Medical Marijuana A Growing Business Forward Looking Statements - - PowerPoint PPT Presentation

Medical Marijuana – A Growing Business

November 2014 TSXV:TPI

Forward Looking Statements

Certain statements in this corporate presentation constitute forward-looking statements, within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, are “forward-looking statements”. We caution you that such “forward-looking statements” involve known and 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 sales of medical marijuana, anticipated revenues, projected size of market, quantities

• f future medical marijuana production, completion of production facilities and other information that is based
• n forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

T-Bird Pharma Inc. (the “Company”) does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. These forward-looking statements involve risks and uncertainties relating to, among other things, results of production and sale activities, the Company’s historical experience with medical marijuana operations, uninsured risks, regulatory changes, availability of production facilities, timeliness of government approvals and the granting of permits and licenses, changes in prices, actual

• perating and financial performance of facilities, equipment and processes relative to specifications and
• expectations. Actual results may differ materially from those expressed or implied by such forward-looking

statements.

Investment Highlights



T-Bird Pharma Inc. (T-Bird) is the first and only publicly listed federally approved licensed producer of medical marijuana from British Columbia (BC). 1 of only 13 Licensed Producers in Canada.



A technology driven approach to growing Medical Marijuana and security that is both scalable and efficient.



Premium pharmaceutical grade products will be grown in a sterile, dirt free clean room environment.



Developing proprietary technology and software which will allow for break-even with 400 patients.



Shipments to patients targeted to begin late 2014.



Focus on premium BC developed strains with a portfolio of over 60 high-grade medicinal strains (including popular named varieties).



BC ‘bud’ is a world renowned global brand.



Most undervalued of the 4 publicly traded licensed producers.



Experienced and aligned leadership.

Financial Summary

Go public date September 09, 2014 StockListing TSX-V:TPI MarketCapitalization * $25.3 M Shares outstanding (b/fd) 46.1 M / 55.0 M Cash position ~$2.6 M Share ownership Rob Gagnon, CEO: 19.3% Insiders: 46.3% Employees / Consultants: 3.6%

* As at October 31, 2014

New Industry – New Era



Since April 01, 2014, only Federally Licensed Commercial Producers can supply Medical Marijuana (“MM”) to Patients in Canada (except those on old MMR program under injunction)



Eventually, Health Canada intends all current patients migrate to the new commercial program



The new licensing requirements emphasize need to ensure Security, Hygiene and Auditability – the bar is very high



Thunderbird was one of the first Canadian companies (13) to

• btain a Federal License (MM005-2014) to produce, dry and

store Marijuana



Thunderbird estimates the overall Canadian market is estimated at 450,000+ patients (and may be as high as 1,000,000)

Note: “Marihuana” is the spelling the Federal Government uses

Health Canada website listing

http://www.hc-sc.gc.ca/dhp- mps/marihuana/info/list-eng.php

The Purchase Lifecycle

Visit Producer Site Take forms to Doctor Send forms to Producers Order Product Online Research

• nline

70% of Physicians report being asked about Medical Marijuana Product is “familiar” to almost all public, brand is not relevant at moment “Pharmaceutical-Grade” is finally an actual option, not just a benchmark of strength

Business Plan

Service a Portion of the Current Market & Focus on Becoming Cash-flow Break-even Immediate Become Supplier of Premium Medical Marijuana Near Term Leverage Knowledge to Widen Our Industry Footprint Long Term

How big is this market?

The market is new and market data is scarce, but estimates are:

 450,000 patients in Canada will have an average daily dose of 2

grams

 450,000 patients = 900,000 grams per day  Retail price expected to be around $8 - $15 per gram  That equates to an estimated Total Addressable Market in Canada of

$3.285B/yr (Canada Only)

California estimates that 3% of their population hold medical Marijuana Cards. Apply that rate to Canada, that would represent 1,000,000+ patients. Note: California actually has a lower approval rating (amongst general public) for Medical Marijuana than Canada.

