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Corporate Presentation
February 2019
February 2019 – This presentation was prepared by management of Osoyoos Cannabis Inc. (“Osoyoos”).
The information contained in this presentation:a) is provided as at the date hereof and is subject to change without notice;b) does not purport to contain all the information that may be necessary or desirable to fully and
accurately evaluate an investment in Osoyoos; andc) is not to be considered as a recommendation by Osoyoos that any person make an investment.
An investment in the securities of Osoyoos is speculative and involves a number of risks that should be considered by any prospective investor.
This presentation does not constitute an offer or solicitation in any jurisdiction to any person or entity and was not prepared in connection with any such offer or solicitation.
Readers of this presentation should not construe the contents of this presentation as legal, investment, tax or other advice.
Disclaimer
Osoyoos cautions that statements in this presentation are forward-looking statements. All statements, other than statements of historical facts, contained in this presentation, including statementsregarding our future results of operations or financial condition, prospects, business strategy and plans and objectives of management for future operations, the success of our sales and marketing efforts,the extent of market acceptance for our products and services, our ability to develop and bring to market new or enhanced products, potential earnings, our ability to develop our production facility andengage in cannabis oil production, product development and cannabis cultivation, regulatory approvals in Canada, regulatory approvals foreign jurisdictions and continuing uncertainty in the globaleconomic environment, are forward-looking statements.
The words “believe,” “will,” “may,” “estimate,” “continue,” “projection”, “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” or other similar expressions are intended toidentify forward-looking statements, although not all forward- looking statements contain these identifying words.
Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors.
The forward-looking statements contained in this presentation speak only as of the date the statements are made and are based on information available to Osoyoos at the time those statements aremade and/or management’s good faith belief as of that time with respect to future events. Such statements are based upon the current beliefs and expectations of Osoyoos’ management and are subjectto significant business, social, economic, political, regulatory, competitive and other risks, uncertainties, contingencies and other factors.
Many assumptions are based on factors and events that are not within the control of Osoyoos.Actual future results may differ materially from historical results or current expectations.
These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. In addition, even if the outcome and financial effects of theplans and events described herein are consistent with the forward-looking information contained in this presentation, those results or developments may not be indicative of results or developments insubsequent periods.
Although Osoyoos has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there maybe other factors and risks that cause actions, events or results not to be as anticipated, estimated or intended.
Forward-looking information contained in this presentation is based on Osoyoos’ current estimates, expectations and projections, which Osoyoos believes are reasonable as of the current date.
Osoyoos can give no assurance that these estimates, expectations and projections will prove to have been correct.
You should not place undue reliance on forward-looking information, which is based on the information available as of the date of this presentation. Osoyoos assumes no obligation to update or revise them to reflect new events or circumstances.
Historical statements should not be taken as a representation that such trends will be replicated in the future.
No statement in this presentation is intended to be nor may be construed as a profit forecast.
Additional information related to Osoyoos, including risks and uncertainties, can be found on its SEDAR profile at: www.sedar.com.
Cautionary Note Regarding Forward-Looking Information
WelcomeOSOYOOS CANNABIS
High quality concentrates are the future of cannabis. Osoyoos Cannabis believes in the importance of customizable extraction solutions for Canada’s top Licensed Producers.
Osoyoos Cannabis is an applicant under the Cannabis Act for a standard processing license in association with the Osoyoos Indian Band in Oliver, BC. Our three phases of execution provide a multi-faceted, forward looking approach to cannabis production.
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Advantage
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TRANSPARENCY & CONTROL
PRODUCT FLEXIBILITYBRANDING
GLOBAL OPPORTUNITY
Unique and relevantbrand identity focuses on Canada’s fastest-growing demographics
Our facility is designed tocGMP standards to
allow for export
Through strain selection from our suppliers and specific processing control, we ensure the highest quality products
We can produce a variety of products which gives access to wide-ranging markets and
modes of consumption
Osoyoos Indian BandThe Osoyoos Indian Band (OIB) is considered one of Canada’s most successful First Nations groups.
The OIB has a record of leadership and success under the stewardship of Chief Clarence Louie, a Canadian Business Hall of Fame inductee, who has chaired the Federal Government's National Indigenous Economic Development Board for over 10 years.
