november 2018 true leaf medicine international ltd
TRANSCRIPT
November 2018
True Leaf Medicine International Ltd.
CanadaUnited States
Germany
CS: MJOTCQB: TRLFFFSE: TLA
DISCLAIMERForward Looking Statements
This Presentation (the “Presentation”) has been prepared solely for informational purposes by True Leaf Medicine International Ltd. (“True Leaf) and is solely for use byprospective investors and other third parties in connection with their consideration of an investment in True Leaf. This presentation is not, and should not be assumed tobe, complete. This presentation has been prepared to assist interested parties in making their own evaluation of True Leaf and does not purport to contain all of theinformation that may be relevant. In all cases, interested parties should conduct their own investigation and analysis of True Leaf and the data set forth in thispresentation and other information provided by or on behalf of True Leaf. Any views and opinions expressed in this presentation are those of True Leaf and do notnecessarily represent facts. In addition, certain of the information contained herein may be derived from information provided by industry sources. True Leaf believes thatsuch information is accurate and that the sources from which it has been obtained are reliable. True Leaf cannot guarantee the accuracy of such information, however,and has not independently verified such information. The information presented herein remains subject to change. Statements in this presentation are made as of thedate of this presentation unless stated otherwise.
This presentation also contains statements that, to the extent they are not recitations of historical fact, constitute “forward-looking statements.” Forward-lookingstatements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,”“predict,” “potential” or the negative of such terms and other comparable terminology. The forward-looking statements included herein are based upon True Leaf’scurrent expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgmentswith respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predictaccurately and many of which are beyond True Leaf’ control. Although True Leaf believes that the expectations reflected in such forward-looking statements are based onreasonable assumptions, True Leaf’ actual results and performance and the value of its securities could differ materially from those set forth in the forward-lookingstatements due to the impact of many factors including, but not limited to, risks and uncertainties detailed in the “Risk Factors” in the Risk Factors section of True Leaf’Offering Circular on Form 1-A, filed with the U.S. Securities and Exchange Commission and other discussions of risk factors contained in True Leaf’s periodic filings orsupplements to the offering circular. True Leaf Offering Circular on Form 1-A can be found at https://www.trueleaf.com/pages/investor. True Leaf claims the safe harborprotection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. True Leaf undertakes no obligation to update or revise anysuch information for any reason after the date of this presentation, unless required by law.
Investment in True Leaf’s securities involves significant risks. You should purchase these securities only if you can afford a complete loss of your investment.
True LeafOverview | Pet | Financials 2www.trueleaf.com |
RETURN THE LOVE
Our PurposeTo help pets live healthier lives by embracing natural alternatives
Our VisionGlobal cannabis-for-pets brand leader
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UNDERSTANDING CANNABIS USESDifferentiation of hemp, hempseed, CBD-producing flowers, and more
<0.3% THCis the requirement for a
cannabis plant to be defined as hemp
Marijuana
Cannabis
Hemp
Hemp w/ CBD
• Contains cannabinoids (THC, CBD, e.g.)
• Illegal in most jurisdictions• Medicinal and psychoactive
properties
Hemp w/ trace levels of
CBD
True LeafOverview | Pet | Financials www.trueleaf.com | 4
CANNABIS IN THE MARKET
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Hemp Seed CBD
TRUE LEAF COMMERCIAL STRATEGYPremiere Branding is a Key Differentiator
Dossier is our design and innovation partner that brings a solid track record and process to creating and scaling consumer centered brand platforms.
Creating Brand Insistence
1
2
34
5
The 5 Consumer Drivers
Emotional Engaging
ValueDrivers
AccessibilityAwareness
RelevantDifferentiation
True LeafOverview | Pet | Financials www.trueleaf.com | 6
Global brand recognition with our legal products will drive growth and
set True Leaf apart from its peers in both the pets and cannabis space
TRUE LEAF VISIONGlobal cannabis-for-pets brand leader
PET
$184.1
billionCAGR: 4.9%
CANNABIS
$93.8 billionCAGR: 24.9%
True Leaf serves two of the
hottest industries worldwide
References1. Grandview Market Research Estimates. Estimates are for 2023, calculated from 2025 figures.2. Pet Care Global Industry Overview. Euromonitor.
