COMPANY OVERVIEW CNSX: IAN OTCQB: ITHUF - September 2018 - cloudfront.net
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COMPANY OVERVIEW
September 2018
CNSX: IAN
OTCQB: ITHUF
Disclaimer
Cautionary Note Regarding Forward-Looking Information Securities Laws
• This investor presentation, dated September 6, 2018 (this “Presentation”), contains • This Presentation is for informational purposes and does not constitute an offer or a
“forward-looking information regarding iAnthus Capital Holdings, Inc. (“iAnthus” or the solicitation of an offer to purchase the securities referred to herein.
“Company”) and its subsidiaries. • iAnthus’ shares have not been and will not be registered under the United States
• Statements in this Presentation that are forward-looking statements are subject to various Securities Act of 1933, as amended.
risks and uncertainties concerning the specific factors disclosed herein and elsewhere in • iAnthus expressly disclaims any and all responsibility for any direct or consequential loss
iAnthus' periodic filings with Canadian securities regulators. When used in this or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any
Presentation, words such as “will, could, plan, estimate, expect, anticipate, intend, may, information contained herein, (ii) any error, omission, or inaccuracy in any such
potential, believe, should,” and similar expressions, are forward-looking statements. information, or (iii) any action resulting therefrom.
• Although iAnthus has attempted to identify important factors that could cause actual
results, performance or achievements to differ materially from those contained in the
forward-looking statements, there can be other factors that cause results, performance No Reproduction or Distribution
or achievements not to be as anticipated, estimated or intended, including, but not • The contents of this Presentation are not to be reproduced or distributed to any third
limited to: dependence on obtaining regulatory approvals; investing in target party, including the general public or the media, without the express written consent of
companies or projects which have limited or no operating history and are engaged in iAnthus.
activities the Company believes to be compliant with applicable U.S. state and local
law, but are currently considered illegal under US Federal laws; change in laws; limited
Market and Industry Data
operating history; reliance on management; requirements for additional financing;
competition; hindering market growth and state adoption due to inconsistent public • This Presentation includes market and industry data that has been obtained from third
opinion and perception of the medical-use and adult-use cannabis industry and; party sources, including industry publications. iAnthus believes that the industry data is
regulatory or political change. Forward-looking statements involve known and unknown accurate and that the estimates and assumptions are reasonable, but there is no
risks, uncertainties and other factors. Many of these risk factors and uncertainties are assurance as to the accuracy or completeness of this data. Third party sources
disclosed in the Company’s Annual Information Form for the year-ended December 31, generally state that the information contained therein has been obtained from sources
2016 in a section entitled “Risk Factors” and other documents, including the Company’s believed to be reliable, but there is no assurance as to the accuracy or completeness
Short Form Prospectus dated November 14, 2017, the Company files with the Canadian of included information. Although the data is believed to be reliable, iAnthus has not
securities regulators on SEDAR at www.sedar.com. independently verified any of the data from third party sources referred to in this
Presentation or ascertained the underlying economic assumptions relied upon by such
• There can be no assurance that such information will prove to be accurate or that
sources.
management's expectations or estimates of future developments, circumstances or
results will materialize. As a result of these risks and uncertainties, the results or events
predicted in these forward-looking statements may differ materially from actual results or Additional Information
events. • Additional information pertaining to iAnthus has been filed electronically through SEDAR
• Accordingly, readers should not place undue reliance on forward-looking statements. and is available at www.sedar.com or iAnthus’ website at www.ianthuscapital.com.
The forward-looking statements in this Presentation are made as of the date of this
Presentation. iAnthus disclaims any intention or obligation to update or revise such
information, except as required by applicable law, and iAnthus does not assume any
liability for disclosure relating to any other company mentioned herein.
2
CNSX: IAN │ OTCQB: ITHUF
iAnthus operates best-in-class licensed
cannabis facilities throughout the United
States providing investors with diversified 6 States
industry exposure.
8 Cultivation Facilities
46 Dispensaries
~50 Million Addressable Market
THE iANTHUS
(1)
OPPORTUNITY Proven First Mover
NOTES
1) Assuming build out of Florida, New York, Vermont and Massachusetts
CNSX: IAN │ OTCQB: ITHUF
Unparalleled Ability to Execute
Finance and Operations and Regulatory and
Capital Markets Project Development Government Affairs
HADLEY FORD
• CARLOS PEREA
• RANDY MASLOW
Co-founder & CEO COO Co-founder & President
JULIUS KALCEVICH
• JOHN HENDERSON
• DR. RICHARD BOXER
•
CFO Chief Development Officer Board Member
4
CNSX: IAN │ OTCQB: ITHUF
Exceptional Market Opportunity
US$50 Billion Market Moving from “Black to White”(1)
Annual U.S. Cannabis Sales vs. Other Industries & Goods
Beer $111.0B
Cigarettes
Estimated Total Demand for
$80.3B Cannabis now rivals
Recreational Cannabis in the U.S.
