Nutritional High International Inc.
CSE:EAT OTCQB:SPLIF Frankfurt:2NU
Q3
2017
CORPORATE PROFILE
Nutritional High International Inc.
Forward Looking Statements and Risk Disclosure
The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors
may require. Prospective investors are encouraged to conduct their own analysis and reviews of the Company and of the information
contained in this presentation. Prospective investors should consult their own professional advisors to assess their potential investment in
the Company. The remarks contained in this presentation (“Presentation”) may contain forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) relating to the Company’s operations or to its business environment. These
statements are identified by the use of forward-looking terminology such as “believes,” “plans,” “intend,” ”scheduled,” “potential,”
“continue,” “estimates,” “hopes,” “goal,” “objective,” “expects,” “may,” “will,” “should” or “anticipates” or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The safe harbor
provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended,
apply to forward-looking statements made by the Company. The reader is cautioned that no statements contained in Presentation should
be construed as a guarantee or assurance of future performance or results. These forward-looking statements involve risks and
uncertainties, including those identified within this Presentation. The actual results that the Company achieves may differ materially from
any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations,
and the Company assumes no obligation to update this information. Readers are urged to carefully review and consider the various
disclosures made by the Company in it’s reports filed on SEDAR that attempt to advise interested parties of the risks and factors that may
affect the Company’s business. The information in this current report shall not be incorporated by reference into any registration
statement pursuant to the Securities Act of 1933, as amended. The furnishing of the information in this Presentation is not intended to,
and does not, constitute a representation that such furnishing is required by Regulation FD or that the information this current report
contains is material investor information that is not otherwise publicly available. This summary has been provided to the recipient for
information purposes only and no representation or warranty, express or implied, is made as to the completeness or accuracy of the
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These trademarks and logos are the property of their respective owners. An investment in the Company's securities should be considered
highly speculative. There is no guarantee that an investment in the Company will earn any positive return in the short or long term. An
investment in the Company is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.
There are certain risk factors associated with an investment in the Company’s securities.
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Nutritional High International Inc.
Company Profile
• Nutritional High is a Canadian public company focused on the U.S. medical and recreational marijuana industries
• Focus is on the high margin, high growth segments - edibles and oil extracts market
• Currently have active projects in 4 U.S states:
• Colorado: Operating one of Colorado’s largest and most automated oil extraction and infused edibles facilities: MIPs License secured through agreements with Colorado-based Palo Verde LLC
• Illinois: Operating in Effingham, IL since Sept 2016. The only dispensary in ISP District 12 in over 60 mile radius
• Nevada: In a process of acquiring producer & processor licenses Nevada, and a real estate property to which the licenses are attached
• Oregon: Closed acquisition of property in La Pine, Oregon, and in the advanced stages of an application process to manufacture cannabis concentrates and edibles in Oregon
• Acquired strategic interest in Aura Health – a private company focused on developing medical cannabis clinics in various US states
• Forming a strategic partnership with Lineage Grow Company Ltd. which intends to build cannabis cultivation facilities in NV and CO at NH’s properties
• Pursuing expansion in additional states – initially targeting WA, CA, AZ, FL, OH and MI
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Building a robust production and distribution platform for nationally branded marijuana-infused products
First marijuana company to successfully complete an IPO (not an RTO) in the Canadian market, raised over $12million to date
Check out our corporate video by clicking here:
Leadership Team
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Jim Frazier
Chief Executive Officer
• Over 23 years of experience in the food industry and a proven
track record of developing and implementing branded and
private label programs and driving profits
• Owns and operates a successful Florida-based candy and
chocolate business which has been a well-known manufacturer of
confectioneries for over 40 years
• Managed the expansion of his plant facilities and significantly
expanded sales and developed new customer bases across all
retail channels
David Posner
Chairman of the Board and Director
• Brought “Hempen Gold,” the first hemp-infused beer to Canada
• Imported and created marketing and branding initiatives for
various other alcoholic products in Canada
• Acquisitions Manager for Stonegate Properties Inc. where he
managed real estate and brokered deals in Canada and Oklahoma
Amy Stephenson
Chief Financial Officer
• Over 20 years senior management and capital markets experience,
10 of which were spent in the CFO position for various public
companies, incl. Ceres Global Ag Corp., Goldeye Explorations Ltd.,
Petroworth Resources Inc., and Augen Capital Corp
• As former CFO of Bedrocan Cannabis Corporation, Ms.
