2. TSX: ZENA
1
Disclaimers
IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING. The information contained in this document has been prepared by Zenabis Global Inc. (“Zenabis” or the “Company”). The information
contained in this document (a) is provided as at the date hereof and is subject to change without notice, (b) does not purport to contain all the information that may be necessary or desirable to fully and accurately evaluate
an investment in the Company, including important disclosures relating to the terms of an investment and risk factors associated with an investment in the Company and (c) is not to be considered as a recommendation by
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This presentation, and the information contained herein, is not for release, distribution or publication into or in the United States or any other jurisdiction where applicable laws prohibit its release, distribution or publication.
This presentation (“Presentation”) is being issued by the Company for information purposes only. It is information in a summary form and does not purport to be complete. It is not intended to be relied upon as advice to
investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Reliance on this Presentation for the purpose of engaging in any investment
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This Presentation is not a prospectus, offering memorandum or an advertisement and is being provided for information purposes only and does not constitute or form part of, and should not be construed as, an offer or
invitation to sell or any solicitation of any offer to purchase or subscribe for any securities in Canada, the United States or any other jurisdiction. Neither this Presentation, nor any part of it, nor anything contained or referred
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be made on the basis of the information contained in this Presentation but are referred to the entire body of publicly disclosed information regarding the Company. This Presentation is qualified in its entirety by reference to,
and must be in read in conjunction with, the Company’s publicly disclosed information.
Certain information contained herein includes market and industry data that has been obtained from or is based upon estimates derived from third party sources, including industry publications, reports and websites. Third
party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance or guarantee as to the accuracy or completeness of included data.
Although the data is believed to be reliable, neither the Company nor its agents have independently verified the accuracy, currency or completeness of any of the information from third party sources referred to in this
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sources of market and industry data or information. This Presentation has not been independently verified and the information contained within may be subject to updating, revision, verification and further amendment.
While the information contained herein has been prepared in good faith, except as otherwise provided for herein, neither the Company, its directors, officers, shareholders, agents, employees or advisors give, has given or
has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other
written or oral information made or to be made available to any interested party or its advisers and liability therefore is expressly disclaimed for any loss howsoever arising, directly or indirectly, from any use of such
information or opinions or otherwise arising in connection therewith. Except as may be required by applicable law, in furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the
recipient with access to any additional information or to update this Presentation or to correct any inaccuracies or omissions. Information contained in this Presentation is the property of the Company and it is made available
strictly for the purposes referred to above.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION: This document includes information, statements, beliefs and opinions which are forward-looking, and which reflect current estimates,
expectations and projections about future events, including, but not limited to the intended conversion, expansion and optimization of the Company’s facilities, the anticipated production capacity of the Company, the receipt
of required licenses to operate, our harvest forecast for the remainder of 2019, and other statements that contain words such as "believe," "expect," "project," "should," "seek," "anticipate," "will," "intend," "positioned," "risk,"
"plan," "may," "estimate" or, in each case, their negative and words of similar meaning. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or
events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events
described herein. These factors and risks include, but are not limited to, those described in our Base Shelf Prospectus dated April 9, 2019, a copy of which is available on SEDAR at www.sedar.com, and could cause actual
events or results to differ materially from those projected in any forward-looking statements. Forward-looking information contained in this Presentation is based on our current estimates, expectations and projections, which
we believe are reasonable as of the current date. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Investors
are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions and/or management's good-faith belief with respect to future events and are subject to known
or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control. You should not place undue reliance on forward-looking statements, which are based on the
information available as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking information contained in this document, whether as a result of new
information, future events or otherwise, unless required by applicable law. The forward-looking information included in this Presentation is expressly qualified in its entirety by this cautionary statement.
Historical statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. In this regard, certain financial information
contained herein has been extracted from, or based upon, information available in the public domain and/or provided by the Company. In particular historical results of the Company should not be taken as a representation
that such trends will be replicated in the future. No statement in this document is intended to be nor may be construed as a profit forecast.
ELECTRONIC DISTRIBUTION: This document may have been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic
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accepts any liability or responsibility whatsoever in respect of any difference between the document distributed to you in electronic format and the hard copy version that is available to you.
3. TSX: ZENA
1999
Purchased adjoining
72 acres of land
1986 2019
2
Zenabis was formed in January 2019 after the reverse-takeover of
Bevo Agro Inc. by Sun Pharm Investments Ltd.
WHERE WE CAME FROM…
▪ Successful 30+ year growing history in British Columbia, Canada
▪ Specialized in the propagation of hundreds of unique crops at an industrial scale
▪ EBITDA grew at a compounded annual rate of ~20% from FY2011 to FY20181
▪ EBITDA margins of ~24% in FY20181; strong margins in a competitive industry
1986
Purchased first 26
acres of land
Note: 1) FY means the fiscal year ended June 30 of Bevo Agro Inc.
▪ Broad depth of experience ranging from successfully developing businesses in highly regulated
industries to operating one of the largest fresh herb and produce companies in North America
▪ 100+ years combined experience in pharmaceuticals and agricultural consumer packaged goods
2000
Became a public
company
1987
First 2.5 acre
greenhouse was built
2014
Purchased a five acre
greenhouse in Pitt
Meadows
2014
Cannabis business
formed as Zenabis
Limited Partnership
2016
Received investments
from Government of
NB and the Listuguj
First Nation
2016
Acquired Zenabis
Stellarton through
acquiring all shares of
Vida Cannabis
2017
Obtained cultivation
and processing
licenses in Zenabis
Delta and Zenabis
Atholville
2019
Completed reverse
take-over to form
Zenabis Global Inc.
