Inner Spirit Holdings - Corporate Presentation

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Inner Spirit Holdings - Corporate Presentation
CSE:ISH

Inner Spirit Holdings
    Corporate Presentation

           April 2019
Inner Spirit Holdings - Corporate Presentation
LEGAL DISCLAIMER.

The information provided herein is not intended to provide financial, tax, legal or accounting advice. This Corporate Presentation and the contents herein do not constitute or form part of any advertisement, any offer to sell or any

solicitation of an offer to buy or subscribe for securities of Inner Spirit Holdings Ltd. (the “Company” of “Inner Spirit” or “ISH”) or represent an intention to induce any person to make an investment in the Company or to assist any person

in the making of an investment decision. This Corporate Presentation and the contents herein shall not form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever.

This Corporate Presentation includes statistical information that the Company has obtained from independent industry publications, government publications, market research reports and other published independent sources. Such

publications and reports generally state that the information contained therein has been obtained from sources believed to be reliable. Although the Company believes these publications and reports to be reliable, it has not independently

verified any of the data or other statistical information contained therein, nor has it ascertained or validated the underlying economic or other assumptions relied upon by these sources. The Company has no intention and undertakes no

obligation to update or revise any such information or data, whether as a result of new information, future events or otherwise, except as, and to the extent required by applicable securities laws. Readers should also be advised that the

watch, sunglasses and related accessories business of the Company is carried out through its wholly-owned subsidiary, WATCH IT! Consolidated Ltd., and any reference herein to “WATCH IT!” is a reference to such subsidiary.

FORWARD LOOKING INFORMATION

This Corporate Presentation contains “forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”) within the meaning of applicable securities legislation. Forward-looking information

in this Corporate Presentation include, but are not limited to, statements or information with respect to: the Company’s intended strategy; the Company’s ability to execute its strategy and ensure success; the expected legalization of

recreational cannabis; market expectations; intended products, delivery systems and partnerships; and other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Actual

results, performance or achievement could differ materially from that expressed in, or implied by, any forward-looking information in this Corporate Presentation, and, accordingly, readers of this Corporate Presentation should not place

undue reliance on any such forward-looking information. Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially

from those expressed or implied in any forward-looking statements and accordingly, should not be read as guarantees of future performance or results. Forward-looking information involves numerous risks and uncertainties including,

but not limited to, the ability of management to execute its business strategy, objectives and plans; that the Company will have sufficient capital to fund its business plans; general economic and business conditions; changes to laws,

regulations, rules, rulings, policies, procedures and other instruments applicable to the Company and its business; the risk of disruptions to the Company’s supply chain; risks associated with the Company’s reliance on key personnel;

and changing consumer sentiments. Forward-looking information contained in this Corporate Presentation is based on the Company’s current estimates, expectations and projections, which the Company believes are reasonable as of

the current date. The Company can give no assurance that these estimates, expectations and projections will prove to have been correct. Historical statements should not be taken as a representation that such trends will be replicated

in the future. No statement in this Corporate Presentation is intended to be nor may be construed as a profit forecast.

FUTURE-ORIENTED FINANCIAL INFORMATION

This Corporate Presentation also contains future-oriented financial information and financial outlook information (collectively, “FOFI”) including, but not limited to, prospective annual revenue, prospective net profit, prospective system

wide sales, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this Corporate Presentation was made as of the

date of this Corporate Presentation and was provided for the purpose of providing information about management’s current expectations and plans relating to the future, and for certain illustrative purposes. The Company disclaims

any intention or obligation to update or revise any forward looking statements or FOFI contained in this Corporate Presentation, whether as a result of new information, future events or otherwise, unless required pursuant to applicable

securities law. Readers are cautioned that the forward-looking information and FOFI contained in this Corporate Presentation should not be used for purposes other than for which it is disclosed herein. The forward-looking statements

and FOFI contained in this Corporate Presentation are expressly qualified by this cautionary statement.

