CORPORATE PRESENTATION November 2018 Delivering Long-term Success - - PowerPoint PPT Presentation

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Delivering Long-term Success in Cannabis Investing

CSE : CGOC

November 2018

CORPORATE PRESENTATION

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Disclaimer

Terms undefined herein have the meanings ascribed to them in the Prospectus. An investor should rely only on the information contained in the Prospectus. This presentation is qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing in the Prospectus. Neither the Corporation nor the Agent has authorized anyone to provide investors with different or additional information. The Corporation is not offering, or soliciting

• ffers to acquire, the securities in any jurisdiction in which the offer is not permitted. For purchasers outside Canada, neither

the Corporation nor the Agent have done anything that would permit the offering or distribution of this presentation together with the Prospectus in any jurisdiction where action for that purpose is required, other than in Canada. An investor is required to inform itself about and to observe any restrictions relating to the planned public offering and the distribution of this presentation and of the Prospectus. No securities regulatory authority has expressed an opinion about the securities of the Corporation discussed in this presentation and it is an offence to claim otherwise. The securities of the Corporation discussed in this presentation have not been, and will not be, registered under the U.S. Securities Act, or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This presentation does not constitute an offer to sell or solicitation of an offer to buy any of the securities of the Trust in the United States. An investment in the securities offered by the Prospectus must be considered speculative as the securities are subject to certain risk factors as set out under the heading “Risk Factors” in the Prospectus or otherwise described in the Prospectus. An investment in Units of the Corporation is appropriate only for investors who have the capacity to absorb a loss of some

• r all of their investment. Investors should also review the financial statements included in the Prospectus.

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Forward-Looking Information

The presented materials and accompanying oral presentation may constitute “forward-looking information” within the meaning of Canadian securities laws and are based on expectations, estimates and projections as of the date of this presentation. Forward-looking statements include, without limitation, statements with respect to: a) the completion of the Offering and receipt of all regulatory approvals in connection therewith; b) the use of the net proceeds of the Offering; c) the availability of investment opportunities; d) the performance of the Corporation’s business and operations; e) applicable laws, regulations and any amendments thereof including, but not limited to, the legalization of cannabis and the timing thereto; f) the competitive and business strategies of the Corporation; g) statements related to the effect and consequences of certain regulatory initiatives; h) the expected growth of the cannabis sector; i) the competitive conditions of the industry; j) the Corporation’s investments in the U.S. and consequences of those investments under U.S. federal law; and k) the anticipated changes to laws regarding the recreational use of cannabis and the business impacts on the Corporation. Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made in this presentation, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being incorrect. In addition to the various factors and assumptions set forth in this presentation, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: general economic, financial market, regulatory and political conditions in which the Corporation operates will continue to improve; the Corporation will be able to compete in the industry; the Corporation will be able to make investments on suitable terms; issuers in the Portfolio will be able to meet their objectives and financial estimates and that the risk factors noted below, collectively, do not have a material impact on the Corporation. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Known and unknown risk factors, many of which are beyond the control of the Corporation could cause actual results to differ materially from the forward-looking information in this presentation. Such factors, without limitation, include the following, which are discussed in greater detail in the “Risk Factors” section of the Prospectus: there is no assurance that the Corporation will be able to achieve its investment objectives; risks relating to the Portfolio issuers; risks relating to medical cannabis; risks relating to risk and timing of legalization of recreational cannabis; regulatory risks; risks relating to the performance of the Portfolio issuers; risks relating to the licensing process; no current market for Common Shares or Warrants; risks relating to recent and future global financial developments; industry concentration risks; risks associated with investment in illiquid and private securities; risk factors related to U.S. cannabis legislation; changes to the cannabis laws; United States anti-money laundering laws and regulations; investments in U.S. cannabis sector; short selling; use of the Prime Broker to hold assets; sensitivity to interest rates; reliance on the Manager and Investment Manager; conflicts of interest; risks related to dilution; loss of investment; risks relating to currency exposure; risks relating to foreign market exposure; lack of operating history; risks related to the exchange option; and tax risks. These risk factors are not intended to represent a complete list of the factors that could affect the Corporation and investors are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

