48NORTH CANNABIS CORP. TSXV: NRTH - INVESTOR PRESENTATION - MAY 2019 - may 2019 48north cannabis corp. tsxv ...
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48N ORTH CANNABIS C ORP.
TSXV: NRTH
IN V E S T OR P RE S E N TAT I ON - M AY 2019
Forward-Looking Statements
Disclaimer And Cautionary Statements
Certain information included in this presentation, which is prepared as of May 21, 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).
© 2019 48North Cannabis Corp. All rights reserved. 48North Cannabis Corp., the 48North logos, and all other products or service names are trademarks
of 48North Cannabis Corp. or their respective owners.
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; 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 Products
48North is focused on the next-generation of cannabis. We are the first publicly-traded Licensed Producer to have been
granted an outdoor cultivation license from Health Canada. Annually, Good Farm is expected to produce over 40,000 kg
at what is expected to be lowest per gram in the country.
Next-generation cannabis products are expected to make up 70 per cent of the recreational cannabis market. It is projected that
total North American spending on edibles and beverages alone will reach $6B CAD by 2022.1 48North is focused on launching
a suite of next-generation products for retail sale in Fall 2019.
Next-generation cannabis products require low-cost, extracted cannabis ingredients. 48North’s Good Farm is expected to
Low Cost provide cannabis at the lowest cost in the country, giving the company a significant advantage in the development and
manufacturing of value-added cannabis products.
We are a significant step ahead of our competition. We are the only publicly traded Licensed Producer in the country
Powerful
FirstEcosystem
Mover with an outdoor cultivation site. Seasonal realities dictate that 48North will maintain this advantage until atleast the 2020
growing season.
48North is uniquely positioned to leverage significant and low-cost production to form strategic partnerships with CPG brands
Powerful Ecosystem looking to enter the cannabis space.
We are building, strong, authentic, well-recognized and trusted brands for consumers who believe in premium
Brands Matter next-generation cannabis products.
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
farm in Brant processing facility in processing facility
County, Ontario Brantford, Ontario in Kirkland
Lake, Ontario
Premium sun grown Premium Contract manufacturing Premium
organic cannabis indoor -grown and supply wholesale: indoor -grown
for retail and organic cannabis for • Full spectrum oil cannabis for
next generation retail distribution • Flower retail distribution
products • Distillate/isolate
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 Good Farm providing the company with organic, sun-grown cannabis and a significant first-mover advantage in the
production of low-cost, next-generation, extract-based cannabis products.
• In addition, 48North operates two indoor cannabis production facilities in Ontario with an annualized production capacity of approxi-
mately 5,000 kg.
OUTDOOR CULTIVATION INDOOR CULTIVATION, PROCESSING AND MANUFACTURING
Good Farm 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 public company to be granted outdoor of dried cannabis be 2,500 kg of dried cannabis
cultivation licence from 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
I N V E S T O R P R E S E N TAT I O N 5
Our Differentiators
1
Outdoor Cultivation
2
Organic Cannabis 1
3
Authentic Brands
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 publicly traded Licensed Producer to be granted an outdoor cultivation
licence from Health Canada
• Largest cultivation facility in Canada, over 3.7 million square feet of
cultivation space, expected to produce over 40,000 kilograms of cannabis
• Supply agreements:
• A historic outdoor cannabis agreement with the SQDC (the exclusive
distributor of cannabis in Quebec) for 1,200 kg of dried cannabis
• A supply agreement to provide 2,460 kilograms of dried
cannabis to AGLC, the wholesaler of Alberta, which leads the country in
both cannabis stores and per capita cannabis sales
• An agreement with Humble + Fume for 6,000 kg of dried
cannabis and trim
• 48North expects to cultivate cannabis at the lowest cost per gram in country,
25 cents per gram. In comparison, average indoor grown cannabis is grown at
$2 a gram and greenhouse grown cannabis is grown at 90¢
• 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
methods of cannabis cultivation in the country
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
May 2019 June 2019 Oct 2019
Good Farm licensed Begin outdoor Launch suite of
cannabis cultivation next-generation
at 100-acre farm cannabis products
and harvest outdoor
Begin retail cannabis, subject to
distribution regulatory 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 May 21, 2019)
Basic Common Shares Outstanding 167 , 076, 965
Options and RSU’s 18, 509 , 410
Broker Compensation Options and Warrants 1 , 846, 457
Warrants
22 , 586, 072
Total Issue d and Outstanding (Fully Dilute d) 210 , 018, 509
Cash And Debt NRTH (TSX-V)
*As of May 21, 2019
Cash (as of March 9 , 2019 ) 1 $17 , 990 , 481 Stock Price: $1.19
Avera ge Volume: 1,750,000
Market Cap: 195,000,000
52 We ek High – 1.69
1
D oes not include April 2, 2019 bought deal of $28.75MM or warrant
52 We ek Low – 0.42
a cceleration of $13.5MM on May 2, 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
Latitude
3
F8
4
Mother & Clone
5
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
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 18BRAND
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 19BRAND
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 20BRAND 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 21
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
I N V E S T O R P R E S E N TAT I O N 22Contact 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
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