High Ground Cannabis Investor Presentation June 2021 - high-ground.ca - High Ground Medica
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High Ground
Cannabis
Investor Presentation
June 2021
1 high-ground.ca
Disclaimer
This Presentation contains forward-looking statements that relate to the Company’s current expectations and views of future events . This Presentation does not
contain all of the information you should consider before purchasing securities of the Company.
In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”,
“plan”, “indicate”, “seek”, “believe”, “predict” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward-looking
statements. The Company has based these forward-looking statements on its current expectations and projections about future events and financial trends that it
believes might affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other
things, statements relating to: the Company’s expectations regarding its development, operations, growth and capital cost; The Company’s expectations regarding
completion of the construction of the facility; the Company’s anticipated competitive advantages; the Company’s intention and ability to grow the business and its
operations; including its ability to complete business acquisitions and integrate acquired businesses; the Company’s expectations regarding demand for product and
product sales prices; expectations with respect to future production costs and capacity; expectations regarding growth plans and strategies; expectations with respect
to the approval of the Company’s cannabis licenses; and the Company’s expected business objectives.
Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends,
current conditions and expected future developments and other factors it believes are appropriate and are subject to risks and uncertainties. In making the forward
looking statements included in this Presentation, the Company has made various material assumptions, including but not limited to (i) obtaining the necessary
regulatory approvals; (ii) that regulatory requirements will be maintained; (iii) general business and economic conditions; (iv) the Company’s ability to successfully
execute its plans and intentions; (v) the availability of financing on reasonable terms; (vi) the Company’s ability to attract and retain skilled staff; (vii) market
competition; (viii) the products and technology offered by the Company’s competitors; and (ix) that our current good relationships with our suppliers, service providers
and other third parties will be maintained. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and
we cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, prospective purchasers
of the Company’s securities should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform
to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors,.
The Company’s forward-looking statements are based on the reasonable beliefs, expectations and opinions of management. Although the Company has attempted to
identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that
cause results not to be as anticipated, estimated or intended. There is no assurance that such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. We do not
undertake to update or revise any forward-looking statements, except as, and to the extent required by, applicable securities laws in Canada.
2 high-ground.ca
Investment Overview Our Mission:
To provide high quality cannabis
for healthier lives
Scalable, Stacked Wet Cannabis Processed in European
Oyen Facility Cultivation Trimmed/Shipped Malta Distribution High Ground business plan:
❖ Opportunity: Supply medical grade EU-GMP certified cannabis to ❖ Primary focus: Medical sales to
European distributors at premium price points on contracted volumes European markets - $5-8/gm
revenue
❖ Oyen Facility: Production, Processing, Sales, and Exports
❖ Secondary focus: Innovative edible
Cultivation: Aeroponic triple deck units, facility footprint: 133,000 sq.ft.
products for the Canadian market
❖ Malta Facility: Processing, Packaging, and Exports ❖ Secure supply agreements first then
EU-GMP certification; Facility footprint: 19,000 sq. ft. build capacity to serve; not build
capacity then hope for demand
❖ Production: 5,000,000 grams for Year 1, total capacity is in excess of
❖ Strict cost control measures
41,000,000 grams at full development
targeting:
Export Advantage
High Ground targets the European medical market supplemented by the Canadian market:
1. Exporting higher valued cannabis to 4. Diversified distribution strategy into
Europe, ($5-8/gram), to be distributed provincial recreational sales channels
into the European medical markets of dry flower, pre-rolls, and powderized
through local partnerships and supply oil derivatives to meet growing adult
agreements. demand
2. 2028 European medical market: US$83 5. Accelerated path to Health Canada
billion with the German market Licensed production due to recent
doubling ever year. regulatory process amendments
Total European market in 2028: 6. Low capital costs and a large and
US$135 billion, (Prohibition Partners scalable production footprint that
estimate) could make High Ground one of the
3. Efficient process to achieve cultivation largest Aeroponic/Hydroponic
costs below $0.50/gram and all-in producers in Canada
costs below $2.50/gram
high-ground.ca
*contains requirements for production areas, storage areas, and QC areas that are absent in GPP
**Major requirements of EU-GMP include Quality System Requirements, Personnel, Premises and Equipment, Documentation, Production, Quality Control,
Quality Differentiation Outsourced Activities, Complaint/ Defect/ Recall and Self Inspection.
