48NORTH CANNABIS CORP. TSXV: NRTH - INVESTOR PRESENTATION - APRIL 2019 - april 2019 48north cannabis corp. tsxv ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
48N ORTH CANNABIS C ORP.
TSXV: NRTH
IN V E S T OR P RE S E N TAT I ON - A P RIL 2019
Forward-Looking Statements
Disclaimer And Cautionary Statements
Certain information included in this presentation, which is prepared as of April 4, 2019 and speaks only as of such date, including any
information as to future financial or operating performance and other statements that express expectations or estimates of the future
performance of 48North Cannabis Corp. and its subsidiaries (collectively, “48North” or the “Company”), constitute “forward-looking
statements”. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”,
“expect”, “intend”, “forecast”, “objective” and “continue” (or the negative thereof), and words and expressions of similar import, are
intended to identify forward-looking statements. Forward-looking statements in this presentation include statements regarding: receipt
of applicable regulatory approvals, including for the Company’s outdoor farm; future production capacity, including for the Company’s
outdoor farm; potential health benefits of cannabis; expected future growth of the cannabis market; the expected future evolution of the
cannabis industry, including with respect of consumer touch, branding and promotion; 48North’s product differentiation; expected market
growth and market scope; 48North’s proposed capacity expansion plan; 48North’s brands and the extension of licensing arrangements
for same; the expected success and timing of 48North’s product development activities; 48North’s proposed growth plan, including in
respect of product lines, geographic expansion, building of capabilities and capacity and development of key strategies; and 48North’s
potential future revenue drivers.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the
possibility that forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-
looking statements, and actual results may differ materially from those expressed or implied in such statements. The Company cautions
readers not to place undue reliance on these statements, as a number of important factors, many of which are beyond the Company’s
control, could cause actual results to differ from the expectations expressed in such forward-looking statements. These factors include, but
are not limited to, risks related to: the future evolution of the regulated cannabis market; industry, competition, customer, legal, taxation
and accounting matters; adverse industry events; general economic conditions; loss of potential markets; future legislative and regulatory
developments; inability to access sufficient capital in order to pursue business objectives on favourable terms or at all; the ability of the
Company to implement its business plan; competition; product liability; crop failure; and other factors beyond the control of the Company.
Please refer to the Company’s SEDAR filings for further details, including the risk factors in the annual information form of the Company
dated March 12, 2019 and the short form prospectus of the Company dated March 26, 2019. The foregoing lists of factors that may affect
future results is not exhaustive. When reviewing the Company’s forward-looking statements, readers should carefully consider the foregoing
factors and other uncertainties and potential events. The Company does not intend, and disclaims any obligation, to update any forward-
looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.
This presentation also includes information obtained by the Company from third parties, including, but not limited to, information
regarding market data and the potential health benefits of cannabis. The Company believes such information to be accurate but has not
independently verified such information. There is a risk that the assumptions made and conclusions drawn by the Company based on such
third party information are not accurate. Further, Health Canada has advised that cannabis is not an approved therapeutic drug in Canada
and that, at present, while pointing to some potential therapeutic benefits, the scientific evidence does not establish the safety and
efficacy of cannabis to the extent required by the Food and Drug Regulations for marketed drugs in Canada unless a particular cannabis
product has received a notice of compliance from Health Canada and a Drug Identification Number (DIN).
I N V E S T O R P R E S E N TAT I O N 1
Corporate Overview
• 48North is a vertically integrated Licensed Producer focused on
best-in-class health and wellness products, profitability, good governance,
and diversity.
• Our assets include: a disruptive, large-scale, low-cost, 100-acre outdoor
organic farm (pending Health Canada approval); two modern, indoor licenced
cultivation and production facilities; and partnerships with leaders in
cannabis, manufacturing and consumer packaged goods.
• 48North is developing high-quality formulations and manufacturing capabilities
for its own proprietary products, as well as positioning itself to contract
manufacture products for consumer packaged-goods brands.
I N V E S T O R P R E S E N TAT I O N 2
Next-Generation Cannabis
48North is well positioned for the next generation of cannabis. We are the first Licensed Producer to have an application into Health
Simply Put Canada to grow cannabis outdoors. In addition to our expected 5,000 kg of indoor-grown production capacity, we expect to cultivate
40,000 kg of dried cannabis from our farm, subject to Health Canada licencing. This will serve 48North’s objective of being the
industry leader with respect to the development and distribution of next-generation cannabis products.