Our Short Term Market Focus

 The estimated 30,000 people in Canada who

currently hold a prescription for Medical Marijuana

 Patients must obtain a

prescription/authorization from an approved healthcare practitioner which now includes Nurse Practitioners

 MM is an accepted medical product,

understood by both patients and healthcare practitioners At At 40 400 0 Patien tients (ou ts (out of t of a mar a market et of

• f app
• pprox. 450
• x. 450,000

,000+) +) Thu hund nder erbir bird d co could co uld conc nceiva eivabl bly y be be Br Brea eak-Ev Even en

Our Long Term Market Objective

 High Net-Worth / High

Disposable incomes

 Familiar with “older brands”

and loyal.

 Aging group comfortable with

“alternative” healthcare and treatments Our lon Our long g ter term v m visi ision

• n is

is to be to be the pr the premium MM p emium MM prod

• duc

uct t

• n
• n the mar

the market et

Marketing - Lite

There are some peculiar aspects of this industry that both make marketing a challenge, but also provide advantages to licenced producers:



Canadian law doesn’t permit advertising of narcotics – thus marketing in the typical sense is not possible



However, the Federal Government serves as a marketing channel to Licensed Producers – Patients visit the Government’s website (sending us 3000+ unique visits per month) to find licensed producers



Once buying from a producer, a patient must cancel/revoke their certificate with that producer in order to move to another – makes for “sticky customers” so long as you service their needs



We only need to capture 400 patients (0.13% of the potential market) to potentially be break-even, and the upside of growing the market share is significant

Why Us / Why Now?

 Thunderbird Biomedical has 60 years combined IT

, Grow, Mail-order and Pharmaceutical experience.

 The Scalability of Grow, Inventory and Patient Management

is IT driven and we have that experience.

 For the first time in history, businesses can legally produce

Medical Marijuana in large quantities and sell directly to patients (100% vertically integrated).

 We have both import/export and mail-order experience in

controlled substances to take advantage of the opportunity.

Maximum Security Grow Facility

We have:

 An approximately 3,200 square foot secure processing and grow

facility in Victoria, British Columbia

 Our current license permits us to produce 243Kg of Marijuana  4 grow rooms ready now, 1 more in plan for 1st Facility  Targeted first commercial shipment from 1st Facility is late

2014

 A 500 sq. ft. room can produce approximately 72,000gr/yr for a

gross value of $720,000

Barriers to Entry?

 Only licensed producers can produce product (other

than those under injunction from old MMRA program)

 After April 01, 2014, new producers must obtain starting

materials from existing licensed producers

 Security/Setup costs prevent individuals /small

• rganizations from being successful

 All directors of licensees must pass 10 year Security

Background Check (similar to DND or CISIS work)

 Health Canada licencing is getting tougher and the bar

is being raised for new entrants

Comparables

Company Shares outstanding Shipping Status Market cap *

Tweed Inc. (TSX-V:TWD) 40.0M shipping $73.0M Bedrocan(TSX-V:BED) 67.5M shipping $47.9M Organigram (TSX-V:OGI) 51.6M shipping $59.8M Mettrum Health Corp. (TSX-V:MTI) 33.7M shipping $53.2M T-Bird PharmaInc. (TSX-V:TPI) 46.1M late 2014 $27.6M

* As at October 31, 2014

Growth Potential!

 We invested in becoming a Processing Facility, over simply a grow

facility - there are others who just wish to be growers with less security requirements

 Software/Technology being developed internally has industry

applicability

 R&D underway is leading to a highly scalable, replicable way to increase

capacity “on demand”

The medical marijuana industry is a relatively new industry in Canada. New industries have growing pains associated with the maturation of the industry, both regulatory and commercial risks. We will use processes to control and Insurance to mitigate company risks where possible and use associations and lobby organizations to mitigate legislative risks. Use of proceeds includes significant expenditures on preventative legal services.

Regulatory Risks

 Federal – Changes to legislation, court challenges, bureaucracy and Taxation  Provincial – ALR (Agricultural Land Reserve)/ALC – Provincial Taxation  Local – Zoning (Varied/Changing/not nationally consistent) – Police/Fire

Security Risks

 Premises – High Value Product (Theft) Public Controversy (Damage)  Operational – Theft of goods (internal/external) and Risk to Staff

Legal Risks

 This is a “Natural Health Product” (Claims/Liability)  High perceived Cash Value Industry (Litigation)

Industry Risks

Financial Metrics

 Production Rooms and plant development geared to 8

week turnaround time on crops

 Targeting avg. $10/gr @ 25 gr/plant  Estimated annual revenue from 4 rooms = $1M (current

facility has 1 additional room for expansion).