Bevo
Sun Pharm
Zenabis
4. TSX: ZENA
WHO WE ARE TODAY
Cultivation Expertise & Low-Cost
Production
Existing cultivation cost of $0.78 per gram at
Zenabis Atholville, where design capacity
was revised upwards by 35% based on
outperformance3, and forecast cultivation
cost of $0.50 per gram at Zenabis Langley4.
Facility Footprint & Licensing
Expertise
54,000kg current capacity, with additional
12.9% outperformance in July, and
143,200kg1 of expected capacity under the
existing capital program1, with four facilities
currently licensed for cannabis cultivation.
Domestic Recreational Distribution
Supply agreements and arrangements2 with
eight provinces and one territory.
Brands and Products
Domestic Medical Distribution
Medical distribution through Shoppers and
Pharmasave.
Notes: 1) If all facilities are fully built out and converted as planned. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final Base Shelf Prospectus dated April 10, 2019 and filed on SEDAR. 2) Supply
arrangements do not contain purchase commitments or otherwise obligate the purchaser to buy a minimum volume of products from Zenabis. 3) Outperformance, calculated based on the total actual harvested weight of dried cannabis relative to the original design capacity
harvest weight, was 35% in Q2 2019 as presented on slide 6. Zenabis Atholville’s design capacity has been revised upwards by 35% as of August 14, 2019. 4) This is $0.25 per gram, or 33%, lower than the $0.75 per gram estimate previously provided by the company. This
cost of cultivation estimate is based on the company’s estimates for facility staffing costs (inclusive of facility overhead), utility costs and material costs based on Zenabis’ experience at Zenabis Atholville.
Zenabis is a licensed cannabis producer with four existing licensed production facilities, significant existing capacity and domestic
distribution, and a management team committed to completing facility conversion and developing an international business.
Our Values
Excellence
Responsibility
Compliance
Delivery of Stakeholder Value
3
Management Expertise
100+ years of combined experience in
cultivation, pharmaceuticals, procurement,
sales, distribution, and research and
development.
Growing International Platform
Conditional approval to develop production
and processing facility in Malta; binding
arrangement for distribution in the EU and
non-binding plans for distribution in South
America.
5. TSX: ZENA
4
OUR FACILITIES
Notes: 1) The greenhouse to the right of the Zenabis Langley photo is not part of Zenabis Langley. 2) If all facilities are fully built out and converted as planned. Additional details on facility conversion, including additional assumptions are
outlined in the Zenabis Global Inc. Final Base Shelf Prospectus dated April 10, 2019 and filed on SEDAR. 3) First harvest of industrial hemp is expected in September 2019.
▪ 25,000 sq. ft. indoor facility
▪ Licensed for cultivation,
processing, and sales
▪ Intended for R&D, extraction
and manufacturing
4. Zenabis Delta
Delta, British Columbia
2. Zenabis Langley1
Langley, British Columbia
▪ 380,000 sq. ft. indoor facility
▪ 43,300kg current capacity
▪ 46,300kg capacity under
existing capital program2
▪ Licensed for cultivation,
processing, and sales
(including cannabis oil)
1. Zenabis Atholville
Atholville, New Brunswick
▪ 2,100,000 sq. ft. greenhouse
▪ 9,900kg current capacity
▪ 96,100kg capacity under
existing capital program2
▪ 426,000kg design capacity if
fully built out as planned
▪ Licensed for cultivation
3. Zenabis Stellarton
Stellarton, Nova Scotia
▪ 255,000 sq. ft. indoor facility
▪ 800kg current capacity
▪ 18,500kg design capacity if
fully built out as planned
▪ Licensed for cultivation
Zenabis currently has cannabis production
capacity of 54,000kg and expects this to
increase to 143,200kg under its existing capital
program
▪ 218,000 sq. ft. greenhouse
▪ Used for propagation/floral
business
▪ Licensed for industrial hemp
cultivation
▪ Intend to grow hemp on surplus
land and in greenhouses off-
cycle from other crops
Zenabis Pitt Meadows
Pitt Meadows, British Columbia
▪ 453,000 sq. ft. greenhouse
▪ Used for propagation/floral
business
▪ Licensed for industrial hemp
cultivation
▪ Growing hemp on surplus land
and in greenhouses off-cycle
from other crops3
Zenabis Aldergrove
Aldergrove, British Columbia
14
2
3
6. TSX: ZENA
Zenabis
Atholville
Atholville, NB
Zenabis
Langley
Langley, BC
Zenabis
Stellarton
Stellarton, NS
Zenabis
Delta
Delta, BC
Zenabis Pitt
Meadows
Pitt Meadows, BC
Zenabis
Aldergrove
Aldergrove, BC
Parcel Size 871,000 sq. ft. 4,279,000 sq. ft. 547,000 sq. ft. 51,000 sq. ft. 871,000 sq. ft. 2,180,000 sq. ft.
Total Facility Space 380,000 sq. ft. 2,100,000 sq. ft.1 255,000 sq. ft. 25,000 sq. ft. 218,000 sq. ft. 453,000 sq. ft.
