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Flower One investor presentation - February 2019


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An overview of Flower One Holdings Inc., a company sharply focused on quickly becoming the leading cannabis cultivator, producer and innovator in the highly lucrative Nevada market.

Flower One’s common shares are traded on the Canadian Securities Exchange under the symbol "FONE" and in the United States on the OTCQB under the symbol "FLOOF." For more information visit:

Published in: Investor Relations
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Flower One investor presentation - February 2019

  1. 1. CSE:FONE | OTCQB:FLOOF Sharply focused on executional highs Investor Presentation February 2019 CSE: FONE OTCQB: FLOOF
  2. 2. CSE:FONE | OTCQB:FLOOF Disclaimer All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements include forecasts for production, investments, cash flow, capital expenditures and debt levels and are based on estimates. These statements involve known and unknown risks, uncertainties, assumptions and other factors, some of which are beyond the control of Flower One Holdings Inc., that may cause actual results to differ materially from a conclusion, forecast or projection in such forward-looking statements. Flower One Holdings Inc. believes that the expectations reflected in those forward-looking statements are reasonable at the time made but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in, or incorporated by reference into, this presentation should not be unduly relied upon. These statements speak only as of the date of such information, as the case may be, and may be superseded by subsequent events. Flower One Holdings Inc. does not intend, and does not assume any obligation, to update these forward-looking statements whether as a result of information, future events or otherwise. 2
  3. 3. CSE:FONE | OTCQB:FLOOF 3 Flower One is sharply focused on quickly becoming the largest cannabis cultivator, producer & innovator in the highly lucrative Nevada market.
  4. 4. CSE:FONE | OTCQB:FLOOF c 4 Currently converting the largest greenhouse facility in Nevada to prepare for large-scale hydroponic cannabis cultivation, processing, production and high volume packaging. Targeted completion of 400,000 sq/ft cultivation facility in Q1 2019 and 55,000 sq/ft production facility in early Q2 2019. The largest commercial greenhouse in Nevada
  5. 5. CSE:FONE | OTCQB:FLOOF c Becoming a leading cultivator & processor 5 148,000 lbs • 4 medical licenses and 4 recreational licenses for cultivation and production from the State of Nevada • One pending distribution license • Retail license applications submitted in September annual cultivation capacity via combined 480,000 sq/ft from the greenhouse & NLVO facilities
  6. 6. CSE:FONE | OTCQB:FLOOF c Becoming a leading cultivator & processor 6 420,000 lbs Annual production capacity includes: • 20,000 litres of distillate • 50,000 litres of concentrates • 60,000 lbs of wax • 12,000,000 auto-fill packages • 61,000,000 pre-rolls annual processing capacity through CO2, ethanol and butane extraction via 55,000 sq/ft production facility
  7. 7. CSE:FONE | OTCQB:FLOOF Becoming a leading cultivator & processor 7 Products will include: • Bulk flower & trim • Flower (jars & pouches) • Pre-rolls • CBD oil • Rick Simpson oil • Vape pens • Shatter • Dab • Live resin • Topicals • Edibles • Soft gel caps • Drink mixes
  8. 8. CSE:FONE | OTCQB:FLOOF 8 Ken Villazor President & Chief Executive Officer 20+ years corporate affairs experience Held numerous senior positions with large pharmaceutical companies, working extensively in government regulated aspects of commercial operations Served as an Alternate Governor and advisor to a National Hockey League franchise Leadership team Geoff Miachika Chief Financial Officer CPA with 10 years of experience in finance and accounting Formerly Senior Manager with with one of the big 4 accounting firms in Vancouver where he primarily served Canadian and U.S. public companies in audit, accounting advisory and securities engagements
  9. 9. CSE:FONE | OTCQB:FLOOF c Greenhouse conversion underway 9 Greenhouse conversion • > 30,000 hours of construction work completed • Cultivation Facility Targeted Completion Q1 2019 • Production Facility Targeted Completion Early Q2 2019
