PROVIDING CAPITAL TO THE WORLD'S FASTEST GROWING INDUSTRY - November 2020 - Vencanna
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PROVIDING CAPITAL TO THE WORLD’S November 2020 FASTEST GROWING INDUSTRY
Disclaimer
This corporate presentation contains “forward-looking statements”, within the meaning We believe the expectations represented by our forward-looking statements are
of applicable Canadian securities laws . Forward-looking statements can be identified by reasonable, yet there can be no assurance that such expectations will prove to be
the use of words, such as “anticipates”, or “believes”, “budget”, “estimates”, “expects” correct. The purpose of the forward-looking statements is to provide the reader with a
or “is expected”, “forecasts”, ”intends”, “plans”, “scheduled”, or variations of such words description of management’s expectations regarding our anticipated financial
and phrases or state that certain actions, events or results “could”, “may”, “might”, performance and may not be appropriate for other purposes. Furthermore, unless
“will”, “would”, or be taken, occur or be achieved. These forward-looking statements otherwise stated, the forward looking statements contained in this presentation are
relate to, among other things, our future results, levels of activity, performance, goals or made as of the date of this presentation and we do not undertake any obligation to
achievements, returns on investment prospects, regulatory conditions, investment update publicly or to revise any of the included forward-looking statements, whether as a
strategy, dividends, use of proceeds and other future events. These forward-looking result of new information, future events or otherwise unless required by applicable
statements are based on current expectations and various assumptions and analyses legislation or regulation. The forward looking statements contained in this document are
made by us in light of our experience and our perceptions of historical trends, current expressly qualified by this cautionary statement. The presentation under no
conditions and expected future developments and other factors we believe are circumstances is the be construed to be an offering of securities. Neither this
appropriate in the circumstances. These forward-looking statements involve known and presentation, nor its delivery to a recipient shall constitute an offer to sell, or the
unknown risks, uncertainties and other factors that may cause actual results or events to solicitation of an offer to buy. It is provided solely for use by prospective investors in
differ materially from those anticipated in our forward-looking statements. Readers considering their interest.
should refer to SEDAR for more information, in particular the risk factors described in the
Company’s corporate listing statement therein under the heading “Risk Factors”, which is This presentation is not an offer of the securities for sale in the United States. The
available under Top Strike Resources Corp’s profile at www.sedar.com. securities have not been registered under the U.S. Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent registration or an exemption
These factors may cause our actual performance and financial results in future periods to from registration. This presentation shall not constitute an offer to sell of the solicitation
differ materially from any estimates or projections of future performance or results of an offer to buy nor shall there by any sale of the securities in any state in which such
expressed or implied by such forward-looking statements. Forward-looking statements offer, solicitation or sale would be unlawful.
do not take into account the effect that transactions or non-recurring or other special
items announced or occurring after the statements are made have on our business. For
example, they do not include the effect of asset impairments or other charges
announced or occurring after the forward-looking statements are made. The financial
impact of such transactions and non-recurring and other special items can be complex
and necessarily depends on the facts particular to each of them.Mission Statement Vencanna aims to provide capital, liquidity and expertise to early stage
jurisdictional compliant cannabis initiatives thereby providing our
investors with a high growth cannabis investment strategy
The Target Cannabis companies consisting the right set of attributes; proven
operational success, self sustaining, possess a competitive advantage,
with the ability to scale
Achievements Made multiple investments aggregating $13 million, in a very volatile
market, with a weighted average return of 21%
The Goal A Transformative Transaction where an investment Target, through
Vencanna, enters the public market
3Management
David McGorman 25 years of experience in the financial services and investment banking industry having participated
CEO & Director in over $12 billion in transactions; including private and public equity issues, debt placements, M&A
advisory services and restructuring assignments. Held senior positions at US and Canadian financial
service firms; VP at Chase Manhattan Bank, SVP at Raymond James, MD at Haywood Securities, CEO
of Jennings Capital Inc. and Vice Chairman of Mackie Research.
Jon Sharun MBA, CPA, CSA, LEED AP, and ICD.D with over 19 diverse years of international investment, real
Executive Chairman & CFO estate, branding and business development experience. Founder and Managing Partner of Venexo
Capital, a boutique private equity firm that has raised in excess of $100 million in healthcare,
hospitality and real estate. Venexo has been an early investor into the medical cannabis sector with
over 50 international placements. Jon has received international accolades at Inbev Anheuser Busch,
won $1.8 billion in project wins at Colliers International, sits on many private, public and NFP boards,
and is both a Top Forty Under 40 and a Top 100 in Finance award winner.