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Our Value Proposition

Creating an Opportunity for Long-term Cannabis Investing with Reduced Risk CGOC’s qualified group of advisors have the knowledge and experience to conduct sound research and due diligence before making any investment decision

• Exposure to publicly traded companies in both Canada and the US
• Unique exposure to the private US Cannabis sector – the future of

legalization will drive growth

• Ability to invest globally and be a first mover in the global emerging

markets Ultimately this diversification results in less volatility and ability to invest across the broad spectrum of Cannabis companies from producers to retailers, and everything in between

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The CGOC Team Experienced leadership and operational team

Jamie Blundell Director, President & COO

25+ years of experience in senior leadership roles, extensive experience with M&A, private equity firms and large corporate divestitures.

Paul Andersen, CPA, CA Director & CFO

Over 20 years of experience as a senior officer and/or director of numerous public and private. Cannabis- specific experience and currently serves as director of Canada House Wellness Group Inc., and has worked as a consultant with a privately owned Oregon-based cannabis company.

Bruce Campbell CIO

24+ years of investment management experience and an active cannabis investor since 2013. Founder and Portfolio Manager of StoneCastle Investment Management. A go to professional in the space from media such as Bloomberg, The Globe and Mail and Small Cap Power.

Nick J. Richards Independent Director

Practicing tax attorney, adjunct professor of law and legal specialist to the United States cannabis industry, advising businesses and owners throughout the U.S., and is licensed to practice law in California and Colorado.

Brayden Sutton Independent Director

Co-founded and served as EVP for Supreme Pharmaceuticals from 2013 – 2014 and played an instrumental role in the early days of Invictus MD Strategies Corp., Aurora Cannabis Inc. and CannaRoyalty Corp. Throughout his career, Mr. Sutton has played a major role in restructurings, reverse takeovers, IPOs and M&As

John Durfy Independent Director

25+ years of senior investment and financial management experience. Previously CIO at a hedge fund and prior to that, Managing Director of Global Equities for the Ontario Municipal Employees Retirement System (“OMERS”) from 2008-2011.

Gary Yeoman Independent Director

From 2005 to 2011, Mr. Yeoman served as the CEO of Altus Group, and led the company through a seven- year growth period. Currently Chairman of the board of Golden Leaf Holdings and Executive Chair of iLOOKABOUT.

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The Cannabis Industry Opportunity

Canada leading a unique value-creation opportunity

Canadian Market

By 2025, Canadian Cannabis market is forecasted to be on par with the size of beer & tobacco today.(1)

8.6x over 7 years

2018 est. $1.4B(2) 2025 proj. $12B+(2)

US Market

While the current regulatory environment remains challenging, change is happening

• fast. New research estimates suggest

increasing long-term industry potential.

Canada in the Global Market

Canadian companies and investors have tremendous opportunities globally, given Canada’s current position as a change leader in the global industry.

9.7x over 11 years

2016 $5.9B 2027 proj. $57B(3)

Canada leading the world ACMPR legislation becoming a standard framework globally Canadian companies expanding globally: 14 companies expanding across 13 markets

Global medical market growth:

+21% CAGR 2018-2022 (3)

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The Cannabis Industry Opportunity Investing across the whole ecosystem multiplies the potential

• $12B Canadian Cannabis industry estimate based on base market business models: cultivation and extraction(1)
• The whole ecosystem projected to reach $23B, after factoring in ancillary services shown below(2)

Suppliers

Seeds, fertilizers, etc.

