Conference Call Presentation October 29, 2019 TSX: ZENA TSX: ZENA - - PowerPoint PPT Presentation

TSX: ZENA

Conference Call Presentation

October 29, 2019

TSX: ZENA

TSX: ZENA

1

IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING. The information contained in this document has been prepared by Zenabis Global Inc. (“Zenabis” or the “Company”). The information contained in this document (a) is provided as at the date hereof and is subject to change without notice, (b) does not purport to contain all the information that may be necessary or desirable to fully and accurately evaluate an investment in the Company, including important disclosures relating to the terms of an investment and risk factors associated with an investment in the Company and (c) is not to be considered as a recommendation by the Company that any person make an investment in the Company. This presentation, and the information contained herein, is not for release, distribution or publication into or in the United States or any other jurisdiction where applicable laws prohibit its release, distribution or publication. This presentation (“Presentation”) is being issued by the Company for information purposes only. It is information in a summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Reliance on this Presentation for the purpose of engaging in any investment activity may expose an individual to significant risk of losing all of the property or other assets invested This Presentation is not a prospectus, offering memorandum or an advertisement and is being provided for information purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or any solicitation of any offer to purchase or subscribe for any securities in Canada, the United States or any other jurisdiction. Neither this Presentation, nor any part of it, nor anything contained or referred to in it, nor the fact

• f its distribution, should form the basis of or be relied on in connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in

relation to any securities of the Company. Recipients of this Presentation who are considering acquiring securities of the Company are reminded that any such purchase or subscription must not be made on the basis of the information contained in this Presentation but are referred to the entire body of publicly disclosed information regarding the Company. This Presentation is qualified in its entirety by reference to, and must be in read in conjunction with, the Company’s publicly disclosed information. Certain information contained herein includes market and industry data that has been obtained from or is based upon estimates derived from third party sources, including industry publications, reports and websites. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance or guarantee as to the accuracy or completeness of included data. Although the data is believed to be reliable, neither the Company nor its agents have independently verified the accuracy, currency or completeness of any of the information from third party sources referred to in this presentation or ascertained from the underlying economic assumptions relied upon by such sources. The Company and its agents hereby disclaim any responsibility or liability whatsoever in respect of any third party sources of market and industry data or

• information. This Presentation has not been independently verified and the information contained within may be subject to updating, revision, verification and further amendment. While the information contained herein has been

prepared in good faith, except as otherwise provided for herein, neither the Company, its directors, officers, shareholders, agents, employees or advisors give, has given or has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers and liability therefore is expressly disclaimed for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. Except as may be required by applicable law, in furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies or omissions. Information contained in this Presentation is the property of the Company and it is made available strictly for the purposes referred to above. CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION: This document includes information, statements, beliefs and opinions which are forward-looking, and which reflect current estimates, expectations and projections about future events, including, but not limited to the intended conversion, expansion and optimization of the Company’s facilities, the anticipated production capacity of the Company, the receipt of required licenses to

• perate, our harvest forecast for the remainder of 2019, and other statements that contain words such as "believe," "expect," "project," "should," "seek," "anticipate," "will," "intend," "positioned," "risk," "plan," "may," "estimate" or, in

each case, their negative and words of similar meaning. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. These factors and risks include, without limitation, statements regarding the timing of and other procedural matters associated with the Rights Offering; the funds to be raised under the Rights Offering; the expected participation of insiders in the Rights Offering, the proposed use by Zenabis of the proceeds of the Rights Offering, and Zenabis’ proposed plans, timing and cost of conversion of Zenabis’ facilities, expected cultivation output and expected demand, contained in this press release. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements or information. Important risks and factors that could cause actual results to differ materially from Zenabis’ plans and expectations include the actual results of business negotiations, marketing activities, adverse general economic, market or business conditions, regulatory changes, delays in licensing, ramp-up delays, weaker than expected demand for Zenabis’ products and other risks and factors detailed herein and from time to time in the filings made by Zenabis with securities regulators and stock exchanges, including, but are not limited to, those described in our Base Shelf Prospectus dated April 9, 2019, a copy of which is available on SEDAR at www.sedar.com, and could cause actual events or results to differ materially from those projected in any forward-looking statements. Forward-looking information contained in this Presentation is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control. You should not place undue reliance on forward-looking statements, which are based on the information available as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking information contained in this document, whether as a result of new information, future events or otherwise, unless required by applicable law. The forward-looking information included in this Presentation is expressly qualified in its entirety by this cautionary statement. Historical statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. In this regard, certain financial information contained herein has been extracted from, or based upon, information available in the public domain and/or provided by the Company. In particular historical results of the Company should not be taken as a representation that such trends will be replicated in the future. No statement in this document is intended to be nor may be construed as a profit forecast. ELECTRONIC DISTRIBUTION: This document may have been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic

• transmission. You are responsible for protecting against viruses and other destructive items. Your receipt of this document by electronic transmission is at your own risk and it is your responsibility to take precautions to ensure that

it is free from viruses and other items of a destructive nature. As a consequence of the above, neither the Company nor any director, officer, employee or agent of any of them or any affiliate of any such person accepts any liability

• r responsibility whatsoever in respect of any difference between the document distributed to you in electronic format and the hard copy version that is available to you.

DISCLAIMERS

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2

OUR PROGRESS TO DATE – OVERVIEW

Zenabis continues to increase its available capital, expand its licensed production footprint, achieve success in cultivation and processing, and drive sales through strong customer relationships.

Licensing

Increased licensed capacity from 5,700 kg to 57,000 kg

• ver last ten

months (see slide 3). Licensed two additional facilities, including receiving

• ur Zenabis

Langley cultivation license within three weeks of submitting the site evidence package. Attained a range of

• ther licenses,

including processing and sales licenses. On track to achieve licensed capacity of 96,400 kg by the end of 2019, and 143,200 kg in 2020.

Packaging

After experiencing challenges in September, increased bud packaging output from an average of 6,276 units per day in September to 14,053 units per day in October3, with a peak of 28,909 units on October 22, 2019. Packaged an average of 21,344 pre-rolls per day in October3, with a peak of 43,449 on October 17, 2019.

Cultivation

Outperformed

• riginal design

capacity of Zenabis Atholville by 35% in Q2 2019, resulting in an upward revision of design capacity by 12,000 kg. Outperformed revised design capacity by a further 25.7% in the most recent quarter (see slide 4). Have rapidly achieved exceptional cultivation

• utcomes while

being transparent about performance

• n a monthly basis.

Fulfilment

Rapidly scaling up fulfilment capacity, with the Zenabis Stellarton sales license application to be submitted imminently. Once approved, Zenabis intends to utilize Zenabis Stellarton as the primary fulfilment centre on the east coast.

Financing

Secured $27.5m in subordinated convertible notes, $25m in senior debentures, $4.6m in unsecured convertible notes, $10.7m in issued equity, $6.7m from warrant exercises, $55m in aggregate credit facilities with BMO1, $15m in unsecured convertible debentures, $28.8m from a public unit offering; $40m in prepaid supply agreements, $25m in upsized senior secured debentures.

Construction

Completed Zenabis Athollvile substantially on time and >$8m under budget. Completed the conversion of Phase 1 of Zenabis Langley, with Phase 2A substantially complete2; Phase 2B of Zenabis Langley is

• n track for

completion by the end of 2019.

Drying & Trimming

Have achieved strong, consistent

• utput from drying

and trimming teams as ramp-up has occurred at Zenabis Atholville and Zenabis Stellarton.

Sales

Secured distribution arrangements with five additional provinces and territories, and with Shoppers Drug Mart. One of six licensed producers with distribution to ten

• r more provinces

and territories (see slide 9). Successfully launched new value brand Re-Up, which has driven Zenabis’ market share in New Brunswick to 37%.

Notes: 1) Approximately $13m of the BMO credit facilities was incremental capital. 2) Substantially complete means the ability to undertake (subject to licensing) all production activities within the design capacity of the facility. 3) As at October 23, 2019.

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• 10

20 30 40 50 60 70 80 90 100 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 (000kg) Indoor Closed Greenhouse Pending Licensing

3

OUR PROGRESS TO DATE – CONSTRUCTION AND LICENSING

Year to date, Zenabis has increased its licensed annual production capacity from 5,700 kg to 57,000 kg. Zenabis has submitted a license amendment for Zenabis Langley that would add another 39,400 kg of licensed annual production capacity.