Jason Ewasuik 10 years of global financial market and trading experience. Led Venexo Capital’s cannabis efforts as
VP Originations Director of Healthcare, placing over 20 cannabis investments. Previously Director of Trading at
Auspice Capital, a quantitative and systematic investment fund.
4Independent Directors
Matt Christopherson Former founder, President and CEO of HighArchy Cannabis Group, former founder and EVP of
Independent Director Keirton Inc. (provider of the world’s fastest and most dependable cannabis harvesting machines.
Twister TrimmerTM) and a co-founder of Lift & Co, Canada’s largest database of comprehensive
medical marijuana revies left by real patients..
Alan Gertner Prior CEO of HIKU Brands and founder of Tokyo Smoke (HIKU sold to Canopy Growth in Sept’18 for
Independent Director ~$600 million based on Canopy’s share price at closing). A founding member of Google's first Global
Business Strategy team and was formerly a Management Consultant at Oliver Wyman in New York.
W. Scott McGregor 20-year investment banking professional. Recently served as Executive Vice President and director of
Independent Director Merrco Payments, a secure payment gateway that provides a fully customizable method to regulate
a direct-to-consumer cannabis mail-order system in Canada.
J. Smoke Wallin Chairman of Vertical Companies and the CEO of Vertical Wellness. He previously served as Chairman
Independent Director and President of the Wine and Spirits Wholesalers of America. Smoke helped build National Wine &
Spirits (now part of RNDC) into one of the largest distributors of beer, wine, and spirits in the U.S.,
with over $1 billion in beverage sales serving more than 36,000 retail accounts. He is a frequent
speaker at global cannabis and CBD conferences as well as being a guest speaker at the likes of
Cornell, Dartmouth, USC, and Vanderbilt.
5Team Attributes
Industry Strong track record as both investor and founder of cannabis companies
Operating experience throughout the value chain; cultivation, processing,
Operations product placement, and distribution
Over 100 years of combined corporate finance, capital markets, and direct
Capital Markets investing experience
A large and growing network throughout North America within industry,
Deal Sourcing regulatory, buy side, and sell side contacts
Transaction $ Billions in equity raised, acquisitions structured, and projects financed
6Company Attributes
Relationships Corporate relationships with LPs, MSOs, Canadian dealers, and Tier I
professional service providers
Corporate Clean public company consisting of cash and interest bearing securities
Structure
Low Overhead A lean, focused, dedicated team
Consists of strategic cannabis funds, capital market professionals, senior
Shareholder Base members of LPs and MSO’s. Insiders hold over 25% basic (30% FD).
Investment A disciplined (and patient) investment thesis
Criteria
7Snapshot
Balance Sheet (July 31, 2020) Assets
Assets Galenas LLC (Ohio)
$3.7 million cash - US$4.0 million convertible debenture
US$4.0 million Galenas Debenture - Matures July 2021
US$1.3 million Galenas Debenture - Interest accrues at 8.0% p.a.
US$0.3 million Galenas New Jersey - Convertible at Vencanna’s option into 35% equity
- US$1.3 million convertible debenture
Liabilities
- Matures Aug 2021
US$1.3 million Vencanna Debenture - 9.6% interest p.a. payable monthly
No leases or other liabilities - Convertible at Vencanna’s option into 10.5% equity
Any loss experienced from the US$1.3 million Galenas Debenture
is offset against amount owed to Vencanna Debenture holders
Galenas New Jersey
- Hold a 60% and a 54% interest in NJ cultivation and dispensary
Capitalization (July 31, 2020) application respectively
Basic: 182.0 mm - The assumed value is costs incurred for the application
- Licenses were expected to be awarded in Q2 2020, though delayed due to
Warrants: 117.7 mm (avg price of $0.076) COVID-19 and legal challenge
Options: 17.5 mm (avg. price of $0.051)
- Nov 3, 2020 NJ voted in favor to legalize recreational cannabis
Insiders hold ~25% basic shares outstanding (~30% FD)
NAV is estimated to be $0.06 per share
8State Stats – New Jersey and Ohio
New Jersey Ohio
Population 8,882,190 11,689,100
Patients (1) 81,111 147,678
Medical 19 – Including anxiety, chronic pain, opioid use 21 – Including chronic pain & PTSD
Conditions disorder & PTSD
Go-Rec Ballot Initiative passed November 2020 (lawmakers Ballot Initiative planned for 2022
Initiatives approved by supermajority)
Licenses Vertical: 12 Issued (3 retail per) Cultivation: 33 Issued
Vertical: 4 pending (1 retail per) (19 Level 1, 14 Level 2)
Cultivation: 5 (Pending) Processing: 48
Dispensaries: 15 (Pending) Dispensaries: 57
Licenses Vertical: 11 (12 retail) Cultivation: 25 (13 level 1, 12 level 2)
Operating Processing: 24
Dispensaries: 52
(1) As of October 31, 2020
9Galenas Ohio
• One of 33 licensed cultivators (and one of 25 operating) in the state of Ohio and the
only organic licensed and operational cultivator in the state. Vertical three-tier-
grow, patient-focused, craft cannabis cultivator located in Akron, Ohio.