Video Games $36.0B
$50B-$55B
American spending
Doughnuts $19.9B on Netflix subscriptions
– and will likely surpass
Firearms & Ammunition $11.9B
McDonald’s $8.0B
Netflix
Legal Recreational & Medical
$6.6B
McDonald’s annual
$5.8B-$6.6B
U.S. revenue this year
Cannabis in 2017
Organic Produce $4.8B
– MJ Biz Daily
Tattoos $1.5B
Oreos $0.7B
NOTES
1) Source: Brewers Association, Alcohol & Tobacco Tax & Trade Bureau, Entertainment Software Association,
Goldstein Research, IBIS World, Netflix, Nielsen, Nabisco. 2018 Marijuana Business Daily.
5
CNSX: IAN │ OTCQB: ITHUF
The Tide is Turning
“…federalism-based legislative solution to fix this states’ rights issue once
and for all.”
– Colorado Senator Cory Gardner
“…I support Senator Gardner […] I will probably end up supporting
that [bill].”
– U.S. President Donald Trump
“Cannabis may be de-regulated nationwide within four years and if we do
our job, it’s game over in 2 years…”
– U.S. Rep. Earl Blumenauer
"I'm convinced de-scheduling the drug is needed …“
– John Boehner, the retired Speaker of the House of Representatives
6
CNSX: IAN │ OTCQB: ITHUF
Why Invest in iAnthus?
Exposure to Leading
Funded for Compelling Proven
$50 billion U.S. Position in
Growth Valuation Leadership
Market(1) Strongest States
Operations
~50% Growth US$50 M US$407 M Regulations
Anticipated in Investment Market Cap
2018 May 14, 2018 Healthcare
Government
Real
Estate
Finance &
Capital
Markets
NOTES
1) Source: 2018 Marijuana Business Daily.
7
CNSX: IAN │ OTCQB: ITHUF
iANTHUS
OPERATIONAL EXCELLENCE
CNSX: IAN │ OTCQB: ITHUF
iAnthus is Operating in Six States
Vertically Integrated Operations
Florida New York Massachusetts Vermont Other Assets
Colorado
Population: 21.2 million 19.9 million 6.9 million 0.6 million
Cultivation: 200,000 ft2 39,500 ft2 36,000 ft2 6,900 ft2 New
Mexico
25%
Ownership
Dispensaries: 30 4 3 2(1)
NOTES
1) Recent legislation allows Grassroots Vermont to open an additional dispensary (2 total).
9
CNSX: IAN │ OTCQB: ITHUF
A Sunny Investment
Why Investors Should Care:
• Over 21 million residents
• Favorable demographics – adding ~2,500
patients a week
• GrowHealthy has one of only 14 licenses
• Only 52 open dispensaries across the state
• Weekly revenue of ~US$4.5 million and
growing
• Market estimated to reach US$1.0 billion by
2020(1)
• Recent addition of flower sales
NOTES
1) The State of Legal Marijuana Markets: 5th Edition, ArcView Market Research
10
CNSX: IAN │ OTCQB: ITHUFGrowHealthy: Covering the State
Orlando
Lake Wales Open Q4 2018 Cultivation/Processing
Open
• 33 acre campus in Lake Wales, FL
• 25,000 ft2 built out
Tampa
Open Q1 2019 • Capacity to retrofit an additional 175,000 ft2
• Producing since April 2017
Statewide Delivery
Dispensary/Delivery
West Palm Beach • Up to 30 dispensaries
Open Q4 2018
• Secured locations in West Palm Beach,
Tampa, Orlando, Deerfield Beach, Miami,
Deerfield Beach Oakland Park, Sarasota, Cape Coral,
Open Q1 2019
Brandon, Bonita Springs, and Tallahassee
+ 26 additional • Select dispensaries will be delivery hubs
dispensaries
• Delivery began in Q4 2017
11
CNSX: IAN │ OTCQB: ITHUFNew York, New York it’s a Helluva State
Rec’s in the City
Why Investors Should Care: Miranda & Mr. Big Agree…
• Large population of nearly 20 million “There are a lot of
good reasons for
residents legalizing
marijuana”
- Cynthia Nixon,
• Wide range of secondary products gubernatorial
candidate for
allowed New York
• Citiva has one of only 10 licenses
• Vertically integrated licenses
“It’s no longer a question of
• Home delivery allowed legal or illegal […] it’s going
to be here anyway.”
