INVESTOR PRESENTATION
A p r i l 2 0 1 9
INVESTOR PRESENTATION A p r i l 2 0 1 9 FORWARD LOOKING STATEMENTS - - PowerPoint PPT Presentation
INVESTOR PRESENTATION A p r i l 2 0 1 9 FORWARD LOOKING STATEMENTS Some of the statements contained in the following material are forward-looking statements that are based on current expectations, estimates, forecasts, projections, beliefs
INVESTOR PRESENTATION
A p r i l 2 0 1 9
FORWARD LOOKING STATEMENTS Some of the statements contained in the following material are “forward-looking statements” that are based on current expectations, estimates, forecasts, projections, beliefs and assumptions made by management of the Company about the industry in which it operates. Words such as “expect”, “anticipate”, “intend”, “plan”, “believe”, “seek”, “estimate”, and variations of such words and similar expressions are intended to identify such forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statement or information. Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. In making the forward looking statements included in this Presentation, the Company has made various material assumptions, including but not limited to: (i) obtaining the necessary regulatory approvals; (ii) that regulatory requirements will be maintained; (iii) general business and economic conditions; (iv) the Company’s ability to successfully execute its plans and intentions; (v) the availability of financing on reasonable terms; (vi) the Company’s ability to attract and retain skilled staff; (vii) market competition; (viii) the products and technology offered by the Company’s competitors; and (ix) that our current good relationships with our service providers and other third parties will be maintained. While management considers these assumptions to be reasonable, based on information available, they may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the medical cannabis industry in Canada and the United States generally, income tax and regulatory matters; the ability of the Company to implement its business strategies including expansion plans; competition; crop failure; currency and interest rate fluctuations, and the other risks discussed under the heading “Risk Factors” in the Company’s Prospectus available on SEDAR www.sedar.com. The foregoing factors are not intended to be exhaustive. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. For more information on the Company, readers should refer to www.sedar.com for the Company’s filings with the Canadian securities regulatory authorities
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Bu Buil ilding ing the worl rld’s ’s strong ngest ca cannabis brand
deployment of pop-up manufacturing facilities in 2019
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PLUS INTENDS TO BUILD THE WORLD’S STRONGEST CANNABIS BRAND
PLUS INTENDS TO BUILD THE WORLD’S STRONGEST CANNABIS BRAND
EXPAND TO ADDITIONAL LEGAL MARKETS WIN IN THE LARGEST MARKET FOUNDATION ESTABLISHED TO EXECUTE
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EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION
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EXPAND TO ADDITIONAL LEGAL MARKETS WIN IN THE LARGEST MARKET FOUNDATION ESTABLISHED TO EXECUTE
PLUS INTENDS TO BUILD THE WORLD’S STRONGEST CANNABIS BRAND
THE BEST BRANDS ARE LIKELY TO EMERGE FROM CALIFORNIA BECAUSE IT IS THE LARGEST LEGAL CANNABIS MARKET…
U.S. CANNABIS REVENUE BY STATE1
(Top 5, 2018, $M USD)
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(1) Arcview Market Research & BDS Analytics: The State of Legal Marijuana Markets 6th edition Update
$0 $500 $1,000 $1,500 $2,000 $2,500 CA CO WA MI OR
W I N I N T H E L A R G E S T M A R K E T
NUMBER OF EDIBLE BRANDS BY STATE1
(2017, CA vs. CO)
…AND BECAUSE IT IS THE MOST COMPETITIVE MARKET
Due to a long history of medical legalization, California is also the most competitive market “Companies gain advantage against the world’s best competitors because
Nations
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50 100 150 200 250 CA CO
(1) BDS Analytics GreenEdge™ reporting; count of edible brands with revenue in 2017, excluding tinctures
W I N I N T H E L A R G E S T M A R K E T
50% 60% 70% 80% 90% 100% 110% 120% 130%
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
THE STRONGEST BRANDS WILL EMERGE FROM EDIBLES
Average unit price as % of initial price since Q2 2014 in Colorado and Washington
P R I C E I N D E X T I M E Edibles Concentrates Flower
(1) BDS Analytics GreenEdge™; Weighted average price by Subcategory by Quarter Q2 2014 to Q2 2018, data shown as percent of Q2 2014 price per unit
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PRICE OF KEY CATEGORIES SINCE RECREATIONAL LEGALIZATION1
Brands are built in differentiated, not commoditized, product categories. Prices in flower and concentrates are already commoditizing in recreational markets.