Premium Bulk
❖ Indoor: Aeroponic/Hydroponic
❖ Greenhouse/Outdoor
❖ Produced under GACP standards*
❖ Produced in Canada to GPP standards
❖ Positioned for EU-GMP certification**
❖ Cannot meet EU-GMP certification
❖ Low risk of contamination
❖ High risk of contamination
❖ Stability Program required for GMP
❖ Stability program not required for GPP
❖ Inspector from Europe must approve to GMP
❖ Health Canada will not inspect to GMP standard
standard
❖ Variability of potency does not meet medical
❖ Variability of potency less than 10% per medical
requirements: often over 30% variability
requirements
❖ Bulk cannabis: $0.50 - $2/gram
❖ Premium dry cannabis: projected $5-$8/gram,
(GER)
High Ground is positioned to become the largest aeroponic/hydroponic producer in Canada
5 high-ground.ca
Markets
MALTA
• Product imported into
Malta facility
• Product processed and
ALBERTA, CANADA
exported to EU
• Headquarters located
countries
in Calgary
• Facility located at Oyen
GERMANY
• Supply agreements
POLAND with pharmaceutical
• Supply agreement with distributors
pharmaceutical
distributor
6 high-ground.ca
German Market
Medical cannabis Max 10% variation of
legalized in 2017 Germany’s medical cannabis THC and/or CBD
market is projected to exceed potency
Estimated current
$1.4 billion by 2024.* Projected $5-8/gram
monthly demand: price for imported
3000 kg product
71% of prescriptions
Domestic production Cannabis in are for pain
to begin in 2021 Germany Facts management
National Health
No current domestic
Insurance plan
production
covers cannabis
All major political parties
EU-GMP standards = support some form of cannabis Over 140,000
no greenhouses and
outdoor growing
legalization patients in 2019
*Arcview Market Research and BDS Analytics report 2019
7 high-ground.ca
Malta: Gateway to European Markets
EU Production
Member Competition
European Domestic:
Projected EU Medical higher power, labour, &
Cannabis Market 2028 - real estate costs
$83 Billion Latin America/Africa:
regulatory, labour,
infrastructure & compliance
challenges
Pharmaceutical Tax Incentives Import
Sector & Low Base Process
Export EU-GMP
Est. March 2018 Effective 5% tax rate + certified flower to
Strong sector with additional investment European medical
clear procedures and incentives) distributors which then
policies sell to pharmacies at
~$14/gram
8 high-ground.ca
Signed Distribution Agreements
High Ground has secured medical
distribution agreements in Germany
❖ Distribution partner supplies 20% of German cannabis
market
❖ Price is FOB: Meaning no supply chain logistics or
responsibilities by High Ground
❖ Volume of 2400 kg/yr in year 1 and 4800 kg/year in
year 2
❖ Dry flower to be supplied
❖ Agreement expandable to other European
jurisdictions
❖ Non-exclusive so High Ground can serve other
jurisdictions and suppliers
❖ The German National Health Service, (almost all
Germans are members), pays for qualified
prescriptions: ~60% of all prescriptions
9 high-ground.ca
Distribution Agreements under Negotiation
High Ground has multiple agreements
under negotiation
❖ Current and imminent suppliers of cannabis to the Germany
German, Polish, and Maltese medical markets
❖ Total market size: 120 million people. Total market
potential estimated at 3% penetration: 3.6 million
potential prescription holders
❖ Combined Volume of 7400 kg/year in year one and
expandable in following years
❖ Projected pricing between $5-$8/gram
❖ Dry flower to be supplied
❖ Agreement expandable to other European jurisdictions
Poland
❖ Non-exclusive so High Ground can serve other
jurisdictions and suppliers
❖ Polish and Maltese markets do not reimburse medical
cannabis prescription costs Malta
❖ Attractive new market: Czech Republic: nationally
insured medical cannabis program
10 high-ground.caCanadian Surplus/Deficit UK/Germany Medical Market
1400
1200
European
1000 Supply Gap:
THOUSANDS OF KGS
German/UK
800 market could
absorb any
surplus amount
600
of Canadian
EU-GMP
400
certified
production
200
0
2022 Estimated Cannabis
11 Supply andhigh-ground.ca
DemandProduct Family
In comparison to other routes of
administration, the bioavailability of CBD
when administered using Oral Tab has been
tested in numerous National Institutes of
Health (NIH) funded studies which
discovered that 40-50% of the CBD reaches
systemic circulation where it can have
effect.
To contrast, non-smoking forms such as
edibles often deliver only 4-11% of the listed
amount of active ingredients.
