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& HEALTH Creating a Global Market Leader in Cannabis Health - - PowerPoint PPT Presentation

& HEALTH Creating a Global Market Leader in Cannabis Health & Wellness, Driving Shareholder Value through Synergies LEGAL DISCLAIMER Cautionary statements regarding forward-looking information Certain statements herein relating to the


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HEALTH

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Creating a Global Market Leader in Cannabis Health & Wellness, Driving Shareholder Value through Synergies

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Aleafia Health Inc. :: Confidential & Proprietary

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HEALTH

Certain statements herein relating to the Company constitute “forward looking statements”, within the meaning of applicable securities laws, including without limitation, statements regarding future estimates, business plans and/or objectives, sales programs, forecasts and projections, assumptions, expectations, and/or beliefs of future performance, are “forward-looking statements”. Such “forward-looking statements involve unknown risks and uncertainties that could cause actual and future events to differ materially from those anticipated in such statements. Forward- looking statements include, but are not limited to, statements with respect to commercial operations, including production and/or sales of marijuana, quantities of future marijuana production, anticipated revenues in connection with such sales, the overall projected size of the market, completion and/or expansion of production facilities, and other Information that is based on forecasts of future results, estimates of production not yet determinable, and other key management assumptions. Actual results may differ materially from those expressed or implied by such forward- looking statements and involve risk and uncertainties relating to the Company’s historical experience with regulatory changes, timeliness of government approvals for the granting of permits and licenses, changes in marijuana prices, actual operating performance of facilities , and other uninsured risks. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law. Contents are provided for general information purposes only and do not constitute an offer to sell or solicitation of an offer to buy any security in any jurisdiction

LEGAL DISCLAIMER Cautionary statements regarding forward-looking information

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Aleafia Health Inc. :: Confidential & Proprietary

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HEALTH

Creating a Global Market Leader in Cannabis Health & Wellness, Driving Shareholder Value through Synergies

Production & Supply Product Innovation International Beachheads Canada’s Largest Clinic Network High Margin Products Distribution Channels 30,000 sq. ft. dedicated Product Innovation Center with GMP certified lab

Medical Non-Medical

~60,000 Individual Patients Seen

Provinces Retailers

Australia (1) Germany Consumer Experiences (Customers & Patients) New Marketplace Platform New Education Platform

HEALTH +

(1) Pending closing of transaction

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Aleafia Health Inc. :: Confidential & Proprietary

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  • Funded 2019 available

cannabis of 138,000 kg coming online over 2019

  • Annual production of

98,000 kg from Outdoor, Indoor and Greenhouse

  • nline over 2019
  • Secured 5 year low-cost

wholesale supply agreements for 38,000 kg per year (182,500 kg)

  • Secured leading edge

genetics and starter material

  • Paris 30,000 sq. ft. state
  • f the art facility

including 5,000 sq. ft. formulation and analytical services lab

  • GMP certification for

export in Q3 2019

  • License agreement for

metered dosage sprays

  • Exclusive Canadian

rights to oral sustained release tablets

  • Research studies for

sleep / sleep deprivation

  • Research studies for

genomics

  • Exclusive CBD supply

agreement for CPG products with royalties

  • New high-margin

products in pipeline include beverages, edibles, vapes, topicals and concentrates

  • Canada’s largest

cannabis clinic network = 40 locations,~60,000 patients seen to date

  • ~12 million data points
  • Team of 100+ doctors

and nurse practitioners

  • German Supply JV with

access to 20,000 pharmacies

  • Coveted supply

agreement with Shoppers Drug Mart

  • Provincial orders from

Saskatchewan, BC, Ontario and Alberta and plans to expand nation- wide in 2019

  • Delivered 100% of

provincial supply commitments

  • Retail orders and

engagement with F&F

  • Retail ownership/JVs

with One Plant & Starbuds (via Compass)

  • Medical and non-

medical flower, oils, drops

  • Metered dosages via

sprays

  • Oil Capsules (10 mg

strengths)

