COMPANY OVERVIEW CNSX: IAN OTCQB: ITHUF - September 2018 - cloudfront.net
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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 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: ITHUF
GrowHealthy: 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: ITHUF
New 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: ITHUF
Citiva: 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: ITHUF
Groundbreaking 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: ITHUF
Massachusetts: 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: ITHUF
Mayflower: 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: ITHUF
Why 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: ITHUF
Grassroots: 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: ITHUF
The 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: ITHUF
iANTHUS INVESTMENT THESIS CNSX: IAN │ OTCQB: ITHUF
East 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: ITHUF
Potential 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: ITHUF
Leadership 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: ITHUF
And 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: ITHUF
IANTH 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: ITHUF
The 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: ITHUF
Canada, 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: ITHUF
iAnthus 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: ITHUF
QUESTIONS? Contact Information: Investor Relations │ 416.428.3533 │ investors@ianthuscapital.com
iAnthus 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 CNSX: IAN │ OTCQB: ITHUF
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