Licensed Annual Production Capacity Growth

Q4 2018 5,700 kg Capacity Q1 2019 10,200 kg Capacity

Zenabis Atholville +3,700 kg Zenabis Stellarton +800 kg

Q2 2019 23,100 kg Capacity

Zenabis Atholville +13,000 kg Zenabis Delta (100 kg)

Q3 2019 57,000 kg Capacity

Zenabis Atholville1 +24,000 kg Zenabis Langley +9,900 kg

Notes: 1) 11,200 kg of the increase in licensed production capacity is as a result of the Zenabis Atholville Capacity Amendment outlined in the Zenabis press release dated August 14, 2019. 2) Zenabis submitted a license amendment for Zenabis Langley’s existing cultivation license on September 27, 2019 which is expected to add 39,400 kg of annual production capacity once the license amendment is approved.

Pending Licensing2 96,400 kg Capacity

Zenabis Langley2 +39,400 kg

TSX: ZENA

(37.5%) (19.8%) 14.2% 1.5% (25.3%) (3.9%) 1.6% 1.5% 5.6% 12.9% 40.9% 21.8%

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 (kg) Design Capacity Harvest Weight Actual Harvest Weight

4

OUR PROGRESS TO DATE – CULTIVATION

In the twelve months ending September 2019, Zenabis harvested a total of 10,089 kg of dried cannabis. Over the past quarter, the amount harvested has exceeded the revised design capacity of the flower rooms by 25.7%.

Cultivation Outperformance Relative to Revised Design Capacity

Note: 1) The Design Capacity Harvest Weight is based on the revised “design capacity” yield that Zenabis has disclosed on August 14, 2019. This figure was derived by converting the actual square footage of flower room space and the forecast canopy for each specific flower room into a kilograms per room per day figure (the “Design Capacity Yield Per Day”) based on Zenabis’ historical yield data at the Zenabis Atholville facility through September 2018, adjusted upwards for 35% outperformance observed in the three months ending June 30, 2019 (referred to herein as “Revised Design Capacity”). The Design Capacity Harvest Weight in the table above is the harvest weight that would have resulted if the Design Capacity Yield Per Day for a room was multiplied by the Effective Flower Room Equivalent Days.

As a result of the consistent cultivation outperformance at Zenabis Atholville, Zenabis revised the facility’s annual production design capacity upwards by 35% in August 2019.

TSX: ZENA

TGOD Aurora VIVO Aphria Cronos Supreme CannTrust Organigram Village Farms Sundial Zenabis

• 5.0

10.0 15.0 20.0 25.0 30.0 ($m/tonne)

5

OUR PROGRESS TO DATE – EFFICIENT USE OF CAPITAL

Based on the share capital of Canadian licensed producers, Zenabis has been more efficient than a majority of peers in achieving its current licensed cultivation capacity with the amount of equity capital raised to date.

Total Share Capital Per Tonne of Current Capacity1

Notes: 1) Share capital based on the most recently disclosed financial statements. All production metrics obtained as of October 25, 2019 from publicly available sources, which have been listed on slide 17. 2) Zenabis share capital adjusted to exclude $49m of goodwill, $29m in non-cash accounting adjustment and $2m in adjustments for cashless option exercises related to the amalgamation of Sun Pharm Investments and Bevo Agro completed on January 8, 2019.

Metrics

TGOD ACB VIVO APHA CRON FIRE TRST OGI VFF SNDL ZENA2

Share Capital1 ($m)

492 4,673 292 1,662 559 218 207 306 105 131 1182

Current Capacity1 (kg)

17,500 175,300 12,000 115,000 40,150 33,580 50,000 76,000 37,500 60,000 57,000

Share Capital /Current Capacity ($m/tonne)

28.1 26.7 24.3 14.4 13.9 6.5 4.1 4.0 2.8 2.2 2.1

$2.1m/tonne

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HOW WE COMPARE TODAY – TRADING MULTIPLES

Notes: 1) Enterprise value as of October 25, 2019. 2) All production metrics obtained as of October 25, 2019 and sources have been listed on slide 17. 3) Enterprise value calculated based on the rights offering implied enterprise value assuming full take-up. See slide 16 for

• calculation. 4) Cannabis only enterprise value based on the share price as of October 25, 2019 and excludes the enterprise value of the propagation business valued at 8.0x EV/EBITDA, based on $9.6m in propagation EBTIDA for the twelve months ending June 30, 2019.