Stephenson has a strong familiarity of the cannabis and hemp
industries
• Ms. Stephenson is a CFA Charter holder, a Chartered Professional
Accountant (CPA, CMA) and a member of the Financial Executive
International (FEI)
Alex Storcheus
SVP, Corporate Development
• Mr. Storcheus has been involved with Nutritional High since its
inception in 2014 and is currently an SVP, Corporate Finance at
Foundation Markets - a Toronto-based merchant/investment
bank
• In his current capacity Mr. Storcheus assists Nutritional High with
expansion efforts in various jurisdictions and financial advisory
projects
• Mr. Storcheus has previously worked at the Department of
National Defense, holds a BBA from the Schulich School of
Business at York University, and is also a CFA Charterholder
Adam K. Szweras
Corporate Secretary and Director
• Partner with the law firm Fogler, Rubinoff LLP
• Chairman and Founder of Foundation Markets Inc., a
Toronto-based investment bank, and Exempt Market Dealer
• Expertise in recreational and medicinal marijuana laws in the
US and Canada
• Practiced securities law since 1997
Billy Morrison
Oil Extraction Consultant and Director
• Founded Peloton Pharmaceuticals, where he designed,
developed, and deployed nearly autonomous grow system
that mitigates labor and reduces cost
• Experience in operating marijuana companies, founding The
Union Collective, a successful delivery dispensary; Capstone
Analytical, one of the first Bay Area thin layer
chromatography testing facilities; and Temez Extracts
• Pioneered a patented water conserving technology that
eliminates water change outs
Landon Long
Operations Manager
• Founded Infusion Factory, one of the nations first cannabis
specific contract manufacturers and white label services
provider focused on the formation, production and
commercialization of safe, consistent, dose accurate and
compliant medicinal products.
• Owns and operates a successful vapor hardware company
that has been creating innovative medicinal, vapor and
ancillary consumer products since 2011.
• Over 20 years of combined Marketing, Production and
Cannabis Specific Expertise.
`
Oil Extracts and Edibles:
High Margin Value Proposition
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Processed oil extract can be
used to make marijuana-
infused products such as
candies, chocolates, topical
creams, tinctures, drink
additives, etc.
Estimated wholesale price
for such products in the
recreational market for
packages that contain
100mg of THC is:
The flower of female marijuana
or cannabis plant (“bud”) is
consumed by smoking, while
leafs, nodes and stems (“trim”)
are not typically utilized for
consuming cannabis through
smoking, but are used in
production of other products
such as oil extracts, which are
used to manufacture number of
Marijuana-Infused Products
~$20-$30/g ~$10-$15/g (~$25 retail)~$5-$7/g
Female Marijuana
Plant Grown Indoors
Flower is usually sold
wholesale to the licensed
dispensaries; trim is either
discarded or sold at a
significant discount to MIP
manufacturers
Estimated wholesale price
for flower is:
Bud and trim can be
processed into extract and
sold to MIP product
manufacturers or to
dispensaries
Estimated wholesale price
for oil extracts ranges
from:
Our Story
6Nutritional High International Inc.