Expected Capacity under
Existing Capital Program
46,300kg 96,100kg 800kg N/A N/A N/A
Design Capacity
(if facilities fully built out and
converted as planned)
46,300kg 426,000kg3 18,500kg N/A N/A N/A
Extraction Design Capacity4
(if facilities fully built out and
converted as planned)
18,000kg N/A N/A 165,600kg N/A N/A
Production Cost $0.78/gram5 $0.50/gram6 $1.30/gram6 N/A N/A N/A
Utilization
Cannabis
Cultivation8 +
Extraction
Cannabis
Cultivation7,8 +
Hemp +
Propagation
Cannabis
Cultivation8 +
Manufacturing9
Extraction + R&D
Propagation +
Floral + Hemp
Propagation +
Floral + Hemp
Cultivation Format
5
PRODUCTION FOOTPRINT
G HIndoor Indoor Indoor
8.8m sq. ft.
(2.4m sq. ft. available for hemp
cultivation)
Total Available Land
0.7m / 2.8m / 3.5m sq. ft.
Total Max Development
Indoor / GH / Total
490,800kg
(excluding hemp production and
0.7m sq. ft. of greenhouse space
for propagation)
Total Maximum Design
Capacity
Total Extraction Design
Capacity
183,600kg
Notes: 1) Includes facility space under glass only; excludes additional warehouse space. 450,000 sq. ft. of Bevo’s existing greenhouses is expected to be initially converted to cannabis production space. The remainder is expected to continue to be used for Bevo’s
propagation business, and may be converted into cannabis cultivation space on an as needed basis. 2) If all facilities are built out and converted as planned. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final
Base Shelf Prospectus dated April 10, 2019 and filed on SEDAR. 3) Assuming full conversion of the 2.1m sq. ft. of available space. 4) Extraction estimates are annual, based on 24 hours of operations per day and based on kilograms of input material. 5) Historical average
cost per gram for the quarter ended June 30, 2019. 6) Estimated cost per gram. 7) Intended utilization after conversion to cannabis production. 8) Includes the packaging of cannabis product. 9) Manufacturing of value-add products.
G H Outdoor G H Outdoor
7. TSX: ZENA
+27.4% (3.0%) +11.9%
+31.3%
+35.1%
+40.8%
+46.2%
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
(kg)
Design Capacity Harvest Weight Actual Harvest Weight
6
ATHOLVILLE PRODUCTION – ORIGINAL DESIGN CAPACITY
Note: 1) The Design Capacity Harvest Weight is based on the original “design capacity” yield that Zenabis disclosed. This figure was derived by converting the actual square footage of flower room space and the forecast canopy for each specific flower
room into a kilograms per room per day figure (the “Design Capacity Yield Per Day”) based on Zenabis’ historical yield data at the Zenabis Atholville facility through September 2018. The Design Capacity Harvest Weight in the table above is the harvest
weight that would have resulted if the Design Capacity Yield Per Day for a room was multiplied by the Effective Flower Room Equivalent Days, as defined on slide 35.
Between January 2019 and July 2019 Zenabis harvested a total of 5,183 kg of dried cannabis at Zenabis Atholville. Year to date, the amount
harvested has exceeded the original design capacity of the flower rooms by 29.5%.
Historical Harvests – Atholville
Jan
2019
Feb
2019
Mar
2019
Apr
2019
May
2019
June
2019
July
2019
Total
Actual Harvest Weight 474 kg 480 kg 518 kg 809 kg 908 kg 756 kg 1,238 kg 5,183 kg
Original Design Capacity Harvest Weight1 372 kg 495 kg 463 kg 616 kg 672 kg 537 kg 847 kg 4,002 kg
Difference (kg) 102 kg (15 kg) 55 kg 193 kg 236 kg 219 kg 391 kg 1,181 kg
Difference (%) 27.4% (3.0%) 11.9% 31.3% 35.1% 40.8% 46.2% 29.5%
Actual Harvest Weight vs. Original Design Capacity Harvest Weight
8. TSX: ZENA
+1.5% (25.3%) (3.9%)
+1.6%
+1.5%
+5.6%
+12.9%
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
(kg)
Design Capacity Harvest Weight Actual Harvest Weight
7
ATHOLVILLE PRODUCTION – REVISED DESIGN CAPACITY
Note: 1) The Revised Design Capacity Harvest Weight is based on the revised “design capacity” yield that Zenabis has disclosed on August . This figure was derived by converting the actual square footage of flower room space and the forecast canopy for
each specific flower room into a kilograms per room per day figure based on Zenabis’ historical yield data at the Zenabis Atholville facility through September 2018, adjusted upwards for 35% outperformance observed in June 30, 2019 (the “Revised
Design Capacity Yield Per Day”) . The Revised Design Capacity Harvest Weight in the table above is the harvest weight that would have resulted if the Revised Design Capacity Yield Per Day for a room was multiplied by the Effective Flower Room
Equivalent Days, as defined on slide 35.
Between January 2019 and July 2019 Zenabis harvested a total of 5,183 kg of dried cannabis at Zenabis Atholville. Since April 2019, the
amount harvested has exceeded the revised design capacity of the flower rooms by 5.9%.
