MANAGEMENT PRESENTATION MARCH 2019 DISCLAIMER 2 Industry Macro - - PowerPoint PPT Presentation

MANAGEMENT PRESENTATION

MARCH 2019

DISCLAIMER

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Today’s agenda

Our Company Industry Macro Trends Our Brands Q318 Financials

01 02 03 04

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$80 Billion

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BY 2030

$24 Billion

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PROFIT $196B

$114B $102B $80B $75B $71B $57B $51B $30B

Frozen Alcohol General Food Cannabis Home Care Health Refridgerated Beverages Beauty Billion U.S. Dollars

Cannabis will become a top consumer category by 20303

• 1. COWEN CANNABIS ESTIMATE JANUARY 2019
• 2. INTERNAL ESTIMATE
• 3. STATISTA 2017 RETAIL $ VOLUME AND COWEN CANNABIS ESTIMATE JANUARY 2019

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THE OPPORTUNITY U.S. CANNABIS MARKET IS BECOMING EVEN MORE ATTRACTIVE

5 REGULATION ACCESS EXPECTATIONS

KEY MACRO TRENDS

Increased regulation Increased complexity Ubiquitous retail 9 new states in 2019 Evolving consumer needs Greater industry expectations

BDI STATES TO WATCH IN 2019

Our mission is to normalize and professionalize cannabis

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Highly Effective Execution Scale Selling System House of Brands Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGE CAPABILITIES TO DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-Tier Management Team 7

UNMATCHED SUCCESS IN COMPETITIVE STATES

• 1. We win competitive

licenses to open new markets

• 2. We acquire

to enter existing markets

• 3. We get to

market faster

• 4. We establish

dominant positions

ACQUIRE ASSETS TO DRIVE GROWTH AND FOOTPRINT OPERATIONAL FASTER THAN COMPETITORS ACHIEVE 100% PENETRATION AND DOMINANT MARKET SHARE

HIGHLY EFFECTIVE EXECUTION

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• 1. MANAGEMENT ESTIMATES AND SUBJECT TO CLOSING PENDING TRANSACTIONS IN NY, MA & MD
• 2. MARKET CAP AS OF FEBRUARY 28, 2019

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ONE OF THE LARGEST OPERATORS IN THE U.S.

Summary Company Information1

Charles Bachtell

CEO & COFOUNDER

Joe Caltabiano

PRESIDENT & COFOUNDER

Ken Amann

CFO

David Ellis

COO

Zach Marburger

CIO

Jason Erkes

CCO

John Schetz

GENERAL COUNSEL

Jennifer Clark

EVP OPERATIONS

Emily Fitzgerald

DIRECTOR HUMAN RESOURCES

DECADES OF EXPERIENCE WITHIN OUR MANAGEMENT TEAM

Scott Wilson

CXO

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DIVERSITY OF TOP-TIER EXPERIENCES ACROSS THE TEAM

+120 Million

RESIDENTS

+866 Million

TOURISTS

CURRENT OPERATIONS/LICENSED IN IL, PA, OH, NV, CA, AZ AND NY, MD, AND MA ARE SUBJECT SOLELY TO REGULATORY APPROVAL PENDING LICENSE APPLICATION MI MINDY’S EDIBLES LICENSING OPPORTUNITY IN OR, WA, CO, OK, NM TARGETING EXPANSION IN FL, NJ VA, CT

WE ARE BUILDING SCALE ACROSS THE U.S.

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CURRENT PRODUCTION CAPACITY

CULTVATION SQUARE FEET DRY FLOWER ANNUAL CAPACITY (LBS)

TOTAL # FACILITIES TOTAL FACILITY SQUARE FOOTAGE CURRENT EXPANSION TOTAL BY 2019 YE CURRENT(5) EXPANSION(5) TOTAL BY 2019 YE(5)

I L L I N O I S (3)

3 238,000(3) 39,000 100,000 139,000 14,190 53,170 67,360

P E N N S Y L V A NI A (3)

1 118,000(3) 20,000 85,000 105,000 8,250 43,312 51,563

O H I O (2)

1 77,000(3) 25,000 25,000 50,000 9,376 9,543 18,919

C A L I F O RN I A (2)

3 650,000 132,000 460,000 592,000 42,408 140,284 182,692

N E V A D A

1 60,000 N / A 36,000 36,000 N / A 13,578 13,578

A R I Z ON A (1)