April 2014
Company formed
Jun 2014
Closing of seed
financing and PSA on
Pueblo Property
Jul 2016
Jim Frazier appointed
as CEO
Aug 2016
IL license granted;
Launch of Jimi Hendrix
cannabis products
Sept 2016
Grand opening of
Clinic Effingham
Nov 2016
Closing of Aura Health
Acquisition
Dec 2016
$5.5m financing,
launch of Pueblo
Facility
Dec 2016
Launch of flagship
“FLI” brand
Dec 2016
Aura Acquires 2nd
clinic
Jan 2017
Enters into Acquisition
for NV licenses
Jan 2017
Acquisition of Dab
Stick product I.P
Feb 2017
Partnership with
Lineage Grow
Mar 2017
Acquisition of Oregon
property
April 2017
Commenced retail
sales of FLI Cartridges
May 2017
Palo Verde achieves
95%+ THC content in
its extracts
TrufflesChocolate
Candy Bar
Gummies Lollipop
FLI Vape Pen Cartridges ready
for shipmentDistillate produced by Palo
Verde at Pueblo Facility
FLÏ - Our Flagship Premium Product Line
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Concentrate Products
Edible Products Concepts
FLI Cartridges on a shelf in CO
Marketing Strategy
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Product Strategy Distribution StrategyBranding and
Promotion Strategy
• Focus on highest-margin
segments of the industry
• Focus on manufacturing high
quality oil, which forms the
core of the quality standard for
extract and infused products
• Employ leading manufacturing
and extraction methods which
have the potential to become
gold standard, as the industry
continues to evolve
• Continue to innovate by
acquiring and developing
products with novel delivery
systems
• Assemble a robust portfolio of
brands, which have the
potential to become
nationally-recognized
• Develop brands internally:
and partner with IP holders or
acquire brands with widely-
recognized names:
• Focus on promotion in a
manner that is compliant with
regulations and has potential
to reach a wide base of 21+
consumers
• Work exclusively with or through
Licensed Operators, which are
fully compliant with applicable
regulations
• Cultivate key retail-channel
relationships with wholesale buyers
• Source Contract Manufacturing
Opportunities (CMOs) to utilize idle
manufacturing capacity
• Employ distribution strategies that
have successfully been employed in
traditional industries (eg. Direct
Store Delivery Program):
Dab Stick – Innovative Delivery System for Oil Consumers
• The Dab Stick is a dispenser for viscous liquid substances, capable of carrying
approximately ½ gram of cannabis oil extract designed with the retail consumer and adult
use user in mind
• The oil vessel is capable of dispensing oil in very small metered doses, which ensures
consistency between each dose of oil dispensed and providing desired consumer
experience
• The product is also designed with a view to being able to easily integrate empty vessels
into filling equipment
• A provisional patent application has been filed with the United States Patent and
Trademark Office
• Acquisition terms: CAD $500k in shares upon achieving certain operating milestones
(Please see Press Release dated January 30, 2017)
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Geographic Footprint
• Successfully staked out footholds in 4 U.S states
• Colorado: Successfully established one of
Colorado’s largest and most automated oil
extraction and infused edibles facilities: MIPs
License secured through agreements with
Colorado-based Palo Verde LLC
• Illinois: Own 50% of The Clinic Effingham – a
thriving medical cannabis dispensary in
Effingham, Illinois that has been operational
since Sept 2016
• Nevada: Finalizing the acquisition of producer
& processor licenses and real estate to which
the licences will be attached with a view to
commence build-out of MIPs facility in Q3 2017
• Oregon: Closed acquisition of property in La
Pine, Oregon and in the advanced stages of an
application process to manufacture cannabis
concentrates and edibles in Oregon
States with Active Projects
States with Prospective Projects
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Nutritional High International Inc. 11
Large Warehouse (10,000sf) for Indoor
Cultivation
~2 acres of vacant
land for Outdoor
Greenhouse
Cultivation Small
Warehouse
(5,000sf) for
Indoor
Cultivation
Main Building (11,000sf) for MIPs
Manufacturing (Phase I and
Phase II)
Metal Sheds
and Garages
for Misc.