Historical Harvests – Atholville
Jan
2019
Feb
2019
Mar
2019
Apr
2019
May
2019
June
2019
July
2019
Total
Actual Harvest Weight 474 kg 480 kg 518 kg 809 kg 908 kg 756 kg 1,238 kg 5,183 kg
Revised Design Capacity Harvest Weight1 467 kg 643 kg 539 kg 796 kg 895 kg 716 kg 1,097 kg 5,153 kg
Difference (kg) 7 kg (165 kg) (21 kg) 13 kg 13 kg 40 kg 141 kg 30 kg
Difference (%) 1.5% (25.3%) (3.9%) 1.6% 1.5% 5.6% 12.9% 0.6%
Actual Harvest Weight vs. Revised Design Capacity Harvest Weight
Performance relative to revised design
capacity has grown by 51.2% from
(25.3%) in February 2019 to 12.9% in July
2019
9. TSX: ZENA
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Emerald Flowr Zenabis OrganiGram CannTrust Sundial HEXO Zenabis Tilray Aurora
(kg)
Next Three Months Forecast Production
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
VIVO TGOD Supreme Village Farms Cronos CannTrust Zenabis Sundial OrganiGram Aphria Zenabis Aurora
(kg)
Expected Capacity Under Existing Capital Program
-
0.50
1.00
1.50
2.00
2.50
Sundial Cronos WeedMD Aurora Aphria Canopy OrganiGram HEXO Zenabis
($/gram)
8
COMPARABLE PRODUCTION METRICS1
54,000kg
Current Licensed Annual Production Capacity
2,876kg
Notes: 1) All metrics obtained as of August 14, 2019 and sources have been listed on slide 37. 2) Expected annual production capacity if all facilities are built out as planned and outlined in the Zenabis press release dated August 14, 2019. 3) Amount of cannabis produced
on a dried flower equivalent basis as disclosed in the most recent financial reports. 4) Cash cost of cultivation is not recognized as a standard industry metric, and the calculation methodology used by each producer may vary as a result of accounting and reporting
differences. Zenabis recognizes that some cultivation cost figures may be several quarters dated due to changes in reporting standards.5) Zenabis’ next three months forecasted production as outlined in the harvest schedule on slide 28.
Last Three Months Production3
Cash Cost of Cultivation4
$0.78/gram
5
2
143,200kg
2
10,688kg
5
10. TSX: ZENA
9
COMPARABLE PRODUCTION MULTIPLES1
Notes: 1) All production metrics obtained as of August 14, 2019 and sources have been listed on slide 37. 2) Enterprise value as of market close on August 23, 2019. 3) Amount of cannabis produced on a dried flower equivalent basis as disclosed in the most recent financial
reports.
Metrics CRON TGOD ACB VFF SNDL APHA OGI FIRE VIVO TRST ZENA
Enterprise Value2
($m)
2,758 801 7,780 759 1,329 2,148 927 478 75 324 286
Current Capacity
(kg)
40,150 175,300 17,500 37,500 60,000 115,000 61,000 33,580 8,000 50,000 54,000
EV/Current Capacity
($m/tonne)
68.7 45.8 44.4 20.2 22.2 18.7 15.2 14.2 9.3 6.5 5.3
Metrics EMH FLWR ACB TLRY OGI SNDL HEXO ZENA TRST
Enterprise Value2
($m)
287 319 7,780 3,922 927 1,329 1,232 286 324
Last Three Months
Production (kg)
212 280 15,590 11,474 6,052 9,551 9,804 2,902 9,500
EV/Last Three Months
Production ($m/tonne)
1,355.2 692.5 499.1 341.8 153.2 139.2 125.7 99.4 34.1
Current Licensed Annual Production Capacity
Last Three Months Production3
11. TSX: ZENA
10
BRANDS
Existing Brands
Type: Medical brand
Sales Channels: Online
Current Products: Dried cannabis
Near-Term Products: Oils, sprays
Future Products: Food products,
hemp products
Type: Premium recreational brand
Sales Channels: Online and brick-
and-mortar
Current Products: N/A
Near-Term Products: Dried cannabis,
pre-rolls, oils, sprays
Future Products: TBD
Brands in Development
Type: Niche recreational brand
Sales Channels: Online and brick-
and-mortar
Current Products: Pre-rolls
Near-Term Products: Oils, sprays
Future Products: Concentrates
Type: Recreational brand
Channels: Online and brick-and-mortar
Expected Products: Dried cannabis, pre-rolls,
oils, sprays, food products and beverages
Type: Niche recreational brand
Channels: Online and brick-and-mortar
Expected Products: Dried cannabis, pre-rolls,
concentrates, food products
12. TSX: ZENA
11
PRODUCT PORTFOLIO
Current Products
OilsDried Flower Softgel CapsulesTinctures and Sprays
Currently Intended Future Products1
Pre-Rolls
Note: 1) Subject to Health Canada regulation.
Edibles TopicalsHealth and Beauty
Other Non-Alcoholic BeveragesKombucha DIY KitsVapes and Concentrates
Flavoured and Sparkling Water
13. TSX: ZENA
12
DOMESTIC PARTNERSHIPS AND DISTRIBUTION CHANNELS
Zenabis has developed a diverse set of partnerships and relationships with provinces1, distributors, pharmacies and First Nations.
