C21 Investments Inc. CSE: CXXI
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August 27th, 2018
C21 Investments Inc.
CSE: CXXI
Disclaimer
This documentation is a presentation (the “Presentation”) of general background information about C21 Investments While management considers these assumptions to be reasonable, based on information available, they may prove to be
Incorporated., (“C21”) activities current as of Aug 26,2018. It is information in a summary form and does not purport to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the
complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the actual results, performance or achievements of C21 to be materially different from any future results, performance or
investment objectives, financial situation or needs of any particular investor. These should be considered, with or without achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but
professional advice, when deciding if an investment is appropriate. 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 marijuana; inability to access sufficient capital from internal and
The information contained in this Presentation is derived solely from management of C21 and otherwise publicly available third external sources, and/or inability to access sufficient capital on favorable terms; the medical marijuana industry in USA generally,
party information and does not purport to be all-inclusive or to contain all the information that an investor may desire to have in income tax and regulatory matters; the ability of C21 to implement its business strategies; including facility, expansion, within
evaluating whether or not to make an investment in C21. The third party information has not been independently verified. While budget and on the schedule currently anticipated; competition; crop failure; currency and interest rate fluctuations, and the other
C21 may not have verified 3rd party information, nevertheless, it believes that it obtained the information from reliable sources risks common for a business such as C21’s. The foregoing factors are not intended to be exhaustive. In addition to the foregoing
and has no reason to believe it is not accurate in all material respects. No representation or warranty, express or implied, is made cannabis is still an illegal product under USA Federal law and certain legal risks exist in terms of Federal enforcement that
or given by or on behalf of C21 or any of its affiliates, directors, officers or employees as to the accuracy, completeness or fairness investors should consult lawyers or qualified professionals to assess. Although C21 has attempted to identify important factors
of the information or opinions contained in this Presentation and no responsibility or liability is accepted by any person for such that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there
information or opinions. C21 does not undertake or agree to update this Presentation after the date hereof except as required by may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-
securities laws and stock exchange policies applicable to C21. No person has been authorized to give any information or make any looking statements contained herein are made as of the date hereof and C21 and its directors, officers and employees disclaim
representations other than those contained in this Presentation and, if given and/or made, such information or representations any obligation to update any forward-looking statements, whether as a result of new information, future events or results or
must not be relied upon as having been so authorized. The information and opinions contained in this Presentation are provided otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future
as at the date of this Presentation. The contents of this Presentation are not to be construed as legal, financial or tax advice. Each events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on
prospective investor should contact his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial forward-looking statements due to the inherent uncertainty therein. All forward-looking information is expressly qualified in its
or tax advice. entirety by this cautionary statement. Forward-looking information and other information contained herein concerning
management’s general expectations concerning the medical marijuana industry are based on estimates prepared by management
Certain statements in this Presentation may constitute forward-looking information, including future-oriented financial using data from publicly available industry sources as well as from market research and industry analysis and on assumptions
information and financial outlooks, within the meaning of applicable securities laws. Forward looking information may relate to based on data and knowledge of this industry which management believes to be reasonable. However, this data is inherently
C21’s future outlook and anticipated events or results and may include statements regarding C21’s financial results, future imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While
financial position, expected growth of cash flows, business strategy, budgets, projected costs, projected capital expenditures, management is not aware of any misstatements regarding any industry data presented herein, industry data is subject to change
taxes, plans, objectives, potential synergies, industry trends, construction schedules, construction budgets, and growth based on various factors. This Presentation may not be reproduced, further distributed or published in whole or in part by any
opportunities. Often but not always, forward-looking information can be identified by the use of words such as “anticipate”, other person. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in any other jurisdiction
“believe”, “expect”, “project”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “might”, “target”, “plan” and other similar which prohibits the same except in compliance with applicable laws. Any failure to comply with this restriction may constitute a
expressions or variations (including negative variations) of such words and phrases. Forward-looking information contained in violation of applicable securities law. Recipients are required to inform themselves of, and comply with, all such restrictions or
this Presentation is based on certain assumptions regarding expected growth, results of operations, performance, industry trends prohibitions and C21 does not accept liability to any person in relation thereto.
and growth opportunities.