Significant opportunity to capitalize on next generation cannabis products. It is projected that total North American spending on
Macro Trend edibles and beverages alone will reach $5.3B CAD by 2022.1
Opportunity to leverage significant and low-cost production to form strategic partnerships with established experienced CPG
Powerful Ecosystem brands. These partnerships may open up entirely new markets, and expertise not yet tapped by traditional Licensed Producers.
We believe we are a step ahead of our competition. We are benefitting from significant network effects and economies of scale.
First Mover
We are building strong, authentic and trusted brands for consumers who believe in premium natural products for health and wellness.
Brands Matter
SOURCES:
1 ARCVIEW MARKET RESEARCH I N V E S T O R P R E S E N TAT I O N 3
Corporate Structure
The The
Good Good DelShen
Farm* House
100-acre 46,000 sq. ft. 40,000 sq. ft.
outdoor organic cultivation and cultivation and
cultivation in Brant processing facility in processing facility
County, Ontario Brantford, Ontario in Kirkland
Lake, Ontario
Premium sun grown Premium Contract manufacturing Premium
organic cannabis for indoor -grown and supply wholesale: indoor -grown
retail and next organic cannabis for • Full spectrum oil cannabis for
generation products retail distribution • Flower retail distribution
• Distillate/isolate
*PENDING HEALTH CANADA APPROVAL I N V E S T O R P R E S E N TAT I O N 4
Current Licensed Production Facilities
• 48North operates two indoor cannabis production facilities in Ontario with an annualized production capacity of approximately 5,000 kg.
• In addition, 48North has submitted a cultivation licence application under the Cannabis Act for its 100-acre organic farm, if approved,
the farm will provide 48North with organic, sun-grown cannabis and a significant first-mover advantage in the production of low-cost,
next-generation, extract-based cannabis products.
OUTDOOR CULTIVATION INDOOR CULTIVATION, PROCESSING AND MANUFACTURING
The Good Farm The Good House DelShen Therapeutics
• 100-acre outdoor/organic farm*
• 46,000 sq. ft. state-of-the-art indoor • 40,000 sq. ft. state-of-the-art indoor
• Production capacity of 40,000 kg of dried cultivation facility located on five acres facility located on 800 acres
cannabis*
• Annualized capacity expected to be 2,500 kg • Annualized production capacity expected to
• First company in the country to submit for of dried cannabis be 2,500 kg of dried cannabis
cultivation licence with Health Canada
• Facility set up for Good Manufacturing • Licenced to cultivate and sell cannabis as
• Cultivation expected to begin by June 2019* Practices (GMP corridor) well as produce and extract cannabis oil
• Organic cultivation to be certified • Organic production to be certified
by Ecocert by Ecocert
• 25,000 sq. ft. of available space to support
pre/post farm production, extraction, labs,
and manufacturing
Annualized production is expected to be 45,000 kg
*PENDING HEALTH CANADA APPROVAL I N V E S T O R P R E S E N TAT I O N 5
Our Differentiators
1
Authentic Brands
2
Outdoor Cultivation
3
Organic Cannabis
I N V E S T O R P R E S E N TAT I O N 6
Strong, Authentic And Trusted Brands
48North is focused on building a portfolio of iconic, engaging, trusted, health and wellness cannabis brands
I N V E S T O R P R E S E N TAT I O N 7
Outdoor Cultivation Is A Game Changer
• First company to apply for an outdoor cultivation licence from
Health Canada
• Signed Canada’s first-ever outdoor supply agreement with the
Société Québécoise du Cannabis (SQDC), Quebec’s sole legal
retailer of recreational cannabis
• Opportunity to provide the legal market with 40,000 kilograms of
organic, sun-grown cannabis*
• Opportunity to be of relief to the national shortage of recreational
cannabis*
• Provides 48North with a head start in the production of low-cost,
high-quality, next-generation products as the industry prepares for
the legalization of next generation products
• Production will be one of the most environmentally friendly, and energy
efficient method of cannabis cultivation in the country
• Expected to consume a fraction of the energy required of traditional
grow facilities
• Outdoor cannabis expected to be a critical step in addressing
cannabis supply challenges across the country
*PENDING HEALTH CANADA APPROVAL I N V E S T O R P R E S E N TAT I O N 8
Organic Cannabis Matters
• Consumer preferences continue to trend towards organic
products, including in the cannabis industry
• 55%+ of Canadian consumers purchase organic products on a
weekly basis1
• 80%+ of Canadian consumers have maintained or increased their
organic purchases in the last year2
• Organic product will be a differentiator that will help to penetrate
distribution channels
• Organic cannabis expected to generate premium price
• Key product differentiator for next-generation products
• Existing organic products need organic inputs including
cannabis ingredients
SOURCES:
1 CANADA ORGANIC TRADE ASSOCIATION
2 CANADA ORGANIC TRADE ASSOCIATION I N V E S T O R P R E S E N TAT I O N 9Market Opportunity
Consumer Trends
• The cannabis consumer is rapidly changing. It is The Next Health and Wellness Craze
helpful to look to the more mature and robust legal
U.S. market for consumer trends.
