Investor Presentation Q2 2021 - TSXV: EXP, FSE: MB31, OTCQB:EXPFF www.experionwellness.com www.citizenstash.com - Citizen Stash
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Investor Presentation Q2 2021
TSXV: EXP, FSE: MB31, OTCQB:EXPFF
www.experionwellness.com
www.citizenstash.com
1
Disclaimer
NOTICE TO RECIPIENT This presentation (the "Presentation") of Experion (the "Company") is an overview statement. The forward-looking statements and information included in this Presentation are made as of
only and does not contain all the information that a prospective investor may require to make investment the date of this Presentation and the Company assumes no obligation to update such forward-looking
decisions. This Presentation is for information purposes only and does not constitute an offer to sell or a statements to reflect new information, subsequent events or otherwise unless required by applicable
solicitation to buy any securities of the Company. In making an investment decision, investors must rely securities legislation.
on their own examination of the Company, including the merits and risks involved. .
CAUTIONARY NOTE REGARDING FUTURE-ORIENTED FINANCIAL INFORMATION
FORWARD LOOKING STATEMENTS
To the extent any forward-looking statement in this Presentation constitutes "future-oriented financial
This Presentation contains forward-looking statements and forward-looking information. Often, but not information" or "financial outlooks" within the meaning of applicable Canadian securities laws, such
always, forward-looking statements can be identified by the use of words or phrases or state that certain information
actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. is being provided to demonstrate the anticipated market penetration and the reader is cautioned that
Forward-looking statements involve known and unknown words such as "plans", "expects" or "does not this information may not be appropriate for any other purpose and the reader should not place undue
expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or reliance on such future-oriented financial information and financial outlooks. Future-oriented financial
variations of such words and risks, uncertainties and other factors which may cause the actual results, information and financial outlooks, as with forward-looking statements generally, are, without limitation,
performance or achievements of the Company to be materially different from any future results, based on the assumptions and subject to risks as set out above under the heading "Forward-Looking
performance or achievements expressed or implied by the forward-looking statements and information. Statements". The Company’s actual financial position and results of operations may differ materially from
management’s current expectations and, as a result, the Company’s revenue and expenses may differ
Examples of such statements include: (A) the financial forecast of the Company; (B) the intention to grow materially from the revenue and expenses profiles provided in this presentation. Such information is
the business and operations of the Company; (C) anticipated timing for the availability of the Company’s presented for illustrative purposes only and may not be an indication of the Company’s actual financial
products to market and expected sale prices; (D) expected growth in the number of users of medical and position or results of operations.
recreational marijuana anticipated; and (E) the expansion of the Company’s business into other revenue
streams. THIRD PARTY INFORMATION
Actual results and developments are likely to differ, and may differ materially, from those expressed or This Presentation includes market and industry data which was obtained from various publicly available
implied by the forward-looking statements contained in this Presentation. Such forward-looking sources and other sources believed by the Company to be true. Although the Company believes it to be
statements are based on a number of assumptions which may prove to be incorrect, including, but not reliable, the Company has not independently verified any of the data from third-party sources referred to
limited to: expectations regarding the ability of the Company to raise capital and grow through in this presentation, or analyzed or verified the underlying reports relied upon or referred to by such
acquisitions; growth strategy, joint venture, other commercial opportunities and the ability of the sources, or ascertained the underlying assumptions relied upon by such sources. The Company does
Company to carry out its stated work program; and expected sources and uses of capital. not make any representation as to the accuracy of such information.
