Overview of Zoetic International plc February 2020
Overview of Zoetic International plc • 33,000 square foot indoor • 16 acres outdoors facility • Sufficient production for • Bespoke built for cannabis own products and / hemp wholesale • Total control over climate •Chemical free / “organic” and environment farming methods • 53 acre site Seed Outdoor genetics growth UK US retail retail • Tinctures in 4 flavours and • Tobacco alternative products 2 strengths • Smokables and chew • Range of 4 skincare pouches – 3 blends / products and massage oil flavours of each • Softgels – 2 strengths • Available in 89 US • Gummies – 2 strengths convenience stores and 2 flavour combinations Revenue from natural resources has supported high growth CBD division 2
From seed to shelf Vertically integrated hemp genetics, growing, manufacturing and products Growing & Manufacturing Two Retail Brands – Genetics – Feminised Seeds Operations Zoetic & Chill Higher margin Middle ground becoming Higher margin increasingly commoditised Building a transparent and trusted brand 3
The rise of CBD • Japan 14 86 Sales of CBD in the US are forecast to surpass $23bn by 2023 (Brightfield Group) France 23 77 • 6m people in the UK are using, or have used, CBD Germany 38 62 products (Times) • Greece 44 56 More popular than Vitamin C and Vitamin D in the UK Switzerland 60 40 • UK market expected to rise from around £1bn today (CMC) to £16.5bn in the next UK 63 37 decade (Financial Times) US 76 24 0 20 40 60 80 100 Have heard of CBD Have not heard of CBD Source : CBD-Intel, 2019 Fast growing industry presents numerous opportunities 4
Main reasons for regular use of CBD Pain Anxiety Stress Improve Health Sleep Prevention Skin Condition Other 0 5 10 15 20 25 30 35 40 45 50 Stress Anxiety Pain 0 20 40 60 80 100 0 20 40 60 80 100 Female Male 35 and older Under 35 5 Source : CBD-Intel, 2019
Feminised seed production Only feminised hemp seeds produce a commercial yield 33,000 sq ft state of the art indoor grow facility with capacity for up to 10,000 hemp plants at least 3 times per annum Bespoke built for cannabis / hemp plants Vast amounts of Ability to control climate and environment 4 bays each capable of growing up to 2,500 plants per season yield-enhancing Up to 500 seeds per plant hydrogen-nitrogen Target up to 1,000,000 seeds per month once we reach full capacity gas mixture suitable 2019 wholesale price: $1 per seed (less quality control, for agricultural use logistics and seed broker fees) Zoetic is registering to sell seeds in 5 US states and also has interest from overseas buyers Feminised seed sales will start when Zoetic has sufficient volumes of high 6 quality seeds
Outdoor growth 16 acres in Palisade, Western Colorado Around 2,500 plants per acre Strictly organic farming methods only – no chemical pesticides or herbicides Vast amounts of Harvested in September / October 2019 yield-enhancing Plants dried and Zoetic intends to process them for our own use and / or sale as wholesale CBD isolate hydrogen-nitrogen gas mixture suitable for agricultural use 16 acres produces sufficient CBD for Zoetic’s present needs 7
US retail • Tobacco alternative products ➢ Smokables – herbal cigarettes infused with CBD – 3 blends ➢ Chew pouches – mint, vanilla & peach flavoured • All products are tobacco-free, nicotine-free and THC-free • Currently selling in convenience stores in the US ➢ Original distribution via Schrader Oil stores in Colorado ➢ Expansion into new chains and additional US states ➢ Sales of 2 – 3 packs per store per day ➢ Sub-$10 products with c. 50% margin • Interest in wider distribution from AATAC and New Age Beverages ➢ 12,000 stores between them ➢ Introduction of display cases is expected to boost sales • Trials underway with contract manufacturers ➢ Key to the major distribution contracts as Zoetic’s in-house manufacturing will not be sufficient ➢ Initial products are of high quality 8
