CiF PRIVATE AND CONFIDENTIAL CannaIncome Fund Corporate Presentation Q3 2018
CiF Disclaimer FORWARD-LOOKING INFORMATION This presentation contains "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. This forward-looking information is based on current expectations, estimates and assumptions concerning future events and is subject to a number of uncertainties and factors, many of which are outside the fund’s control, which could cause actual results to differ materially from those described in the forward-looking information. No assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur or, if any of them do so, what benefits will be derived therefrom. Investors, potential investors, financing institutions and other readers are urged to consider these factors carefully in evaluating the forward-looking information which speak only as of the date made. Except as may be required by law, the fund expressly disclaims any intention or obligation to revise or update any forward-looking information and information whether as a result of new information, future events or otherwise. 1 PRIVATE AND CONFIDENTIAL
OUR APPROACH CiF Investment Vehicles Leverage our collective industry, private equity and capital markets experience to find early-stage pre-IPO cannabis companies in Canada, US, or globally, with a niche product and/or a sustainable competitive advantage. CannaIncome Fund Corporation (“CIF”) is a private investment company, which provides yield and capital Investment appreciation upside, via valuation arbitrage opportunities Instruments: primarily between private and public markets. • Gross over-riding royalties • Convertible debentures • Secured debt Our goal is to work with, and advise, companies to find capital solutions which expedite their path to positive cash • Mezzanine / bridge flow. Although not a requisite for all investments, our bias financing is to find instruments where we rank higher in the capital • Preferred shares structure with distributions that occur before taxes • Common equity (reducing taxable events for companies). 2 PRIVATE AND CONFIDENTIAL
CiF Terms Private Placement Offering Issuer: CannaIncome Fund Corporation Offering: Common Shares Price: $0.50 per Common Share Target Amount: Up to $25,000,000 Liquidity Target: Q1 2019 Target Annual Dividend Yield: 6% Distribution: Quarterly Management Fee: 2% Performance Fee: 20% (8% hurdle rate) Timing: Q3 2018 Targeted Fund Return: 25% Gross IRR 3 PRIVATE AND CONFIDENTIAL
CiF The Portfolio Management Team Arthur H. Kwan, MBA, CFA Chief Executive Officer and Senior Portfolio Manager Arthur was formerly Managing Director, Investment Banking for PI Financial and Paradigm Capital, both partner-owned national investment banking firms. Previously, he was the Managing Director, Private Equity for RedRock Capital Partners. He brings over 18 years of investment banking, capital markets, and private equity experience. He has been involved in several early stage cannabis companies as an investor, advisor, and financier. Michael A. Zuk Vice President, Investments Michael was formerly an Equity Research Analyst for Stifel Nicolaus, a full service US brokerage and investment banking firm. He brings over 12 years of equity research experience at large US and Canadian banks, as well as executive officer roles within publicly traded companies, leveraging corporate development and capital markets experience. He has been a successful early investor in the cannabis sector. Jeremy Ross Vice President, Business and Corporate Development Jeremy has over 20 years of experience in venture capital and marketing for small- to mid- cap cannabis, mining, and technology companies. He was a Director of Fission Uranium (TSX:FCU) from 2013 to 2017, during which it was named a Top 50 TSX-V company for its performance. He holds multiple board positions with TSX, TSX-V, and CSE listed companies, including SpeakEasy Cannabis Club. 4 PRIVATE AND CONFIDENTIAL