Supply Arrangement
BC Liquor
Distribution
Branch
(“BCLDB”)
Supply Agreement
Alberta Gaming,
Liquor &
Cannabis
(“AGLC”)
Supply
Arrangement
Saskatchewan
Wholesale
Distributor
Supply
Arrangement
Manitoba Liquor
and Lotteries
(“MBLL”)
Definitive
agreement
primarily for oil
Supply agreement
for medical cannabis
products
Supply Arrangement
Yukon Liquor
Corporation
(“YLC”)
Supply Arrangement
Société
québécoise du
cannabis
(“SQDC”)
Supply Agreement
Alcool New
Brunswick Liquor
(“ANBL”)
Supply Arrangement
Nova Scotia Liquor
Corporation
(“NSLC”)
Supply Arrangement
PEI Cannabis
Management
Corporation
Investment
Investor
Investor
Opportunities NB Investor
Investor
Songhees First
Nation
Listuguj Mi’gmaq
Government
Millbrook First
Nation
Note: 1) Supply arrangements do not contain purchase commitments or otherwise obligate the purchaser to buy a minimum volume of products from Zenabis.
14. TSX: ZENA
13
GROWING INTERNATIONAL DISTRIBUTION
Malta
Zenabis has signed a non-binding letter of intent to
supply cannabis to a chain of 15 pharmacies in
Malta; Zenabis has also received conditional approval to
develop a production and processing facility in Malta
Europe
Zenabis has signed a non-binding letter of intent with a
European distributor to supply 2,400kg of dried
cannabis equivalent per year with the potential to
provide 6,000kg of dried cannabis equivalent per year
starting in 2020
Germany
Zenabis has entered into a binding term sheet for a
three-year supply arrangement with a German
pharmaceutical company to receive biosynthetic CBD for
sale in the Canadian market, and to provide medical
cannabis for sale in Germany
Panama
Non-binding plans for a joint-venture in Panama to
supply up to 6,000kg of dried cannabis equivalent
per year once cannabis is legalized within the country
Paraguay
Non-binding plans with an entity in Paraguay to supply
up to 180kg of cannabis oil per year, once legalized
15. TSX: ZENA
14
RECENT DEVELOPMENTS
Zenabis continues to deliver on its promises to investors by increasing its available capital, securing additional distribution channels,
expanding its licensed production footprint, and achieving success in cultivation.
August 26
Signed
Agreement with
Beverage
Technology
Company
August 6
Received
Cultivation
License for
Zenabis
Langley
▪ Zenabis received the license amendment for
Phase 2C – Part 1 at Zenabis Atholville, adding
9,800kg of licensed cultivation capacity
▪ This amendment increased total Zenabis
licensed cultivation capacity by more than 40%,
from 23,100kg to 32,900kg of dried cannabis
August 21
Obtained $25m
in Additional
Debt
Financing1
July 29
Increased
Licensed
Capacity at
Zenabis
Atholville
▪ Zenabis signed definitive documentation for
$25.0m in new senior secured debt financing by
way of amending its existing secured debenture
to now represent $50.0m in senior secured debt
▪ Concurrently, holders of the subordinated
secured convertible notes agreed to extend the
maturity date of the subordinated notes to June
30, 2020, and to convert 30% of the principal
amount of the notes at a revised conversion
price of $1.54635
August 14
Released
Second Quarter
2019 Financial
Statements
July 22
Entered Into
$10m Supply
Agreement with
Starseed
▪ Zenabis released its second quarter financial
results; during the three months ended June 30,
2019 Zenabis achieved gross revenues of
$26.5m and net revenues of $25.0m after excise
taxes
▪ Zenabis revised its annual production capacity
estimate for Zenabis Atholville to 46,300kg from
34,300kg of dried cannabis, as a result of the
cultivation outperformance in the quarter
▪ Zenabis received its cultivation license for
Zenabis Langley and has now secured
cultivation licenses for all four of its cannabis
facilities
▪ The license added 9,900kg of licensed annual
cultivation capacity and increased total Zenabis
licensed annual cultivation capacity by more
than 30% to 42,800kg of dried cannabis
▪ Zenabis arranged $10.0m in non-dilutive
financing via a pre-aid supply agreement with
Starseed Medicinal Inc.
▪ Under the terms of the supply agreement,
Zenabis will deliver a monthly quantity of dried
flower or trim to Starseed, at Starseed’s option,
commencing October 2019
▪ Zenabis does not expect its commitments to
prepaid supply agreements to impact its ability to
supply existing customers.
▪ Zenabis entered into a definitive agreement with
a Canadian beverage technology company that
will supply Zenabis with water soluble,
odourless, flavourless and colourless cannabis-
infused inputs
▪ Under the agreement, Zenabis will have access
to beverage inputs to produce a wide range of
THC and CBD-infused beverages, as permitted
by applicable laws and regulations
Note: 1) A comparison of the all-in cost of financing for this debt financing with other recent cannabis debt financings is provided on slide 15.
16. TSX: ZENA
ANNUALIZED ALL-IN COST OF DEBT FINANCING
65.0% 25.8%
Notes: 1) Annualized all-in cost of financing includes the interest rate, annualized financing fees, annualized embedded option value on convertible debt, and annualized value of warrants issued. All option and warrant values are calculated with the Black-Scholes pricing
model and the market implied volatility of Zenabis warrants of 84% as of August 21, 2019, and a risk-free interest rate of 1.9%. 2) Financing fees are based on publicly disclosed cash and convertible securities issued and does not take into account other possible fees. 3)
Analysis of cost of financing is based on the publicly disclosed information in the Fire & Flower press release dated 26 June 2019. 4) Analysis of cost of financing is based on the publicly disclosed information in the Aleafia Health press release dated 27 June 2019.