C21 Investments p.2
W h o i s c 2 1
p.3
C21 investments
About Us
A U.S. VERTICALLY
INTEGRATED CANNABIS
CORPORATION
WHO WE ARE
C21 Investments Inc. (CSE – CXXI). is a vertically
integrated cannabis corporation that cultivates,
processes, manufactures, and distributes quality cannabis
and hemp-derived consumer products with brand
recognition both in the United States and internationally.
www.cxxi.ca
p.4
PROJECTED Operational excellence
REVENUE Vertically Integrated Operations
EXISTING & PROFITABLE OPERATIONS
Profitable operations in Nevada and Oregon with rapidly growing revenue
streams developed through the aggressive expansion of existing operations, and
$110-$130 further opportunistic acquisitions of accretive businesses throughout the US.
Million (usd)
2020
VERTICAL INTEGRATION
Value creation through vertical integration to participate in the entire value
chain while mitigating risk and ensuring brand integrity.
$70-90
Million (usd) EXPERT LEADERSHIP
2019 Decades of experience, with a successful track record in horticulture cultivation,
manufacturing, biochemistry, marketing, operations, capital markets, securities
law, and financial engineering.
C21 Investments *See “Disclaimer” regarding future oriented financial information. p.5
Common shares date Issue price # of shares
Shares – as at August 26, 2018 Jan 31 $- 5,979,695
Cap table Shares Issued On Conversion Of Debentures Jun 15 $1.00 33,500,000
Bonus Shares Issues On Conversion Of Debentures June 15 $- 3,350,000
Shares Issued Pursuant To EFF Acquisition July 6 $- 50,000
Shares Issued On Financing July 9 $2.50 2,082,000
SHARE STRUCTURE
Broker Warrants Options Exercised July 30 $1.00 2,750
C21 Share Structure – Table Options Exercised Aug 22 $0.65 100,000
Total common shares outstanding 45,064,445
updated as of August 22, 2018
Exercise # of # of
warrants Acquisition shares
price shares shares
Warrants $1.38 100,000 EFF Share Payment Note $- **1,977,500
NOTES
Warrants $1.00 100,000 Total acquisition
1,977,500
shares outstanding
**Available to exercise on or after Oct 15, Warrants $5.00 100,000
2018 Exercise # of
Total warrants options
price shares
*See “Disclaimer” regarding future oriented outstanding 5,154,045
financial information. Options $2.80 2,040,000
*Excludes contingent earn out shares
Options $0.65 405,000
Fully diluted shares
outstanding 54,640,990 Total options
C21 Investments outstanding 2,4445,000
p.6
Us$ millions 2019 2020
Profitability Revenues $70-90 $110-130
Pro-forma
EBITDA $14-18 $26-31
Assumptions
- Vertically integrated business with internal sales eliminated
- Pro-forma results include operations as follows:
Acquisition Status % included in Pro-Forma
Eco Firma Farms Wholly owned 100%
Silver State Relief & Cultivation Signed Purchase Agreement 100%
Swell Companies Signed Term Sheet 100%
Grön Signed Term Sheet To Be Added
Phantom Farms Signed Term Sheet 100%
7 Leaf Signed Term Sheet 100%
Pure Green Signed Term Sheet 100%
+22 more dispensaries in next 16 months In Discussions 100%
C21 Investments * See “Disclaimer” regarding future oriented financial information. p.7
Share Market
Company Name Revenue EBITDA Market Cap/Sales Market Cap/EBITDA
price Cap
At 8/8/18 (US 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E
(C$) $mm) (US $mm) (US $mm) (US $mm) (US $mm) (x) (x) (x) (x)
Cannabis Comparables - Canadian Senior Index