• Deloitte estimated the cannabis market could reach
$7.17B in 2019, up to $4.34B of which will come from
89% 65 %
the legal recreational market.1
• After years of dominating cannabis consumer
purchases, the market share for flower has fallen
to near parity with sales of next-generation products.
The share for flower from 66% to 40% in from 2015
to2018. Conversely, the share for concentrates grew
from 16% to 39% over the same period.2 OF CANADIANS BELIEVE THAT OF CANADIANS BELIEVE
CANNABIS CAN BE AN EFFECTIVE THAT CANNABIS CAN BE PART OF
• Significant opportunity to capitalize on next-generation NATURAL MEDICINE3 A HEALTHY LIFEST YLE4
cannabis products, including topicals, cosmetics,
vape pens, edibles and beverages.
SOURCES:
1 DELOITTE
2 NEW FRONTIER DATA
3 STATISTIC CANADA
4 STATISTIC CANADA
I N V E S T O R P R E S E N TAT I O N 10Authentic Brands Resonate With Consumers
66 % 70% 80% 84 %
75 %
Would pay more for Believe companies Would support issues Factor in brands’
products from more should take actions by buying from values when considering
socially responsible to improve issues socially conscious a purchase
companies outside their everyday online retailers
business operations
OF GLOBAL CONSUMERS
• Expect brands to contribute
to our well-being & quality
84 % 88% 89 %
of life1
• Agree companies can
increase profits while
improving economic
and social conditions
in their community2
Believe businesses Would be more loyal Are likely to
have a responsibility to companies that switch to brands
to spur social change support social or they associated
environmental causes with causes
SOURCE:
1 HAVAS | MEANINGFUL BRANDS 2017
2 2017 EDELMAN | TRUSTBAROMETER
2016 GLOBAL STRATEGY GROUP I N V E S T O R P R E S E N TAT I O N 11Milestones
Jan 2018 June 2018 Sept 2018 Oct 2018 Nov 2018 Feb 2019 Mar 2019 Apr 2019
Closed $16MM Listed on the Received licence Announced acquisition Annouced $3MM Closed $10MM Received licence to Closed $28.75MM
bought deal led TSXV: NRTH to extract oil of Good & Green and Canopy Growth private placement extract oil at bought deal led
by Eight Capital at DelShen concurrent $10MM equity investment, The Good House by Eight Capital
private placement supply agreement, Signed LOI with and Canaccord
and retail distribution SQDC for outdoor Genuity Corp.
partnership grown cannabis
April 2019 June 2019 Oct 2019
Begin retail Begin outdoor Launch suite of
distribution cannabis cultivation next-generation
at 100-acre farm* cannabis products
and harvest outdoor
cannabis, subject to
regulatory approval
*PENDING HEALTH CANADA APPROVAL I N V E S T O R P R E S E N TAT I O N 12Management Team
Alison Gordon Jeannette VanderMarel Kevin Helfand David Hackett Kirsten Gauthier
Co-Chief Executive Officer Co-Chief Executive Officer Chief Operating Officer Chief Financial Officer Chief Marketing Officer
and Director and Director
- - - - -
Alison is a veteran of the Canadian Jeannette previously co-founded and Kevin holds an MBA/LL.B. from David is a CPA, CA and holds an MBA Kirsten is an entrepreneur and
cannabis, marketing and health-care served as President of Good & Green the University of Alberta and brings from the Richard Ivey School of creative leader with more than 21
industries, bringing a unique depth and was a co-founder of The Green more than 15 years of experience Business at the University of Western years of award-winning experience
of experience and relationships to her Organic Dutchman (TSX:TGOD), both leading organizations in the banking, Ontario and brings more than 20 who brings innovative solutions and
role as Chief Executive Officer Licensed Producers by Health Canada. payments and technology industries. years of financial and management brand-building skills to 48North.