Zenabis’ annualized all-in cost of financing1 for its $25.0m debt financing closed on August 21, 2019 is significantly lower than that of other
recent Canadian cannabis debt financings.
15
48.2%
Fire & Flower3 Aleafia Health4 Zenabis
Interest Rate 8.0% 8.5% 14.0%
Annualized Financing Fees2 8.1% 3.2% 8.7%
Annualized Cost of Lender
Convertibility Rights
32.7% 18.0% -
Annualized Cost of Lender
Warrants Issued
16.2% 18.5% 3.1%
All-In Cost1 65.0% 48.2% 25.8%
Annualized All-In
Cost of Financing:
17. TSX: ZENA
Secured Oil Sales License at Zenabis
Atholville
Bevo and Sun Pharm RTO Completed to
become Zenabis
Secured Provincial Supply Arrangement with
Manitoba
Secured Provincial Supply Arrangement with
PEI
Secured $51.0m Credit Facility from BMO
Signed Definitive Agreement with Canadian
Beverage Technology Company
Acquired Topgro Greenhouse and 51% of
True Buch
Closed $28.8m Public Offering
Secured Executed Provincial Supply
Agreement with Alberta
Secured Supply Agreement with Shoppers
Drug Mart
Signed Provincial Supply LOI with Quebec
Secured Cultivation License at Zenabis
Stellarton
Announced $75.0m Financing with Eight
Capital and Closed $15.0m First Tranche
Financing Milestones
Licensing Milestones
Corporate Development Milestones
H1 2018 H2 2018 20192017
Secured Cultivation & Processing License at
Zenabis Atholville
Secured Cultivation & Processing License at
Zenabis Delta
Signed LOI with Pharmasave
Secured Medical Sales License at Zenabis
Delta
Harvested First Crop at Zenabis Atholville
Secured Medical Sales License at Zenabis
Atholville
Signed Manufacturing Agreement with
Capcium
Secured Provincial Supply Arrangement with
British Colombia
Secured Recreational Sales License at
Zenabis Atholville
Announced Bevo/Sun Pharm RTO and Signed
Definitive Agreement
Secured Provincial Supply Arrangement with
the Yukon
Launched Recreational Brand
Secured Provincial Supply Arrangement with
Saskatchewan Wholesaler
Secured Recreational Sales License at
Zenabis Delta
Received $2.1m Strategic Investment from
True Buch
Signed Binding Term Sheet with Farmako
Signed Provincial Supply MOU with New
Brunswick
Secured $57.0m of Financing Concurrent to
the RTO Announcement
Received $4.0m Loan from Government of
New Brunswick
Closed $8.4m in Equity FinancingClosed $13.4m in Equity Financing
Secured Provincial Supply Agreement with
Nova Scotia
Signed Collaboration Agreement with the
Listuguj Mi’gmaq Government
16
MAJOR ACHIEVEMENTS
Secured Industrial Hemp License
Launched Pre-roll Products, Oil Products and
Blazery Brand
Secured Approvals for Additional Cultivation
Space at Zenabis Atholville
Secured $40.0m of Non-Dilutive Financing via
Supply Agreements
Secured Cultivation License at Zenabis
Langley
Secured $25.0m Additional Debt Financing
18. TSX: ZENA
Mike McGinty
Chief Administrative Officer
▪ Extensive experience in large-scale
coordination and planning
▪ Formerly a senior officer in the British Army and
served overseas in Iraq and Afghanistan
▪ Remains an active member of the Canadian
Armed Forces
17
MANAGEMENT | (1/2)
Mike Smyth
Chief Financial Officer
Andrew Grieve
Chief Executive Officer
Leo Benne
Chief Growing Officer
▪ Experienced financial executive, entrepreneur
and principal investor (>18 investments)
▪ Co-Founder and Co-Head of Advisory at
Agentis Capital (>$20bn in deal experience)
▪ Advised on acquisition, financing, and project
development transactions across a wide range
of sectors (from infrastructure to technology)
▪ Officer in the Canadian Armed Forces for 15
years, and is currently a Major
▪ Extensive experience in corporate finance,
treasury, finance administration and business
strategy
▪ Formerly the interim CFO at a BC greenhouse
grower where he initiated a cannabis growing
relationship with a respected cannabis company
▪ Previously a Senior Manager at a global fund
manager Lionhart Canada and the Treasurer for
Bell Canada
▪ Formerly Vice President and Director of Bevo
▪ Gained advanced knowledge of modern
horticultural methods at Rijks Middelbare
Tuinbouwschool in Holland
▪ Provided oversight and management at Bevo in
the propagation and floral business for nearly
30 years
▪ Experience in the application of computer
technology to the production of plants
David Lluncor
Chief Revenue Officer
▪ Has more than 15 years of corporate sales
experience working closely with large, national
multi-chain accounts in the retail and consumer
packaged goods industry
▪ Has helped companies capture market share
and helped them develop their brands into
category leaders
Dr. Natasha Ryz, PhD
Chief Science Officer
▪ Over 15 years experience as a health and
nutrition researcher, speaker and educator
▪ Has a PhD in Experimental Medicine from the
University of British Columbia, a Master of
Science degree, and a Bachelor of Science
degree, specializing in Human Nutritional
Sciences from the University of Manitoba