2 150,000 128,000 128,000 34,265 34,265

N E W Y O R K (1)

1 180,000(3) N / A 100,000 100,000 N / A 44,123 44,123

M A S S A C H U S E T T S (1)

1 150,000 13,000 77,000 90,000 5,071 29,968 35,039

T O T A L ( 4 )

13 1,623,000 357,000 883,000 1,240,000 113,560 333,978 447,539

• 1. SUBJECT TO CLOSING PENDING TRANSACTIONS.
• 2. LOCAL APPROVAL RECEIVED, STATE APPROVAL PENDING.
• 3. SUBJECT TO EXPANSION / CONSTRUCTION.
• 4. EXCLUDES MARYLAND PROCESSING FACILITY.
• 5. BASED ON MANAGEMENT ESTIMATES, SUBJECT TO CHANGE

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21 retail licenses1 and counting OWNED RETAIL

1 Includes licenses awarded for additional locations and pending transactions.

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12 current dispensary locations across 6 states

IL PA OH NV AZ NY MA TOTAL / AVG

# STORES 5(3) 6(1) 1 1 1(3) 4(3) 3(3) 21 # PATIENTS ( 4 ) 60k 80k 30k(2) N / A 160k 75K 55K 404k

• EST. 2020E

PATIENTS 250k 250k 150k N / A 200k 250K N / A 1.1M POPULATION 13M 13M 12M 3M 7M 20M 7M 75M TOURISTS 114M 40M 43M 43M 44M 244M 28M 556M MEDICAL Yes Yes Yes Yes Yes Yes Yes N / A ADULT USE No No No Yes No No Yes N / A

CURRENT RETAIL OPERATIONS

• 1. REPRESENTS THE NUMBER OF AUTHORIZED POTENTIAL LOCATIONS.
• 2. MANAGEMENT EXPECTATIONS OF 2019 PATIENT COUNT.
• 3. SUBJECT TO CLOSING PENDING TRANSACTIONS.
• 4. MANAGEMENT ESTIMATE BASED ON AVAILABLE STATE DATA

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Average Revenue Per Square Foot

$6,500(1) $5,546(2) $2,951(2) $2,951(2)

1) CRESCO LABS INTERNAL UNAUDITED ANALYSIS 2) COSTAR RETAIL ANALYSIS JULY 2017

ATTRACTIVE RETAIL PERFORMANCE

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We have taken a CPG approach to building brands

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OVERALL MARKET CRESCOLABS BRANDS

CURRENT CONSUMER LANDSCAPE AND PORTFOLIO

MEDICINAL WELLNESS/ LIFESTYLE HOLISTIC MEDICINE REGULAR LIFESTYLE CONNOISSEUR

CRESCO REMEDI RESERVE

RELIEF RELIABLE TRUST REWARD

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• BRAND ETHOS: WITH FAMILIAR FORMATS AND PRECISE

DELIVERY SYSTEMS, REMEDI PRODUCTS PROVIDE A SAFE, CONSISTENT AND TRUSTED ALTERNATIVE TO TRADITIONAL MEDICINES.

• AUDIENCE: REMEDI WAS DESIGNED AS A REPLACEMENT OPTION

FOR TRADITIONAL MEDICATION TO SUPPORT THE CONSUMER BASE THAT NEEDS IT’S CANNABIS TO BE DISCREET, EASILY IDENTIFIABLE, AND PRECISELY DOSED.

• PRODUCT PILLARS:
• CBD-FORWARD, NON-COMBUSTIBLE
• TRADITIONAL MEDICINE DOSING FORMATS
• PACKAGING IS DESIGNED TO LOOK LIKE TRADITIONAL

MEDICINE

• APPROX. PERCENTAGE OF SALES: 15%

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RISE REFRESH REST

• BRAND ETHOS: CRESCO ELEVATES

EVERYDAY CANNABIS. HIGH QUALITY. TRUE CONSISTENCY. REMARKABLE

• VALUE. CRESCO IS CANNABIS YOU CAN

COUNT ON THAT DELIVERS CONSISTENT CANNABIS PRODUCTS EVERY TIME.

• AUDIENCE: CRESCO PRODUCTS ARE

IDEAL FOR PEOPLE WHO LOVE TRADITIONAL CANNABIS FORMATS. THIS IS THE CANNABIS BRAND FOR THE STARBUCKS CUSTOMER — ABOVE AVERAGE QUALITY BUT STILL ACCESSIBLE TO EVERYONE.

