january 2020 - vivo cannabis · january 2020. forward-looking statements ... •vivo’s annabis...

TSXV: VIVO OTCQX: VVCIF

Corporate PresentationJanuary 2020

TSXV: VIVO OTCQX: VVCIF

Forward-Looking StatementsCertain information included in this presentation, which is dated as of January 14, 2020 constitutes “forward-looking statements” or “forward-looking information” asdefined in applicable Canadian securities laws. Any forward-looking statements speak only as of such date and include any information as to future financial oroperating performance and other statements that express expectations or estimates of the future performance of VIVO Cannabis Inc. and its subsidiaries (collectively,“VIVO” or the “Company”). 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: that the Company is well positioned for growth; timing of expected GMP certification; expectedfuture size of the European medical cannabis market; VIVO’s product differentiation; expected production and extraction capacity; the expected success and timing ofVIVO’s product development activities; VIVO’s proposed growth plan, in Canada and internationally; and VIVO’s potential future revenue drivers. Forward-lookingstatements are intended to provide prospective investors with an outlook on the Company’s activities and information pertaining to the Company’s longer-termobjectives and may not be appropriate for other purposes. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general andspecific, 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 unduereliance on these statements, as many important factors, many of which are beyond the Company’s control, could cause actual results to differ from the expectationsexpressed 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; the occurrence of events that damage the reputation of the industry, increase regulatoryrequirements and cause consumer interest to decline; general economic conditions; loss of potential markets; future legislative and regulatory developments; inabilityto access sufficient capital to pursue business objectives on favorable terms or at all; the ability of the Company to implement its business plan; product liability risks;crop failure risks; and other factors beyond the control of the Company. The foregoing list of factors is not exhaustive. When reviewing the Company’s forward-lookingstatements, readers should carefully consider the foregoing factors and other risks, uncertainties and potential events, including those set out in the Company’sannual information form dated April 30, 2019. This presentation also includes information obtained by the Company from third parties, including, but not limited to,information regarding market data. The Company believes such information to be accurate but has not independently verified such information. The Company doesnot intend, and disclaims any obligation, to update any forward-looking statements or other information in this presentation, whether written or oral, or whetherbecause of new information or otherwise, except as may be required by applicable securities laws. In addition, the Company notes that Health Canada has advisedthat cannabis is not an approved therapeutic drug in Canada and that, at present, while pointing to some potential therapeutic benefits, the scientific evidence doesnot establish the safety and efficacy of cannabis to the extent required by the Food and Drug Regulations for marketed drugs in Canada unless a specific cannabisproduct has received a notice of compliance from Health Canada and a Drug Identification Number (DIN).

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VIVO has built a solid foundation of quality products,top talent, working capital and scalable capabilities.We received two of the first 15 licenses issued byHealth Canada in 2014 and have benefited from oversix years of intense learning in this nascent industry.

Barry FishmanChief Executive Officer

Small-town roots. Big-time vision.

VIVO’s Competitive Edge

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Raising the bar with quality, compliance and governance

Premium and novel cannabis products and services

Phased investments which balance supply and demand

Focus on profitability and disciplined capital allocation

LONG-TERMSHAREHOLDER VALUE

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Investment Highlights

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PREMIUM PRODUCTS & SERVICESwith health and wellness focus

INNOVATION-DRIVEN product development

FOCUSED INTERNATIONAL GROWTH with DE/AU as primary targets

STRONG FINANCIAL POSITION to act quickly on opportunities

DIVERSE TEAM OF PROFESSIONALS with global experience

MEDICAL-GRADE CANNABIS with award-winning quality

Leveraging Pharmaceutical Experience

• Strong network of global relationships within the pharma industry

• Track record of successful medical product launches globally

• Deep understanding of patient needs, regulatory and reimbursement landscape and physician marketing

• Experience in product development, including novel formats, with dose-control and bioavailability

• Ability to leverage large offering of medical cannabis SKU’s

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MEDICAL-GRADE CANNABIS WITH AWARD-WINNING QUALITY

A Quality-First Culture is Priority #1

• EU-GMP certification at Vanluven Road facility nearing completion - a “bar” which is the global gold standard

• Proven track record of clean audits and a strong relationship with Health Canada and other regulators across three licensed facilities

• A semi-annual compliance inspection run by qualified third-parties is in place at all licensed facilities

• A quality and compliance focus is part of VIVO’s DNA

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PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS

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Premium Brands Focused on Health & Wellness

From seed to sale, VIVO is a family of premium products and services developed to meet the needs of both medical and adult-use consumers.

Setting a higher standard with compliance, governance and execution

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Q3 2019 YTD NET REVENUE

$17 million

Plans Driven by Market Segment Insights

Which Need States are More Relevant to Each Market Segment?

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Recreational

Wellness

Medical

Bring control to my day Inhibit the pain Calm my mind Enjoy the moment

Source: VIVO commissioned third-party study of 1,500 adult -use and medical cannabis users across Canada

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Artisanal Products in Small-Batches

• First licensed producer in B.C.