• 10,000 sq. ft. facility won Architect Newspaper’s 2019 Best Green Building Award,
describing the facility as a ”pharmaceutical-grade environment that meets highly
technical specifications” providing “a better-quality product with greater yields
while using 90 percent less water and 35 percent less energy than other cannabis
facilities”.
• Facility currently has ~5,000 sq. ft. of cultivation with potential expansion on the
site beyond the current facility. Facility has reserved 4,000 sq. ft. for a processing
lab and kitchen.
• Received their Certificate of Operation for cultivation April 2019. Product is sold in
all 52 of the operational Ohio dispensaries (currently on 5th harvest).
• Leadership team is comprised of professionals from several fields including
horticulture, manufacturing, law, sales and marketing, supply chain management,
quality control, and product development.
• Due to COVID-19, Ohio recently changed a number of rules for buying cannabis;
patients can make orders over the phone, curbside delivery is allowed, and most
importantly Ohio's 90-day limit has been split into two 45-day purchasing windows
and allowing patients to backdate their purchase allotment.
• Ohio 2019 medical cannabis sales were approximately US$56 million. In 2020, OH
sales will be in excess of US$200 million (projected 2021 sales around US$350
million or more).
• Galenas Ohio had revenues of US$400k for the month of October and expects
revenues of US$500k for January 2021.
Sources: Marijuana Business Factbook 2020
10US Cannabis – 2020 in Review
US Cannabis Index Decline
US Mergers Clear Anti-Trust Hurdles
• April ‘20 MSO Index down 85% YOYl
• Cresco / Origin House, Curaleaf / Select & Grassroots
Bankruptcies on the Rise US Cannabis Index Rise After March/April Bottom
• DionyMed, GenCanna, Wayland, Invictus • US Index rises over 300% from March low
Changes at Senior Management MSO Showing Q3oQ2 Growth
• Canopy Growth, Sundial, MedMen, Aurora • MSO average revenue & EBITDA growth of 48% & 88%
Corporate Share Restructuring US States legalization trend continues
• Tilt, MedMen, iAnthus • Medical: MS & SD, Rec: AZ, MT, NJ & SD
US Mergers Cancelled after Anti-Trust Delays MORE Act Vote
• MedMen, GGB, Cresco, Harvest • The House of Representatives passes the MORE
Act Vote 228-164
11Timeline
Top Strike Resources Corp. (dba Vencanna announces strategic loan; Vencanna announces the retirement of Vencanna
Vencanna Ventures “Vencanna”) $4 million to Vertical Companies the $4 million loan to Vertical, along with continues to
completes Management Recap (“Vertical”) $0.71 million in aggregate interest paid evaluate
(30.0% p.a.) opportunities
Raises $9.6 million ($2.7 million at Smoke Wallin, Vice-Chairman of
$0.05 – Insider PP, and $6.9 million at Vertical, joins Vencanna’s BOD Vencanna announces strategic loan; with a focus
$0.06 - Public PP) US$3.3 Convertible Note in Galenas, LLC on U.S.
(“Galenas OH”) operations
De-lists on the TSX Venture and lists
and
on the Canadian Stock Exchange Galenas OH is a private, one of 32
initiatives
(VENI:CSE) licensed cultivators in the state of Ohio.
Sept / Jan /
July Jan Feb Jul
Oct May Nov+
2019 2020 2020 2020
2018 2019
Vencanna announces strategic Vencanna announces issuance of Since inception Vencanna
Vencanna announces majority
loan; $3.25 million to Ionic Brands US$1.3 million convertible collected $1 million in
ownership in Galenas New Jersey LLC
debenture due in July 2022 interest and earned
May 29, Ionic Brands repays loan (“Galenas NJ”)
another $760k in accrued
plus $0.286 million in interest Vencanna uses proceeds from
Galenas NJ is private company holding interest, which has more
(26.5% p.a.) convertible debenture to purchase
applications to commence cultivation than offset the ongoing
US$1.3 million convertible note in
Exclusivity period expires or dispensary medical cannabis costs thereby
Galenas OH
operations in New Jersey maintaining its corporate
NAV of $0.06 per share
12The Path Forward – US Markets
13Vencanna Ventures
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