Storage
Colorado Project
Phase I
• Phase I construction and
equipment installation is complete
• Palo Verde is currently operational
Phase II
• Phase II development is underway
• Palo Verde is finalizing the permitting
process with technical personnel and
local authorities to expand the product
offering to include edibles
• Aiming to complete Phase II by the end
calendar Q3 2017
Phase III
• Lineage Grow Company. intends
to begin construction of cannabis
cultivation facilities in Q3 2017
• 1st crop expected to be planted in
Q2 2018
Nutritional High International Inc.
– Colorado Licensed Producer
Palo Verde LLC – private Colorado company, which holds license to
manufacture marijuana-infused products
Principal of Palo Verde is an established Colorado lawyer
Palo Verde entered into:
• A lease agreement for a 26,000 sq ft at an annual rate of
US$15/sq ft
• An unsecured loan agreement in the amount of US$500,000 for
a period of 1 year, with up to 5 extensions at a rate of 12% with
Nutritional High
Palo Verde and the Company are finalizing a recipe & IP licensing
agreement and branding and packaging supply agreement
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Over 90%
THC Level
Pesticide
FreeOdorless Made in Colorado
Nutritional High International Inc.
– Strong Production and Sales Team
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David Johnson – Owner
David Johnson is currently affiliated with several emerging
companies and has an extensive domestic corporate,
international corporate, and entrepreneurial background.
Johnson’s skills span a wide range of industries and sectors
including: executive, corporate development, strategic
planning and financial and management capacities both with
domestic non-profit companies and with domestic and
international for-profit companies in consumer products,
telecommunications, medical services, renewable energy,
venture capital, oil and gas, refining, natural resource and
cannabis sectors.
Vincent Morrison – Production Manager
Vincent Morrison graduated from SIUE with a degree in
Chemistry. Morrison worked for a large biotech company for
several years before moving to Colorado and entering the
cannabis industry.
Since relocating, Morrison has worked for both cannabis and
hemp grows with a focus on extraction technology. To date,
he has managed multiple Quality Assurance labs as well as
Extraction labs.
Mike Niswonger – General Manager
Over 30 years experience in confectionery industry and
familiar with all types of chocolate production and
automation. Previously a key production executive with Patsy’s
Candies, a family owned business, which was sold in 2016.
Mike has consulted in the cannabis industry and is familiar
with most types of infused products. Maintained several
national sales accounts. Mike holds a Bachelor’s Degree in
Business from Colorado State University.
Cole Chapman – Sales
Cole was previously a wholesale account manager with Bolder
Cannabis and Extracts, where he led the wholesales efforts
was instrumental in adding a significant amount of
reoccurring sales. Cole has also worked in the sales capacity
with The Green Solution in Denver - which is one of
Colorado’s largest cannabis companies.
Christopher Marchisio – Sales
Previously a budtender and a regional sales representative
with Pueblo West Organics, focused on medical and adult-use
cannabis. Experience in wholesaling dried cannabis, cartridges
and raw distillate products and maintaining relationship with
dispensary owners.
Nutritional High International Inc.
