Cannabinoid Biosciences Inc. (CBDZ) is the first female controlled Cannabis IPO in the United States and Canada. This is a Secured Convertible Note paying 12% annual interest. A $1,000 Note is convertible into 125 shares of CBDZ Common Stock which is currently being registered with the SEC under Reg. A+, to be sold at $10 per share. The minimum investment is $1,000 per unit of our Secured Convertible Notes offered under Reg. D 506 (c). CBDZ has agreed to buy 10 dispensaries from their current owners for $49 million. The 10 dispensaries has $54 million in annual revenue. With the purchase, rollup and consolidation of the 10 dispensaries, CBDZ will IPO on the NASDAQ or NYSE and Canadian Securities Exchange (CSE). Once CBDZ successfully listed on the NASDAQ, that $1,000 investment could fetch up to $21,500 based on what the NASDAQ and NYSE market-participants pay for rollup/consolidated Cannabis business. These market-participants pay an average of $131 per $1 of revenue for Cannabis businesses.
2. Cannabinoid Biosciences Inc.
OUR MARKET: As at November 15, 2018, Thirty-three states and the District of
Columbia currently have passed laws and/or regulations that recognize, in one form or
another, legitimate medical uses for cannabis and consumer use of cannabis in connection
with medical treatment. The District of Columbia and 10 states -- Alaska, California,
Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington -
- have adopted the most expansive laws legalizing marijuana for recreational use. It is no
wonder then that the legal marijuana market in the U.S. is estimated to grow from $9.2
billion in 2017 to $47.3 billion in 2027. Another report from RBC Capital Markets
showed that American cannabis sales are quickly catching up to those of beer and wine,
and the market could be worth $47 billion within a decade.
REGULATION: The regulatory environment is gradually shifting more favorably on
medical cannabis biopharmaceutical cannabinoid at both federal and state level. For
example, the H.R. 2, the Agriculture Improvement Act of 2018, also known as the 2018
Farm Bill, H.R. 2 includes a provision that lift the ban on hemp, authorize hemp
production and research and amend the Controlled Substances Act. See.
https://rules.house.gov/bill/115/hr-2. On December 12, 2018, U.S. Congress approved a
Bill to Make CBD Federally Legal. Passage of 2018 Farm Bill clarifies CBD legal status
and lets U.S. farmers grow hemp, but some regulatory questions remain.
https://www.consumerreports.org/marijuana/will-new-farm-bill-make-cbd-legal-
everywhere/
CUSTOMER BASE AND MARKET ACCEPTANCE: There is excitement in the air
as market sentiment among investors and companies alike in the legal marijuana industry
grows more positive. Many states are promising to deliver new markets, reducing risk
exposure from the federal government legally intervening. This situation is creating an
inviting paradigm for investors; stabilized business environments, breakthroughs in
Congress, and shifts in federal enforcement. Cannabis-related business such as our
research and development of cannabinoid, cannabidiol, endocannabinoids,
phytocannabinoids, and synthetic cannabinoids product platform suitable for specific
treatments, are gaining acceptance in the eyes of the general public including the recent
pronouncements and conducts of the U.S. Food and Drug Administration (FDA), showed
that federal authorities are not opposed to such research and development.
COMPETITION: Right now there is no fund focused on rollup of existing high-margin
dispensaries California and across the U.S. marketplace. In California for example, with
358 licensed recreational marijuana stores, the state’s three licensing authorities have
issued over 5,000 commercial cannabis licenses. So competition is not an issue now.
OPPORTUNITIES: Above market data was one of the reasons that informed our
principals’ decision to raise capital through the Regulation A+ crowdfunding platform to
$50 million with which to acquire/rollup 10 select dispensaries, consolidate their
operation and financial information, and IPO on the NASDAQ or NYSE and Canadian
Securities Exchange (CSE). In addition, we are raising $75 million through the
3. Regulation D 506 (c), for immediate rollup opportunities while waiting for the U.S
Securities and Exchange Commission (SEC) to qualify our Reg. A+ Offering Circular.
ROLLUP OPPORTUNITY: We’re raising $50 million through Reg A+ and $75
million via Reg. D to acquire 10 dispensaries which we’ll rollup into our holding
company and IPO on the NASDAQ or New York Stock Exchange. Based on the most
recent large-scale buy/sell transactions in the stock market (STZ buyinto CGC and Altria
buyinto CRON), and the fact that the market is paying on average $131 per $1 of revenue
for Cannabis businesses, a successful rollup as contemplated would fetch about $4.6
billion or $215 per share after consolidation and listing on NASDAQ or NYSE. See
spreadsheet below:
4. Compared to the currently NASDAQ/NYSE listed peers of ACB, CANN, CBDZ,
CGC, CRON, APHA and GWPH, a $54 million revenue with robust profitability of
$17 million would give CBDZ a market valuation north of $7.1 billion and south of $2.2
billion.
Five-Year Pro Forma Financial Summary
2019 2020 2021 2022 2023
Revenue
Retail and Wholesales 54,237,238 63,544,375 74,448,621 87,224,040 102,191,728
Real Estate and Financial 372,320 1,703,880 3,420,480 4,593,480 5,383,480
Industry Turnkey Solutions 294,000 3,243,600 13,149,321 17,318,186 22,068,824
Compliance Solutions 56,000 1,329,000 4,212,000 5,122,000 7,642,000
Industry Rollup 0 0 0 60,000,000
Total Gross Revenue (USD) 54,959,558 69,820,855 95,230,422 114,257,706 197,286,032
Net profit $17,091,402 $20,024,295 $23,460,474 $27,486,303 $32,202,966
Dividend Distributions 8,545,701 10,012,148 11,730,237 13,743,151 16,101,483
Reinvestments 8,545,701 10,012,148 11,730,237 13,743,151 16,101,483
Projected Market
Capitalization
$4.68
Billion
$5.48
Billion
$6.42
Billion
$7.52
Billion
$8.82
Billion
5. Investment Terms The following summarizes the key terms of the Secured Convertible Notes and
the private placement. Please refer to the relevant sections of the PPM and related documents,
including the Company‛s articles of incorporation (“Articles”) for more complete details about the
Secured Convertible Notes and the private placement.
Issuer Cannabinoid Biosciences, Inc.
Security Secured Convertible Note into Common Stock
Discount 20%
Interest Rate 12% Per Annum
Maturity December 31st 2023
Valuation Cap N/A
Floor N/A
Minimum Subscription $1,000 per investor
Maximum Subscription $75 million per investor
Initial Closing Min. of $10K before 12/31/2019
Additional Closings One or more; up to a total of $75 million
Use of Proceeds Rollup Cannabis and fund growth across US
Dividend Declarations Dividend payment in year 4, subject to Board approval
Liquidity Event Sale of company or listing on a major stock exchange
Mandatory Conversion Converts to Shares of Common Stock
Resale Restrictions No resale permitted within 12 months & Board approval
Voting Rights
Per Cannabinoid Biosciences Inc. Articles of
Incorporation and By Laws
Registrar and Transfer Agent FundAmerica (VStock Transfer)
Escrow Company Prime Trust
Corporate Bank Bank of America
Legal Counsel Law Office of Azuka L Uzoh
ISIN / CUSIP To be issued
Governing Law Laws of California
*Conversion price will be the lower of the price per share determined by the discount to the next
qualified priced round price per share OR the price per share determined by dividing the cap by the
next qualified priced round pre-money valuation.
The PPM is available upon request