W I N I N T H E L A R G E S T M A R K E T
PLUS HAS GROWN TO THE #1 EDIBLE BRAND IN CALIFORNIA IN JUST OVER A YEAR
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Market Share ($ Sales, %) Retail Sales (Units)
136.9K 292.0K 574.4K 760.2K
0.61% 1.05% 4.79% 5.23% 9.89% 13.65%
K 100K 200K 300K 400K 500K 600K 700K 800K 900K 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Retail Sales (K) Edibles Market Share (%)
PLUS RETAIL UNIT SALES AND EDIBLES MARKET SHARE OVER THE LAST SIX QUARTERS1
#34 #21 #5 #4 #1 #1
Market Share Rank
W I N I N T H E L A R G E S T M A R K E T
(1) BDS Analytics GreenEdge™; Retail Sales Q2 2017-Q4 2018: Edibles Excluding Tinctures;
PLUS HAS THE #1 AND #2 BEST-SELLING SKUS ACROSS ALL CATEGORIES IN CALIFORNIA
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(1) BDS Analytics GreenEdge™ Retail Sales Q4 2018: All categories
#1 SKU Q4 2018 across all categories in California1 #2 SKU Q4 2018 across all categories in California1
W I N I N T H E L A R G E S T M A R K E T
PLUS HAS 3 OF THE 5 BEST-SELLING SKUS ACROSS ALL CATEGORIES IN CALIFORNIA
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W I N I N T H E L A R G E S T M A R K E T
$M $1M $1M $2M $2M $3M $3M $4M $4M $5M PLUS "Uplift" THC Gummies PLUS "Restore" THC/CBD Gummies Tinctures #1 Gummies #1 PLUS "CBD Relief" Gummies Gummies #2 PLUS "Create" THC Gummies Chocolate Bites #1 Tinctures #2 Gummies #3 Millions
California top 10 products by retail sales (Q4 2018)1
RETAIL SALES ($M)
Product Name
#1 Best-Selling CBD Edible in CA
(1) BDS Analytics GreenEdge™ Retail Sales Q4 2018: All categories
WE HAVE EXCELLED IN THE CALIFORNIA MARKET BY PAIRING AGILE FOOD MANUFACTURING WITH THOUGHTFUL BRAND TEAMS
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PLUS currently operates in a 12,000 square foot licensed food manufacturing facility which has an annual production capacity of $50M
W I N I N T H E L A R G E S T M A R K E T
PLUS INTENDS TO CEMENT ITS POSITION IN CALIFORNIA THROUGH NEW PRODUCT LAUNCHES AND ACQUISITIONS
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Gummies, 41% Baked Goods, 12% Pills , 12% Other Candies (Mints, Hard Candy), 10% Chocolate Bars, 10% Chocolate Bites, 8% Beverages, 5% Other, 2%
ü Win in largest edible segment (30% market share) ü Complete acquisition in second largest edibles segment (Q4 2018) q Launch new products in other market segments (2019) CA EDIBLES MARKET BY SEGMENT (2H 2018)1
W I N I N T H E L A R G E S T M A R K E T
(1) BDS Analytics GreenEdge™ Retail Sales Q4 2018: Edibles excluding tinctures
EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION
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EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION EXPAND TO ADDITIONAL LEGAL MARKETS WIN IN THE LARGEST MARKET FOUNDATION ESTABLISHED TO EXECUTE
PLUS INTENDS TO BUILD THE WORLD’S STRONGEST CANNABIS BRAND
THE U.S. CANNABIS MARKET IS GROWING RAPIDLY
THE U. S . CAN N ABI S M ARKET I S EXPECTED TO BE
C B D O N L Y N O L E G A L C A N N A B I S A D U L T U S E / R E C R E A T I O N A L M E D I C A L
1 The majority of states already have some form of legal cannabis. PLUSTM already has winning products in each of the adult use, medical, and CBD segments.