CANOPY GROWTH CORPORATION 37.58 6,286 575.6 1030.2 117.7 259.4 10.9 6.1 53.4 24.2
AURORA CANNABIS INC. 6.31 4,546 329.5 490.9 107.2 168.2 13.8 9.3 42.4 27.0
APHRIA INC. 10.38 1,853 334.8 403.3 119.6 188.5 5.5 4.6 15.5 9.8
CRONOS GROUP INC. 7.96 1,080 103.2 189.9 32.3 87.5 10.5 5.7 33.4 12.3
AVERAGE 10.2 6.4 36.2 18.4
Cannabis Comparables - Canadian Intermediate Index
HYDROPOTHECARY CORPORATION 4.60 683 145.1 278.3 47.8 111.7 4.7 2.5 14.3 6.1
CANNTRUST HOLDINGS, INC. 6.85 548 138.4 214.8 45.0 87.2 4.0 2.5 12.2 6.3
ORGANIGRAM HOLDINGS INC. 5.12 491 112.1 163.7 36.3 52.1 4.4 3.0 13.5 9.4
SUPREME CANNABIS COMPANY INC. 1.45 285 93.9 202.0 30.9 76.0 3.0 1.4 9.2 3.8
HIKU BRANDS COMPANY LTD. 1.69 183 59.7 127.8 15.0 44.6 3.1 1.4 12.2 4.1
AVERAGE 3.8 2.2 12.3 5.9
Cannabis Comparables - US Market
GREEN THUMB INDUSTRIES ** 9.65 1076.2 204.8 395.6 52.0 131.2 5.3 2.7 20.7 8.2
MPX BIOCEUTICAL CORPORATION 0.77 227.9 119.7 168.3 33.2 51.9 1.9 1.4 6.9 4.4
CANNAROYALTY CORP. 4.70 194.2 114.2 150.6 17.2 19.2 1.7 1.3 11.3 10.1
IANTHUS CAPITAL HOLDINGS, INC. 6.89 264.5 109.7 153.6 25.6 36.8 2.4 1.7 10.3 7.2
LIBERTY HEALTH SCIENCES INC. 0.81 204.9 25.8 66.3 5.0 22.4 7.9 3.1 41.0 9.1
GOLDEN LEAF HOLDINGS INC. 0.23 100.6 39.7 57.4 8.1 15.4 2.5 1.8 12.4 6.5
AVERAGE 2.9 1.6 14.1 6.4
C21 1.30 $44.96 $80.00 $120.00 $16.00 $28.00 1.1 0.7 5.4 3.1
*See “Disclaimer” regarding future oriented financial information *C21 data is using the midpoint of the 2019/20 pro forma financials on the previous slide. The Market Cap/Sales and EBITDA ratios include the effect of future share issuances to complete the acquisitions on page 6 and a further
2018 capital raise to cover targeted capital spending and working capital needs through Q2 2019 * Source: Bloomberg, Capital IQ, Company Filings and GTI Investor Deck as at July 31, 2018 **GTI Market Cap includes conversion of multiple voting shares into subordinated voting shares p.8
The u.s. market 2018
potential
U.S. Cannabis
consumers spending
USD $11B
The
green 2022
rush U.S. legal cannabis
market sales
projected to reach
Source: BDS Analytics. USD $23B
C21 Investments p.9
Target acquisitions Stage 1 Stage 2
Washington
New Jersey
Oregon
Maryland
California Ohio
Nevada
Colorado
New Mexico
C21 Investments p . 10cultivation
Vertical Rooms Outdoor Indoor Greenhouse yield
integration 22 120,000sqft 200,000sqft 12,000sqft 45g/sqft
processing
laboratories CO2 & Butane
VALUE CREATION 2 15,000sqft
Achieved as we integrate Brands & consumer goods
businesses, build brands, target brands skus
growth initiatives, and chase 15 420
economies of scale. Retail & distribution
Branded Customers Targeted
dispensaries
products in per month expansion (2019)
* See “Disclaimer” regarding future oriented
financial information. 5 544 dispensaries 105,000 50 dispensaries
C21 Investments p . 11S u b s i d i a r i e s
p . 12Nevada Silver State Relief is the leading cannabis cultivation, processing, and retail branded products companies in northern Nevada. Since opening the first legal dispensary in the state, their flagship location now serves 1200+ customers per day. Significant expansion plans are underway for both retail locations. Additionally, new consumer products are coming in 2019. www.silverstaterelief.com p . 13
PROJECTED
Silver state relief | Dispensary REVENUE
Nevada’s First. Nevada’s Best.
