Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on...

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April 2018 Investing In Global Cannabis Opportunities

Transcript of Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on...

Page 1: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

April 2018

Investing In Global Cannabis Opportunities

Page 2: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

This presentation (“Presentation”) is provided on the basis that neither LGC Capital Ltd. (“LGC”) nor its officers, shareholders, partners, affiliates, employees, representatives, agents or advisors make any

representation or warranty (express or implied) as to the origin, validity, accuracy, reliability, relevance, currency or completeness of the material contained in the Presentation and no responsibility is taken

for any errors or omissions therein. Nothing contained in the Presentation is, or may be relied upon as, a promise, representation or warranty, whether as to the past or the future. LGC excludes all

warranties (including implied warranties) and all liability that can be excluded by law for any loss, claim, damage, cost or expense of any nature (including that arising from negligence) arising out of the

Presentation (or any accompanying or other information) whatsoever, or by reason of any reliance upon it. LGC accepts no responsibility to update any person regarding any inaccuracy, omission or change

in information in this Presentation or any other information made available to a person or any obligation to furnish the person with any further information.

This Presentation may contain forward-looking statements with respect to LGC and its operations, strategy, investments, financial performance and condition. These statements generally can be identified

by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of

LGC could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some

important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, government regulation and the

factors described under “Risk Factors and Risk Management” in LGC’s Management's Discussion and Analysis for the fiscal year ended September 30, 2017, as filed on SEDAR (www.sedar.com). The

cautionary statements qualify all forward-looking statements attributable to LGC and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of the

Presentation and LGC does not have any obligation to update such statements, except to the extent required by applicable securities laws.

This Presentation references other corporations and provides certain information in relation to these corporations. All such information was obtained from such corporations. LGC provides no assurances as

to the accuracy or completeness of such information and readers are cautioned not to place any undue reliance on such information.

All persons should seek appropriate professional advice in reviewing or considering the Presentation and all other information with respect to LGC and evaluating its business, financial performance and

operations. Neither the provision of the Presentation nor any information contained in the Presentation or subsequently communicated to any person in connection with the Presentation is, or should be

taken as, constituting the giving of investment or financial product advice to any person in respect of trading in LGC securities, and no such information should be taken to constitute a recommendation or

statement of opinion that is intended to influence a person in making a decision to trade in LGC securities.

This Presentation does not purport to contain all of the information that may be required to evaluate all of the factors that would be relevant in determining whether to trade in LGC securities, including but

not limited to any person's objectives, financial situation or needs. No person should rely on the information provided but should make, and will be taken to have made, its own investigation, assessment

and analysis of the information in this Presentation and other matters that may be relevant to it in considering whether to trade in LGC securities. This Presentation does not constitute an offer to sell or a

solicitation of an offer to buy any securities of LGC.

LGC owns the copyright in this Presentation. No part of this Presentation may be shown or distributed to third parties or reproduced, stored or transmitted in any form or by any means, electronic,

mechanical, photocopying, recording or otherwise without prior written permission of LGC. Certain photos and pictures in this Presentation are for illustration purposes only and may not depict current LGC

operations. All investments by LGC in the cannabis industry, and all share issuances by LGC, are subject to the approval of the TSX Venture Exchange.

Disclaimer

Page 3: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

• LGC’s objective is to build an integrated network of

cannabis growers & retail outlets that address the largest

legalized markets in the world.

• Global reach in the largest markets in the world – North

America through Canada and Jamaica, Europe through

Italy, and further expansion throughout the EU & Asia

Pacific with its investment in Australia.

• From LGC’s investment portfolio – Anticipated 2020 net

annualized production objective – 40,000 to 80,000 kg.

• LGC’s portfolio invests in the complete lifecycle of seed to

shelf to consumer by investing in growing, distribution

and processing opportunities.

Company Overview

Page 4: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

TORONTOMONTREAL LONDON

MONACO

DUBAI

PERTH

ZURICH

JAMAICA

Global Portfolio

SANREMO

Legend

Investee

Companies

Page 5: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

• LGC has acquired a 14.99% interest in Australian medical cannabis company Little Green

Pharma for $1.5 million AUD.

• Little Green Pharma, which is now growing, is the only company in western Australia that has

been granted a license to cultivate and produce medical cannabis.

• Unique manufacturing technology aims for high bio-availability of active cannabinoids

thereby resulting in therapeutic effect which can be (subject to certain conditions) achieved

with very low dosage rates combined with precise dosage control.

Investment In Australia

Page 6: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

• In January 2018, LGC entered into a $4 million secured debenture with Quebec-based medical

cannabis company Tricho-Med (operating as AAA Trichomes), convertible upon the company

obtaining a license to produce medical cannabis into a 49% equity interest and a 5% royalty on

net sales.

• Subject to permitting, the Tricho-Med processing facility will be one of the first enclosed multi-

level medical cannabis producers in Quebec.