  10. 10. CSE:FONE | OTCQB:FLOOF Greenhouse progress 10 Expansion of production facility Installation of cutting cells Vegetative zones nearing completion
  11. 11. CSE:FONE | OTCQB:FLOOF c Nevada's largest cultivation & production facility 11 400,000 sq/ft 400,000 sq. ft. dedicated to cultivation 55,000 sq. ft production facility dedicated to processing and packaging 40,000sq/ft Sustainable cannabis at scale
  12. 12. CSE:FONE | OTCQB:FLOOF Nevada 1st Year Revenue 2018FY Nevada market potential 12 IN NEVADA $529.9 2018 FY Combined Sales (1st Year) Source: : State of Nevada, Department of Taxation and Statista 2018, Colorado Sales Estimate based on Colorado YoY ∆ Nevada’s legal cannabis market (US$ in Millions) IN COLORADO 29.3% 3-year CAGR Combined Cannabis Sales (2014-2017) 529.9 754.1 995.2 1144.4 0 200 400 600 800 1000 1200 2018A 2019E 2020E 2021E Based on Colorado YoY Growth Rate *Includes both recreational and medical cannabis sales
  13. 13. CSE:FONE | OTCQB:FLOOF c A leading cannabis market 13 Established legal market • No limits on cultivation or production for license holders • Gold standard regulatory framework • Approximately 280 licenses across entire value chain • Legal since 2000 Recreational upside • Legalized for adult-use on July 1, 2017 • 55M+ visitors to Nevada(2017) • 3M population • Strong, stable pricing • 62 dispensaries today – expected to double in 2019
  14. 14. CSE:FONE | OTCQB:FLOOF 4.5 8.6 9.1 9.3 6.8 8.5 11.7 4.2 7.8 7.4 6.5 8.0 9.9 37.9 33.4 35.8 32.9 35.4 41.0 35.8 43.7 40.6 41.0 42.0 41.5 41.7 October November December January February March April May June July August September October Fast growing recreational market (US$ in millions) 14 Since Nevada legalized marijuana for recreational use on July 1, 2017, the State has reported a strong pace of monthly sales Source: State of Nevada, Department of Taxation Medical Recreational
  15. 15. CSE:FONE | OTCQB:FLOOF $2,145 $2,268 $2,799 $2,303 $631 $601 $798 $794 7/1/2017 1/1/2018 7/1/2018 1/1/2019 Favourable pricing environment 15 Fair market value per pound (wholesale in US$) Flower Trim Source: State of Nevada, Department of Taxation
  16. 16. CSE:FONE | OTCQB:FLOOF 16 Industry leading food and beverage design build company under exclusive contract to oversee project planning and conversion (including automation of drying, trimming, grading, processing & packaging) In the midst of single conversion of all 8 zones of the greenhouse, with ~80,000 plants growing at any one time once fully canopied Canopy targeted for Q1 2019
  17. 17. CSE:FONE | OTCQB:FLOOF Incorporation of Company (originally as CNX Holdings Inc.). Recent milestones Entered Agreement to acquire the largest commercial scale greenhouse (430,000 square feet) in Nevada. Completed a C$34.7M private placement to support conversion of Nevada greenhouse and construction of an additional 25,000 sq. ft. to enhance production & processing capacity. Received approval from the State of Nevada on the assignment of two provisional marijuana licenses (cultivation and production) to the Company’s greenhouse. Commenced greenhouse conversion. 17 December 2017 March 2018 April 2018 May 2018
  18. 18. CSE:FONE | OTCQB:FLOOF Received approval of its medical marijuana cultivation licenses and medical production cultivation license from the State of Nevada. Recent milestones Company’s Shareholders approved reverse takeover transaction with Theia Resources Ltd. Completed transaction to fully acquire the Nevada greenhouse. . Completed C$57.4M private placement financing, bringing the Company’s total private equity financing to C$92.1M. Completed reverse takeover transaction to Theia Resource Ltd. Received approval of recreational cannabis cultivation licenses and recreational production cultivation license from the State of Nevada. 18 July 2018 August 2018 September 2018 Submitted applications to the State of Nevada for a recreational marijuana cultivation license and production license. Entered amalgamation Agreement with Theia Resources Ltd. (TSX-V:THH). June 2018