LOCATION LICENSES SCALE
Reno, Nevada + (2) Retail / Dispensary Licenses 35,000+ customers/month
Fernley, Nevada
24 points of sale $40-$50
ACCOLADES Million (usd)
Record of 2,700 customers
TYPE served in a single day 2020
1st Legal Dispensary to open
Dispensary
1st Legal Sale to customer
EXPANSION
Top 3 dispensaries by revenue in
EXPERIENCE
Nevada (for the past 36 months) Significant retail and product $35-$40
Employing over 70 offerings coming in 2019 Million (usd)
personnel REACH
Retail expansion into Las Vegas 2019
Serving 499,061 customers in 2018
8000 sq. ft cannabis “Superstore” *See "Disclaimer"
offering over 400 different products regarding future
oriented financial
information. p . 14
C21 InvestmentsPROJECTED
Silver state relief | Cultivation + Processing REVENUE
Nevada’s First. Nevada’s Best.
LOCATION LICENSES SCALE
Reno, Nevada (1) Producer License 155,000 sq. ft state-of-the-art
(1) Extraction License
indoor facility $40-$50
TYPE Utilizing only 20% of available Million (usd)
grow space 2020
Processing + Indoor ACCOLADES
Cultivation Production: 6,000 lbs/year
1st Cultivation License issued Production of ‘A Grade’ flower
EXPERIENCE
1st Production License
averages 400 lbs/month
$35-$40
Million (usd)
5 years combined experience –
1st Ounce Grown + Harvested EXPANSION
Head Cultivation 2019
PhD Horticulture Continue the build out remaining
124,000 sq. ft grow space *See "Disclaimer"
regarding future
oriented financial
information. p . 15
C21 InvestmentsOregon
Eco Firma Farms’ mission is to consciously craft the highest
quality cannabis for both body and mind, while working to
leave the earth better than we found it. Eco Firma operate
out of a 23,000 square foot, state-of-the-art facility, on 20
acres south of Canby, Oregon. Additionally, they’re a
founding member of the Oregon Cannabis Association , a
member of Resource Innovation Institute, and a partner of
the Energy Trust of Oregon.
p . 16
www.ecofirmafarms.comPROJECTED
Eco Firma Farms REVENUE
Weed Done Right
LOCATION ACCOLADES SCALE
Portland, Oregon + Canby, Oregon Runner up ‘Best Indica / Best 23,000 sq. ft, state-of-the-art
Sativa’, Cannabis Classic (‘17) facility on 20 acre site
TYPE Producing 2,000 lbs annually
$5
Runner up ‘Best Sativa’, Million (usd)
Cannabis Classic (‘16)
Indoor Cultivation 2020
‘Highest THC’, Dope Cup (‘15) EXPANSION
EXPERIENCE
Runner up ‘Best Indica’, Dope Expanding propagation
63 years combined experience – Cup (‘15)
Head Cultivators Expanding R&D facilities $3
Increase flower production from Million (usd)
REACH LICENSES
2,000 lbs to 4,000 lbs 2019
Products distributed to over 35 (1) Production License
Enhanced storing and curing
dispensaries statewide
capacity *See "Disclaimer"
regarding future
oriented financial
information. p . 17
C21 InvestmentsOregon Phantom Farms has been at the forefront of the Oregon medical marijuana industry since 2008, and expanded into the recreational market in 2016. Their wholesale license, a vital component of their business model, allows them to distribute Phantom product from their four farms to over 175 dispensaries statewide. Phantom was awarded ‘Best CBD Flower’ at the prestigious Dope Cup in 2016 and 2018. Additionally, they received recognition for ‘Outstanding Terpenes’ at the 2018 Cultivation Classic. www.phantom-farms.com p . 18
PROJECTED
Phantom farms REVENUE
Mighty Tasty Cannabis
LOCATION ACCOLADES SCALE
Southern Oregon + Bend, Oregon ‘Outstanding Terpenes’, 4 farms : producing 7,500 lbs
Cultivation Classic (‘18) of dried flower annually
TYPE
$9
‘Best CBD Flower’, Dope 25,000 pre-rolls a month Million (usd)
Cup (‘16 + ‘17)
Outdoor + Indoor Cultivation 2020
EXPANSION
EXPERIENCE LICENSES
2,500 sq. ft extraction lab
65 years combined experience –
Head Cultivators
(4) Production Licenses
Double indoor flowering capacity
$6