- Governor Andrew Cuomo
• Full rec on the horizon
12
CNSX: IAN │ OTCQB: ITHUFCitiva: Dominant in the NYC Area
Cultivation/Processing
• 8.5 acres of land in Warwick, NY
Warwick
Under Construction • Initial buildout of 39,500 ft2 greenhouse and
Wappingers Falls
processing facility
Open Q1 2019 • Designed to support multiple expansion
Big Flats phases
Open Q3 2019
Dispensary/Delivery
• Four dispensary locations
• 2,000 ft2 dispensary across from Barclays
Staten Island Center in Brooklyn, NY
Open Q1 2019
• Identified locations and negotiating leases
in Staten Island, Big Flats, and Wappingers
Brooklyn
Open Q4 2018
Falls
• Home delivery
13
CNSX: IAN │ OTCQB: ITHUFGroundbreaking on Warwick Facility
Warwick Facility Highlights
• 39,500 ft2 greenhouse and
processing facility
• Site can support up to 125,000 ft2
of total cultivation and processing
space
• Plans to implement high-end
technology and cultivation
Groundbreaking ceremony – July 31, 2018 practices
• Estimated yearly production of
2,400 kg of cannabis
• Phase 1 of buildout projected to
be completed in 1H 2019
Artistic rendering of Warwick facility
14
CNSX: IAN │ OTCQB: ITHUFMassachusetts: The Colorado of the East
Why Investors Should Care:
Massachusetts Cannabis Revenue(1)
• 6.9 million residents
$ 1,049
• 13.2 million people reside within 150 miles $1,000
62% compound
of Boston annual growth
$800
$ 791
Revenue ($US mm)
• Only 33 dispensaries have opened within $ 604
$600 $899
the last four years
$632
$400 $ 380
• Full recreational program has an $438
estimated market size of over US$1.0 $200
$215
billion of annual revenues(1) $165 $166 $159
$151 $150
$0
• Mayflower is the second dispensary to 2017 2018E 2019E 2020E 2021E
open in Boston Recreational Medical
NOTES
1) Massachusetts cannabis revenue reflects historical and projected legal spending figures from
Arcview Market Research / BDS Analytics: “The State of Legal Marijuana Markets 6th Edition”
15
CNSX: IAN │ OTCQB: ITHUFMayflower: Ready for Growth
Cultivation/Processing
Lowell • 36,000 ft2 cultivation and processing
Open Q1 2019
facility
Boston
Open • First harvest, extraction, and processing
cycle initiated in April 2018
Dispensary/Delivery
• Boston dispensary opened in July 2018
with a full suite of products
Holliston • One of only two dispensaries in Lowell
Open
• Third dispensary location secured, with
full details to be provided pending final
+ 1 additional regulatory approval
dispensary
• Medical delivery allowed
16
CNSX: IAN │ OTCQB: ITHUFWhy We Love the Green Mountain State
Why Investors Should Care:
• First state to legalize recreational
cannabis via legislative action
• Large tourist population with ~13
million visitors annually
• Grassroots Vermont has one of only
five licenses
• Proposed second location is in one
of the most densely populated
areas in Vermont
• Market estimates of over US$100.0
million market by 2022(1)
NOTES
1) Vermont market estimate reflects projected legal spending figures from Arcview Market Research / 17
BDS Analytics: “The State of Legal Marijuana Markets 6th Edition” CNSX: IAN │ OTCQB: ITHUFGrassroots: Gaining Share in Vermont
Cultivation/Processing
Statewide Delivery
• 6,900 ft2 cultivation and processing facility
• Recent upgrades to facilities
Williston • Plans underway to expand cultivation
Proposed Location space
Dispensary/Delivery
Brandon • Existing dispensary in Brandon, VT
Open
• Construction on second dispensary