  19. 19. CSE:FONE | OTCQB:FLOOF Recent milestones Added to the CSE 25 Index effective Dec. 21, 2018 Announcement of brand partnership with Huxton, Palms, Old Pal, Flyte and Rapid Dose Therapeutics (RDT). Gives Flower One the right to manufacture, distribute and sell their products in Nevada. Entered a Genetics and Plant Supply Agreement with NLV Organics Inc. Entered definitive agreements for the acquisition of NLV Organics Inc. business assets. Commences trading on the Canadian Securities Exchange under ticker symbol FONE. 19 December 2018 January 2019October 2018 Closed on the NLV Organics Inc. business asset acquisition, including 5 additional licenses. Commences trading on the OTCQB under ticker symbol FLOOF. November 2018
  20. 20. CSE:FONE | OTCQB:FLOOF Turnkey large-scale cultivation & processing Master, senior and assistant growers; integrated pest management; packaging & automation 20 Ability to draw upon a pool of crop/product handling personnel specially trained for the requirements of our facility Extensive network of the best greenhouse industry suppliers Targeted completion of greenhouse conversion and commencement of operations Q1 2019
  21. 21. CSE:FONE | OTCQB:FLOOF 21 Brand partnership portfolio Topical Edible Concentrate Vape Pre-Rolled Bud
  22. 22. CSE:FONE | OTCQB:FLOOF c Internal brand 22 • 25,000 sq/ft state-of-the-art licensed indoor cultivation and production facility, currently at full operational status • 2 medical licenses and 2 recreational licenses for cultivation and production, and one pending distribution license • Extensive retail reach • Selling to 30+ dispensaries • Local leadership / management Immediate access to 50+ strains and accelerates greenhouse cultivation plan by supplying genetics and initial cuttings to rapidly canopy greenhouse Photo from NLVO facility
  23. 23. CSE:FONE | OTCQB:FLOOF Flower products Oils and extracts NLV Organics Inc. product line 23 • Topicals • Packaged flower • Rick Simpson Oil (RSO) • Concentrates• Vape (Reloadable & disposable) • Pre-rolls
  24. 24. CSE:FONE | OTCQB:FLOOF c Brand partnerships 24 • Announcement of brand partnership with Rapid Dose Therapeutics (RDT) • QuickStrip delivery system, with option for sale under their private brand or as white label. • The concentrates products, FlytePen and JetPack • Right to manufacture, distribute and sell their products in Nevada
  25. 25. CSE:FONE | OTCQB:FLOOF c Brand partnerships 25 • Popular lifestyle cannabis brand out of California • Value-oriented segment of the market • Dried flower and pre- ground rolling kit • California-based, experience-driven cannabis brand • High-quality pre-rolls products lines ‘Social’ and ‘Chill’
  26. 26. CSE:FONE | OTCQB:FLOOF Brand partnerships 26 • Leading lifestyle brand developed to simplify buying experience • Based in Arizona and Washington • Blended product categories HIFI, RISE & ZEN • Pre-rolls, flower tins & vape pens
  27. 27. CSE:FONE | OTCQB:FLOOF Key statistics 27 US$ Estimated annual cultivation of greenhouse facility State published fair market value wholesale price* Triple A Flower 100,000 lbs $2,799/lb Trim 30,000 lbs $798/lb Small Bud 10,000 lbs $2,227/lb *as at July 2018
  28. 28. CSE:FONE | OTCQB:FLOOF Capital structure 28 All figures in Canadian dollars Pre-financing shares 140,804,200 Equity financing – round 2 31,388,079 Total shares 172,192,279 Stock option pool 12,290,000 2nd round equity financing price per share C$2.00 Net proceeds to fund greenhouse acquisition, state-approved licenses, facility conversion & general working capital ~60% of current issued & outstanding shares held by insiders Single class common shares and options (no warrants or preferred shares)
  29. 29. CSE:FONE | OTCQB:FLOOF Q3 2018 financials 29 September 30, 2018 December 31, 2017 Total Assets $ 84,583,134 - Total Liabilities 18,142,091 204,666 Total Equity $ 66,441,043 204,666 Three Months ended Sept. 30, 2018 Nine Months ended Sept. 30, 2018 Total Revenue $ - - Loss for the period (5,581,651) (7,170,847) Total assets 84,583,134 84,583,134 Total non-current Financial Liabilities - - Distribution of cash dividends $ - -
  30. 30. CSE:FONE | OTCQB:FLOOF 30 Highlights 1. Will be the largest cultivator & producer in Nevada 2. Licenses for medical and recreational cultivation & production 3. Experienced greenhouse operators with a track record of profitable growth 4. Targeting Q1 2019 for being canopied
  31. 31. CSE:FONE | OTCQB:FLOOF Ken Villazor President Toronto, ON E: Geoff Miachika Chief Financial Officer Vancouver, BC E: Media & Investor Inquiries NATIONAL Capital Markets Toronto, ON T: 416-848-9835 E: 31 Sharply focused on executional highs CSE: FONE OTCQB: FLOOF