See slide 16 for calculation. 5) Amount of cannabis produced on a dried flower equivalent basis as disclosed in the most recent financial reports.

Metrics

FLWR EMH TLRY APHA OGI SNDL HEXO WMD ZENA3

Offering Implied

TRST ZENA4

Cannabis Only

Enterprise Value1 ($m)

334 149 3,303 1,753 724 670 659 167 1373 202 834

Last Three Months2 Production (kg)

460 228 11,474 10,581 6,052 9,551 9,804 3,617 5,239 9,500 5,239

EV/Last Three Months Production ($m/tonne)

727.1 654.8 287.9 165.7 119.6 70.1 67.2 46.2 26.2 21.3 15.9

Current Licensed Annual Production Capacity Last Three Months Production5

Metrics

CRON ACB VFF APHA TGOD SNDL OGI FIRE VIVO TRST ZENA3

Offering Implied

ZENA4

Cannabis Only

Enterprise Value1 ($m)

1,609 5,467 609 1,753 234 670 724 311 52 202 1373 834

Current Capacity2 (kg)

40,150 175,300 37,500 115,000 17,500 60,000 76,000 33,580 12,000 50,000 57,000 57,000

EV/Current Capacity ($m/tonne)

40.1 31.2 16.2 15.2 13.4 11.2 9.5 9.3 4.3 4.0 2.4 1.5

The above presents Zenabis’ enterprise values, both in terms of the rights offering implied valuation and in terms of the cannabis business only, relative to peers as a multiple of current licensed annual production capacity and last three months production. When adjusting for the propagation business, the cannabis business currently trades at below the enterprise value at the rights offering valuation of $137m3.

TSX: ZENA

• 0.50

1.00 1.50 2.00 2.50 3.00 3.50 TGOD Cronos Supreme VIVO Aurora Aphria Zenabis Village Farms CannTrust Sundial Zenabis Organigram ($/gram)

7

HOW WE COMPARE TODAY – KEY FINANCIAL METRICS

Notes: 1) Cash cost of cultivation is not recognized as a standard industry metric, and the calculation methodology used by each producer may vary as a result of accounting and reporting differences. Zenabis recognizes that some cultivation cost figures may be several quarters dated due to changes in reporting standards. 2) SG&A is annualized based on the most recently reported quarterly SG&A. 3) Zenabis quarterly SG&A excludes SG&A from its propagation business of $1.9m for the quarter ending June 30, 2019. 4) Based on Zenabis’ expected capacity upon receipt of its license amendment submitted for Zenabis Langley Part 2A, representing an additional 39,400 kg of annual production capacity.

Zenabis has demonstrated cost efficient operations relative to Canadian licensed producer peers as illustrated by cash cost of cultivation and annualized SG&A per unit of current capacity. Zenabis believes with low cultivation cost per gram

• f cultivation and SG&A costs per gram of capacity, it will be able to earn competitive margins in a low-price

environment.

• 0.50

1.00 1.50 2.00 2.50 Sundial Cronos Aphria Aurora Canopy WeedMD OrganiGram HEXO Zenabis ($/gram)

Cash Cost of Cultivation1

$0.78/gram

Annualized SG&A Per Gram of Current Capacity2

Current: $0.90/gram

3

With 2A Amendment: $0.50/gram

3, 4

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STRONG DEMAND OUTLOOK AND RELATIONSHIPS | (1/2)

Supply Arrangement BC Liquor Distribution Branch (“BCLDB”) Supply Agreement Alberta Gaming, Liquor & Cannabis (“AGLC”) Supply Arrangement Saskatchewan Wholesale Distributor Supply Arrangement Manitoba Liquor and Lotteries (“MBLL”) Supply Arrangement Yukon Liquor Corporation (“YLC”) Supply Arrangement Société québécoise du cannabis (“SQDC”) Supply Agreement Cannabis NB (“CNB”) Supply Arrangement Nova Scotia Liquor Corporation (“NSLC”) Supply Arrangement PEI Cannabis Management Corporation

Notes: 1) As of October 25, 2019. 2) Indicative demand does not necessarily translate into actual demand, as the planning process with provincial counterparties may not result in firm volume indications until two weeks prior to a shipment, with purchase orders at times being finalized within days of shipments.