 Low Burn Rate approximately $150K/month (2014) not

including capital expenditures

 Assuming expansion into a 2nd facility and no revenue,

cash requirement for next six months and twelve months (Opex+Capex) is $2,237,539, and $4,067,776 respectively

 Low number of customers to reach break even:

400 out of a market of estimated 450,000+ in Canada

Business Not Lifestyle

 Management team is dedicated to

production of a pharmaceutical grade medicinal product to consumers.

 Government License has ongoing and

significant requirements of conduct and operations.

 Security of product requires

discretion, anonymity and layers of physical, electronic and process security.

 Federal Government has been clear in

it’s high exceptions for maintaining a license.

Future wide open…

 Estimated $3.285B Canadian Marketplace for Medical Marijuana (dried

flowers), and possibly more with future licensed extracts

 There are spin off Technology/Software, Merchandise, IP and related

• pportunities for Thunderbird that keep ahead of this expanding North

America wide industry

 Opportunities in non-product aspects of US marketplace (Colorado/WA

+ 14 pondering legalization)

 Legislation permits import/export of dried marijuana and plant tissue

• pening opportunities in the future

Use of Proceeds

Existing working capital and net proceeds from $3.0M Private Placement to Accredited Investors and other exempt market investors, will be used for commercialization, expansion & general corporate purposes.

Capital expenditures: $ 1,590,429 Production costs: $ 275,076 Sales and marketing: $ 48,652 Research & development: $ 21,640 General and administrative (legal, rent, salaries, etc.): $ 317,715

• Est. financing closing costs:

$ 110,000 Unallocated working capital: $ 651,488 Total proceeds: $ 3,015,000

53% 9% 2% 1% 10% 4% 21%

USE OF PROCEEDS

Capital expenditures: Production costs: Sales and marketing: Research & development: General and administrative (legal, rent, salaries, etc.): Est financing closing costs Unallocated, addition to working capital:

Milestones

Sept 2014

Second Facility Secured – up to 43,500 sq. ft.

Late 2014

First Patients/Sales Targeted

Jan 2015

Second Facility targeted to

• pen

May 2015

Break even targeted

The Team

Executive Experience

David Raffa, BSc (Biology), LLB Executive Chairman Robert Gagnon Co-Founder, CEO & Director Chris Taylor, CPA, CA Co-Founder, CFO & Director

• Dr. Essam Hamza, MD

Director Frank Barr , FCA Director Karen Parent, BSc, MSc, MPA, PHd(C) VP Quality Assurance

• Over 30 years experience in start-ups and venture capital with

strong public company legal and governance expertise

• Led multiple successful M&A transactions (buy/sell side)
• Former partner of Lions Capital Corp and BC Advantage Fund, a

$100M venture capital fund

• 20+ year technology and software CEO
• Background in security, systems design and infrastructure
• History of successful exits (1998 and 2013)
• 15 Years of CFO experience
• Extensive startup experience (10+ years)
• Former CFO, Pure Edge Systems (acquired by IBM)
• 15 Years experience as a Family Physician in BC and AB
• Successful start-up and micro-cap investor
• Board and advisory experience with TSX-V companies
• Former Asst. Auditor General of BC
• Series Board Member (including Chairman of Fincad)
• Former Chairman, Consumer Protection Branch of BC
• Nursing and Epidemiology background 20+ years
• Extensive Healthcare Management experience
• Former CEO Winoperations (Healthcare Software)

Contact Us

 CEO & Founder, Robert A. Gagnon

 rob@thunderbirdmedical.ca

250-888-1526 Mobile

 CFO, Chris Taylor

 chris@thunderbirdmedical.ca

250-415-9702 Mobile

 Chairman, David Raffa

 david@davidraffa.com

778-668-3532 Mobile

 Twitter: @tbirdmedical  Facebook: /thunderbirdmedical