• Profitable business since 2014

• Large selection of award-winning, hand-trimmed cannabis

• Premium indoor-grown that commands premium pricing

• Operated by the visionary and passionate founders

• Inspired by the stunning scenery

• Organically grown using glacial water, organic soil and other artisan practices

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Targeted Premium Adult-Use Brands

• Craft-produced, high-quality cannabis products

• Unique products targeted to specific market segments in development

• Focus on signature quality in freshness, scent and visual appeal

• Current demand for the VIVO family of products is exceeding available supply

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Promoting a healthy mind and body. All products are non-combustible

A diverse portfolio of premium dried flowered, edibles, vapes and concentrates

Wellness, Elevated. Let’s Spark An Adventure Together.

Building Brand Awareness in the Adult-Use Market

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Engage and support cannabis culture Age-gated activations to drive awarenessRetail partnerships with 50 distribution points, and growing

ENGAGEMENT ACTIVATIONSPARTNERSHIPS


Selecting Leading Strategic Partners to Drive Top-Line Revenue

Provincial and territory government listings

• Ontario

• Alberta

• British Columbia

• Manitoba

• Saskatchewan

• New Brunswick

• PEI

• Yukon

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Private retail partnerships

• Clear selection criteria

• Disciplined account management

• Clear plans, governance and KPI’s

Adult-use Retail Partners

Medical Product Partners

Helping Patients Navigate their Journey

• Our Canna Farms on-line medical marketplace provides one of the widest selections of products in the industry

• Harvest Medicine and the VIVO LP’s offer a fully integrated seed-to-sale solution for medical cannabis patients

• The customer experience is designed to simplify the patient journey

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https://www.cannafarms.ca

Driving Medical Cannabis Market Leadership

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New materials to support the patient journey

Package design to facilitate ease of useOne of the largest on-line medical cannabis marketplaces

EDUCATION SIMPLICITYACCESSIBILITY


Industry-Leading Medical Cannabis Clinics


• Five clinics in Alberta, Ontario, Nova Scotia and New Brunswick with proven patient-focused care

• High-quality proprietary data from 50,000+ patient visits to steer product development and treatment plans

• Telemedicine service provides access from remote locations in the convenience of patients’ homes

• Clinic networks provides valuable medical and patient insights to VIVO’s licensed producers to drive product innovation

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A Sharp Focus on Margin Expansion

• Unique and novel products targeted to specific market segments

• Building efficient and flexible advanced manufacturing capabilities, including extraction and formulation pave the way for value-added products

• Strongest margins achieved through premium quality and value-added products

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INNOVATION-DRIVEN PRODUCT DEVELOPMENT

Dried Flowerand Oils

Cannabis 2.0

Pharma-likeformats

Unique products

INCREASING MARGINS

Proven Product Development Partners

• Strategic partnerships (Pharmascience and several other pharmaceutical GMP certified developers) will provide a future stream of novel medical cannabis products

• Robust pipeline of non-combustible, precisely-dosed products in development under GMP standards

• Data and insights from medical cannabis patients drive product development


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Building Innovative Low-Cost Capacity

Benefit: lower cost than indoor grow, higher quality than outdoor

• Airhouse (seasonal greenhouse) design provides constant air flow, temperature moderation and moisture control

• USDA certified for plant pest quarantine zone - positive pressure keeps insects out

• Capacity of approximately 4,000 kilograms annually with two harvests

• 50+ acres available for future expansion on-site

• Successful pilot planting and harvest completed in 2019

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Diverse Cannabis 2.0 Product Line

• VIVO’s Cannabis 2.0 line includes vapes, chocolates, and concentrates that include kief, rosin, bubble hash, wax and shatter - leveraging our premium adult-use cannabis brands of Canna Farms™ and Fireside™.

• VIVO has partnered with a world-class and award-winning Belgian chocolatier, ChocolaTas, and together have created Fireside™ Chocolates

• VIVO continually reviews and tests all inputs to ensure the highest quality standards are met.

• VIVO vape cartridges contain only natural cannabis extract, and cannabis derived terpenes.

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Experience Scalable Beyond Canada

• Proven track-record of scaling European medical-focused businesses

• Over 5 years of experience producing medical-grade products

• Proven patient-centric approach with leading retention rates

• Leverage robust data from > 50,000 patient visits

• Leverage medical products developed for Canadian market

• Scalable VIVO Canadian model coupled with local market customization and talent

FOCUSED INTERNATIONAL GROWTH WITH DE/AU AS PRIMARY TARGETS

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FORECAST EUROPEAN MEDICAL CANNABIS MARKET FOR 2028

$80B*

A Two-Pronged International Focus

GERMANYpoint of entry into Europe

• Received wholesale and narcotics license – awaiting EU-GMP in Napanee and import license in H1 2020

• Cannabis generally reimbursed by universal drug program

• Licensed EU-GMP cultivation partner: Linneo in Spain

• Leverage Canadian medical product development

AUSTRALIAplatform for growth into Asia-Pacific

• Commenced selling in Q1, 2019

• Initiated pain and palliative care studies in Q2, 2019 with over 100 patients expected to participate

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FOCUSED INTERNATIONAL GROWTH WITH DE/AU AS PRIMARY TARGETS

* Source: BMO Capital Markets “What Could the Global Opportunity for Cannabis Look Like,” November 2, 2018.