There can be no assurance that forward-looking 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. The forward-looking statements and
information contained in this Presentation are expressly qualified in their entirety by this cautionary
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Why Experion
Best at Building Premium Brands
• One of the best-known premium brands: Citizen Stash
• Created through proprietary IP & genetics
National Distribution
• Serving 7 provinces and territories
• Built the supply chain and network to support a
national brand
Proven Strategy and Performance
• Scale craft efficiently with co-farming model
• Capital efficient supply and inventory
• 405% increase in Q1 2021 vs Q1 2020
• Adjusted positive EBITDA in Q1 2021
The Opportunity
• Highly scalable
• Operating in a growing market
• Significant growth opportunities
• Undervalued to peers
Experion Holdings Ltd. is a publicly traded (TSXV:EXP, OTCQB:EXPFF) licensed producer of premium cannabis brands and products and is best
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known for its well-known, rapidly growing Adult-Use premium brand Citizen Stash.
What We Do
Develop Premium IP
• Develop new strains from unique
genetic bank
• First to market, trendsetting products
• Set quality standards
• Industry experience
Partner for Unlimited Scale
• Scale IP with co-farmers
• Supply craft premium products Nationally
• High return on invested capital
Brand and Distribute
• Citizen Stash, premium cannabis
products
• Sell into retail adult use market
• Nationally, into 7 provinces / territories
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Who We Are
JARRETT MALNARICK, Chief Executive Officer
• Over 20 years of executive management including 10 years leading
public companies on various exchanges. Leading rapidly growing
companies with extensive experience in various food and beverage,
natural health, pharmaceutical and agriculture companies and
directly involved in cannabis for over 7 years in Canada and the US.
KERRY BIGGS, Chief Financial Officer
• Over 23 years finance and business experience, including prior
publicly traded CFO experience within the Canadian cannabis sector.
Mr. Biggs has also worked at lululemon athletica, where he was Vice
President, Treasurer looking after all capital markets, liquidity,
treasury and insurance activities, as well as other senior finance roles
at Global Container Terminals (OTPP asset), Finning International and
Enbridge Inc.
DARYN MEDWID, Chief Operating Officer
• Over 20 years of senior management experience in
beverage alcohol including MolsonCoors and Diageo and is
excited to now bring his skillset into the emerging cannabis
space. Well known for his positive leadership style, Mr.
Medwid brings an entrepreneurial perspective to the
workplace helping transform a businesses operations by
creating high performing teams guided by a consumer first
strategic vision.
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Performance Quarterly Gross Revenue Annual Gross Revenue
Financial Performance
• Q1 2021 revenue of $4.1M is 53% higher
than Q4 2020
• Q1 2021 is 405% higher than the same
three-month period of Q1 2020
• Sixth consecutive growth quarter
• Q1 2021 was the first positive adjusted Key Performance Metrics Three Months Ended Fiscal Year Ended
EBITDA quarter in the Company’s history
Feb 28, Nov 30, Aug 31, Feb 29, Nov 30, Nov 30,
(000's of Cad dollars, except per gram metrics) 2021 2020 2020 2020 2020 2019
• FY 2020 sales were $7.3M, an increase of Grams Sold 481,632 317,933 240,017 99,978 848,008 290,293
366% over FY 2019 sales of $1.6M Av erage Realized Price (Rev enue) per Gram 8.35 8.09 8.74 6.60 8.44 5.36
Gross Rev enue 4,060 2,650 2,124 804 7,297 1,567
*1
Net Rev enue 3,419 2,228 1,781 679 6,130 1,415
• Annualize revenues of ~$15M - $16M *2
Gross Profit before Fair Value Adjustments 911 671 448 24 1,441 (237)
*3
Selling, General and Administration Expense 1,018 733 598 986 3,205 5,966
• Average price per gram above $8.00, Net I ncome / (Loss) *4
(89) (393) (188) (1,300) (1,477) (16,153)
Citizen Stash premium brand achieves Adjusted EBI TDA 36 (305) (149) (799) (1,416) (5,523)
pricing well above industry average Number of Shares Outstanding (000's) 100,762 100,762 100,762 100,505 100,762 100,475
*1 - Net of excise tax * 2 - Nov 30/20 adjusted for a one-time inv entory write-down of $376k
*3 - Nov 30/20 adjusted for one-time items * 4 - Nov 30/20 adjusted for one-time items/goodwill/intangible write-down of $2.9 mm
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Performance
Brand and Product Performance
• Nominated best grower 2019 and best
flower 2020, Canadian Consumer awards
• National distribution servicing 7 provinces
and territories. 350% increase in active
SKUs over 2020
• Top 20 supplier in Ontario in 3 months.