19. TSX: ZENA
Dr. Oliver Corea, PhD
Head Scientist, Plant Analytics and Extraction
▪ Over 12 years experience as a molecular
biologist and biochemist studying specialized
plant metabolic pathways
▪ Holds a MSc and PhD involving extensive
research on production of aromatic compounds
and terpenes, flavour and scent compounds
prevalent in many plants, including cannabis
Dr. Zeid Mohamedali, MD, PhD
Chief Medical Officer
▪ Over 20 years of experience in medical
research and clinical practice
▪ Over eight years of experience with medical
cannabis pain management, and is an active
clinician with a large practice of patients
▪ Currently holds a position as a Clinical Assistant
Professor at the University of British Columbia
Dr. Kyle Boniface, PhD
Director, Product Research and Development
▪ Over eight years’ experience as a chemical
researcher, speaker and educator
▪ He is an expert in supercritical CO2 cannabis
extraction and cannabis product development
▪ Kyle has published multiple first author and
several co-authored peer reviewed publications
in internationally recognized scientific journals
18
MANAGEMENT | (2/2)
Kevin Coft
Chief Facilities Officer
▪ An operational and supply chain professional
with over 30 years of procurement, facility
operations, and managerial experience
▪ Has covered a wide range of functions,
including navigating Health Canada’s regulatory
licensing, facility construction, and customer
relationship management
Laura DiFelice
Director, People and Culture
▪ A highly skilled human resources professional
with over 20 years of recruiting and people
management experience
▪ Experienced in leading teams, assessing
employee engagement, developing new
managers, as well as coaching seasoned
executives
20. TSX: ZENA
19
BOARD OF DIRECTORS
Adam Spears
Independent Director
▪ Founder of ace148, an investment
company
▪ Was a Principal and Portfolio
Manager at Anson Funds where
he managed multiple long-short
equity hedge funds
▪ Also worked in private equity at
ONCAP Management Partners,
and in the investment banking
group of Citigroup Global Markets
Larry Van Wieren
Independent Director
▪ President of Van Wieren
Developments Ltd., a company
focused on land development and
international consulting services
▪ Was previously President of Van
Wijnen Canada Ltd, a Canadian
subsidiary of the Van Wijnen
Group based in the Netherlands
Daniel Burns
Independent Director
▪ A lawyer, accountant and
entrepreneur
▪ Experienced corporate director in
the financial services, insurance
and mining sectors
▪ Has served as chair of a number
of significant organizations in
Canada and the United States as
well as chaired the audit
committees of significant public
and private institutions
Andrew Grieve
Chief Executive Officer and Director
▪ Experienced financial executive, entrepreneur
and principal investor (>18 investments)
▪ Co-Founder and Co-Head of Advisory at
Agentis Capital (>$20bn in deal experience)
▪ Has been an officer in the Canadian Armed
Forces for 15 years, where he is currently a
Major
Monty Sikka
Co-Founder, Director and Chairman
▪ Co-founder of Zenabis
▪ As President of the Monark Group, has grown
the business into a multi-million-dollar, multi-
faceted corporation
▪ Has extensive experience in e-commerce,
marketing and finance sectors
Leo Benne
Chief Growing Officer and Director
▪ Formerly Vice President and Director of Bevo
▪ Gained advanced knowledge of modern
horticultural methods at Rijks Middelbare
Tuinbouwschool in Holland
▪ Provided oversight and management at Bevo in
the propagation and floral business for nearly
30 years
▪ Experienced international finance
and M&A attorney who has held
senior positions at several
prominent international law firms
▪ As counsel at Skadden,
represented Fortune 500
companies, financial institutions,
and governments in complex
corporate finance and M&A
transactions totaling >$100bn in
value
Natascha Kiernan
Independent Director
21. TSX: ZENA
20
MANAGEMENT & KEY SHAREHOLDER ALIGNMENT
Security Holder Name Title Percentage of Basic4,5
Blue Samurai Medical Partnership Mark Catroppa Co-Founder – Zenabis 10.5%
Bluecore Medical Partnership Monty Sikka Co-Founder, Director, and Chair – Zenabis 10.5%
Brar Bioceutical Corp. Rick Brar Co-Founder – Zenabis 8.3%
C.G.M Ventures Inc. and Benne Family Leo Benne, Jack Benne, John Hoekstra Founders – Bevo Farms 4.1%
Nuovo Enterprises Kevin Coft Chief Facilities Officer – Zenabis 2.2%
Other Key Shareholders N/A N/A 7.7%
Total 43.2%
Notes: 1) Subject to a downward adjustment for net debt to adjust for the usage of debt to fund earnings. 2) EBITDA of $0.42 per share and earnings of $0.16 per share. 3) Share price of $4.90 by June 2021 and increasing thereafter. 4) Shares in the
pooling agreement are adjusted for shares that have been released to date. 5) Shares outstanding as of August 21, 2019.