Illinois Dispensary
• One of the 52 applicants to receive a medical marijuana dispensary license
in the state, and the only dispensary license in ISP District 12. The only
dispensary in over 60 mile radius
• Experiencing strong month-to-month sales growth and stable gross
margins attributed to an expanding patient count and a strong patient and
physician outreach program
• Achieved a monthly returning patient rate of over 90% demonstrating a
strong and loyal customer base
• The Illinois Department of Public Health has approved applications for
approx. 20,600 qualifying patients and approx. 24,553 individuals have
submitted a complete application
• Total retail sales in the State of Illinois for 2016 were just over $36 million
and almost $67 million since the program's inception in November 2015
• The Clinic Effingham Financial Performance (Sept 17, 2016 – Apr 30, 2017):
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Dispensary location in Effingham, IL
www.clinicillinois.com
* financial summary presented herein is an extrapolation of the results reported in the Company’s
financial statements and shall be reviewed in conjunction with the Company’s financial statements and
MD&A thereto
The Clinic Effingham Quarterly
Income Summary in (USD)*Q1 ended
Oct 31/16
Q2 ended
Jan 31/17
Q3 ended
Apr 30/17
Revenue 37,150 331,319 242,376
Net Profit (Loss) for the Period -47,198 -37,832 11,556
Nevada Project
➢ In the process of acquiring and transferring provisional
producer and processor licenses
➢ Intention to move the licenses to a 17,500 ft2 industrial
building, with approximately 15,500 ft2 of warehouse
space
➢ Building to be remodeled for the purpose of
developing an extraction and MIPs manufacturing
facility, using the same technology and processes
developed in Pueblo, CO
➢ Received approvals from the State of Nevada for the
transfer of licenses. Awaiting approval from the City of
HendersonTarget Facility to Be by Acquired Nutritional High
in Henderson, NV
➢ Partnered with Lakeside Minerals Inc. (to be
renamed Lineage Grow Company Ltd.) to build a
cannabis cultivation and extraction facility in
Henderson, NV
➢ A portion of the building will be acquired by
Lineage, with a view of constructing a cannabis
cultivation facility
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Oregon Project
➢ In the process of finalizing local
permitting for recreational processor
license
➢ Acquired a property in La Pine, OR for
USD $399,000
➢ Construction is expected to start in Q3
2017
➢ Permits are being secured and land-use
compatibility survey has been completed
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Proprietary Product Development Approach
Nutritional High has developed a proprietary approach to
establishing MIPs operations:
• Developed proprietary techniques of infusing products
with THC and CBD extracts on a semi- automatic basis
• Exploring potential patents on the processes it has
developed
• NH composed a database of various extraction and
testing techniques to suit the needs of Licensed
Producers in both medical and adult recreational state
• Working with a consultant who has over 30 years of
experience in establishing confectionary manufacturing
facilities for Fortune 500 companies
• Efforts led by Billy Morrison – an experienced oil
extractor with extensive expertise in the marijuana
industry and manufacturing marijuana and hemp-
infused products
• NH brings a nation-wide network of experts, specialized
in every aspect of the seed-to-sale industry, able to
assist with rolling-out the company’s operations
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1 Assuming fully optimized production and sales process; 2 Subject to ability to place the product with dispensaries;
FINAL PRODUCT:
Distillate Oil Product
Cold Ethanol Distillation Extraction Process
and Economics
STEP 1: Semi Automated
Mechanical Separation using
screens to remove “Kief”
STEP 2: Rotary Evaporator
used for removing residual
solvents
STEP 3: The oil is distilled
using short path apparatus to
remove the terpenes and
purify the product
Economic Parameters
• The current process is able to process up to 50 lbs1 of trim/shake per day, estimated to cost ~US$400/lb in Colorado
• The extraction yield is expected to be 8-10%
• Good quality concentrates for ~US $25/g on the wholesale market (distillate typically goes for higher) 2
• Overhead cost to operate the facility is estimated at US$50,000 per month
• Potential to increase margins by infusing the oil extract into gelatin caps, vape pens and tinctures, which are higher
value add products and where the "effective" value per gram is significantly higher than US$20/g. Eg. a disposable
vape pen with 500mg of THC content is sold for US$15-25/item on the wholesale market
• The margins for edibles are even higher, as the average price for a package with 100mg, sells for $10-15/piece on the
wholesale market
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Precision AgricultureDeep Water Culture
CRAFT CANNABIS
CONTROLLED MICROCLIMATES BEST-OF-BREED GENETICS
Energy Efficiency Water Reclamation Automation
Strategic Partnership with
Key Deal Terms
• Partnering with Lineage to establish cannabis cultivation & extraction facilities
• Starting with an initial grow facilities in Nevada & Colorado
• Lineage to finance the partnership by acquiring the Provisional Cultivation License from Nutritional High for US$500,000
• Lineage to issue 1,750,000 common shares to Nutritional High
• Lineage will acquire a 50% interest in a property in Henderson Nevada for USD$1.1 Million
• Lineage recently closed a private placement of convertible debentures of $2.5 Million
• Lineage will acquire a Nevada Lineage will lease land and a building from Nutritional High in Pueblo, Colorado and sublease to
Palo Verde
• Nutritional High will enter into a long term purchase agreement with Lineage to buy trim
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Traditionally, cannabis cultivation has
adopted the philosophy that ‘bigger is
better’. The industry is focused on large
scale, low-cost production of generic
cannabis while ignoring what really drives
consumer preferences. We see this as an
opportunity to disrupt the industry with
premium craft cannabis - grown using
small-batch production techniques
tailored to optimize the cannabinoid,
flavor and smell profiles of each
individual strain.