• PRODUCT PILLARS:
• THC-FOCUSED, EVERY DAY CANNABIS
• PROPRIETARY COLOR CODED FOR

EASE OF USE

• ALWAYS IN STOCK, EVERY TIME
• APPROX. PERCENTAGE OF SALES: 55%

• BRAND ETHOS: CONNOISSEUR-QUALITY CANNABIS DEMANDS HIGHER

EXPECTATIONS FROM CONSUMER AND CULTIVATOR ALIKE. FOCUSED ON EXCLUSIVE GENETICS, CULTIVATION TECHNIQUE & ATTENTION TO DETAIL, RESERVE IS MORE THAN CANNABIS - IT’S A LIFESTYLE.

• AUDIENCE: FANS OF RESERVE ARE HIGHLY SELECTIVE AND TURN TO

RESERVE FOR A LUXURY EXPERIENCE IN CANNABIS. THEY ARE KNOWLEDGEABLE ABOUT CULTIVATION AND LINEAGE, EXTRACTION AND

• HARDWARE. RESERVE DELIVERS A SUPERIOR CANNABIS EXPERIENCE FOR

THOSE WHO ARE LOOKING FOR TRULY TOP SHELF CANNABIS.

• PRODUCT PILLARS:
• HAND-SELECTED STRAINS & PROPRIETARY GENETICS
• CONNOISSEUR CONCENTRATES & VAPE PENS
• TERPENE-RICH, THC FORWARD PRODUCTS
• APPROX. PERCENTAGE OF SALES: 15%

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• BRAND ETHOS: HIGH QUALITY DESSERTS WITH NO CANNABIS FLAVOR,

CREATED BY THE ACCLAIMED PASTRY CHEF, MINDY SEGAL

• AUDIENCE: LOVERS OF DECADENT, CHOCOLATE-FORWARD, EDIBLE

FORMS OF CANNABIS, WHO WILL PAY A PREMIUM FOR SUPERIOR PRODUCTS

• PRODUCT PILLARS:
• INFUSED WITH ODORLESS, FLAVORLESS DISTILLATE
• DECADENT DESSERTS INSPIRED BY MINDY’S RESTAURANTS
• EXCELLENT GIFT OR REPLACEMENT FOR WINE AT DINNER PARTIES
• Approx. Percentage of Sales: 5%
• BRAND ETHOS: FUN, FRUITY CONFECTIONS FOR EVERYDAY

ENJOYABILITY AND EFFECTIVENESS

• AUDIENCE: CONSUMERS THAT WANT A FUN AND APPROACHABLE TREAT

FROM A HIGH QUALITY PRODUCER

• PRODUCT PILLARS:
• INFUSED WITH WINTERIZED SATIVA, INDICA AND HYBRID OILS
• FUN, FRUITY FLAVORS
• GREAT QUALITY AND CONSISTENCY AT AN ACCESSIBLE PRICE POINT
• Approx. Percentage of Sales: 10%

MARKETING STRATEGY

• Awareness and education via out of home, social

media, and other channels equip consumers with functional knowledge of the science and utility of cannabis.

• Industry programming via patient help centers,

physician CME events, and robust informational materials educate patients and the public.

Awareness & Education In-Store Experience Outreach

• A multi-brand product suite caters to unique

consumer needs and buyer profiles.

• Packaging designed to feature proprietary, benefit-

forward communication is informative and intuitive.

• Collateral, merchandising materials, sales

promotions, public marketing, and retail partner management all contribute to the sales funnel.

• Key influencers help Cresco brands reach wider

audiences via social media and exclusive events.

• The nation-wide industry brand ambassador club offers

behind-the-scenes product access and release events.

• Dedicated customer service teams funnel product

feedback to quality assurance and other key functions.