Financial Highlights

$17MQ3 2019 YTD NET REVENUE

Over 5 million grams sold to date

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$50MCASH AND NON-EQUITY INVESTMENTS*

Strategic equity investments $10M

$7.15g*

DRIED CANNABIS NET SALES PRICE**

* As at September 30, 2019 * Top LP Net ASP in several provinces

** Net of excise tax and sales deductions for Q3, 2019

Well-Capitalized to Execute Focused Growth Plan

As of Sept 30, 2019

Common shares outstanding 295.8

Debentures issuable on conversion 11.0

Warrants 15.2

Options/RSU’s 10.3

Market capitalization* ~$67

Cash and Cash Equivalents** ~$50

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STRONG FINANCIAL POSITION TO ACT QUICKLY ON OPPORTUNITIES

Ownership***

27%

73%

Management & Board

Other shareholders

* Based on Jan 9 2020

** Based on Sept 30, 2019

*** Source: Public filings, Thomson Eikon.

Capitalization Summary (in millions)

Balancing Supply and Demand

STRONG FINANCIAL POSITION TO ACT QUICKLY ON OPPORTUNITIES

1. Current Internal Cannabis Production Capacity

Expected incremental supply through qualified third party licensed cultivators up to 5,000 Kilograms (Ontario and Spain)

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3. Certified Third Party Cultivation Partnerships

Approximate internal capacity of 12,000 Kilograms (premium indoor and seasonal greenhouses for extraction). EU-GMP expected in H1 2020

2. Mid-2020 Internal Processing Capacity

Approximate internal capacity for extraction approximately 50,000 Kilograms (solvent-less, supercritical CO2 and future ethanal)

Seasoned and Focused Senior Management Team

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DIVERSE TEAM OF PROFESSIONALS WITH GLOBAL EXPERIENCE IN REGULATED INDUSTRIES

Barry Fishman, Chief Executive OfficerOver 20 years as a healthcare business leader, former CEO of three pharmaceutical companies; Canadian and international experience. Extensive public company board experience.

Andreas Sander, President, European Operations25 years of experience in European pharmaceuticals, including senior management roles in several multinational pharmaceutical companies.

Dr. Michael Bumby, Chief Financial Officer and Secretary20 years of experience in pharmaceuticals with more than 10 years spent internationally. Previously CFO of three publicly held Canadian companies, most recently at Merus Labs.

Daniel Laflamme, President Canna Farms and Chief Operations Officer Co-founder of Canna Farms. More than 15 years of financial, operational and regulatory business experience.

Tim Hayden, VP Global Corporate Development19 years of experience in corporate finance and business development in the Cannabis, Life Science and Healthcare practices at Deloitte and KPMG in North America, Europe and Africa.

Ray Laflamme, Senior Vice President, Facilities & EngineeringCo-founder of Canna Farms. Commissioned several industrial food grade facilities, including the Canna Farms’ facility.

Gary McMullen, President, Napanee Cannabis Co. 20 years experience in premium segment of the highly regulated brewing industry. President and co-founder of Muskoka Brewery.

Carol Chan, President, Harvest MedicineOver 10 years of sales and marketing leadership experience from the pharmaceutical & medical device industries. Previously led Global Commercial Operations for a women's health company with a market presence in 80 countries.

Select Near-Term Catalysts

• Cannabis 2.0 launches in Q1 2020; including premium chocolates, extracts and vapes

• Increased extraction capacity and production capability

• Product launch in Germany targeted for H1 2020

• Completion of Phase 5 in BC in Q1 2020 adding production space and introducing two-tiered growing

• GMP certification in Napanee facility in H1 2020

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Four Priorities to Drive VIVO’s Scalable Growth

Enhance supply and production CAPABILITIES

• Focus on premium indoor dry flower, as well as low-cost cultivation for extraction

• EU-GMP certification, extraction and automated packaging

• Quality and compliance attitude at all levels

Create a broad and loyal CUSTOMERnetwork

• Leverage our industry-leading medical clinic network

• Promote award-winning brands in medical, craft, wellness and recreational markets

• Build retail and medical strategic partnerships with award-winning products and service

Build an INNOVATION-driven branded organization

• Advance partnerships to create novel products with a speed to market focus

• Focused on sustainable high-margin, high-value products

Accelerate INTERNATIONAL medical business growth

• Apply Canadian learnings to select high-opportunity countries

• Use Germany and Australia as footholds to Europe and Asia-Pacific

• Select partners with local market knowledge and stakeholder network

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CONTACT:

+1.416.848.9839

[email protected]

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january 2020 - vivo cannabis · january 2020. forward-looking statements ... •vivo’s annabis...

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