(1) Processing License (5,000-10,000 sq. ft) – Adds 2,000 Million (usd)
REACH lbs of flower production
(1) Wholesale Distribution 2019
Products distributed to over License Building a cannabis ‘campus’
175 dispensaries statewide (admin offices, growing operations, *See "Disclaimer"
research and development + more) regarding future
oriented financial
information. p . 19
C21 InvestmentsOregon Swell has created some of Oregon’s most recognized cannabis products, while demonstrating a commitment to quality, innovation, and execution at scale. They successfully established themselves as an early and dominant player in the hyper-competitive Oregon recreational market by targeting multiple segments of the cannabis market. Brands beneath the Swell umbrella include Dab Society Extracts, Hood Oil, and LoudLab Cannabis Refinement. www.swellcompanies.limited p . 20
PROJECTED
Swell companies REVENUE
Defining The Future of Cannabis
LOCATION ACCOLADES SCALE
Portland, Oregon Runner up ‘Best Concentrate’, 300,000 grams/month
Cannabis Classic (‘17)
‘Concentrate of the month’,
Durable relationships with $24
TYPE reputable producers supplying over Million (usd)
Dope Magazine (‘16) 60,000 lbs of clean biomass,
Manufacturing + Extraction annually 2020
’Concentrate of the Month’,
EXPERIENCE Oregon Leaf(‘16) Multiple contract manufacturing
arrangements with other companies
30 years combined
experience – Extraction
LICENSES
EXPANSION
$14
(1) Processing License Million (usd)
30+ Employees
Expansion of 2 additional facilities 2019
(1) Wholesale License
Chemical Engineer
Development of new branded
REACH products; in-house and licensed *See "Disclaimer"
regarding future
Products distributed to over Expansion and deployment of Swell oriented financial
325 dispensaries statewide house brands to California and Nevada information. p . 21
C21 InvestmentsOregon Committed to raising the bar for cannabis edibles, Grön (Swedish for ‘green’) has garnered their reputation by offering a beautiful product that tastes incredible, delivers a consistent and repeatable experience, and is professionally packaged and merchandised. Grön is recognized as one of Oregon’s largest and most respected edible brands and known as the most prolific chocolate bar in Oregon. In 2018, Grön launched the first fully licensed CBD café in North America with the introduction of their CBD lifestyle/wellness line with an emphasis on CBD education. Both Grön facilities are located in SE Portland. www.gronchocolate.com p . 22
PROJECTED
Grön REVENUE
Oregon's Favorite Confectioners
LOCATION ACCOLADES SCALE
Portland, Oregon Runner up ‘Best Edible’, 7,000 sq. ft facility
Willamette Weekly (‘18)
TYPE
CBD Café storefront $12
‘Best Cannabis Infused Product’, Million (usd)
Willamette Weekly (‘17)
Edible EXPANSION 2020
‘Best Edible’, Willamette Weekly
EXPERIENCE (‘17) Entry into California and Nevada
40 years combined experience – ‘Best Edible’, Dope Cup (’16) Launch CBD nationally via retail
Commercial Food Production
partnerships $8
REACH LICENSES Million (usd)
Aggressive expansion into
hospitality, food and beverage 2019
Products distributed to over (1) Processing License
400 dispensaries statewide Develop a broader product
(1) Food Manufacturing Facility *See "Disclaimer"
offering with a focus on beverage,
candy and health/wellness regarding future
oriented financial
information. p . 23
C21 InvestmentsOregon
dispensaries
A critical component to C21’s vertical integration strategy
is the acquisition of established and profitable
dispensaries. These dispensaries will be part of the retail
distribution network that will elevate the presence and
delivery of the C21 subsidiary brands. Offering an
extensive menu of Oregon’s best in flowers, concentrates,
extracts, edibles, topicals and more, these retail locations
represent only the beginning of C21’s retail expansion in
Oregon and beyond.