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TRUE LEAF MARKET OPPORTUNITYLarge Obtainable Market Opportunity in Pets and Cannabis
$300 millionServiceable Obtainable Market
1.01 % of TAM
$29.6 billionServiceable Available Market (Global
pet products markets)
$184.1 billionTotal Available Market
Global Pet Care Market
2023
$31 millionServiceable Obtainable Market
0.03% of TAM
$5.5 billionServiceable Available Market (Canada)
$93.8 billionTotal Available Market
Global Legal Cannabis Market
2023
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Growth plans support $300
million to $350 million of
revenue over the next 5 years
True LeafOverview | Pet | Financials
Market Outlook
Market Positioning
• Pioneer of ‘hemp-based’ product in North America and Europe
• Legal hemp-based products with no CBD/THC in US
• Sold in 2000 stores in North America and Europe
• Carried by leading pet retailers worldwide
Own the Hearts and Minds of Pet OwnersTRUE LEAF PET
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$184 BillionWorldwide Market
$30 BillionUS Pet Food Market
$6 BillionUS Pet Treat Market
Growth• Sales of C$1.4M for fiscal year ended Mar. 31,
2018• 280% increase YoY• Record revenue quarter of C$491 K for Q1 2019
(April to June 2018)• 45% gross margin• 14 dedicated staff in Canada, US and Europe• Exploring acquisition opportunities
International Distribution• Sales in Canada, US, Europe and New Zealand• 2,000 stores across North America, Europe and
New Zealand• Ongoing partnership discussions for Asia
(China, South Korea, Japan, India)
Own the Hearts and Minds of Pet OwnersTRUE LEAF PET
2nd largest pet store in the UK
4th largest pet store in North America2nd largest pet store in
Germany
True LeafOverview | Pet | Financials
Canada
www.trueleaf.com | 10
Part of largest pet store in North America
10th largest pet store in North America
15th largest pet store in North America
6th largest pet store in North America
OUR CUSTOMERSTarget demographics
75.4 MILLION MILLENNIALS
35% have a dog or catPets instead of having kidsCannabis over alcohol
74.9 MILLION BABY BOOMERS
32% own petsEmpty nestersCannabis over pharma
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PET GROWTH STRATEGYTraditional Distribution / Direct-to-Store / Direct-to-Consumer
North America
Europe
Asia Pacific
> Traditional Distribution> Direct-to-Store> Direct-to-Consumer
> Traditional Distribution
> Direct-to-Store
> Direct-to-Consumer
2000Currently in
Stores
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> Traditional Distribution
> Direct-to-Store
TRUE LEAF CAMPUS
Overview• 40-acre site in Lumby, BC, Okanagan’s agricultural region
• Groundbreaking March 2, 2018
• Central 18,000 sq. ft. hub, hydroponic grow, future fractionation,
purification and laboratory facilities
• Completion for Fall 2018
Licensing Timeline• License to Grow – Spring 2019*
• License to Sell – Fall 2019*
‣ Phase 1 capacity – 1,500 kgs/yr
‣ Phase 2 capacity – 10,000 kgs/yr
*Subject to Health Canada approval
True LeafOverview | Pet | Financials www.trueleaf.com | 13
2018 KEY MILESTONESCorporate Overview
January to March
✓Raised $14 MM CAD via SEC compliant Reg A+ equity crowdfunding