12 high-ground.caProduct Family
DRY FLOWER DISSOLVABLE
13 high-ground.caValue-Add Strategies
Excess Flower Trim Thin Strips Powderized
❖ Trim is the leaves and stems that
Pre-roll strategy
are lower content THC and CBD ❖ Bioavailability of cannabis ❖ The Powder solutions strategy
❖ Medical quality flower commands ❖ Not ideal for flower and direct
delivered through thin film allows us leverage broad consumer
premium price strips can be as high as 40-50% appeal of health focused products
consumption
❖ Low cost manufacturing and ❖ High Ground will have a
which is equivalent to smoking
or vaping rates.
packaging process Tear Packets
❖ Distribution through Provincial
processor toll process the trim
into an oil to High Ground
❖ Faster onset and more
Agencies consistent effect than edibles
specifications
❖ Niche market for production in excess
as well as not being impacted Honey
❖ Next step is to process the oil by the gastrointenstinal
of supply contract using a granulation process that system.
❖ Outdoor and greenhouse production can be used for a multitude of Soluble Tablets
is lower priced due to higher potency applications
variability which gets processed into Gum
pre-rolls
14 high-ground.caFunctional and Psychedelic Mushrooms
FUNCTIONAL About Types Medical Properties Path Forward
MUSHROOMS • Used in natural
• Reishi, • Anti-inflammatory • Construct cultivation rooms
health food and • Antioxidants at Oyen
• Lion’s Mane • Anti-Aging • Procure high quality
nutraceutical
• Shiitake • Enhance Exercise performance Genetics for cultivation
industry • Skin health • Grow organic quality
• TurkeyTail
• Human health • Cordyceps
•
•
Anti-tumor properties
Immune support & modulation
functional mushroom
varieties
optimization • Oyster • Cardiovascular health • Dry and process harvested
• Non psychoactive mushrooms •
•
Beta-glucan
Amino acid and Vitamin rich •
mushrooms
Whole dry and powdered
• Chaga • Anti-microbial properties formulations
PSYCHEDELIC About Types Medical Properties Path Foward
MUSHROOMS • Psylocibin: active • Psilocybe cubensis Mental Health therapies
including: • Apply Health Canada
psychoactive compound • Psilocybe semilanceata research exemption license
• Increasing evidence that (Liberty Caps) • Depression • Apply Health Canada dealer
psilocybin (active • Psilocybe • Anxiety license
compound) therapy is cyanensis (wavy caps) • Obsessive –Compulsive • Cultivated organic quality
disorder psychedelic mushrooms
effect for a multitude of • Psilocybe varieties
• Quitting smoking, alcohol and
physical and mental tampanensis (magic • Extraction and purification
cocaine addiction
health ailments truffles) • Cluster headaches of psilocybin and other
• Combat stress, PTSD, • Psilocybe • Cancer related psychological bioactive compounds
azurescens (Blue distress • Analyse and quantify
depression and psilocybin
addiction Foot)
15 high-ground.ca1Source: research & market April 2020.
Functional and Psychedelic Mushrooms 4
3
2(https://formulabotanica.com/global-organic-beauty-market-22bn-2024/)
(https://www.grandviewresearch.com/press-release/global-central-nervous-system-cns-therapeutic-market)
(https://www.marijuanamoment.net/nearly-100-cities-are-considering-decriminalizing-psychedelics-map-shows/)
The Opportunity & The Numbers
❖ The global functional mushroom market is ❖ Treatment for mental health / neurological
expected to reach $34.3 Billion USD by 2024, disorders: $205B by 2028 3
registering a CAGR of 8.04% during the
❖ Jurisdictions in US are pursuing the
forecast period (2019-2024).1
decriminalization or legalization of psilocybin
❖ Natural Health and Beauty global Market to and seeking its reclassification to what’s
reach $54B by 20272 known as a “Nootropic Vitamin” — a term
used to define a range of substances that
enhance cognitive functioning in the brain
The global functional mushroom market is expected to reach $34.3 Billion USD by 2024
16 high-ground.caThe High Ground Advantage
❖ Pre-existing cannabis connections to Europe, and partnerships
established in Canada for medicinal purposes.
❖ High Ground’s EU-GMP compliant Malta facility available for
European market.
❖ Currently legal GMP quality psilocybin is not readily available and
doesn’t meet the quality standards set by Health Canada for clinical
trials.