“As I grew up and studied our history, I became convinced that the remedy to most of our problems was economic development.”
Chief Clarence Louie
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The Nk’Mip Wine cellars is an award winning winery, and was named Canadian Winery of the Year in 2016. It was opened in 2002 in partnership with Vincor, now Aterra Wines Canada. Nk’Mip’s vitner, Justin Hall, is considered one of the first Aboriginal vintners globally.
Nk’Mip Wine Cellars, a winery located on OIB lands, is the first Aboriginal owned and operated winery in North America.
The success of the winery has helped to bring prosperity and opportunity to the OIB, ideals which Osoyoos Cannabis intends to foster.
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The OIB’s Pro Business Attitude
Site & LocationOsoyoos Cannabis is in the process of retrofitting its 10,410 ft2 facility in the Senkulman Business Park in Oliver, BC. The Business Park is a 143-acre, fully-serviced project developed by the OIB. The vision of the SenkulmenBusiness Park is to encourage and accommodateeconomic development in this growth region.
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Game PlanTHREE-PHASED EXECUTION Osoyoos Cannabis is launching its operations in three phases.
Phase One will focus on extraction of cannabis and hemp oils for existing licenced producers. Osoyoos Cannabis’ highly tuneable Vitalis supercritical CO2 Extraction Systems will allow for a wide range of finished products. Our equipment for this phase has already been built and delivered, and we are finalizing the details for the initial facility retrofit.
Phase Two will continue to focus on extraction for existing licensed producers. In this phase, we will retrofit the balance of our facility, and with additional equipment from Vitalis, double our extraction capacity. We will also addpackaging equipment and services to offer our customers.
Phase Three of operations will be to develop and operate an outdoor cultivation facility. Osoyoos Cannabis has had preliminary discussions with the OIB about lease opportunities for this purpose.
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Phases One & Two
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Osoyoos Cannabis will be using Vitalis supercritical CO2 Extraction Systems, allowing for a customizable product for all partners and customers.
The Phase One equipment has already been built and delivered. This consists of four Vitalis Q-90 S Extraction Systems.
Running 10 hours per day, only on standard business days (they are designed to tolerate running 24 hours per day, 365 days per year), these machines will process approximately 50,000 kilograms of dry cannabis or hemp annually. Assuming 10% cannabinoid content, this would yield over 4,900 kilograms of winterized oil per year.
For Phase Two, Osoyoos Cannabis plans to four more Q-90 S Extraction Systems. This would double capacity to approximately 100,000 kilograms of dry cannabis or hemp annually with winterized output of over 9,800 kilograms.
FacilityOsoyoos Cannabis has secured and is the process of retrofitting a 10,410 ft2 facility in Oliver, BC to accommodate our extraction systems, winterization equipment and packaging systems. Vitalis will conduct on-site training and installation.
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September 2018
November 2018
February 2019
March 2019
August 2019
LeaseAgreementon Facility Executed
Vitalis Equipment Delivered
Finalize Retrofit Details
Commence FacilityRetrofit
Phase One Retrofit
Complete
ExtractionExtraction is at the forefront of cannabis products.
Over the 2017-2018 fiscal year, monthly sales of dried flower grew by 18.3%, while monthly sales of cannabis oils grew 91.7%1.
Osoyoos Cannabis will use environmentally responsible, industry leading Vitalis Q-Series CO2 Extraction Systems providing extremely high-grade oils.
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1. https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/licensed-producers/market-data.html
Market OpportunityEXTRACTS
• Allow for precise dosing and incorporation into a variety of products including lotions, beverages, and edibles
• Consistently dosed and purified for consumer safety
• Products with longer shelf-life and better stability
• Many countries only allow for extract-based cannabis products
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Phase ThreeOUTDOOR CULTIVATION
Phase Three of our business will be to cultivate a captive supply of hemp and cannabis outdoors, on OIB Lands. The Okanagan Valley is one of the hottest and driest places in Canada, making it an ideal location for outdoor cultivation, allowing us to cultivate ata very competitive cost per gram.
Osoyoos Cannabis has had preliminary discussions with the OIB about securing land for cultivation. The OIB is very supportive and has indicated that leasable land will likely be available to Osoyoos Cannabis when required.
