iAnthus Capital Holdings, Inc. BUSINESS OVERVIEW September 2016 - - PowerPoint PPT Presentation

iAnthus Capital Holdings, Inc.

BUSINESS OVERVIEW

September 2016

This presentation has been prepared for informational purposes only and does not constitute an offer or solicitation to sell shares or securities in the Company or any related or associated company. None of the information or analyses presented are intended to form the basis for any investment decision, and no specific recommendations are intended. Accordingly this presentation does not constitute investment advice or counsel or solicitation for investment in any security. This presentation does not constitute or form part of, and should not be construed as, any

• ffer for sale or subscription of, or any invitation to offer to buy or subscribe for, any

securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. The Company expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained herein, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.

Disclaimer

2 Business Overview • September 2016

iAnthus Capital Holdings, Inc. (CSE: IAN), delivers a comprehensive solution for financing and managing licensed cannabis cultivators, processors and dispensaries throughout the United States1

The iAnthus Mission

3 Business Overview • September 2016

NOTES

(1) iAnthus Capital Holdings, Inc. operates in the United States through its wholly-owned subsidiary iAnthus Capital Management.

• Huge, proven $50 billion market for cannabis in the U.S.
• Active state-led legalization
• Industry is extremely underfunded, driving potential

for high returns

• Best-in-class management team and strategic partners
• Investments in three states and a large pipeline of
• pportunities
• Pure play, public company diversified across multiple states

and operators

Cannabis in 2016

4 Business Overview • September 2016

Market iAnthus

Huge Market Opportunity

5 Business Overview • September 2016

NOTES

(1) Source: The Marijuana Business Factbook 2016; CDC – Economic Factbook; Mckinsey & Company – The Future of Textbooks; Industry Leaders Magazine (2) Source: 2016 Arcview Market Research & New Frontier .

Total estimated annual demand for recreational cannabis in 2015 exceeds that of wine, organic food, chocolate, and craft beer.1 Legal cannabis sales are projected to grow at 31% per year from 2014 to 2020 with sales quadrupling in the next five years.2

$0.8 $1.5 $5.7 $10.0 $12.0 $19.6 $21.0 $35.9 $37.6 $50.0 $80.0 $101.5 $0.0 $50.0 $100.0 Girl Scout Cookies E-Cigarettes 2015 Legal Cannabis Sales Textbooks National Football League Craft Beer Chocolate Organic Food Wine Cannabis Demand Tobacco Beer Sales (Billions) $4.6 $5.7 $7.1 $8.5 $12.5 $18.2 $22.8 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 2014 2015 2016 2017 2018 2019 2020 Sales (Billions)

Compound Annual Growth Rate 31%

6 Business Overview • September 2016

• Medical use in 25 states

and recreational use in four states

• Currently 40 states have

allowed some degree of legal cannabis use

• 86% of Americans live in

a state that allows some degree of legal cannabis use1

NOTES

(1) Source: 2016 Arcview Market Research & New Frontier (2) CBD Only states permits medicinal use of cannabis products that have little or no THC..

Recreational Use & Medical Medical Only CBD Only2 No Laws

Market Highlights

A State-Driven Legalization…

The federal government has set a cautious framework that has allowed the states to move forward

…and a Cautious Federal Approach…

7

NOTES

Source: The Marijuana Business Factbook 2015, CannaBusinessMedia

Federal Government

Business Overview • September 2016

• "Cole Memo” from U.S. Dept. of Justice in 2013:

Licensed cannabis businesses will not be federally prosecuted in states with strictly regulated legal cannabis programs.

• Bipartisan U.S. Congressional Support:

2015 U.S. Federal Budget: DOJ prohibited from using federal funds to interfere in the implementation of state medical cannabis laws.

• CARERS Act:

Proposed senate legislation would alleviate federal banking and tax code constraints.