Production

Cultivation

Research and development

Extraction

Analytical equipment & services Production equipment, security & infrastructure Software

Retail and Distribution

Online / ecommerce Stores, consumption locations

Consumer Products

Flower and

• il extracts

Edibles, tinctures, topicals, infused etc. Delivery Systems (vaporizers, pipes, rolling papers, etc.) Apparel Packaging & distribution

Services

Buildings, equipment Business, regulatory, legal, etc. Marketing Pharmaceuticals Nutraceuticals Fiber, seeds, food

Cannabinoid Therapeutics Finance Real Estate Hemp

Capital, structuring CGOC has also invested in

Traditional Industry

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Future Catalysts for the Evolving Cannabis Industry Canada nada

• M&A
• Supply agreements / retail

distribution

• Regulation on extracted

products

• Investment by pharma /

alcohol / tobacco companies

Inter erna natio tional nal

• Supply agreements
• Canadian partnerships
• Medical program adoption – WHO’s drug

committee reviewing its cannabis policies, including descheduling CBD

United ed States

• M&A
• Continued public offerings
• Additional state legislation
• Impact of the mid-term

elections on Farm Bill or STATES Act

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The Cannabis Industry Challenge

An early, volatile and complex industry

In order to effectively manage risk requires dedicated experts actively managing a diversified portfolio

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The CGOC Difference The Cannabis Growth Opportunity Corporation

Access to the expertise and focus needed to build and grow an international portfolio of public and private investments to minimize downside risk, while participating in the long-term upside.

A portfolio of

Public Cannabis Businesses

• Diversified to minimize downside
• Actively managed
• Global focus
• ~60% of invested capital

A portfolio of

Private Cannabis Businesses

• Unique access
• Global focus
• Target 12-24 month liquidity
• ~40% of invested capital

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The CGOC Network Effect

CGO GOC

Creating value that results in proprietary deal flow

Invest estors

• rs

Private e Co’s Public c Co’s

Ga Gain e exposure to to more sophisti sticat ated ed instituti tiona nal shareholders rs Gain n name exposure to to public markets ets Partn tnersh rships and M&A opportuniti ties

Gain access ess to to prof rofess essio ionall ally managed ed diversif rsified ied portfolio tfolio Gain access ess to to private e investmen stments ts

Gain s strat ategic egic advisory ry fro rom m CGOC

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US Investments CGOC: your gateway to the US cannabis market

• Unique access to private US Cannabis investment opportunities
• Strong industry connections providing proprietary deal flow
• CGOC Network Effect in full force south of the border

Private US Investments

8 investments across 18 states 7 investments across 7 states in pipeline

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US Cannabis Market Legalization history overview

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A Changing Environment Requires Continuous Monitoring of Information Keeping up to date on a fast-changing environment on the regulatory as well as investor sentiment side – We stay in the know!

Rapid regulatory change (local & global) Implication Key investing behaviors required to succeed: Active management, access to privates, timing investments US market attractiveness increasing Reasons Experienced operators + meaningful REV & EBITDA US capital is starting to increase rapidly Implication Need to focus & actively invest in US privates Privates need help navigating capital markets Implication Continue to focus and build capabilities to help privates access, navigate and succeed with the capital markets and M&A opportunities CGOC network effect working Implication Continue to connect investors, publics and privates and drive the CGOC network effect: trust

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Portfolio Overview

• Geographic Breakdown
• Top 10 Public & Private Investments

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Portfolio Breakdown CGOC helps bring access to key investments in Canada, USA and International markets, driven by its private portfolio.

*Portfolio breakdown at cost

Geographical Breakdown of Public and Private Portfolios

3% 3% 37% 37% 60% 60%

Break akdo down wn of

• f Portfolio
• lio

Cash Private Portfolio Public Portfolio

23% 23% 75% 75% 2% 2%

Percen enta tage ge of Public blic Portf tfoli

• lio

37% 37% 59% 59% 4% 4%

Percen enta tage ge of Private e Portf tfoli

• lio

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Public Portfolio Diversified across ecosystem

Strategy for public portfolio construction is to actively manage and diversify in three ways: by geography, by sub-sector and by company.

