption

2,700+ kgs

historical registrations

12,000+ 12

clinics nationwide LP partners and growing

25+ 2,400+

fully insured patients (Veterans)

5,200+

total patients with active med docs

  • Valuable client base that orders directly from LPs
  • 98% of Revenues are LP Education fees
  • 35%+ clinic market share of Veteran medical cannabis program5
  • Average monthly revenues over $70/client/month

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See references in Appendix on slide 29.

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CLINICS REVENUE MODEL

+20 others 1. Patient registers with Clinics 2. Clinics educate patients and help choose a Licensed Producer for most effective strain 3. Licensed Producer pays clinic a service and education fee

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CLINICS DIFFERENTIATOR

TECHNOLOGY

Data-driven analysis enables condition- specific and patient-specific strain selection CPM 2.0 launched March 2019. Next generation Cannabis Patient Management software.

Knalysis Technologies: CHV-owned, CHC-led, software firm with proprietary patient management software and AI analytics. It supports CHC in Canada and global clients to obtain and retain patients while giving them a best-in-class experience.

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Secure Telemedicine integrated into CPM 2.0 with physician and patient portals

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  • CHC Founders created Veteran

cannabis market

  • Government funds cannabis for

Veterans diagnosed with PTSD and

  • ther awarded conditions
  • Support beyond cannabis with non-

profit Post-Traumatic Growth Association (PTGA)

  • Per client revenue 4-6 times higher

than standard

  • Steady Veteran client growth for CHC

Total Veteran clients over time

CLINICS DIFFERENTIATOR

VETERAN RELATIONSHIPS

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  • Jan. 2018

April 2018 July 2018

  • Oct. 2018
  • Jan. 2019
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Abba Medix is a fully licensed and

  • perational Licensed Producer with an

active production facility in Pickering, Ontario and 180,000+ sq ft. of secured production space in Alberta and Ontario.

Medicine Man Technologies’ (MDCL) proven production methodology exclusively licensed in Canada Cannabis Cultivation, Processing, and Sales Licenses from Health Canada ~40,000 kg of secured production capacity Fully operational LP with first full commercial- scale harvest expected in Mid-2019 180,000 sq ft production facility, Phase 1 expected to be

  • perational

before FYE 2020

CULTIVATION & PROCESSING

Pursuing EU-GMP certification allowing for sales to high- value EU market

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PICKERING VEGREVILLE PHASE 1 VEGREVILLE PHASE 2 TOTAL 2,000 – 3,000 kg 3,000 – 5,000 kg ~ 27,000 – 35,000 kg ~40,000 kg/yr Mid-2019 Mid-2020 Mid-2021

PRODUCTION RAMP UP

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Total production (kgs) 2,500 6,500 40,000

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+ + =

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Canada House of Brands is focused on product development and will market and sell craft cannabis to the medical, recreational, and health & wellness markets globally. Its first dispensary will be located in Edmonton.

HOUSE OF BRANDS

Product development for medical, recreational, and health & wellness markets Pursuing provincial supply agreements, bulk transfer

  • pportunities and

high-value EU distribution channels Oils and edibles lab being built with strategic partner Dispensary license awarded in Edmonton, Alberta

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Licensing agreement with Medicine Man Technologies

Exclusive Canadian licensing agreement for:

  • Success Nutrients
  • Three a Light grow

methodologies

MOU with University

  • f New Brunswick

Potential areas of collaboration between Canada House and UNB include:

  • Education
  • Technology platforms
  • Analytics, clinical and

medical research

  • Plant research and

genomics

KEY PARTNERSHIPS

Joint venture with Nutritional High

Produce medical-grade Abba Medix extracts to serve both the medical and recreational markets.

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MEDICAL ADVISORY BOARD

  • Provides guidance on ethics and

best practices

  • Provide medical leadership

across CHV

  • Membership from physicians

prescribing cannabis for Canada House Clinics and external physicians with key expertise

  • 4 physicians growing to 6 as

board formalizes in 2019

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COMPETITIVE ADVANTAGE

FOCUS ON PREMIUM INDOOR FLOWER

  • Medicine Man Technologies’(MMT)

proven production methodology for industry-leading yields

  • Some growers using MMT have achieved 4

pounds per light6

  • Genetic Library to capitalize on shortage
  • f genetics in Canadian marketplace
  • Strains chosen for medical market based
  • n evidence stemming from Clinics

division and CPM 2.0

  • Key focus on regulatory compliance
  • EU GMP certified Canadian LP – only a

handful of LPs have this distinction

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Dried flower 49%

Vape cartridges 21% Extracts 8% Pre-rolled joints 8% Edibles 8% Tinctures/droppers 3% Disposable vape pens 2%

Source: BDS Analytics and CIBC World Markets Inc.