By “leading from behind,” the Federal government has kept the usual providers of growth capital on the sidelines

…has Kept Traditional Capital Sources on the Sidelines

8 Business Overview • September 2016

Commercial and investment banks, private equity and venture capital firms have all been extremely cautious in providing capital or services to the cannabis industry

0% 1% 1% 4% 8% 10% 13% 22% 79%

0% 20% 40% 60% 80% 100% Crowdfunding Site Donations From Industry Advocates Bank or State Agency Loan Other Sources Venture Capital/Private Equity Angel Investor(s) Running Funds/Profit Friends & Family Investment(s) Founders' Own Savings/Personal Debt

Percent of Businesses

Source of Capital to Launch a Cannabis Business

As a Result, 3rd Party Capital is Scarce…

9 Business Overview • September 2016

NOTES

Source: The Marijuana Business Factbook 2016, 2016 Marijuana Business Daily

79% of Cannabis Companies are backed by the founders’ savings and personal debt

10

…and in Demand

Over 50% of medical dispensaries and recreational stores are either actively seeking or planning to seek funding in 2016

NOTES

Source: The Marijuana Business Factbook 2016

Business Overview • September 2016

41% 37% 35% 11% 24% 13%

0% 10% 20% 30% 40% 50% 60% 70% Medical Dispensaries / Recreational Stores Infused Product Manufacturers Wholesale Cultivators

Percent of Cannabis Businesses Seeking Funding in 2016

Actively Seeking Funding Plan to Seek Funding This Year

52% 61% 48%

Leading to High Returns with Limited Risk for Capital Providers

11

Return Highlights

Business Overview • September 2016

NOTES

Source: The Marijuana Business Factbook 2016

Limited Investor Risks

• The average ROI realized by investors in

privately held cannabis businesses is 36%.

• 9% of investors in privately held cannabis

businesses are achieving 100%+ ROI’s.

• The average length of time to break-even

for MMJ dispensaries is under 6 months.

• The average length of time to break-even

for rec stores is under 12 months.

• Markets have a high barrier to entrance due

to limited licenses in most states.

iAnthus combines real world management expertise with access to institutional capital

The iAnthus Solution

12

• Cannabis investment

vehicle for professional fund managers, family

• ffices, and select

angel investors

• Access to institutional

capital for cannabis partners

Capital

• Licensed cannabis
• perations and

regulatory compliance

• Healthcare management,

policy, and finance

• Cannabis cultivation, testing,

extraction, and derivative product formulation

Expertise

iAnthus Capital Management

Combine capital and operating experience: “Value-added capital” Current Portfolio: Massachusetts Vermont New Mexico

Business Overview • September 2016

$3.4 $3.9 $7.8 $9.4 $11.3 $13.5

• $5.0
• $3.0
• $1.0

$1.0 $3.0 $5.0 $7.0 $9.0 $11.0 $13.0 $15.0 FY'1 FY'2 FY'3 FY'4 FY'5 FY'6 FY'7 Millions

Illustrative Deal Model

Investment Services or Cash Flow Distribution Loan Payment or Preference Interest or Dividend Revenue

We Invest in Cash Flow

Business Overview • September 2016 13

Structure

• Senior secured debt
• Preferred equity
• Service contracts

Uses

• Start-up and growth capital
• Buy-outs
• Acquisitions

As our partner grows, so does our cash flow

We “front load” our cash flow to enhance returns and reduce risk

Unparalleled Ability to Execute

14 Business Overview • September 2016

Healthcare Industry Veterans Experts in Cannabis Cultivation & Dispensary Operations Regulatory Compliance, Real Estate & Finance

ADAM COHEN

Cultivation Advisor Co-Founder & Managing Director of MJardin, the largest commercial cannabis cultivator in the U.S.

• ALEX FORD

Operations Advisor Founder & Executive Director

• f Grassroots Vermont, a licensed

cannabis dispensary

• DR. RICHARD BOXER

Medical Advisor Finalist for position of Surgeon General of the United States in the Clinton and Bush administrations

• HADLEY FORD

Co-founder & Managing Director Co-Founder and CEO of ProCure Treatment Centers, Inc.

• CHRIS HUDALLA

Science Advisor Co-Founder of ProVerde Laboratories, industry leader in cannabis testing and product formulation

• JAIME LEWIS

Operations & Public Advocacy Advisor Founder & CEO of Mountain Medicine and chair of the National Cannabis Industry Association

RANDY MASLOW

Co-founder & Managing Director Senior Vice President for Business Development and General Counsel at XO Communications, Inc.

• JOHN HENDERSON

Managing Director Chief Operating Officer & Chief Development Officer at ProCure Treatment Centers, Inc.

• CRAIG ZWERLING

Vice President of Finance Director, Corporate & Project Finance & Reimbursement at ProCure Treatment Centers, Inc.