THIS CORPORATE PRESENTATION MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED OR PUBLISHED IN WHOLE OR IN PART WITHOUT WRITTEN PERMISSION FROM THE COMPANY.

                                                                                                                                                                                                                           APRIL 2019 | 02
Inner Spirit Holdings - Corporate Presentation
The start of something incredible.

 Inner Spirit Holdings Ltd. is applying a successful franchise and retail model to the

recreational cannabis industry. With a group of over 100 franchise partners, corporate

 retail cannabis locations, and a proprietary brand portfolio under various stages of

      development, Inner Spirit Holdings is positioned to be an industry leader.

                                                                                 APRIL 2019 | 03
Inner Spirit Holdings - Corporate Presentation
Investment Highlights

Leverage to Canadian legal recreational     Low-cost and highly scalable franchising   Strategic partnerships with premium

cannabis market. The Canadian adult use     model to maximize ROI – more than 100      producers creates a fully integrated

market is currently worth up to $5.0B and   corporate and franchise locations under    business model

is expected to grow to $7.0B in FY22 1      development across Canada

Proprietary house brands to offer           Highly experienced team with

consumers a market-leading retail           significant expertise in the cannabis,

experience                                  branding, consumer retail, real estate

                                            and franchising industries

                                                                                                                    APRIL 2019 | 04
Inner Spirit Holdings - Corporate Presentation
Meet the Team

      Darren Bondar                             Chris Gulka                              Cecil Horwitz                               Jeremy Lee
        President & CEO                                 CFO                            Business Development                             Controller

∙    20 years experience in retail      ∙   CPA and CFA with > 26 years            ∙   Extensive experience in retail        ∙   Experience across financial
     and franchise industries               business experience                        sales since beginning of                  reporting, controlling and
                                                                                       WATCH IT! in 1999                         finance functions
∙    Previously founded WATCH IT!       ∙   President of Working Capital
     in 1999                                Corporate since 1999                   ∙   Founder and clinical director of      ∙   Previously at Big 4 accounting
                                                                                       Whole Family Health                       firms and in industry roles
∙    Bachelor of Arts from Western      ∙   Founded Passport Energy Ltd.,
     Ontario University and MBA             and was the CFO of Rochester           ∙   Cannabis advocate for both            ∙   Chartered Accountant
     from University of Alberta             Energy Corp.                               health and recreational use               designation in 2000

     Robert Verbuck                           Christine Kitz                             Alisa Kuzmina                           Christine Smith
    Legal & Capital Markets                        Operations                            Creative Director                  Marketing & Communication

∙    Corporate securities lawyer        ∙   Oversees business systems and          ∙   Overseas ISH’s commitment to          ∙   10 years progressive marketing &
     with 20 years experience               operations at ISH                          creative excellence                       sales experience with tier 1 global
                                                                                                                                 companies
∙    Since 2014, actively involved in   ∙   Previously held financial, strategic   ∙   Significant experience working
     advising businesses in the             and human resources                        within the retail and franchise       ∙   Significant experience in brand
     cannabis industry                      positions within the retail sector         industries                                execution allied to a track record of
                                                                                                                                 excellence in delivering results
∙    Law degree from the University                                                ∙   Degree in Communications
     of Toronto                                                                        with a Major in Information Design    ∙   Bachelor of Management degree
                                                                                                                                 with a major in Marketing from the
                                                                                                                                 University of Lethbridge

                                                                                                                                                     APRIL 2019 | 05
Inner Spirit Holdings - Corporate Presentation
Board of Directors

     Darren Bondar                          Chris Gulka                       David Margolus                                Jeff Tung
       President & CEO                              CFO                               Director                                 Director

∙   20 years experience in retail
    and franchise industries
                                     ∙   CPA and CFA with > 26 years
                                         business experience
                                                                          ∙   Former Managing Partner of
                                                                              Witten LLP
                                                                                                                   ∙   COO of Auxly Cannabis