Product Mix In Select US States, 2018E

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See references in Appendix on slide 29.

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COMPETITIVE ADVANTAGE

DISTRIBUTION NETWORK

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  • Domestic medical market and

Canada House Clinics in Canada

  • Loyal and growing valuable

Veterans patient base

  • Targeting international medical

market via EU GMP Certified Product

  • Domestic adult use – setting up long-

term supply agreements with provincial buyers

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COMPETITIVE ADVANTAGE

CONSULTING REVENUES

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  • Through the MMT licensing Agreement,

CHV offers consulting services targeting the micro grow community

  • Revenue model based on revenue

share above minimum yield

  • Capital Light strategy to secure high

quality cannabis by offering clients supply agreement for production c a n a d a

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CHG shares expertise with micro grower Micro growers plant seeds Send revenue and product back to CHG via supply and/or revenue share agreement Harvest

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Up to $300M Revenue Expected $80M EBITDA

40,000 kg production output

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CANADIAN MEDICAL EUROPEAN UNION MEDICAL CANADIAN RECREATIONAL

20% 40% 40%

REVENUE PROJECTIONS

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* CSE: CHV

2022 forecast

Assumptions:

  • A. Price/gram based on “What Could the Global Opportunity for Cannabis Look Like?” report from BMO

Capital Markets. See Appendix on slide 29. B. This forecast is based on assumptions that management considers appropriate to its planned course of action, based on management’s judgement as to the most probable set of economic conditions.

  • C. Please see the Disclaimer on slide 2.
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CAPITALIZATION TABLE

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in millions

Capitalization summary As of

  • Feb. 28, 2019

Common Shares Outstanding 224.0 Management Ownership

(b)

6.2% Debentures ($0.40 exercise price) 2.9 Warrants ($0.37 weighted exercise price) 60.0 Options 18.9 Total 305.7 Market Cap

(a)

$31.4 Cash balance $2.6

(a) Based on Common Shares Outstanding (b) Based on Options held by management

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BOARD OF DIRECTORS

Chris Churchill-Smith - CEO Accomplished investment executive with extensive international M&A, asset management and operational experience having lived and worked in Canada and Europe with a focus on highly regulated industries. Mike Southwell Experienced entrepreneur, Veteran

  • f the Canadian Armed Forces, and

co-founder of Canada House Clinics. Dennis Moir An accomplished financial and

  • perational executive with

significant experience in strategy formulation and mergers and acquisitions. Norman Betts A recognized leader in corporate governance and strategy. Awarded PhD in Management from the School of Business at Queen’s University in 1992.

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MANAGEMENT TEAM

Chris Churchill-Smith - CEO Accomplished investment executive with extensive international M&A, asset management and

  • perational experience

having lived and worked in Canada and Europe with a focus on highly regulated industries. Alex Kroon – President, Canada House Clinics Extensive healthcare and business leadership experience including the management of rapid growth for companies in various business stages and industry sectors. Paul Hart - CFO Served as CFO of public companies trading in Canada, the US and Europe. He brings many years of Board and C-level experience to investor relations and debt and equity fund-raising. Riley McGee – President, Abba Medix Cannabis industry expert and Veteran of the Canadian Armed Forces. Has over 10 year’s experience in real estate resale, investment, management and development. Steven Pearce - Vice- President, Legal Brings a wealth of cannabis-specific legal experience to Canada

  • House. Acted as Canada

House’s general counsel for the past 5 years. 23

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FINANCIAL HIGHLIGHTS

  • 1. 5 new clinics in 2019, an increase from 10 in 2018
  • 2. Production of 2,000 to 3,000 kilograms per year beginning in

2019, with production increasing up to 40,000 kilograms/year.

  • 3. Improving gross margins and EBITDA in the last quarter of

calendar year 2019 as our state-of-the-art production facility and sales stabilize from our production facility.[7]

  • 4. Opportunity to significantly increase gross margins due to

vertical integration

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See references in Appendix on slide 29.