p . 24Current holdings PROJECTED
Oregon Dispensaries REVENUE
$30 $45
Million (usd) Million (usd)
2019 2020
STATS (15 dispensaries) (25 dispensaries)
LOCATION CUSTOMERS SIZE (SQ. FT)
PURE GREEN OVERVIEW
Portland, OR 2,500 / mo 3,000 sq. ft
3 CURRENT
LOCATION CUSTOMERS SIZE (SQ. FT)
7 LEAF
COLLECTIVE Salem, OR 2,000 / mo 1,250 sq. ft 8 ACTIVE NEGOTIATIONS
Salem, OR Opening Soon 2,000 sq. ft
15 BY END OF ‘18
25 BY END OF ‘19
C21 Investments p . 25O u r t e a m
p . 26Meet the team
C21 Investments
Robert Cheney BA, LLB Michael Kidd CPA, CA
President, CEO & Director CFO
Robert Cheney is an entrepreneur and investor Michael is a chartered accountant with
with a background in media, film, internet extensive experience at the executive level in
Executive technology and telecommunications. His focus is
building exceptional management teams and
several industries and in both larger
organizations and start-ups. He’s spent the
officers focusing on investment opportunities with strong
growth potential. Additionally, Rob’s early
past 10 years as COO/CFO for a mid-size
distributor with 9 branches across Canada
training as a corporate securities lawyer lends an and the Middle East. Additionally, he has
advantageous skill-set in the execution of M & A more than 15 years of experience in the
transactions. With C21, Rob’s strategy is value Forest Industry (including 5years in New
creation through disciplined consolidation of an Zealand) starting as Controller and
early-stage fragmented industry; building scale progressing to the executive level.
and life-style brands as a consumer driven
products company.
C21 Investments p . 27Meet the team
C21 Investments
Bruce Macdonald will Werden
Director Director
Bruce is a seasoned senior executive with Will has over 30 years of experience in global
more than 35 years of experience in financial horticulture cultivation. He specializes in
Board of services including extensive expertise in the
capital markets sector. He has an impressive
outdoor and indoor grow practices, facilities
construction and design, lighting systems and
Directors track record of leading innovative new
business ventures in support of global growth
practices, temperature and humidity control,
and genetic strain selection. Having overseen
strategies. Bruce has exceptional expertise in large-scale grow operations with state of the art
building risk management and corporate technology, Will brings a wealth of knowledge to
governance control environments. Further, he the C21team.
serves on the boards of several Canadian
corporations and associations, and holds an
ICD.D designation from the Institute of
Corporate Directors.
C21 Investments p . 28Meet the team
C21 Investments
Keturah M. Nathe Chris Cherry CPA, CA, CGA
VP Corporate Development & Director Director
Keturah has over 11 years of finance experience Mr. Christopher Cherry has over 14 years of
working with various public and private companies corporate accounting and audit experience. Mr.
Board of in mineral exploration and development, oil and gas,
technology, agriculture, and property development.
Cherry has extensive corporation experience
and has held senior level positions for several
Directors Ms. Nathe’s current and previous experience public mining companies including Director,
Chief Financial Officer, and Secretary. Mr.
includes; corporate and regulatory compliance,
Cherry has been a Chartered Accountant since
structuring and execution of debt and equity
February 2009 and a Certified General
financings, corporate strategy, identifying and
Accountant since 2004. In his former
evaluating acquisition targets and completing due
experience as an auditor, he held positions with
diligence reviews, industry/market research and
KPMG and Davidson and Co. LLP in Vancouver,
contract negotiations
where he gained experience as an auditor for
junior public companies, and an IPO specialist.
C21 Investments p . 29G e t i n t o u c h
p . 30CSE: CXXI Head Office Suite 303-595 Howe Street Vancouver, B.C. V6C 2T5 Telephone: (604) 336-8615 Email: info@cxxi.ca www.cxxi.ca C21 Investments
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