CiF Board of Advisors William (Bill) Fleming Chief Executive Officer – Mernova Medicinal / Creso Pharma (ASX:CPH) Bill is the Founder of Mernova Medicinal, an Aboriginal owned company focused on becoming a producer of legal marijuana; it was recently acquired by Creso Pharma (ASX:CPH). Previously, he was formerly the CEO of Abattis Bioceuticals (CSE:ATT), a leading diversified cannabis company, with interests in growing, extraction, and retail distribution. Mr. Fleming also has provided advisory services to Health Canada. Marc Geen Chief Executive Officer – SpeakEasy Cannabis Club (CSE:EASY) Marc has been active in the legal medical marijuana industry for more than 10 years, consulting, complying with and participating in the MMAR, MMPR and ACMPR programs. Prior to co-founding Speakeasy Cannabis Club, Marc’s family founded Sun-Rype Products, and is a proud 4 th generation BC farmer. Marc has also co-created a full line of cannabis extract products designed under ACMPR regulations. Raj Grover Chief Executive Officer – High Tide Ventures Raj is the founder of High Tide Ventures and its subsidiary companies: RGR Canada, Smoker’s Corner and Canna Cabana, and co-founder of High Tide’s newest subsidiary, Famous Brandz. Raj started Smoker’s Corner in 2009 and has been operating profitably as a pioneer in the cannabis accessories industry ever since. He leads the industry in manufacturing capabilities and has built the largest network of retail stores in Canada. 5 PRIVATE AND CONFIDENTIAL
CiF Board of Advisors (continued) Ronan Levy, JD Chief Strategy Officer – Trait Biosciences Ronan is Co-Founder, Chief Corporate Officer, and General Counsel of Canadian Cannabis Clinics, Canada’s largest network of cannabis-specialized medical clinics. Ronan is also a co- founder of CanvasRx Inc., which was acquired by Aurora Cannabis (TSX:ACB) where he remained with the company as SVP of Business and Corporate Affairs until joining Trait Biosciences. Ray Yue Co-Founder and Director – Canndara Ventures Ray is a Clinical Pharmacist, serial entrepreneur, and healthcare innovator. Ray is a Co- Founder and Director of Canndara, a cannabis-based apothecary operating across four provinces. He is also the Chairman and Co-Founder of Imagine Health and FEMME | HOMME Medical. Ray is a member of YPO; he is a City of Edmonton Top 40 under 40 Alumni and selected as Canada’s Top 40 Canadian Entrepreneurs in 2017 by Ivey Business. 6 PRIVATE AND CONFIDENTIAL
CiF Established Track Record The principals of CIF were early investors in the cannabis sector; our private cannabis portfolio was up >300% in 2017 with strategic investments into early-stage cultivators and ancillary players. Select past investments: Select current investments: Bien Brands – Bien’s focus is the development, Tinley Beverage Company (TNY-CN) – marketing and sale of cutting edge THC/CBD 2017: $0.36 to $1.76 (388%) products that are “micro-dosed” to achieve consistent and reliable effects in every individual who consumes them. The CEO is founder and former CEO of Well Juicery, Canada’s largest cold pressed juice company with distribution in over Emerald Health Therapeutics (EMH-V) 700 grocery and convenience stores. YTD return: – 2017: $1.34 to $5.24 (291%) ↑ 171% High Tide Ventures – High Tide is a privately- CannaIncome Fund is currently in held, Alberta-based, downstream cannabis advanced discussions with several accessories corporation. It is among the most cannabis companies operating in the vertically-integrated players in the Canadian edibles, consumables, and dispensaries cannabis market, with several portfolio sectors about potential investments in companies, including Famous Brandz, RGR Canada, and Canna Cabana. CIF is an investor in the founders or seed rounds. the seed round. 7 PRIVATE AND CONFIDENTIAL
CiF Select Current Portfolio Investments The Green Organic Dutchman Camarico Group is a Being one of a limited number of • • • has a funded capacity of 116,000 comprehensive private equity Licensed Dealers in Canada kg per year and is building fund for the integrated authorized to handle and 970,000 sq. ft. of cultivation investment of medical and conduct cannabinoid products, facilities in Ontario and Quebec. recreational marijuana interests. Scientus Pharma has the ability to wholesale, buy, process and In addition, including the Camarico Land & Development • • sell cannabinoid derivatives, recently completed IPO and over- Corp. is a speculative re-zoning from and to Licensed Producers, allotment option, the company and phased development of 320 as well as international markets. has raised approximately $290 acres of lease land designated for million dollars and has over the cultivation of marijuana in Scientus is also a Licensed • 5,000 shareholders. the County of Vulcan, Alberta, Producer (Cultivation) under the Canada. Access to Cannabis for Medical YTD return: ↑ 44% • Purposes Regulations (ACMPR). YTD return: ↑ 300% • YTD return: ↑ 33% • 8 PRIVATE AND CONFIDENTIAL
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