• Growing operations are scheduled to begin in early 2019.

• Production rate - 24,000 kg in 2019. Anticipated to scale up to 100,000 kg/yr by 2020, then

up to 200,000 kg/yr in 2021.

• Advantages – lowest cost of electricity in Canada, close proximity to Montreal.

Investment In Canada

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• In January 2018, LGC announced a letter of intent for a $2.5 million secured debenture in Global Canna

Labs, convertible into an initial 30% equity interest, and a 5% royalty on net sales for $2 million,

payable in LGC shares, subject to regulatory approval.

• The Jamaican Cannabis Licensing Authority granted Global Canna Labs conditional approval for a

Cultivator's Licence (Tier 3) (over 5 acres) on December 20, 2017.

• Plans to start cultivation of its first commercial cannabis crop by Q2 2018.

• To open an on-site farm store and a dispensary in Kingston, Jamaica by the end of 2018.

• Two locations have been identified for dispensaries - Montego Bay’s Hip Strip and Negril Beach.

• Production targets: 2019 – 15,000 kg; 2020 – 40,000 kg; 2021 – 60,000 kg

Proposed Investment In Jamaica

Page 8: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

• In March 2018, LGC announced a letter of intent for a € 3 million (approximately CAD $4.7 million),

convertible in certain circumstances into a 49% equity interest. The LOI also provides that LGC will

acquire a 5% royalty on net sales for $2 million, subject to due diligence and regulatory approval.

• Evolution Bnk is retrofitting its first 5,000 m2 (54,000 sq. m.) greenhouse in San Remo Italy.

• First phase growing is expected to begin this summer and is expected to produce 32,000 kg of

cannabis in its first year of operation.

• Anticipating large scale future expansion, as San Remo has significant surpluses in vacant

greenhouses.

• Cannabis to be produced will be legal low THC" (0.2% THC by law) Cannabis Light and sold by

tobacconists.

• Estimated margins expected to be greater than 50%.

Proposed Investment In Italy

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CLV Frontier Brands

• Proposed Joint Venture between LGC, Creso Pharma & Baltic

Beer Co. will create a vertically-integrated cannabis operation

with a global footprint spanning cultivation, IP generation,

innovative product development and commercialization.

• CLV Frontier Brands to produce hemp flavored alcoholic and

non-alcoholic beer, by using terpenes.

• CLV Frontier Brands expects to formalize testing and production

by April/18 – with first product launch planned for summer

2018.

• CLV Brands objective to engage in developing sales and

distribution of products jointly in Europe, Canada, Latin

America, Africa, Japan and the Asia-Pacific region.

Page 10: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

How Does LGC Capital Compare?

Company Symbol Volume - Kg/Yr

Shares Issued

(MM) Market Cap (MM) Closing Price - 4/3/18

Aphria Inc. APH.T F Q1/19 - 230,000 208.9 $2.102 $10.06

Supreme Cannabis FIRE.V F H1/19 - 60,000 253.3 $382.5 $1.51

MedReleaf Corp. LEAF.T F H1/19 - 140,000 100.0 $1,605 $16.05

Cronos Group CRON.V F H1/19 - 45,000 163.5 $915 $5.60

Organigram OGI.V F H1/20 - 113,000 124.6 $461 $3.70

Hydropothecary THCX.V F H1/19 - 108,000 155.0 $560 $3.61

CannTrust Holdings TRST.T F H2/18 - 42,500 91.7 $616 $6.72

Canopy Growth WEED.T F/20 - 370,000 190.0 $5,318.1 $27.99

LGC Capital LG.VF/20

40,000 - 80,000356.0 $45 $0.13

* Volume & Shares Issued Information From Cormark Securities Research

Page 11: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

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LGC Capital Ltd.

TSX.V - LG

Shares Issued: ~356 Million

Current Cash: ~$16 million

Insider Ownership: ~25%

Website: www.lgc-capital.com

Offices:

(Operations and Investments)Toronto, Montreal, London, Perth

Capital Structure

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John A.D. McMullen - Chief Executive Officer

Anthony Samaha - Chief Financial Officer and Director

David Lenigas - Co-Chairman and Director

Mazen Haddad - Co-Chairman and Director

Rafi Hazan - Secretary and Director

Mohammed Ghafari - Independent Director

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Management & Board of Directors

Page 13: Investing In Global Cannabis Opportunities · This presentation (“Presentation”)is provided on the basis that neither LGC Capital Ltd. (“LGC”)nor its officers, shareholders,

For additional information, please contact:

Canada: John McMullen, Chief Executive Officer

Phone: (416) 803-0698

Email: [email protected]

UK: Anthony Samaha, Chief Financial Officer

Phone: +44 (0) 20 7440 0640

Investor Relations: The Howard Group Inc.

Contact: Dave Burwell - Vice President

Phone: (403) 221-0915

Email: [email protected]

Thank You!