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100%

MARKET PENETRATION

+28%(1)

MARKET SHARE

100%

MARKET PENETRATION

+30%(2)

MARKET SHARE

WE DRIVE WHOLESALE DISTRIBUTION EFFECTIVENESS

100%

MARKET PENETRATION MARKET SHARE

TBD

(1) BASED ON DATA PROVIDED BY THE STATE OF ILLINOIS (2) BASED ON DATA OBTAINED DIRECTLY FROM PA DISPENSARIES

RETAIL INSIGHTS DESIGN & DEVELOP TEST & VALIDATE

OUR CAPABILITIES ALLOW US TO INNOVATE, LEARN, AND SCALE RAPIDLY

New Brands & Formats Technology Intellectual Property New Product/Brand Trials Evaluation and Improvements Consumer Awareness Trend Forecasting Consumer Behaviors Multi-states Access Marketing Awareness Continued Consumer and Patient Feedback

SCALE

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SUSTAINABLE FINANCIAL PERFORMANCE Q3 & YTD 2018 FINANCIAL RESULTS

NOTE: EBITDA IS A NON-IFRS MEASURE. PLEASE REFER TO INVESTORS.CRESCOLABS.COM FOR THE DEFINITION

$16.3M

PROFORMA REVENUE +335% YOY

$3.9M

NET INCOME UP COMPARED TO A NET LOSS OF $0.2M IN Q3 2017

$5.3M

• ADJ. EBITDA

UP COMPARED TO ADJUSTED EBITDA OF $0.1M IN Q3 2017

YTD 2018

NINE MONTHS ENDED 9/30/18

PROFORMA REVENUE

$35.1M

NET INCOME

$6.5M

• ADJ. EBITDA

$8.1M

Q3 2018

THREE MONTHS ENDED 9/30/18

+248% YOY UP COMPARED TO A NET LOSS OF $0.9M IN YTD 2017 UP COMPARED TO ADJUSTED EBITDA OF -$0.8M IN YTD 2017

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• On December 6th, 2018, Cresco Labs announced a definitive agreement to acquire 100% membership interests of Hope Heal Health, based in Massachusetts with licences for

cultivation, processing, and the ability to obtain up to three medical marijuana dispensary licenses and three adult-use dispensary licenses.

• On December 7th, 2018 Cresco Labs announced three new marketing appointments to accelerate the aspiration to become the leading brand builder within the cannabis

industry, those hires include: Greg Butler as CMO, former Vice President of Growth Strategy and Marketing for MillerCoors, Cory Rothchild as Vice President of Brand Marketing, former Vice President and Brand Director for Gatorade, and Chis Rivera as Vice President of Marketing, formerly of Senior Director of MillerCoors Craft division.

• On December 12th, 2018 Cresco Labs announced that Co-founder and CEO, Charles Bachtell, was appointed to the Cannabis Legalization Subcommittee of Illinois Governor-

elect JB Pritzker’s transition team to lead the efforts for adult use legalization.

• On December 12th, 2018, Cresco Labs announced that it had been granted the first approval to operate a marijuana dispensary in the state of Ohio.
• On December 19th, 2018, Cresco Labs announced that it had been awarded a second merit-based license for dispensary operations in Pennsylvania which allows us to open

three additional dispensary locations.

• On December 20th, 2018, Cresco Labs announced that it had signed dual definitive agreements to acquire licensed Illinois medical cannabis dispensaries MedMar Rockford

and MedMar Lakeview bringing our total number of dispensaries in Illinois to five.

• On January 16th, 2019, Cresco Labs announced that it had made the first legal sale of medical marijuana in the state of Ohio.
• On January 28th, 2019, Cresco Labs announced that it had appointed Dun & Bradstreet CEO Tom Manning as Chairman of its Board of Directors. Mr. Manning has been a

member of Cresco Labs' board since 2016 and was formerly the CEO of Cerberus Capital Asia, Capgemini Asia, and Ernst & Young Consulting Asia and was also a senior partner at Bain & Company.

• On January 30, 2019, Cresco Labs opened a manufacturing facility and two dispensaries in the state of New York.
• On February 1, 2019, the IL program implemented the Alternative to Opioids Act which removed finger printing, background checks and provides same day access for patients.
• On February 5, 2019, Cresco Labs announced that its Mindy’s Kitchen brand has been ranked the top selling edible in Nevada according to Headset.
• On February 25, 2019, Cresco Labs announced the formation of a new hemp CBD subsidiary, Well Beings, that will provide the Company the ability to expand its house of

branded products to all 50 states to potentially reach a new customer base outside of the licensed dispensary channel.

• On February 26, Cresco Labs announced the opening of a third Pittsburgh area dispensary and launched online ordering in Western Pennsylvania.
• As of February 28th, 2019, Cresco Labs stock is up over 50% from the launch price.

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