of 48North. leadership to 48North.
I N V E S T O R P R E S E N TAT I O N 13Independent Directors
The Honourable William Assini Anne Darche Alain Dubuc Lieutenant General
Martin Cauchon - - - James C. Gervais (retired)
- Mr. Assini is a chartered professional Ms. Darche is a marketing and con- Mr. Dubuc is an economist, author -
Mr. Cauchon was first elected to accountant and was both Senior Vice- sumer trends specialist with a 20-year and journalist. He is the national Mr. Gervais is a retired Army
political office in October 1993 in the President and Partner at PriceWater- career in Montreal advertising agen- affairs columnist for the Montréal Commander of the Canadian Armed
federal riding of Outremont. He has houseCoopers LLP for more than 20 cies. The agency she helped build and Daily La Presse and is the recipient Forces who also served 12 years
held many cabinet positions, including years, where he had advisory respon- administer, Allard Johnson (now KBS), of numerous awards, including the as a public servant as Assistant Deputy
Minister of National Revenue, Minister sibility for southwestern Ontario. Mr. has become one of Canada’s leading National Newspaper Award for editorial Minister to Canada’s Governor General.
of Justice and Attorney General of Assini is also a director and audit com- advertising firms. A respected speaker, commentary and the Public Policy In retirement, he has been a director
Canada. As Justice Minister, he intro- mittee member of IG Trust Company she has been heard regularly on Radio Forum Hyman Solomon Award for on the boards of several mining com-
duced in 2003 legislation decriminalizing Limited. He is also a past director Canada sharing her views on trends, excellence in journalism. He sits on panies and has served as the Chairman
the possession of small amounts of of GoviEx Uranium Inc., M.R.S. Trust breakthroughs and market disruptions. several boards, including the Institute of the Board of Commissionaires
cannabis. Currently, Mr. Cauchon Company, Canada Flourspar Inc., and Ms. Darche also serves as a director for Research on Public Policy and the Ottawa, the largest not-for-profit
is Executive Chairman of Groupe Mettrum Health Corporation. for Groupe Germain Hotels and KDC, McGill Institute for the Study of Can- security firm employing military and
Capitales Médias. a leading North American contract ada. He has written seven books on RCMP veterans.
manufacturer of health and beauty economics and political subjects and
care products. was named an Officer of the Order of
Canada in 2011.
I N V E S T O R P R E S E N TAT I O N 14Capital Structure
Shareholder Ownership
C api t aliz a ti on t able (as o f Apr il 2, 2019, p ost $ 28.75
milli on b oug h t de al)
Basic Common Shares Outstanding 147 , 529 , 881
Options and RSU’s 18, 190 , 000
Broker Compensation Options and Warrants 1 , 846, 457
Warrants
40 , 813, 912
Total Issue d and Outstanding (Fully Dilute d) 208, 380 , 250
NRTH (TSX-V)
*As of April 1, 2019
Stock Price: $1.35
Cash And Debt
Avera ge Volume: 1,285,000
Market Cap: 199,000,000
Cash (as of D e cember 31, 2018) 1 $12 , 042 , 072
52 We ek High – 1.69
D ebt (as of D e cember 31, 2018) 2 $2 , 300 , 000
52 We ek Low – 0.42
1
D oes not include April 2, 2019 bought deal
2
Mor tga ge debt of $2.3 million was paid in full on Februar y 5, 2019.
I N V E S T O R P R E S E N TAT I O N 15Appendix - Our Authentic Brands
1
48North
2
Good & Green
3
Latitude
4
F8
5
Mother & Clone
6
Avitas
I N V E S T O R P R E S E N TAT I O N 16BRAND
48North is a vertically integrated Licensed Producer
focused on best-in-class health and wellness products,
profitability, good governance, and diversity.