✓Purchased 40-acres in Lumby, BC
✓Retained Dossier
April to June
✓ Announced cultivation team
✓Broke ground on Phase 1 of True Leaf Campus
✓280% revenue growth FY 2018 (YE Mar 31)
July to Sep
✓Recruited Sylvain Toutant, former David’s Tea CEO, to Board
✓Launched Veterinarian Advisory Board with Founding Chair Dr. Katherine Kramer
✓Appointed CFO Kerry Biggs, formerly of Lululemon
✓Record revenue quarter Q1 2019 (Apr – Jun 2018)
2H 2018
□ Complete TL Campus construction
□ Select capital markets advisory partner
□ Close next financing round
□ Up-list to major exchange(s)
□ Line extensions
1H 2019
□ Receive License to Grow and Sell
□ Launch global rebrand campaign
□ Launch new hemp-seed and CBD/THC product lines
True LeafOverview | Pet | Financials www.trueleaf.com | 14
COMPANY COMPARISONSCannabis, Pet, Health & Wellness Valuation
True LeafOverview | Pet | Med | Financials www.trueleaf.com | 15
HEA
LTH
& W
ELLN
ESS
/ P
ET
Acquisition Date COMPANY DESCRIPTION SALES ACQUISITION PRICE SALES MUTIPLE
June 2015 Vega®(2015) Plant-based Protein Foods $135 M C$715 M 5.3 X
June 2015 Manitoba Harvest(2015) Hemp-based Foods $38M C$133M 3.5 X
Pet Products
May 2018 Ainsworth Pet (2018) Rachel Ray® $1.9B USD -
April 2018 Blue Buffalo®(2018) Pet Food $1.3B USD $8 B USD 6.25 X
March 2015 Wag® (2017) Dog Walking App $300M investment $650M valuation -
January 2018 Big Heart Brands®(2015)Meow Mix®, Milk-Bone®
Natural Balance® $2.23B $5.8 B USD 2.6X
January 2014 Zukes® (2014) Pet Treat brand $25M* $75M* 3X
CA
NN
AB
IS
COMPANY STOCK SYMBOLLAST PRICE(SEPT 9/17)
Oct 31, 2018 MARKET CAP YEAR END REVENUES
Canopy Growth NYSE: CHC $9.18 $48.29 CAD $11.30 B CAD $55.14 M CAD
Tilray Nasdaq: TLRY - $124.08 CAD $11.82 B CAD $10.1 M CAD
Aurora Cannabis NYSE: ACB $2.23 $8.90 CAD $8.68 B CAD $18.07 M CAD
Aphria APH.TO $6.01 $15.70 CAD $3.83 B CAD $20.44 M CAD
Cronos Group CRON.TO - $9.72 CAD $1.76 B CAD $4.1 M CAD
Green Organic Dutchman (TGOD) TGOD.CN - $3.10 CAD $779 M CAD Non-revenue generating
HIKU Brands HIKU.CN - $2.76 CAD $464 M CAD Non-revenue generating
Terrascend TER.CN - $9.24 CAD $886 M CAD Non-revenue generating
Supreme Cannabis FIRE.V - $1.56 CAD $440 M CAD Non-revenue generating
True Leaf MJ $0.51 $0.51 CAD $49.03 M CAD $1.4 M CAD
LEADERSHIPExpertise in pets, cannabis, retail, branding and government
Executive– Darcy Bomford, Founder and CEO
– Tenzin Khangsar, Executive VP
– Kerry Biggs, CPA, MBA – Chief Financial Officer
– Don Chisholm , VP Global Branding
– Steve Schroeder, Chief Cannabis Industry Advisor
Board of Directors– Mike Harcourt, OC. Chair
– Darcy Bomford
– Sylvain Toutant, CEO of DAVIDsTEA
– Kevin Bottomley
Veterinary Advisory Board– Dr. Katherine Kramer, DVM
Advisors– Osler, Hoskin & Harcourt LLP
– Edison Group
– Dossier Creative
– Hill + Knowlton Strategies
– BreakThrough CommunIcations
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CORPORATE SUMMARYWhat makes us special?
✓ True Leaf: global cannabis-for-pets brand
✓ Pioneer of hemp seed-based pet products
✓ High-growth industries: Pet and Cannabis
✓ Legal revenue in 2000+ stores worldwide
✓ First cannabis company with successful SEC-compliant financing
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