  • Access to leading US

brands via Serruya JV

  • New Education Learning

Management System Platform

  • Online Medical Ordering
  • New eCommerce Global

Marketplace for Medical and Non-Medical

  • Global Clinical / Training

Platform to Scale IP

VERTICAL INTEGRATION WITH HORIZONTAL & GLOBAL DIVERSIFICATION

Grow & Supply Extraction & Formulation Testing, Research & Development Retail / Provincial Distribution Products & Brands Consumer Experience Medical / Clinic Distribution (1) All Figures Approximate

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TRANSACTION HIGHLIGHTS HEALTH

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Aleafia Health Inc. :: Confidential & Proprietary

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Transaction Structure

  • Aleafia to acquire all of the issued and outstanding shares of Emblem by way of a court approved Plan of Arrangement, subject

to court approval, shareholder approval and TSX:V approval among other conditions Consideration

  • Each Emblem share will be exchanged for such number of common shares of Aleafia
  • Represents share consideration of 0.8377 for each Emblem share and a 27.0% premium to Emblem’s closing price
  • Implied equity value of ~$173.2 million

Pro Forma Ownership

  • 59% Aleafia / 41% Emblem (as at date of arrangement agreement)

Timing

  • Special meeting of Emblem shareholders expected to occur and closing of the transaction thereafter is expected following

receipt of all required regulatory approvals and satisfaction of other customary closing conditions

TRANSACTION SUMMARY

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Aleafia Health Inc. :: Confidential & Proprietary

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HEALTH

Strong Market Position

  • Scale matters: leading licensed producers command premium valuations
  • Significantly expanded production and operational capacity enables the pro forma company to access a lower cost of capital
  • Improved platform to leverage international expansion into new markets
  • Combined management expertise to leverage best practices

Fully Integrated Market Leader

  • Pro-forma entity would be a top LP in Canada in terms of planned production capacity with leading access to supply creating

significant scale for growth

  • Expansion into higher-margin, value-added product development
  • State-of-the-art facilities across Ontario with planned GMP formulation & manufacturing

Global Distribution Platform

  • Combination of Canabo and GrowWise Health creates the largest national clinic network with 40 locations, 60,000 individual patients

seen

  • Significant supply agreements across 4 Canadian provinces covering 67% of national population, 2 national retail chains, emerging

retail platform in Ontario, and national pharmacies in Canada and Germany with growth opportunities in Europe and Australia Focus on High- Margin, Value-Added Products

  • Low-cost production capacity to supply high-margin product portfolio of oils, capsules, oral sprays, sustained release oral tablets and

CBD-infused health & wellness products

  • Branded product innovation for quality beverages, edibles, vape pens, topicals and concentrates

TRANSACTION HIGHLIGHTS :: Combination Creates Medical Cannabis Leader with Renowned National Brands, Robust Footprint in Value-added Products and International Growth Opportunities

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VIEW FORWARD HEALTH

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Aleafia Health Inc. :: Confidential & Proprietary

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HEALTH

750.0 550.0 255.0 156.0 138.0 117.2 113.0 108.0 98.0 95.0 75.0 62.9 57.0 50.0 50.0 50.0 40.0 37.0 17.6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Guaranteed Access to Supply in a Market Facing Shortages

Strong Growth in Planned Annual Capacity

(in thousands of kgs)

Leading Producers Mid-Tier Producers Other Producers

(1) Includes Secured Wholesale Supply Agreements

TOGETHER, A LEADING CANNABIS COMPANY

The Pro Forma Company will have a strong production profile with a leading access to supply, enabling significant scale to leverage global opportunities

Mackie Research December 11, 2018 (1)

(2) All figures approximate

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Aleafia Health Inc. :: Confidential & Proprietary

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HEALTH

$14,867.0 $7,768.9 $3,381.0 $1,970.7 $1,185.2 $774.9 $757.2 $667.4 $436.1 $422.5 $374.0 $249.3 $233.7 $215.6 $198.6 $136.4 $130.0 $97.0 $91.6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

MARKET CAPITALIZATION :: SIZE MATTERS

Leading Cannabis Companies Command Premium Valuations, Have Greater Access to Capital and Improved Liquidity

CAD Millions December 18, 2018

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