• JULIUS KALCEVICH

Financial Advisor Partner at Bellotti Goodman sponsor of Hydropothecary, a leading Canadian cannabis company

Strong relationships with industry leaders and channel partners equals quality investment opportunities

Strategically Aligned With Best-in-Class Industry Leaders

15 Business Overview • September 2016

Legal

• Leading national U.S. law

firm representing clients in the marijuana industry

• 3+ decades of combined

experience representing clients in the areas of cannabis licensing and marijuana policy reform

Production

• Highly specialized large-

scale producer of legal cannabis;10 tons of cannabis produced in 2015 for 17 clients in multiple states; 50 tons estimated in 20161

• Proprietary industry-leading

cultivation methodologies, technologies, and practices

Testing

• Leader in medical cannabis

extraction, product formulation, and analytical testing

• Co-founder is a Ph.D.

analytical chemist with over 25 years of research experience in analytical chemistry

• Accredited in accordance

with ISO/IEC 17025:2005

Advisory

• Leading advisor to license

applicants across U.S.

• Extensive experience in

dispensary and cultivation

• perations, compliance,

corporate finance, policy, project management, and strategy

NOTES

(1) Source: MJardin estimates.

iAnthus is Already Invested

16

Current investments Active partnership discussions

Business Overview • September 2016

9,500

~3,000

100,000

Medical Adult Use

Potential Full Adult Use Market

Active Patients Currently Unregistered Qualifying Patients Potential Adult Use Consumers

Vermont Investment Highlights

Business Overview • September 2016 17

Partner Snapshot:

• One of four vertically integrated license holders; and
• Only approved statewide delivery system.

Recent Developments:

• Patient count up 125% year over year;
• Revenue up 30% year over year; and
• Cultivation yields up 30% YTD.

Market Highlights:

• 600,000 total population;
• 13 million tourists annually;
• Recent expansion in the medical program to include chronic

pain; and

• Adult use legislation likely to be considered in 2017.

New Mexico Investment Highlights

Business Overview • September 2016 18

Partner Snapshot:

• Market share leader with ~16% market share across all managed

licenses; and

• RGA manages three cultivation and dispensary licenses plus a

manufacturer’s license.

Recent Developments:

• Added two additional licenses YTD
• Increased grow capacity by 50% in 2016
• Opened 1 new dispensary and built out ~8,000 sqft of additional

cultivation in 2016; and,

• Opened manufacturing/processing facility.

Market Highlights:

• ~ Two million people in New Mexico with 26,500 patients currently

registered, representing a 70% increase in year-over-year patient count.

5,000 10,000 15,000 20,000 25,000 30,000

New Mexico MMJ Patient Growth(1)

NOTES

(1) New Mexico Department of Health

Compound Annual Growth Rate: 42%

Massachusetts Investment Highlights

Business Overview • September 2016 19

Partner Snapshot:

• Led by a nationally renowned medical cannabis executive with over

a decade of experience in medical dispensary operations in Colorado and infused cannabis product manufacturing; and,

• Strategic partnership with Vicente Sederberg, the country’s premier

marijuana law firm.

Recent Developments:

• Secured a cultivation site in the city of Holliston,
• Secured City Council and zoning approval to open a dispensary in a

prime location the City of Boston; and,

• Secured provisional licenses in Boston and Gloucester with a third

license approval pending

Market Highlights:

• 6.7 million people in Massachusetts with ~33,000 patients currently

registered, representing a 114% increase in year-over-year patient count.

5,000 10,000 15,000 20,000 25,000 30,000 35,000

Massachusetts MMJ Patient Growth(1)

Annual Growth Rate June 2015 to June 2016 114%

NOTES

(1) Massachusetts Department of Health

Current Capitalization

• CSE Initial Trading Date: September 7, 2016
• Basic shares outstanding: 16.9 million
• Fully diluted(1): 19.4 million
• Management/Insiders: 38.8%

Historical Capitalization

• 2015: Raised US $2.3 million at US$1.00 per share; US

$12.3 million post capital valuation

• 2016: Raised US $6.7 million at US $1.25 per share; US

$20.0 million post capital valuation(2)

Capital Structure

20 Business Overview • September 2016

NOTES

(1) Includes all dilutive securities; assumes all options and warrants are exercised (strike prices range from US$1.00 to US$1.75 and convertible securities are converted (convertible at US$1.65) (2) Includes $1.3 million convertible debenture

Contact Information

Lucy Zheng | Investor Relations | 212.479.2572 | Lucy.Zheng@IanthusCapital.Com