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CATALYSTS FOR GROWTH

  • Clinic expansion in key

markets – Greater Toronto Area, Quebec, British Columbia and Halifax

  • Physician detailing and

expanded consumer marketing

  • Expansion with patients with

financial coverage for medical cannabis

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  • Focus on product
  • development. Brands

matter.

  • Opening first dispensary

in 2019

  • Pursuing supply

agreements across Canadian and international markets

  • Produce quality craft

cannabis for medical market first

  • Manufacture and sell

edible and oil extract products

  • Propagate genetics and

develop genetic breeding program

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INVESTMENT HIGHLIGHTS

  • Premium indoor craft cannabis production
  • Execution of expansion plans to drive profit and generate

positive EBITDA and cash flow

  • Year ending April 2022: $300M revenue and $80M EBITDA
  • New leadership in 2018
  • Data-driven patient-specific treatment excellence
  • Vertically integrated brand experience for medical and

recreational target segments

  • Significant focus on value-add product development

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  • Clinics open with initial

focus on Veterans

  • Expanded to 10 clinics

nationally with focus on Veterans and non- Veterans

  • CHV becomes a licensed

producer

  • Leading-edge technology

company added to support clinic operations

  • Extracts and oils

capabilities added

CHV AT A GLANCE

2013-2017

Calendar Years

2018

Calendar Year

2019

Calendar Year

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2020

Calendar Year

  • Over 12,000 registered

patients

  • Cannabis Sales License

granted

  • Secured exclusive leading

grow methodology IP

  • First bulk seed sales
  • Acquired land for additional

production facility

  • Partnered with Peak Pharma

Solutions to increase patient growth

  • First harvest of cannabis

crops

  • Dispensary license awarded

in Edmonton, Alberta

  • Full capacity cannabis production

in June

  • Cannabis oil products in Q2
  • Supplying cannabis for medical

and recreational markets

  • Significant clinic expansion
  • Improving patient experience

(time to treat and treatment protocols)

  • Expand clinic marketing efforts to

consumers and referring doctors

  • Establish all forms of clinics (free

standing, clinic in a clinic, embedded, visiting and virtual).

  • Increase in production

capacity by an additional 180,000 sq ft, up to 40,000 kg

  • Ramp-up of international sales
  • Establish clinical research

partnerships and expand medical leadership

  • Evaluate partnerships to

address Veteran markets in the US anticipating coverage

  • Optimize clinic network across

all types for full coverage in target markets

  • Cooperation agreements with

corporations, governments and insurers for increased coverage

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Thank you

canadahouse.ca

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APPENDIX

1. Chen, T., & Sklar, P. (n.d.). What Could the Global Opportunity for Cannabis Look Like? (p. 6, Rep.). BMO Capital Markets. 2. Chen, T., & Sklar, P. (n.d.). What Could the Global Opportunity for Cannabis Look Like? (p. 9, Rep.). BMO Capital Markets. 3. Chen, T., & Sklar, P. (n.d.). What Could the Global Opportunity for Cannabis Look Like? (p. 7, Rep.). BMO Capital Markets. 4. Chen, T., & Sklar, P. (n.d.). What Could the Global Opportunity for Cannabis Look Like? (p. 3, Rep.). BMO Capital Markets. 5. Veteran market share calculation:

Veterans Affairs Canada (VAC) fiscal year spend on cannabis ($51M) X Clinic market size of 20% = $10.2M clinic revenues from VAC Total Canada House Clinics Revenue ($4.6M) X share from Veterans (84%) = $3.864M Canada House Clinics revenue from Veterans ($3.864M) ÷ clinic revenues from VAC ($10.2M) = 38%

6. Medicine Man Technologies Inc. (2017, December 06). Medicine Man Technologies California Cultivation Clients Now Comprise Over 700,000 Gross Square Feet of Project Space [Press release]. Retrieved from https://www.globenewswire.com/news-release/2017/12/06/1234111/0/en/Medicine-Man-Technologies- California-Cultivation-Clients-Now-Comprise-Over-700-000-Gross-Square-Feet-of-Project-Space.html 7. Ruthnum, K., & Zamparo, J. (n.d.). Cannabis: The Beginning Of A Global Seismic Shift (Rep.). CIBC World Markets.

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