UK retail • Commenced sales in August 2019 via www.zoetic.uk.com ➢ Since expended to 19 product lines, including tinctures, softgels, massage oil, skincare products and, most recently, CBD gummies • All products are THC-free (0.0%) and many of our products are manufactured with a higher CBD content than competitors • With wider product line up, the Company is now getting more traction with retailers ➢ Several stores now selling products ➢ The CBD Warehouse stocking all lines since the start of February • Gummies have generated considerable inbound interest ➢ Launched in the first week of February ➢ 2 flavor combinations and 2 strengths 9
Developing sales channels Online retail www.zoetic.uk.com www.thechillway.com Social media Instagram and Twitter Specialist distribution LeafyQuick stocking products in Chicago The CBD Warehouse recently began stocking full UK range Affiliate marketing programmes in UK and US Retail stores Convenience stores in the US Interest from AATAC and New Age Beverages Trade fairs Natural & Organic Products – April 2020 Beauty UK – May 2020 Media Working with RKM Communications for product placement in magazines, newspapers, blogs etc. Extensive coverage in recent months correlated with improving sales 10
Summary • Rapid growth of CBD industry in US and Europe ➢ Zoetic is the only vertically integrated CBD company listed on the London Stock Exchange ➢ Shares also trade on the OTC in New York • Two key revenue streams ➢ Sale of feminised seeds – will commence when sufficient quantities are in stock ➢ Retail brands – Chill and Zoetic • Company poised for significant revenues ➢ Distribution contracts for Chill in the US ➢ Growing brand awareness in the UK 11
Appendices 12
Awareness of CBD by gender Japan 59 41 France 52 48 Germany 48 52 Greece 55 45 Switzerland 50 50 UK 46 54 US 48 52 0 10 20 30 40 50 60 70 80 90 100 Male Female 13 Source: CBD-Intel, 2019
Use of CBD by gender Japan 55 45 France 55 45 Germany 45 55 Greece 45 55 Switzerland 51 49 UK 40 60 US 47 53 0 10 20 30 40 50 60 70 80 90 100 Male Female 14 Source : CBD-Intel, 2019
Use of CBD by age Japan 71 29 France 75 25 Germany 50 50 Greece 50 50 Switzerland 48 52 UK 46 54 US 58 42 0 10 20 30 40 50 60 70 80 90 100 18-44 45+ 15 Source : CBD-Intel, 2019
Product types regularly consumed 60 50 40 30 20 10 0 Oil/Tinctures E-Liquid Capsules Edibles Topicals Flower Crystals 16 Source : CBD-Intel, 2019
Product categories stocked online Oil E-Liquid Topicals Capsules Edibles (Gummies/Candies/Etc.) Soft Drinks/Soda Paste Smokeable Extracts Crystals Tea Pet Products Flower Coffee Water Lubricant Suppositories Wine Powder Supplements 0 10 20 30 40 50 60 70 80 90 100 17 Source : CBD-Intel, 2019
Brand awareness 18 Source : CBD-Intel, 2019
Importance of product attributes UK made Terpene profiles Organic Lab Reports Price Trustworth retailer 0 20 40 60 80 100 120 Absolutely essential Very important Of average importance Of little importance Not important at all 19 Source : CBD-Intel, 2019
Natural resources operations Colorado Shale Kansas Gas Resource Recovery of funds 2 shale oil and gas projects with First well capable of producing 2,500 $270,000 lodged with US states due • • • potential for additional projects Mcfpd of hydrogen-nitrogen gas back during 2020, with $50,000 due 7.5% working interest in 8 wells in 3,457 acres of leases imminently • • Free of hydrocarbons Sale of non-essential assets ongoing East Denver, generating £1.1 million • • Pressure Swing Adsorption Unit that Target to fund plugging and revenue in H1 • • can separate gas streams to produce abandoning of former Montana gas Company’s ~5,300 -acre project West • Denver bears numerous similarities increased concentrations of specific project from asset sales to East Denver gases for potential markets Patented anti well-bashing • technology, DT Ultravert, successfully deployed on Permian basin in 2018 and Piceance basin in 2016 20
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