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Marketing PrecedentsLAKOTA
Lakota was founded by a Cree man, Richard Stewart, who wanted to use indigenous images and messaging to provide a natural and effective product based in traditional knowledge.
Lakota is a widely used product across demographics, and is focused on addressing pain relief. The particular niche it occupies as being natural and healing in balm, salve, and oil forms which would be easily replicated using cannabis.
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BURT’S BEES
Burt’s Bees has become a widely recognizable brand that stands by a mandate of natural products.
Founded in 1984 Burt’s Bees began as a small-scale craft operation, where a brand ethos of responsible farming, and sustainability, developed and remains today. These are branding concepts that bring value to brands like Osoyoos Cannabis.
Product OfferingsBranded products will include oils, creams, gels capsules, and various other product opportunities.
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AlignmentCanada’s First Nations, Inuit, and Metis (FNIM) population is growing at four times the rate of the rest of the Canadian population. An estimated 20% of the Canadian workforce will be Indigenous persons by 20401 due to the rapid growth of younger demographics.
The FNIM cannabis market is expected to be underserved, and many communities are wary about a lack of consultation and engagement. Osoyoos Cannabis sees this as a meaningful opportunity to engage with communities on topics such as education and empowerment.
We will capitalize on shifting Canadian sentiments, where 80% of Canadians believe that FNIM participation in the economy strengthens our social fabric2, and 73% of Canadians want private sector businesses to participate in FNIM entrepreneurship3.
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1. http://toronto.citynews.ca/2018/01/03/indigenous-urban-business-initiatives-growing-as-demographics-shift/ 2. https://www.theglobeandmail.com/report-on-business/small-business/sb-growth/indigenous-entrepreneurs-important-to-canadian-economic-growth/article35296384/ 3. https://www.theglobeandmail.com/report-on-business/small-business/sb-growth/indigenous-entrepreneurs-important-to-canadian-economic-growth/article35296384/
Corporate PositioningOsoyoos Cannabis sees an opportunity to create a socially responsible brand that supports Prime Minister Trudeau’s promised reconciliation efforts with Canada’s Indigenous peoples.
By hiring OIB members whenever practicable, Osoyoos Cannabis will create opportunities in a highly specialized skill set and foster the skills growth of OIB community members.
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ISSUED AND OUTSTANDING
COMMON SHARES 31,170,157
DEBENTURES 6,833,3331
WARRANTS 31,121,5892
OPTIONS 2,600,0003
Capital Structure
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1. Debentures can be converted to common equity at $0.15 at the option of the holder 2. Warrants shall generate approximately $15,300,000 on exercise
3. Options shall generate approximately $900,000 on exercise
Business ModelMULTIPLE REVENUE STREAMS
• Sale of bulk winterized cannabis and hemp oil to Licensed Producers with input materials sourced from other Licensed Producers
• Provision of tolling extraction services to licensed standard and micro cultivators
• Development and sale of proprietary Osoyoos Cannabis branded and white-labelled products with input materials sourced from other Licensed Producers
• As we evolve, we will cultivate our own cannabis and hemp outdoors to use in our bulk oil sales, branded and white-labelled products
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Gerald Goldberg, CPA, CA Chief Executive Officer, Chairman of the Board and directorMr. Goldberg is a Chartered Professional Accountant and a former senior partner at two major accounting firms. Mr. Goldberg has over 30 years’ of audit experience and was the headof the public company audit division of a major firm. He has industry expertise in cannabis cultivation and aggregation, distribution, retail, mining natural resource and oil & gas, realestate, "not-for-profit" entities and manufacturing industries, with a strong emphasis on taxation and business advisory services. He was active in corporate finance and developmentand was involved in the structure and design of numerous innovative financing instruments, tax shelters and syndications, both in Canada and the US. He was actively involved with theaudit of various public Canadian, US, Chinese and other foreign companies listed in the US and Canada. Mr. Goldberg holds the designation of C.T.A. from the University of SouthAfrica and is a member of the Institute of Chartered Professional Accountants of Ontario and the Public Accountants Council of Ontario. Mr. Goldberg was also active in the MedicalCannabis Industry and until recently was Interim CEO of an integrated licensed producer and patient aggregator.