Ontario Cannabis Retail Corporation (“OCS”) Supply Agreement

As one of six Canadian licensed producers listed in ten or more provinces and territories1, Zenabis has fostered strong relationships with provincial counterparties. Currently, indicative demand from provincial counterparties exceeds forecast supply of packaged flower and through January 2020 without reductions in price2. Zenabis has submitted 2.0 product listing submissions to all provincial, territorial and medical partners.

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STRONG DEMAND OUTLOOK AND RELATIONSHIPS | (2/2)

Note: 1) Indicative demand does not necessarily translate into actual demand, as the planning process with provincial counterparties may not result in firm volume indications until two weeks prior to a shipment, with purchase orders at times being finalized within days of shipments..

BC Liquor Distribution Branch

Zenabis has received indication1 of strong interest from the province for November 2019; BCLDB has also confirmed 2.0 listings of Zenabis’ PAX vape cartridges and beverages

Ontario Cannabis Retail Corporation

Zenabis expects its first shipments to Ontario in the next week and has received strong indicative1 interest for November 2019

Société québécoise du cannabis

Zenabis has continued to grow its relationship with the SQDC and has received strong indication for orders1 from the province in Q4 2019

Cannabis NB

Zenabis expects to ship its largest quantity to the province to date in October 2019; our Re-Up brand has already achieved significant success bringing Zenabis to 37% market share in the province Zenabis expects to commence shipments to Shoppers Drug Mart in Q4 2019 for dried flower and oil formats Zenabis has signed a shareholders’ agreement to form a joint venture in Malta; Zenabis expects to supply the European market through this joint venture in 2020

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Zenabis Rights Offering

TSX: ZENA

WHY A RIGHTS OFFERING?

11

Significant Insider Participation Fairest to Participating Shareholders Strengthen Existing Cash Position Zenabis would like to buttress its cash position given cannabis market conditions within Canada. Given equity capital markets conditions pertaining to the Canadian cannabis industry, Zenabis has identified a rights offering as the least-dilutive path to securing additional liquidity without increasing debt outstanding. Zenabis insiders have been receptive to the opportunity to support the business through further investment. Insiders have committed to $6.3m of the $20.8m to be raised in the Rights Offering (30% of gross proceeds). The commitment of insiders contributing their own capital is strong evidence of insider belief in the business. Zenabis always aims to raise capital in a manner that limits the dilution of existing shareholders. So long as shareholders participate in the Rights Offering by exercising their rights, a Rights Offering is not dilutive to their basic ownership interest1.

Note: 1) A shareholder that does not choose to exercise their rights can also receive value by selling their rights.

TSX: ZENA

Each Zenabis shareholder of record at 5:00pm on October 31, 2019 (the “Record Date”)1 will receive one right (each a “Right”) for each Zenabis common share (“Common Share”) owned as of the Record Date1. 1.5 Rights entitle right holders to subscribe for one Zenabis Common Share at the price of $0.15 per share (the “Subscription Price”) (the “Basic Subscription Privilege”). Each Right may be exercised beginning November 6, 2019 until 5:00pm EST on November 27, 2019 (the “Expiry Time”)2. Shareholders are not obligated to exercise their Right(s). Rights may be traded and transferred within Canada on the Toronto Stock Exchange (the “TSX”) until 12:00pm EST on November 27, 2019.

ZENABIS RIGHTS OFFERING OVERVIEW

12

1 Zenabis Rights Offering Summary 2 3 4

Options Available to Shareholders (Resident in Canada)

Exercise Rights

A Right holder may exercise all or part of their Rights before the Expiry Time to subscribe for Common Shares at the Subscription Price.

Sell or Transfer Rights

A Right holder may sell their Rights through the TSX; Rights are fully transferable into and within Canada.

Do Nothing

All unexercised Rights will expire at the Expiry Time, after which time the Rights will be void and of no value, and shareholders who exercised will have the right to take-up these rights.