                                                                                                                   ∙   Formerly co-founder of CPS
∙   Previously founded WATCH IT!
    in 1999
                                     ∙   President of Working Capital
                                         Corporate since 1999
                                                                          ∙   Served on boards of Edmonton
                                                                              Regional Airports Authority,
                                                                                                                       Management Partners

                                                                              Liquor Stores N.A. Ltd., PowerComm
                                                                                                                   ∙   MBA from the Richard Ivey
∙   Bachelor of Arts from Western
    Ontario University and MBA
                                     ∙   Founded Passport Energy Ltd.,
                                         and was the CFO of Rochester
                                                                              Inc. and The XS Cargo Income Fund        School of Business, Bachelor
                                                                                                                       of Computer Engineering from
    from University of Alberta           Energy Corp.
                                                                          ∙   Bachelor of Arts and Law from the
                                                                              University of Alberta
                                                                                                                       the UBC

        Larry Wosk                       Craig Steinberg
            Director                             Director

∙   15 years experience at the
    Sauder School of Business
                                     ∙   Former partner at Miller
                                         Thomson LLP

∙   27 years in senior
    management positions
                                     ∙   >10 years experience as a
                                         private mortgage banker
                                         and corporate counsel
    President and CEO of companies
∙   across retail, real estate
    development, hospitality
                                     ∙   Law Society of Alberta,
                                         Canadian Bar Association and
    and consulting                       Real Estate Council of Alberta

                                                                                                                                         APRIL 2019 | 06
Inner Spirit Holdings - Corporate Presentation
Corporate Highlights
March 16, 2017                           June 16, 2017                            January 8, 2018                    January 29, 2018                 February 6, 2018

ISH Formed                               CFA Membership Granted                   Auxly                              Retail Store Concept             100th Franchise and
                                                                                                                                                      $4.5M Equity

Inner Spirit Holdings Ltd. was           Spiritleaf is first and only             ISH announces cross-investment     Spiritleaf unveils its concept   ISH grants its 100th franchise and
founded in Calgary, AB.                  cannabis company granted                 and strategic alliance with        retail store design.             completes its $4.5 million private
                                         entry into CFA.                          Auxly (TSXV:XLY), which closes                                      placement equity financing.*
                                                                                  on February 6, 2018.

May 23, 2018                             July 31, 2018                            November, 2018                     December 3, 2018                 April 1, 2019

Newstrike                                Inner Spirit Holdings Ltd. Closes        Franchise Store Openings           Tilray                           Kingston Cannabis Retail Store
                                         IPO                                                                                                          Opens in Ontario Market

Newstrike Brands Ltd.                    ISH closes IPO on maximum                ISH opens first 4 franchise        ISH announces $4.5 million       Spiritleaf opens its doors at 27
(TSXV:HIP) announces cross-              gross proceeds of $3,750,000             locations in Brooks, Lethbridge,   investment by Tilray, Inc.       Princess Street in the historic
investment and strategic                 and issued 25,000,000 Units. Its         St. Albert & Moosejaw.             (NASDAQ: TLRY) and formation     Smith Robinson building in
alliance with ISH. ISH                   common shares began trading                                                 of strategic partnership.        Kingston, Ontario through
announces its support of the             on August 1, 2018 on the CSE                                                                                 a branding and licensing
Gord Downie & Chanie Wenjack             under the symbol “ISH”.                                                     Tilray increases investment to   agreement and is one of the first
Fund (DWF) via a five-year                                                                                           $6 million in March 2019.        brands to open in Ontario.
charitable commitment and the
establishment of a DWF Legacy
Room.

