& HEALTH Creating a Global Market Leader in Cannabis Health - - PowerPoint PPT Presentation
& 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
Aleafia Health Inc. :: Confidential & Proprietary
2
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
Aleafia Health Inc. :: Confidential & Proprietary
3
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
Aleafia Health Inc. :: Confidential & Proprietary
4
HEALTH
- 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
TRANSACTION HIGHLIGHTS HEALTH
&
Aleafia Health Inc. :: Confidential & Proprietary
6
HEALTH
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
Aleafia Health Inc. :: Confidential & Proprietary
7
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
VIEW FORWARD HEALTH
&
Aleafia Health Inc. :: Confidential & Proprietary
9
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
Aleafia Health Inc. :: Confidential & Proprietary
10
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