Brandon expected to begin in Q4 2018
Open
• Launched statewide delivery service
18
CNSX: IAN │ OTCQB: ITHUFThe iAnthus Winning Formula…
Premier Locations + Quality Design + Full Range of Products
Boston
Deerfield
Tampa
Beach
Brooklyn
West Lowell
Orlando
Palm Staten
Beach Island
19
CNSX: IAN │ OTCQB: ITHUF…Made Possible by a World-Class Team
20
CNSX: IAN │ OTCQB: ITHUFiANTHUS
INVESTMENT THESIS
CNSX: IAN │ OTCQB: ITHUFEast Coast Triad – Over 48 Million Strong
2019E Market
Population Facilities Competition
Size (US $s) (1)
4 Dispensaries;
19.9 Million $309 Million 1 of 10 Licenses
1 Cultivation Facility
3 Dispensaries;
6.9 Million $604 Million 1 of ~35 Licenses
1 Cultivation Facility
30 Dispensaries;
21.2 Million $768 Million 1 of 14 Licenses
1 Cultivation Facility
2 Dispensaries(2);
0.6 Million $29 Million 1 of 5 Licenses
1 Cultivation Facility
39 Dispensaries; 14 Weighted Average
48.6 Million $1.7 Billion
4 Cultivation Facilities Competitors
East Coast
48.6 million residents and US$1.7 billion 2019 market with limited competition
NOTES
1) Estimated 2019 state market sizes reflect projected legal spending figures from Arcview Market Research
/ BDS Analytics: “The State of Legal Marijuana Markets 6th Edition”
2) Recent legislation allows Grassroots Vermont to open an additional dispensary (2 total) and will also grant 22
one additional license (5 total) CNSX: IAN │ OTCQB: ITHUFPotential Addressable Market of US$8.0 Billion
If Florida and New York become full recreational, the market could
expand to almost US$8.0 billion(1)
Illustrative Four State Footprint Near Term Market Revenue(2)
$9,000
$7,875
$8,000 The medical and full rec
opportunity
Revenue (US$ mm)
$7,000
$6,000 $5,679
$5,000
$4,000
$3,000 $2,196
$2,000
$1,000
$0
Medical Recreational Medical & Recreational
NOTES
1) Company estimates. Assumes 1.5% penetration for medical markets and 8% penetration for recreational
markets
2) Illustrative four states footprint includes Massachusetts, Vermont, New York, and Florida 23
CNSX: IAN │ OTCQB: ITHUFLeadership and Execution is Rewarded
iAnthus vs. US Comparables(1) iAnthus vs. US and CAN Peers
As of As of YTD
iAnthus is up 213% YTD, the Ticker Company 12/29/2017 9/6/2018 Return
only stock in peer group CNSX:IAN 2.50 7.83 213%
that is up on the year TSX:WEED Canopy Growth Corporation 29.74 68.47 130%
CNSX:CRZ CannaRoyalty Corp. 3.73 6.45 73%
TSX:CRON Cronos Group Inc. 9.74 16.38 68%
GTI(2) TSXV:OGI OrganiGram Holdings Inc. 4.10 6.53 59%
TSX:HEXO The Hydropothecary Corporation 4.09 5.89 44%
CNSX:MPX MPX Bioceutical Corporation 0.82 1.00 22%
TSX:TRST CannTrust Holdings Inc. 9.15 10.02 10%
TSXV:GENE Invictus MD Strategies Corp. 1.59 1.69 6%
TSX:APH Aphria Inc. 18.70 18.48 -1%
TSX:ACB Aurora Cannabis Inc. 9.60 8.68 -10%
MPX TSXV:FIRE The Supreme Cannabis Company, Inc. 2.29 2.03 -11%
MedMen(3) TSX:VFF Village Farms International, Inc. 7.64 6.56 -14%
TSXV:EMH Emerald Health Therapeutics, Inc. 5.21 4.34 -17%
Liberty Health TSXV:WMD WeedMD Inc. 2.45 2.04 -17%
Sciences CNSX:GLH Golden Leaf Holdings Ltd. 0.38 0.28 -27%
Golden Leaf TSXV:EMC Emblem Corp. 2.28 1.52 -33%
TerraTech CNSX:LHS Liberty Health Sciences Inc. 2.07 0.93 -55%
iAnthus is up 213% YTD vs
median cannabis stock
NOTES
1) Prices as of January 2, 2018 through September 6, 2018. performance of 3%
2) GTI share price as of June 18, 2018 represents price at open.
24
3) MedMen share price as of May 29, 2018 represents price at open.