❖ Highly competent cultivation and extraction teams at High ground
with a network of medical doctors and university researchers
❖ Cultivation: Grow highest quality organic functional and psychedelic
mushroom strains in 16,000 sq. f indoor space
❖ Opportunity to supply whole dry mushroom and extracted psilocybin
to Health Canada certified research programs, clinical trials &
academic studies
❖ Develop High Ground brand for functional mushrooms in
nutraceutical and natural health formulations.
❖ White label supply to growing market
❖ International export to our facility in Europe for EU-GMP
certification.
17 high-ground.caFunctional and Psychedelic Mushrooms
Our Cultivation Process
1
The introduction of the cubensis to a It is critical that this is done in a sterile Typically, if spores are being used, a
sterile substrate, either by using
Inoculation spores or with living mycelium from
environment; contaminants are most
likely to cause issues during this phase.
syringe filled with a spore solution is
injected into the subsrate in multiple
an existing colony. places to expedite colonization.
2 Colonization
The spores/mycelium grow and
spread throughout the entire
subsrate, colonizing it.
The temperature should be kept at
about 24-27°C. Mycelium should not be
exposed to light during this phase.
Colonizing can take 2 – 5 weeks
depending on the subsrate,
environment, and volume.
The mucelium is induced to Mycelium should receive ambient light. Humidity should be kept as high as
3 Fruiting
produce fruiting bodies
(mushrooms), to create spores
and continue it life cycle.
Ventilation is very important, the
cubensis needs oxygen and produces
CO2.
possible for mushrooms to grow to
maturity and are usually ready to
harvest in 2-4 weeks.
Mushrooms are ready for harvest The psilocybin content begins to Mycelium can also be rehydrated
4 Harvesting
with peak psilocybin content just as
they reach the point in which the
veil begins to break.
decrease once the mushroom releases
its spores, this appears as black stains
on the mushroom
after harvest and may produce 2-3
batches of mushrooms.
high-ground.caFunctional and Psychedelic Mushrooms
Product Examples
high-ground.caOyen Facility
FACILITY AND
PROPERTY SIZE
GROW AREA
133,000 sq.ft. ADDITIONAL
164 acres BENEFITS
Up to 125,000 sq ft
of canopy using
double stacked -Low property
AEssence tables taxes
-Less than 5 miles
to town with all
municipal services
STRONG LOCAL SUPPORT
BACK ROW: Mayor Douglas Jones, Jeff Callaway, CAO of Oyen Noreen Rude
FRONT ROW: MLA Nate Horner; Oyen & District Multiplex Director Heather Norris
20 high-ground.caScalable Development
❖ Development will match Supply
Agreements
❖ Efficient scalable growth
❖ Continuous production for efficiency
❖ Over 40,000 kg/year of annualized
production
❖ Bulk package flower for European
medical market with excess flower for
pre-rolls
❖ Manufacture edibles from trim
21 high-ground.caSenior Management and Directors
Jeff Callaway Keith Macdonald: Surinder Singh Benil Sable Jonathan Denis, David Parker Jane Kelly
President/CEO, Chairman/CFO, Ph.D QC: Director VP Business Director
Director Director VP Operations; QAP Development
Master Grower Former Attorney Principal: Vision
Director of Cannabis General of Principal: DJ Contracting
Financial advisor
Drakkar, Bellatrix, Compliance, Alberta, Legal Parker &
for 16 years, co- RMMI, Ph.D, numerous LP B. Sc U of
President of Advisor to the Associates,
founder of a license Alberta
Bamako U of Canadian Political Advisor,
licensed cannabis Investment applications Strategist
Saskatchewan, Cannabis Entrepreneur
producer, Management McGill Chamber, who has
founder and CEO Principal of founded,
of High Ground Guardian Law managed, sold
Cannabis, CEO of Group several
Blacksteel agriculture &
Energy, Algonaut transportation
Capital businesses
22 high-ground.cawww.high-ground.ca
info@high-ground.ca
(ph): 403-879-1171
CEO
Jeff Callaway
ceo@high-ground.ca
24 high-ground.caAppendix: Cannabis: Pharmacy in a Plant
❖ Over 500 phytochemicals including
❖ Cannabinoids
❖ Terpenes
❖ Flavonoids
❖ Trillions of possible phytochemical combinations
❖ For medical use, education and medical
community endorsement efforts are growing
❖ Vast majority of perception about what
cannabis is, has done, and can do is anecdotal
and not based on medical studies
❖ Evidence-based cannabis research is critical in
legitimatizing its medical use.
❖ Medical use is growing strongly across all legal
European medical markets as an alternative,
(for ex: doubling every year in Germany
according to our distribution partners)
25 high-ground.caYou can also read