Cultivati tion & Beyond

Canopy Growth Hexo Organigram Canntrust Specia cialty ty LPs James E Wagner Indiva Charlotte’s Web Namaste

Ret etail Focused

Solo Cannabis Ravenquest Planet 13

Vertical al Inte tegrati gration / M Multi-Stat State

Green Thumb Industries C21 Sunniva Vivo Cannabis Harvest One

Testing and Extracti ction

Valens Groworks Friday Night Cannex

Canada da and United ted States es Diversification Strategy

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Top 10 Public Investments

A diversified portfolio of public companies focused on maximizing long-term growth

Canada // NDVA

Niche producer with strain experience

Canada // OGI OGI East Coast leader / internationally expanding USA // SNN SNN

Low-cost producer, pharma and production experience

Canada // VGW

Extraction & testing

USA // CXXI

Acquisitions of vertical

• perations

USA // SNN SNN

Nevada vertical integration and super dispensary

Canada // VIVO VIVO

Pharma and Rec Canada

Canada // HEXO

Low Cost High Margin

USA// Listing Pending

Medicinal cultivation & extraction

Canada // TRST

Federally regulated LP

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Top 10 Private Investments

Cana nada da

Medical cannabis producer

USA

Vertically integrated cannabis company

Cana nada da

Organic medical cannabis producer

Jama maica ca

Low cost and energy efficient producer

USA

Artisan cannabis chocolate bars

Cana nada da & U USA

Vertical producer focused on wellness

USA

Multi-state medical cannabis

USA

California vertically integrated cannabis company

Cana nada da

Vertically integrated biopharmaceutical licensed dealer

*Canada da & USA

Cannabis healthcare technology

*CB2 insights was formerly Sail Cannabis

A diversified portfolio focused on early access, whole ecosystem and US/International markets to deliver long-term growth opportunities

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Private Portfolio Success Stories

Private portfolio investments already producing valuation increases due to go further funding and liquidity events

UPCOMING RTO’s TO GO PUBLIC

Bhang and CB2 (formerly Sail) are in the process of completing Reverse Takeover Transactions to go public

NOW PUBLICLY TRADED

Raised a subsequent round of funding 35% markup Acquired 55% ROI in 3 months Two Subsequent Raise’s

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Valuation & Performance

• Overview of CGOC performance over time

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Valuation & Performance CGOC NAV

• NAV as of November 15th = $2.63, performing well against our benchmarks
• NAV increase of 13.5% since IPO in January 2018

Compar aris ison

• n to

to select t Indices and ETF’s where e the average e gain since Jan/2 n/26/1 6/18 was as -19.8% 8%

*HMJR from February 14, 2018, **Jan 26 starting NAV after agents fee $2.3171

HMMJ HMJR NAMMAR CGOC NAV Return* Since Inception

• 16.82%
• 25.70%
• 16.98%

13.50%

• 16.82%
• 25.70%
• 16.98%

13.50%

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CGOC Relative Performance

CGOC strategy has resulted in portfolio gains and reduced downside through industry volatility

* MJJ from February 1, 2018, SEED from February 12, 2018, **Jan 26 starting NAV after agents fee $2.3171

Valuation & Performance

• 40%
• 30%
• 20%
• 10%

0% 10% 20% 30% 40% 50% 60% HMMJ HMJR* NAMMAR CGOC NAV**

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Valuation & Share Price

Sh Shar are Pr Price ice NAV

$1.49 49 $2.63 63

CGOC SP CGOC NAV

• 43%

discoun unt t to to NAV

NAV Vs Share Price

• While the NAV continues to appreciate, there remains a significant discount gap

to the share price.

• The company has embarked upon a number of initiatives to close the gap, and

ensure the share price is more reflective of the positive gains achieved through the actively managed portfolio

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Summary

• NAV continues to trend well
• Remain undervalued with a ~40%

discount to NAV

• Several US privates in the pipeline
• Private holding liquidity events yet to

be rated The actively managed portfolio has mitigated downside risk while allowing for participation in the upside.

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Th Than ank y k you

• u!

cgocorp.com Delivering long-term returns in cannabis investing through public and private diversification