* Includes Auxly’s $350,000 equity investment on January 8, 2018, Auxly’s additional $150,000 equity investment on                                                       APRIL 2019 | 07
February 6, 2018, and Grenville’s $1M equity investment on January 18, 2018.
Inner Spirit Holdings - Corporate Presentation
Canada’s New Growth Industry

                                                                                                                                                                                                     $5.0B in FY18
   Substantial Market                                                                                                                   X                                   X                    =
                                       1                                                                                                                                                             $7.0B in FY22
                        Size
                                                                                    Population of Adult                                                Annual Consumption       Price per Gram        Estimated Total Adult
                                                                                       Consumers                                                         Volume in Grams         of Marijuana            Use Market Size
                                                                                                                                                          per Consumer

                                                                                     ∙        Current consumers are expected to buy nearly two-thirds of products from legal retailers

  Shift Towards Legal                                                                ∙        Legalization expected to attract a more conservative experimenter – typically one who is aged 35-54, has a
                                                      2
         Consumption                                                                          university education, and has family or other responsibilities

                                                                                     ∙        After legalization, current frequent cannabis consumers expect to buy products more often

                                                                                      ∙        Current and likely consumers expect to purchase the majority of products at

   Demand For Retail                                                                           physical retail locations

                                                                                      ∙
                                                 3
             Experience                                                                        Consumers to demand high quality products at a range of competitive price points

                                                                                      ∙        Privacy and security when purchasing are key considerations for consumers

1 . G T R e s e a r c h , “ C a n a d i a n L e g a l R e c r e a t i o n a l C a n n a b i s M a r k e t ”, 2 0 1 8                                                                                          A UAGPURSI T
                                                                                                                                                                                                                         L 2019
                                                                                                                                                                                                                              8 | 08
                                                                                                                                                                                                                                   4
2 . D e l o i t t e , “A s o c i e t y i n t r a n s i t i o n , a n i n d u s t r y r e a d y t o b l o o m – 2 0 1 8 c a n n a b i s r e p o r t ”
Inner Spirit Holdings - Corporate Presentation
The Inner Spirit Strategy

 Build an iconic Canadian brand and           Sell select brands together with our   Utilize a low CAP X franchise and
  a chain of recreational dispensaries       proprietary licensed brands through     streaming strategy to maximize ROI
 across Canadian jurisdictions where           our own retail network and other               and scalability.
private distribution of cannabis is legal.          distribution channels.

Franchising to maximize ROI

                                             $25,000 upfront franchise fee

                                             5% royalty on gross sales

                                             1% of gross sales allocated to Spiritleaf’s advertising fund

                                                                                                                 APRIL 2019 | 09
Inner Spirit Holdings - Corporate Presentation
Over 110 franchise agreements executed and 73 locations secured across Canada

                                                                                                      Manitoba

                                            Alberta                                                   ∙   Prequalified for the next Manitoba lottery
                                                                                                          for cannabis retail licenses
                                            ∙   4 Spiritleaf stores now open and operating in
                                                Calgary, St. Albert, Brooks and Lethbridge.
                                            ∙   46 additional sitres have been secured with
                                                municipal permits and are in various stages
                                                of development.

                                                                                                            Ontario
British Columbia
                                                                                                            ∙   Opened Ontario office, and secured prime
∙   6 Spiritleaf locations conditional on                                                                       locations
    municipal and provincial approvals                                                                      ∙   Granted first 25 franchises and secured
                                                                                                                leases for 16 locations
                                                                                                            ∙   Continuing due diligence on numerous
                                                                      Saskatchewan                              additional franchise applications
                                                                                                            ∙   Kingston store opened on April 1, 2019.
                                                                      ∙   Moose Jaw store opened on
                                                                          November 19, 2018

                                                                                                                                      N O V EAMPBREI LR 22 00 11 98 || 11 01
The Space

                                                          Open spaced opportunity to re-imagine the typical
                                                          retail environment of a dispensary.

                                                          The Retail Brand
                                                          Stores offer an impressive selection of products,
                                                          knowledgeable staff and a welcoming and comfortable
                                                          environment.

Franchise
First Cannabis company to receive membership in
the Canadian Franchise Association.