Notes: 1) Due to trading and settlement mechanics, Zenabis common shares will begin trading “ex-rights” (without an entitlement to receive the rights) as of the beginning of trading on October 30, 2019. 2) Common shares issuable upon the exercise of rights will be available for trading after the Expiry Time.

1.5 Rights + $0.15 One Zenabis Common Share

We understand from the TSX that, due to trading and settlement mechanics which are out of Zenabis’ control, the common shares of Zenabis will begin trading without an entitlement to a right as of market open on Wednesday, October 30, and at the same time, the rights will begin trading on the TSX. Shareholders are encouraged to contact their investment advisors with any questions they may have about trading and settlement mechanics.

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ZENABIS RIGHTS OFFERING | (1/2)

Note: 1) If a shareholder elects not to exercise Rights, then a shareholder’s percentage ownership of Common Shares will be diluted by approximately the listed amounts based on the corresponding percentage of total rights issued under the offering being exercised. For the avoidance of doubt, dilution would only impact non-participating shareholders.

13

How many Rights are being issued? An aggregate of 208,629,937 Rights are being issued based on the 208,629,937 Common Shares currently outstanding as at October 24, 2019. These Rights may be utilized to subscribe for 139,086,624 common shares at a price of $0.15 per common share. Assuming all of the Rights are exercised and no other issuances of Common Shares occur before the Expiry Time, Zenabis will have 347,716,561 Common Shares outstanding immediately after the Expiry Time, which represents a 67% increase in shares outstanding as a result of the offering.

Available Funds and Dilution

Assuming Insider Commitments Only Assuming 50% of Offering Assuming 75% of Offering Assuming 100% of Offering Amount to Be Raised By This Offering $6.3m $10.4m $15.6m $20.8m Less: Estimated Offering Costs ($0.2m) ($0.2m) ($0.2m) ($0.2m) Equals: Available Funds $6.1m $10.2m $15.4m $20.6m Assuming Insider Commitments Only Assuming 50% of Offering Assuming 75% of Offering Assuming 100% of Offering New Common Shares to Be Issued 41,859,486 69,543,312 104,314,968 139,086,624 Percentage Increase in Shares Outstanding 20% 33% 50% 67% Maximum Share Dilution1 17% 25% 33% 40%

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ZENABIS RIGHTS OFFERING | (2/2)

14

How will the available funds be used? The proceeds of the offering will be used for general working capital purposes of the company. Zenabis has determined that it is in the best interest of its shareholders to secure additional surplus liquidity in the form of equity capital.

Insider Participation

Security Holder Position Indicative Participation Andrew Grieve Chief Executive Officer and Director 100% of Basic Subscription Privilege; $100,000 standby commitment Manoj (Monty) Sikka Chair and Co-Founder 76% of Basic Subscription Privilege Leo Benne Chief Growing Officer and Director 100% of Basic Subscription Privilege Adam Spears Director 100% of Basic Subscription Privilege and 750,000 additional Rights (outside of the Basic Subscription Privilege)1 Daniel Burns Director 1,000,000 Rights (outside of the Basic Subscription Privilege)1 Larry Van Wieren Director 2,000,000 Rights (outside of the Basic Subscription Privilege)1 Natascha Kiernan Director $20,000 standby commitment Mike Smyth Chief Financial Officer 100% of Basic Subscription Privilege Mark Catroppa Co-Founder 76% of Basic Subscription Privilege

Based on the above indicated intention of insiders to participate in the offering, at least ~30% of the rights issued under the

• ffering would be taken-up by insiders

Note: 1) Adam Spears, Daniel Burns and Larry Van Wireren intend to exercise Rights provided by Monty Sikka and Mark Catroppa that will not be exercised by either of Monty Sikka or Mark Catroppa

Are insiders participating? To our knowledge, insiders (founders, management team and directors) have committed to exercise Rights to purchase ~$6.3m in shares in the Rights Offering; this is equivalent to ~30% of the shares on offer in the Rights Offering.