CRAFT CANNABIS
Nutritional High International Inc.
Corporate Strategy
Nutritional High is seeking to expand nationally by either pursuing organic growth strategies or
pursuing acquisition opportunities focused on:
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Cole Memo Compliant Operations Only
Our focus is only on the operations which operate within adequate
licensing frameworks and are in compliance with the requirements of the
Cole Memo.
Focus on High-Margin Segments
Nutritional High is focused on the edibles and oil extracts segment of the
marijuana industry, which it believes to have the highest margin potential
and provide an opportunity for rapid scaling. The Company may work in
other value chain segments (such as cultivation or retail dispensaries) in
the jurisdictions which have implemented a "seed-to-sale" regulatory
licensing model, or where a focus solely on edibles or oil extracts is too
prohibitive on stand-alone basis.
Creating Leading Products
Manufacturing high quality products with consistent THC
levels has been one of the dominant problems faced by the
industry. Nutritional High aims to manufacture products
that can become industry leading in terms of quality, THC
levels and have appealing packaging design in each market
from day one.
Compliant Structure and Transparency with
the Regulators
In the U.S. States with residency requirements, the Company
will work exclusively with Licensed Operators to provide a
suite of services (such as providing real estate, financing,
brands and expertise) to facilitate expansion of the Licensed
Operator’s business in the edible MIPs and oil extract
markets. In the states without the residency requirements
the Company may also apply for licenses directly or enter
into JV arrangements with other companies.
High Growth Potential States
Nutritional High selects the states which have a high growth potential.
While the U.S. states which have legalized marijuana for adult recreational
use are the primary focus, Nutritional High will take steps to expand into
the states which have legalized marijuana for medical use with significant
population base, or have potential for legalization for adult recreational
use in the near to medium term.
Expansion Opportunities Overview
California Opportunity
• With state regulation being introduced in California, the
company is developing a potential strategies to secure a
license and enter the edibles market
• Some studies estimate that California accounts for as
much as half of total legal cannabis sales in the United
States, est. at $2.7 billion in 2014
• In Sept 2015, the legislature introduced regulations
contemplating 17 license categories, expected to be
implemented by different state departments by Jan 1,
2018
• Proposition 64 has legalized cannabis for adult
recreational use
Arizona Opportunity
• NH is considering an application for a processing license once
the licensing becomes available
• In discussions with several potential acquisition targets
Michigan Opportunity
• Voters approved the Michigan Medical Marihuana Act on
Nov 4, 2008
• Application submissions after Dec 15, 2017
• 211,000 estimated patients
Washington Opportunity • In discussions with several parties holding Tier 2 or 3 Producer
and/or Processor Licenses regarding a potential transaction with Nutritional High
• Several potential revenue streams:
• Acquire real estate to lease to a licensed entity
• Acquire equipment to lease to a licensed entity
• Provide management services and licensing through a contract
Ohio Opportunity • State licensed dispensaries allowed but not yet operational
• Final rules and specifics to be adopted by Sep 8, 2017. The state plans to grant 40 processor licenses.
• Cultivator rules are adopted and Level I Cultivator applications started being accepted Jun 19th till Jun 30th. Level II Cultivator applications closed Jun 16th.