MAC1 top seller over $50/jar in Ontario
• 500,000+ pre-rolls sold in first 6 months
of launch
• Top 5 pre-roll supplier in Ontario, beating
Aurora, Sundial, OrganiGram, 7acres
• Soft chews available nationally, top 13
supplier to Ontario within three-months
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Business Model
Asset Light
• Low overhead and capital cost
• Market leading Return on Invested
Capital (“ROIC”)
• Supply becomes variable cost
• Results in a quicker path to profit
Cost Efficient with Unlimited Scale
• Upfront capex and costly infrastructure
to ramp cultivation not required
• Expand as needed with partners
Leverage
• Genetics and IP
• Co-farming developed partnerships
• National distribution and premium brand
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The Opportunity
Under-valued Company
“Canadian LP’s started to bottom out and settle at the ~5x revenue
level in the fall of 2019 and they have remained in that range since,
which gives us increased confidence regarding valuation support
going forward.”
Source: Desjardins Capital Markets, FactSet. 2021 outlook—hindsight 2020 as the cannabis
industry advances, December 17, 2020
• Experion’s quarterly revenue is in line, and its profitability and
margin exceeds its peers
(In CAD$,
Capitalization Table
except share data)
• Experion currently trades at a discounted revenue multiple to its
peers – a 2.1x net revenue (based on latest quarter annualized) Shares Price: May 14, 2020 $0.26
versus a peer average of 8.9x 52 weeks: high / low $0.495 / $0.07
Shares Outstanding 100.1M
• At the 8.9x average multiple, Experion’s market capitalization Fully Diluted Shares Outstanding 104.1M
has significant upside with an implied equity value of $120M
Market Capitalization $26.0M
Debt Outstanding $1.5M
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The Opportunity
Growing Market
• Canadian market annualized as a $4B
market in 2021 and $5B in 2022
• 60% of all cannabis consumed in Canada
continues to be flower
• Premium ‘flower’ product continues to be
in demand
Citizen Stash Well Positioned *Cannabis Market Projections for the US and Canada, April 2021, Headset.io
• Actively operating in a growing market
• Branded as premium cannabis flower
• Flower will continue to drive market
• Growing with the market – six
consecutive sales growth quarters
10The Opportunity
Market Share in Canada Next Steps to Fuel Growth
• Experion has significant runway to grow • Continue product development and
sales in a capital efficient manner in 2021 diversification of in-demand strains and
and beyond products
• Canadian market annualized as a $4B • Increase listings and SKUs with Ontario,
Market in 2021 and $5B in 2022 Alberta and BC
• 60% of all cannabis consumed in Canada • Distribute to all provinces and territories,
continues to be flower adding Quebec and Maritimes
• ~20% of the flower market is considered • Launch new product line of extractions and
premium or super-premium concentrates nationally
• Citizen Stash goal is to capture 10% to
• Add processing capacity into
20% of the premium flower market, central/eastern Canada
translating to $50M to $100M in sales
• Experion is positioned to execute • Explore international opportunities
11• Popular premium brand with following and national distribution – Citizen Stash
• Proven and scalable ‘aggregation and distribution’ model, eliminating the need for
costly assets to increase supply
Value Proposition • Growth company with F2020 sale increased 366% over F2019 and Q1 2021 sales
that increased 405% over Q1 2020
• Operating in a growing market in the premium segment
• Attractive entry point valuation, as Experion trades at a discount to its peers and
market
12ir@experionwellness.com
Contact Us www.experionwellness.com
www.citizenstash.com
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