Instagram
@48nrth
Website
48nrth.com
I N V E S T O R P R E S E N TAT I O N 17BRAND
Good & Green is equally committed to social
responsibility and the development of high-quality,
consistent, and homogeneous organic cannabis and
cannabis products. Good & Green combines its disci-
plined approach and strong passion for organic pro-
duction, free from chemicals and pesticides, to reli-
ably deliver premium cannabis products.
Instagram
@goodandgreenco
Website
goodandgreen.com
I N V E S T O R P R E S E N TAT I O N 18BRAND
Latitude is an interactive, omni-channel that empowers
women to connect, engage and share their personal
stories with cannabis. Latitude exists as a book,
a website, a newsletter and storytelling events.
Instagram
@explorelatitude
Website
explorelatitude.com
I N V E S T O R P R E S E N TAT I O N 19BRAND
F8 accessories exist to connect and deepen people’s
relationship with the objects that inhabit their everyday
world. F8 believes design should be purposeful,
versatile and stimulating, crafted with lasting style
that inspires individual exploration and expression.
Instagram
@f8te.ca
Website
f8te.ca
I N V E S T O R P R E S E N TAT I O N 20BRAND
Mother & Clone strain-specific sublingual products Products
are uniquely PhD formulated for rapid absorption The only strain-specific, water-based sublingual cannabis spray on the market.
under the tongue. Effects are felt within minutes.
.
Ingredients are pure and simple. No artificial flavours
or sweeteners, just the naturally occurring terpenes
in each strain (which happen to be delightful on the
palate and calorie-free).
Instagram
@momandclone
Website
momandclone.com
Partners
M + C has partnered with a number of hotel chains
including Ace Hotel, Roosevelt LA, W Hotel Texas
and more to come. Lemon Haze Sativa G.D.P. Indica Child resistant, pharma grade
2.5 MG THC per spray 2.5 MG THC per spray polypropylene (BPA-free and
100 MG THC per bottle 100 MG THC per bottle considered safest plastic)
Brightening Dreamy Metered dose
Calorie-free Calorie-free
.
*48NORTH SIGNED AN EXCLUSIVE CANADIAN LICENCING AGREEMENT WITH
MOTHER & CLONE, THE COMPANY DOES NOT OWN THE MOTHER & CLONE BRAND I N V E S T O R P R E S E N TAT I O N 21BRAND Avitas is uniquely poised to take advantage of the cannabis curious audience focussed on health and wellness. Avitas is concerned about what consumers are putting in their bodies and offer premium high-quality cannabis products. Instagram @avitas_grown Website avitasgrown.com *48NORTH SIGNED AN EXCLUSIVE CANADIAN LICENCING AGREEMENT WITH AVITAS, THE COMPANY DOES NOT OWN THE AVITAS BRAND I N V E S T O R P R E S E N TAT I O N 22
Investment Highlights
Disruptive Production Next Generation Products Differentiated Brands Strategic Partners
Expected total annualized Focused on innovative next- Strong, authentic and Best-in-class companies and
production to be 45,000 kg generation products for health trusted brands organizations providing industry-
of dried cannabis from two and wellness market leading expertise, capabilities,
indoor Licensed Producers brands and products
and 100-acre outdoor farm*
Experienced Team Profitability Corporate Social Responsibility Well Capitalized
Proven management and Board Committed to a profit-oriented Substantive commitment to all Well positioned to expeditiously
of Directors with strong approach driven by disciplined stakeholders and communities execute on business plan
character, passion and exceptional investments, industry-leading with publicly stated objectives
industry experience yields, operational excellence and reporting with strong
and low-cost production corporate culture to attract and
retain best-in-class people
*PENDING HEALTH CANADA APPROVAL I N V E S T O R P R E S E N TAT I O N 23Contact Us CONNOR WHITWORTH DIRECTOR OF CORPORATE AFFAIRS CWHITWORTH@48NRTH.COM 48NORTH CANNABIS CORP. 243 QUEEN STREET WEST 2ND FLOOR TORONTO, ONTARIO CANADA M5V 1Z4 48NRTH.COM
You can also read