Tyler Devenyi, J.D., BA (Hons.) Chief Operating OfficerMr. Devenyi is a graduate of Osgoode Hall Law School and a member of the Law Society of Ontario. In addition to having worked in both full service and criminal law firms, he hasworked as an investment banking analyst, and was in charge of operations for an international medical real estate development company.
Rakesh Malhotra, B.Com (Hons.), CPA, (Illinois, USA), CPA, CA (Canada), FCA (I) Chief Financial OfficerMr. Malhotra has over 25 years of experience in accounting, finance and internal controls, including senior management positions in publicly traded and private companies and servesas the Chief Financial Officer and as a Consultant to various public companies listed in both Canada and the USA. He started his career working for a large accounting firm A.FFerguson & Co. (Indian correspondent for KPMG). Mr. Malhotra moved to the Middle East and worked for five years with the highly successful International Bahwan Group ofCompanies in a senior finance position. From 2001 to 2005, Mr. Malhotra worked as Vice President of Finance for a private group of service companies in Toronto.
Dr. Shane Lu, PhD Quality Assurance ManagerDr. Lu holds a PhD in Microbiology from Murdoch University in Australia. He has more than ten years’ of experience in quality assurance & regulatory affairs for strictly regulated health products, including medicinal cannabis and other Natural Health Products. He has worked extensively with a wide range of herbal extracts that possess various medicinal properties. Dr. Lu has significant knowledge and experience in interfacing with Health Canada, the US Food and Drug Administration, and other international regulatory authorities. Dr. Lu was one of six members of the Health Canada Technical Working Group for Natural Health Products. This group was formed to develop GMP standards and licensing regulations to improve the level of quality assurance for Natural Health Products sold in Canada.
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Management
Gerald Goldberg, CPA, CA Director and Chairman of the Board and directorMr. Goldberg is a Chartered Professional Accountant and a former senior partner at two major accounting firms. Mr. Goldberg has over 30 years' of audit experience and was the headof the public company audit division of a major firm. He has industry expertise in cannabis cultivation and aggregation, distribution, retail, mining natural resource and oil & gas, realestate, "not-for-profit" entities and manufacturing industries, with a strong emphasis on taxation and business advisory services. He was active in corporate finance and developmentand was involved in the structure and design of numerous innovative financing instruments, tax shelters and syndications, both in Canada and the US. He was actively involved with theaudit of various public Canadian, US, Chinese and other foreign companies listed in the US and Canada. Mr. Goldberg holds the designation of C.T.A. from the University of SouthAfrica and is a member of the Institute of Chartered Professional Accountants of Ontario and the Public Accountants Council of Ontario. Mr. Goldberg was also active in the MedicalCannabis Industry and until recently was Interim CEO of an integrated licensed producer and patient aggregator. Mr. Goldberg is presently the the CEO and Chairman
Michael Ash, BA DirectorMr. Ash brings a wealth of pharmaceutical industry expertise in the areas of domestic and international sales and distribution, product and brand development, and product packaging.From 2015 to 2018, he was President of Pharmetics Inc. and was identified by the private equity firm that owned the company as the ideal industry expert capable of rebuilding thebusiness, increasing sales and selling the company in 2018. From 2013 to 2015, Mr. Ash was President of NutraLab Canada Ltd. ("NutraLab) where he developed and launched privatelabel brands of vitamins, minerals and supplements for large retailers across the country. From 1997 to 2013, Mr. Ash held the role of Senior Vice-President of Sales and Marketing atPharmetics Inc. where he successfully grew sales of vitamins and over the counter (OTC) products from 15 million to close to 100 million dollars. He was able to accomplish substantialsales growth due to his strong retail relationships allowing the business to become the number one supplier of private label OTC products in Canada. From 1984 to 1995, Mr. Ash heldprogressive sales roles at Apotex Inc., including the role of Managing Director International where he was accountable for developing international distribution networks for thecompany's generic drug brands. He holds a BA in Political Science from McGill University.