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E X PA N D T O A D D I T I O N A L L E G A L M A R K E T S
Notes: National Conference of State Legislatures (1) Cowen Research Ahead of the Curve Series: CANNABIS: $75B Opportunity; Category Cross-Currents Keep US Cautious On Booze (April 4, 2018)
PLUS INTENDS TO EXPAND TO NEW JURISDICTIONS WITH QUICKLY DEPLOYABLE PRODUCTION FACILITIES
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Deployable, smaller versions of current equipment that ensure consistent manufacturing processes across different jurisdictions
5,000 square feet
PLUS proposes to enter new markets both through direct ownership and partnerships
and market share
Market 2022E Market Size1 Canada $5.9B Florida $1.6B New York $1.6B Michigan $1.4B Massachusetts $1.1B Nevada $0.8B
KEY FOCUS MARKETS
E X PA N D T O A D D I T I O N A L L E G A L M A R K E T S
OUR STRATEGY
(1) Arcview Market Research & BDS Analytics: The State of Legal Marijuana Markets 6th edition Update
TOP CANNABIS BRANDS COULD COMMAND SIZABLE MARKET SHARE
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43% of global non-alcoholic beverages industry
SOURCE: STATISTA
32% of U.S. chocolate market
SOURCE: CNBC
42% of global tooth paste market, 2017
SOURCE: FORBES
assuming half the penetration of Coca-Cola or Colgate
E X PA N D T O A D D I T I O N A L L E G A L M A R K E T S
(1) The Brightfield Group, https://www.forbes.com/sites/monazhang/2017/11/07/global-marijuana-market-31-billion-investors-cautious/#3c8206997297 (2) GreenEdge™ Retail Sales, NCIA Report
PLUS is already commanding sizable market share in the largest edibles segment
PLUS SEEKS TO ACHIEVE THESE LEVELS OF MARKET OWNERSHIP
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E X PA N D T O A D D I T I O N A L L E G A L M A R K E T S
CA Gummy Market — Q4 20181
41% of Total Edibles Market
PLUS 31%
(1) BDS Analytics GreenEdge™; Retail Sales Q4 2018: Edibles Excluding Tinctures;
THE CBD MARKET IS EQUALLY EXCITING
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The farm bill passed in December 2018 making Hemp CBD production legal in the US at the federal level Some estimate that the industry could be as large as $22B by 2022
E X PA N D T O A D D I T I O N A L L E G A L M A R K E T S
PLUS INTENDS TO EXPAND CBD MARKET REACH
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PLUS currently has the #1 selling CBD edible product in California’s regulated cannabis market1 We intend to leverage our expertise in manufacturing and branding to seek new markets for a hemp-derived version
E X PA N D T O A D D I T I O N A L L E G A L M A R K E T S Currently, only cannabis-derived CBD is allowed in California’s regulated cannabis channels. We do not expect any material challenges in the manufacturing of PLUS Gummies using hemp- derived CBD and are therefore actively preparing for entry into the national hemp-derived CBD market, pending regulatory clarity.
(1) BDS Analytics GreenEdge™; Retail Sales Q4 2018: Edibles Excluding Tinctures;
EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION
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EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION EXPAND TO ADDITIONAL LEGAL MARKETS WIN IN THE LARGEST MARKET FOUNDATION ESTABLISHED TO EXECUTE
PLUS INTENDS TO BUILD THE WORLD’S STRONGEST CANNABIS BRAND
PLUS IS LED BY A WORLD CLASS LEADERSHIP TEAM
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F O U N D AT I O N E S TA B L I S H E D T O E X E C U T E
JAKE HEIMARK
DIRECTOR, CHIEF EXECUTIVE OFFICER Formerly Product Manager, Gumroad Risk, Facebook A.B. Economics, Brown University
CRAIG HEIMARK
CHAIRMAN, CHIEF STRATEGY OFFICER
JON PAUL
CHIEF FINANCIAL OFFICER
MATT SCHMIDT
NON-EXECUTIVE DIRECTOR
SANDY POSA
NON-EXECUTIVE DIRECTOR
JENNIFER TUNG
CHIEF RISK OFFICER Formerly Legal Director, Uber Lead Counsel, Facebook J.D. Harvard Law School B.A. Sociology, Stanford University Formerly CIO, UBS Supervisory Board, Deutsche Böerse A.B. Economics, Brown University
Formerly CFO, Fair Oaks Farms 25+ years experience in CFO Roles M.B.A Harvard Business School B.S. Accounting, University of Illinois Current EVP at The Green Organic Dutchman Holdings Ltd. A.B. Commerce, University of Windsor M.B.A Wilfrid Laurier University Current Director, Perdue Farms Former VP, P&G A.B. Economics, Brown University M.B.A. University of Chicago
PLUS HAS BROUGHT IN THE RIGHT OPERATIONAL & PRODUCT TEAMS TO SCALE
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Key team members include:
Production capabilities scaled over 500% in 2018 while maintaining industry leading product consistency and dosing
F O U N D AT I O N E S TA B L I S H E D T O E X E C U T E
PLUS HAS A DIVERSE SHAREHOLDER BASE AND A NUMBER OF STRATEGIC INVESTORS
SHARE CLASS # OF SHARES1 Common (Subordinate Voting) 24,330,799 Class A Common (Proportionate Voting) 15,322,604 Total Shares Outstanding 39,653,403 Warrants 4,092,175 Options 1,748,235 Total as of Jan. 29 20192 45,493,813
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(1) # of shares calculated on an as-converted to Common Share basis (2) Unaudited — subject to update
F O U N D AT I O N E S TA B L I S H E D T O E X E C U T E
All pre-IPO shares are subject to selling restrictions until at least 6-months post-IPO 6,535,947 of the Pre-IPO Shares are subject to a contractual selling restriction until December 31st, 2019
EXPAND RAPIDLY ACROSS THE WORLD WIN IN THE LARGEST MARKET LAYING A STRONG FOUNDATION
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PLUS INTENDS TO BUILD THE WORLD’S STRONGEST CANNABIS BRAND
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Bu Buil ilding ing the worl rld’s ’s strong ngest ca cannabis brand