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Canada Opportunity• In discussions with several ACMPR LPs and late-stage
applicants regarding a potential transaction with Nutritional High
• With the recently announced federal legislation to legalize recreational cannabis, Canada presents a tremendous growth opportunity
Nutritional High International Inc.
Company Shapshot
Exchange/Symbol
Canadian Securities Exchange EAT
OTCQB SPLIF
Frankfurt 2NU
Market Info as of July 1, 2017
Basic Common Shares Outstanding 250,383,732
Warrants (CN $0.05 - 0.22) 38,005,599
Options (CN $0.075 - $0.30) 16,367,500
Fully Diluted Common SharesOutstanding
304,756,831
Non-Convertible Debt US $1.2 M
Cash Balance CAD $4.51 M
Stock Price $0.152
Market Cap $38 M
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1Includes amounts in escrow account for Nevada acquisitions2Price of most recent financing
David Posner
Chairman of the Board and Director
T: (647) 985-6727
Adam Szweras
Director, Corporate Secretary
T: (416) 564-5926
Jim Frazier
Chief Executive Officer
T: (321) 576-7171
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Nutritional High International Inc.
Risk Disclosure
The Company is seeking to establish new business lines, which inherently contains a high degree of risk. The subscribers in theOffering are cautioned to review the following risk factors in addition to those contained in public disclosure record of theCompany (available on www.sedar.com), relating to the Company: (1) The Company has a very limited operating history in anemerging area of business and had negative cash flows from operations in its most recently completed financial year. (2) Non-compliance with federal, provincial or state laws and regulations, or the expansion of current, or the enactment of new laws orregulations, could adversely affect the Company's business. (3) The Company may become subject to additional governmentregulation and legal uncertainties that could restrict the demand for its services or increase its cost of doing business, therebyadversely affecting its financial results. (4) The Company may be required to obtain and maintain certain permits, licenses andapprovals in the jurisdictions where their products are licensed, although the Company does not anticipate such approvals will benecessary. (5) As a manufacturer and distributor of products designed to be ingested by humans, the Company faces an inherentrisk of exposure to product liability claims, regulatory action and litigation, if its products are alleged to have caused significant lossor injury. (6) Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a varietyof reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances,packaging safety and inadequate or inaccurate labeling disclosure. (7) The Company may not be able to accurately predict its futurecapital needs and it may not be able to secure additional financing. (8) The market price of the Common Shares could be subject tosignificant fluctuations in response to various factors, many of which are beyond the Company's control. (9) The Company iscurrently in the early development stage. There is a risk that the additional resources will be needed and milestones will not beachieved on time, on budget, or at all, as they can be adversely affected by a variety of factors. (10) The Company may face intensecompetition and expects competition to increase in the future, which could prohibit its development of customer base andgenerating revenue. (11) The Company's operations are subject to environmental and safety laws and regulations concerning,among other things, emissions and discharges to water, air and land, the handling and disposal of hazardous and non-hazardousmaterials and wastes, and employee health and safety. (12) The Company must rely largely on its own market research to forecastsales as detailed forecasts are not generally obtainable from other sources at this early stage of the industry in the U.S. (13) TheCompany may be subject to growth-related risks including capacity constraints and pressure on its internal systems and controls.(14) The Company has no earnings or dividend record, and does not anticipate paying any dividends on the Common Shares in theforeseeable future. Dividends paid by the Company would be subject to tax and, potentially, withholdings. (15) Exchange ratefluctuations may adversely affect the Company's financial position and results. (16) In the event of a dispute arising from theCompany's foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successfulin subjecting foreign persons to the jurisdictions of courts in Canada. (17) Officers and directors of the Company own significantshares and can exercise significant influence. (18) Sales of a large number of Common Shares in the public markets, or the potentialfor such sales, could decrease the trading price of the Common Shares and could impair the Company's ability to raise capitalthrough future sales of Common Shares. (19) Volatile global financial and economic conditions may negatively affect theCompany's operations.
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