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Appendix A – Other Information

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CALCULATION OF ENTERPRISE VALUE

Rights Offering Enterprise Value Calculation Value Basic Shares Outstanding 208.6m Plus: Rights Offering Shares Issuable 139.1m Equals: Shares Outstanding Post-Rights Offering 347.7m Times: Rights Offering Price $0.15 Equals: Equity Value at Rights Offering Price $52m Add: Debt1 $142m Less: Cash2,3 ($57m) Equals: Enterprise Value $137m

Notes: 1) Debt includes all non-convertible financing and out-of-the-money convertible financing. 2) Cash balance of $8.7m as outlined in the Zenabis Global Inc. Financial Statements as at June 30, 2019 has been adjusted to take into account the impact

• f the $30.0m prepaid advance from Tilray on July 20, 2019, the $23.0m net proceeds received from R.C. Morris shortly after closing on August 21, 2019, less capex remaining as disclosed in the Zenabis Global Inc. Management Discussion and Analysis

for the three months ending June 30, 2019. The negative value indicates a subtracted value, rather than a negative cash balance. 3) Includes the net proceeds from the rights offering, assuming full take-up. 4) Propagation EBITDA for the twelve months ending June 30, 2019, including $1.6m of intercompany rent revenue from the cannabis business. 5) As at October 25, 2019.

Rights Offering Enterprise Value Cannabis Only Enterprise Value

Propagation Enterprise Value Calculation Value LTM EBITDA $9.6m4 Times: EV/EBITDA Multiple 8.0x Equals: Propagation Enterprise Value $77m Cannabis Only Enterprise Value Calculation Value Basic Shares Outstanding 208.6m Times: Share Price5 $0.26 Equals: Equity Value $54m Add: Debt1 $142m Less: Cash2 ($36m) Equals: Aggregate Enterprise Value $160m Less: Propagation Enterprise Value ($77m) Equals: Cannabis Only Enterprise Value $83m

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17

COMPARABLE METRICS SOURCES

▪ Canopy. Canopy MD&A dated February 14, 2018 and August 14, 2019; Canopy financial statements dated August 14, 2018 and August 14, 2019. ▪ Aurora. Aurora 2019 annual report dated September 11, 2019. ▪ Aphria. Aphria MD&A dated October 11, 2019; Aphria financial statements dated October 11, 2018 and October 11, 2019. ▪ Tilray. Tilray MD&A dated August 13, 2019; Tilray financial statements dated August 29, 2018 and August 13, 2019. ▪ Emerald. Emerald MD&A dated August 28, 2019; Emerald financial statements dated August 29, 2018 and August 28, 2019. ▪ HEXO. Hexo MD&A dated October 26, 2018 and June 12, 2019; Hexo financial statements dated June 27, 2018 and June 12, 2019. ▪ Cronos. Cronos MD&A dated August 13, 2018 and August 7, 2019; Cronos financial statements dated August 13, 2018 and August 7, 2019 ▪ CannTrust. CannTrust MD&A dated May 13, 2019; CannTrust financial statements dated May 14, 2018 and May 13, 2019 . ▪ WeedMD. WeedMD MD&A dated August 28, 2019; WeedMD financial statements dated August 27, 2018 and August 28, 2019. ▪ OrganiGram. OrganiGram MD&A dated July 12, 2019; OrganiGram financial statements dated July 27, 2018 and July 12, 2019. ▪ Supreme. Supreme MD&A dated September 17, 2019; Supreme financial statements dated September 24, 2018 and September 17, 2019; Supreme September 2019 investor presentation. ▪ TGOD. TGOD MD&A dated August 13, 2019; TGOD financial statements dated August 14, 2018 and August 13, 2019 ▪ Village Farms. Village Farms July 2019 investor presentation (http://villagefarms.com/wp-content/uploads/2014/08/VFF-Investor-PresentationJuly- for-Web-Site-Jul-17.pdf); Village Farms MD&A dated August 12, 2019; Village Farms financial statements dated August 14, 2018 and August 12, 2019. ▪ Flowr. The Flowr Corporation MD&A dated August 14, 2019; The Flower Corporation financial statements dated October 26, 2018 and August 14, 2019. ▪ Sundial. Sundial Growers Inc. prospectus dated July 31, 2019; Sundial Growers Inc. MD&A and financial statements dated August 13, 2019. ▪ VIVO. VIVO MD&A dated August 28, 2019; VIVO financial statements dated August 29, 2018 and August 28, 2019.