CNSX: IAN │ OTCQB: ITHUFAnd Execution adds Revenue
Near term dispensary openings can generate as much as
$7.0 US$6.0 million per month
$0.3
$6.0 $0.4
$0.3
$0.5
Monthly Revenue ($US mm)
$5.0
$0.5
$0.5
$4.0
$0.5
$0.5
$3.0
$1.0
With the potential for many
$2.0
$1.5 more dispensary openings
$1.0 on the horizon
$0.0
Store A Store B Store C Store D Store E Store F Store G Store H Store I Store J
Market 1 Market 2 Market 3 Market 4 Market 5
NOTES
1) Hypothetical revenue figures for illustrative purposes, not actual revenue forecasts. 25
CNSX: IAN │ OTCQB: ITHUFIANTH
US IA
N 7.88
Watch your Ticker… CAD +
0.62 (
8.54%
)↑
Q3 2018
Boston Dispensary Open
Q4 2018
Brooklyn Dispensary Open West Palm Beach, Orlando and
Brandon Dispensaries Open
1H 2019
Lowell Dispensary Open Tampa and Deerfield Beach
Dispensary Open
Staten Island and Wappingers Falls Dispensaries Open;
Completion of Cultivation and Processing Facility
26
CNSX: IAN │ OTCQB: ITHUFThe Best Odds at the Starting Line?
iAnthus GTI MedMen
States Six Seven Four
East Coast Triad (FL, NY, MA) 3/3 2/3 3/3
Strong Balance Sheet Yes Yes Yes
Proven Use of Stock for Acquisitions Yes No No
Stage of Development Early Early Early
Valuation US$406.9 million(1) ~US$2.1 billion(2) ~US$2.1 billion(2)
NOTES
1) Adjusted to include current share count as of September 6, 2018.
2) Share count as reported by the Canadian Securities Exchange as of September 6, 2018.
27
CNSX: IAN │ OTCQB: ITHUFCanada, Analogue to the U.S.?
The Canadian capital markets have been ahead of the U.S.
What does parity look like?
Canada iAnthus East Coast
Metric
(Vertically Int) Markets(1) No matter
Population 36 million 48 million 33% larger
which
metric you
Near Term Rec and use, iAnthus
C$6.0 billion C$9.8 billion 63% larger
Medical Market
has a clear
Competitors 116 14(2) 88% fewer
advantage
Revenue per
C$51.7 million C$700.0 million 13x more
Competitor
Public Companies 39 1
Average / Current
~C$1.1 billion C$536.6 million 50% discount
Market Cap(3)
NOTES
1) East Coast markets include Massachusetts, Vermont, New York, and Florida
2) Weighted average license holders by population in Massachusetts, Vermont, New York, and Florida
3) CapIQ, basic market caps as of September 6, 2018. iAnthus adjusted to include current share count. 28
CNSX: IAN │ OTCQB: ITHUFiAnthus Highlights
Large U.S. market opportunity Exposure to $50 billion market
48 million addressable market in
Leading position in strongest states
NY, MA and FL
Funded for growth Access to public and private capital
Limited ways to participate in the
Compelling valuation
legalization of U.S. cannabis
Opening of dispensaries and
Near term catalysts
cultivation facilities
First-class team with deep
Proven leadership
expertise and broad experience
29
CNSX: IAN │ OTCQB: ITHUFQUESTIONS?
Contact Information:
Investor Relations │ 416.428.3533 │ investors@ianthuscapital.comiAnthus Capital Structure Overview
Capital Structure Funds Raised
Basic Shares Outstanding Funds raised to date: ~C$162.3 million
Common (Voting) 51.63 M • US$9.0 million (Private; Pre-IPO)
Common (Class A: Non-Voting) 16.89 M • C$21.0 million (Public; November 2016)
Total Basic Shares Outstanding 68.53 M • C$20.0 million (Public; February 2017)
Dilutive Securities • US$3.0 million (Private; October 2017)
• C$15.7 million (Public; November 2017)
Options (Strike C$1.34 – C$3.56) 5.86 M
• US$20.0 million (Private; January 2018)
Warrants (Strike C$1.70 – C$4.92) 21.34 M
• US$50.0 million (Gotham Green; May 2018)
Convertible High Yield Notes (Strike C$3.94) 12.97 M
Total Dilutive Securities 40.17 M
Stock Performance
Total Fully Diluted Shares Outstanding 108.7 M 52 week range
Insider Ownership % 14.01% • IAN: C$1.70 – C$8.08
• ITHUF: US$1.32 – US$6.16
YTD
` return: 213%
31
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