Best in Class

Best in class retail experience with over 100 franchise
partnerships with local entrepreneurs,

                                                                                                      APRIL 2019 | 11
Currently Anticipated Timeline

  January 2019        July 2019     January 2020    July 2020

    5 Franchise       2 Corporate    10 Corporate   10 Corporate
                      8 Franchise    27 Franchise   65 Franchise

                                                          N O V EAMPBREI R
                                                                         L 2019
                                                                              8 | 12
                                                                                   51
FLOWERS / PRE-ROLLS / OILS & EXTRACTS

  We Source, Create and Curate Quality
           Cannabis Brands

The Spirit Joint Disposable Vaporizer
Anticipated to be one of the most discreet, disposable vaporizers
on the recreational cannabis market. 150 puffs of pure CO2
cannabis oil. No smell, no lighter, no charging, no prep, no hassle.

                                                                       APRIL 2019 | 13
APRIL 2019 | 14
Tilray announced its newly-formed partnership with Inner Spirit’s retail network
Key Terms

Tilray to subscribe for $4,500,000 of ISH shares, comprised of $2,250,000 in cash and $2,250,000 in Tilray common shares

On December 10, 2018 ISH and Tilray completed the cash tranche at price of $0.1985 per ISH share. The second tranche is to be
completed on June 20, 2019.
ISH and Tilray have entered into a collaboration agreement which includes, among other things:
      (i) guidance for promoting High Park’s products, for each retail location of Spirit Leaf which, will represent 20% of the retail
      space at each Spirit Leaf location; and
      (ii) general terms for Tilray to support the charitable endeavours of ISH and Spirit Leaf.

On March 31, 2019, Tilray icreased their investment to $6,000,000 with a $1,500,000 short-term loan at 12% interest.

                                                  About Tilray and High Park

                                                  Tilray is a global pioneer in cannabis research, cultivation, processing and
                                                  distribution with operations in 12 countries spanning 5 continents

                                                  High Park is a wholly owned subsidiary of Tilray, Inc. (NASDAQ: TLRY), and is led
                                                  by a team with deep experience in cannabis and global consumer brands

                                                                                                                                 APRIL 2019 | 15
Strategic Partnership

                        Collaboration on retail initiatives including product acquisition and in-store marketing
                        and branding
                        Auxly currently holds ~14% of the outstanding ISH common shares
        TSX.V: XLY

                        Retail distribution of Up Cannabis products, and the creation of Up Cannabis-branded
                        customer lounges in Spirit Leaf stores
                        Newstrike holds ~8% of the outstanding ISH common shares
                        HEXO Corp. Acquires Newstrike Brands in March 2019
        TSX.V: HIP

                        ISH licensed to distribute and sell all High Times magazines in corporate & retails stores

                        ISH holds 11,000 shares of class A common stock of High Times Holding Corp.

                                                                                                       APRIL 2019 | 16
Where we’ve come from,
          where we’re going.

                      Bringing 20 years of franchise, branding, retail, marketing & real
Experience comes      estate experience to the recreational cannabis market

with time. Success    Opportunity to participate in Canada’s emerging recreational
comes with passion.   cannabis market

                      Platform to invest in a proven revenue-generating business model

                                                                              APRIL 2019 | 17
Trading commenced on August 1, 2018 (CSE:ISH)

         Capital Structure (March 31, 2019)

Basic Shares Outstanding				            193.4 million

Recent Share Price (March 31, 2019)		   $0.29
                                                        Top 5 shareholders own ~40%

Current Market Capitalization			        $56 million

                                                        Capital light business model
Warrants and Options Outstanding		      46.8 million

Weighted Average Strike Price			        $0.26

                                                                                 APRIL 2019 | 28
Headquarters                          Contact
#102, 5740 - 2nd Street SW           invest@spiritleaf.ca
   Calgary, AB. T2H 1Y6                403-930-9300

                www.innerspiritholdings.com
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