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Board of Directors
Ernie Eves, QC, LL.B, LL.D (Hon.) DirectorMr. Eves is the former Premier of the Province of Ontario. Prior to serving as Premier, he was Deputy Premier and Minister of Finance. Mr. Eves has had a distinguished career in boththe public and private sectors. He is also a director of Nighthawk Gold Corp. and Gravitas Financial Corp. Currently, he serves as an advisor and board member for several firms inCanada and the United States. Mr. Eves is a graduate of Osgoode Hall Law School. He was called to the bar in 1972, and in 1983 was made a Queen's Counsel.
Sara Lee Irwin, BA, B.Ed DirectorMs. Irwin is a nationally recognized public voice on cannabis and cannabinoids for therapeutic use. With decades of experience as both an industry consultant and chronic pain patient,she has leveraged her personal experience to become a leading representative and liaison working to bridge interests across multiple stakeholder groups, including patients,physicians, researchers, the pharmaceutical industry, investors, institutional brokers and government. An early advocate of the benefits of the pharmaceutical application ofcannabinoids, Ms. Irwin was the Director of Investor Relations at Cannasat Therapeutics (CTH, 2004-2010), an early stage cannabinoid pharmaceutical company that in 2006 becamethe first publicly traded cannabis company in North America.
John McMahon DirectorMr. McMahon is the Managing Partner of Thought Launch Capital and Advisory Inc. based in Toronto. Prior thereto, Mr. McMahon held a number of senior banking roles within theinvestment industry. Mr. McMahon was Managing Director of Investment Banking for Industrial Alliance Securities. He also served as Vice Chairman and Head of Investment Bankingfor Mackie Research Capital Corporation. Mr. McMahon is also a director of Big Dougie Capital Corp.
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Board of Directors
Michael Ash, BAMr. Ash brings a wealth of pharmaceutical industry expertise in the areas of domestic and international sales and distribution, product and brand development, and product packaging.From 2015 to 2018, he was President of Pharmetics Inc. and was identified by the private equity firm that owned the company as the ideal industry expert capable of rebuilding thebusiness, increasing sales and selling the company in 2018. From 2013 to 2015, Mr. Ash was President of NutraLab Canada Ltd. ("NutraLab) where he developed and launched privatelabel brands of vitamins, minerals and supplements for large retailers across the country. From 1997 to 2013, Mr. Ash held the role of Senior Vice-President of Sales and Marketing atPharmetics Inc. where he successfully grew sales of vitamins and over the counter (OTC) products from 15 million to close to 100 million dollars. He was able to accomplish substantialsales growth due to his strong retail relationships allowing the business to become the number one supplier of private label OTC products in Canada. From 1984 to 1995, Mr. Ash heldprogressive sales roles at Apotex Inc., including the role of Managing Director International where he was accountable for developing international distribution networks for thecompany's generic drug brands. He holds a BA in Political Science from McGill University.
Kurt Divich, BScMr. Divich serves as President of Integrity Investor Relations. One of the true pioneers of Internet-based financial communications, Mr. Divich is a veteran writer, copywriter, and publicrelations specialist who has been representing public companies on the web and in traditional media since the 1990s. An accomplished writer, Divich is twice published, first as anovelist in the political thriller “Lords of Las Vegas,” Stephens Press, and a non-fiction work, “The Smith Center for the Performing Arts, A Dream in the Desert,” Stephens Press. KurtDivich previously served as Senior Partner at Market Pathways Investor Relations servicing clients including Smith & Wesson, and is a much sought after public relations and brandingconsultant assisting athletes, entertainers, politicians and companies in all media channels including new and social media. Divich holds a Bachelors of Science in Communications withEmphasis in Journalism from the University of Nevada-Las Vegas (’95).
Sara Lee Irwin, BA, B.EdMs. Irwin is a nationally recognized public voice on cannabis and cannabinoids for therapeutic use. With decades of experience as both an industry consultant and chronic pain patient, she has leveraged her personal experience to become a leading representative and liaison working to bridge interests across multiple stakeholder groups, including patients, physicians, researchers, the pharmaceutical industry, investors, institutional brokers and government. An early advocate of the benefits of the pharmaceutical application of cannabinoids, Ms. Irwin was the Director of Investor Relations at Cannasat Therapeutics (CTH, 2004-2010), an early stage cannabinoid pharmaceutical company that in 2006 became the first publicly traded cannabis company in North America.
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Consultants