Pooling Agreement Shares4
CEO Compensation Alignment
CEO does not receive cash compensation unless two hurdles are met by the company:
1. Earnings (as measured by EBITDA1 or EPS) above a certain measure2 in 2020
2. Share price over the four quarters commencing June 2021 is greater than a certain hurdle3
Insider Ownership
Founders and insiders own a total of 52% of common Zenabis shares outstanding
Voluntary Pooling Agreement
Key Zenabis shareholders have entered into a voluntary pooling agreement covering 43%4 of common Zenabis shares outstanding5
22. TSX: ZENA
21
SELECTED FINANCIAL INFORMATION
Selected Financial Metrics Value
Adjusted Cash $62m1
Debt $142m1
Market Capitalization $205m2
Enterprise Value $285m2
Financial Results Q2 20193
Gross Revenue $26.5m
Net Revenue $25.0m
Net Loss ($18.5m)
Adjusted EBITDA4 ($6.3m)
Balance Sheet
Total Assets5 $329.2m
Total Non-Current Liabilities $85.2m
Property, Plant and Equipment $201.4m
Notes: 1) Debt is based on the amounts listed on slide 33. Cash balance of $8.7m as outlined in the Zenabis Global Inc. Financial Statements as at June 30, 2019 has been adjusted to take into account the impact of the $30.0m prepaid advance from
Tilray on July 20, 2019 and the expected $23.0m net proceeds to be received from R.C. Morris shortly after closing on August 21, 2019. 2) Market capitalization and enterprise value are calculated on a fully-diluted, in-the-money basis as of August 23,
2019, as calculated on slide 32. 3) For the three months ended June 30, 2019. 4) Calculation of adjusted EBITDA is shown on slide 36. 5) Tangible assets of $267.4m as of June 30, 2019. 6) As at August 21, 2019. 7) Share percentages on a non-diluted
basis. 8) Insiders include founders of Zenabis.
51.8%
48.2%
Insiders & Founders Other Investors
Shares and Ownership Summary Value
Common Shares Outstanding 208,623,7376
Fully-Diluted Shares Outstanding 272,289,6036
Insider Ownership8 51.8%7
Common Shares in Escrow 46.8%7
Ownership Breakdown
23. TSX: ZENA
22
CORPORATE HIGHLIGHTS
100 Years of Industrial-Scale Cultivation Expertise
Extensive Industry Expertise and Proven Execution Capabilities
Relationships and Partnerships with Government and First Nations
Low Production Costs at Scale
Four Licenced Facilities
Highly Recognizable Brands
Extensive Domestic Distribution Network
26. TSX: ZENA
25
ZENABIS ATHOLVILLE
Zenabis Atholville is Zenabis’ largest indoor facility. This facility is expected to produce 46,300kg1 of dried cannabis equivalent per year
upon full buildout.
Facility Details Description
Location Atholville, New Brunswick
Type and Size 380k sq. ft. indoor cannabis
Status
Substantially operational/conversion
ongoing
Remaining Conversion Cost $10.5m2
Design Capacity 46,300kg1
Extraction Design Capacity 18,000kg3
Current Licenses
Cultivation, processing, medical sales,
recreational sales, oil sales
Pending Licenses N/A
Capacity Milestones1
▪ Current – 43,300kg
▪ Q3 2019 – 46,300kg
▪ Full Buildout – 46,300kg
Summary
▪ One of the largest indoor growing facilities in Canada, Zenabis Atholville is
Zenabis’ flagship indoor facility
▪ Zenabis Atholville is currently substantially operational (43,300kg capacity)
and ongoing conversion activities for the remainder of the facility
‒ Construction is substantially complete for the final phase of expansion
‒ Zenabis expects to submit the final license amendment for Zenabis
Atholville in August 2019
▪ Zenabis has worked closely with the Government of New Brunswick, which
invested $4.0m in Zenabis, to construct Zenabis Atholville
▪ Zenabis Atholville expects to be a major employer in New Brunswick
‒ It currently employs over 300 workers and expects to employ
approximately 450 at full buildout
Notes: 1) If all facilities are fully built out and converted as planned, and subsequent to the upward revision by 35% from the 34,300kg design capacity originally disclosed as outlined in the Zenabis press release dated August 14, 2019,. Additional details
on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final Base Shelf Prospectus dated April 10, 2019 and filed on SEDAR. 2) Estimated expenditures as of June 30, 2019. 3) Extraction estimates are annual,
based on 24 hours of operations per day and based on kilograms of input material.
27. TSX: ZENA
26
ZENABIS LANGLEY
Zenabis Langley is one of the largest greenhouses in Canada with advanced propagation technology. The facility is expected to produce
426,000kg1 of dried cannabis equivalent per year upon full buildout.
Facility Details Description
Location Langley, British Columbia
Type and Size 2.1m sq. ft.2 greenhouse cannabis
Status
Partially operational/conversion ongoing
(for the first 10 acres)
Remaining Conversion Cost $13.7m (first 10 acres)3
Design Capacity 426,000kg1
Extraction Design Capacity N/A
Current Licenses Cultivation
Pending Licenses N/A
Capacity Milestones
▪ Current – 9,900kg
▪ Q3 2019 – 96,100kg
▪ Full Buildout – 426,000kg1
Summary
▪ Initial cannabis conversion activities have commenced for the first 10 acres
of greenhouse and is expected to be complete Q3 2019
‒ Construction and licensing of the first phase has been completed
(9,900kg capacity), and construction of all rooms is expected to be
completed by September/October 2019
▪ Zenabis Langley’s cannabis conversion is based on a closed greenhouse
design, where standard greenhouse venting does not occur
‒ Zenabis believes this will produce a higher quality, more consistent
crop; mitigate the impact on the surrounding community; and better
control pests and contaminants from entering the greenhouse
▪ The remaining 38 acres at Zenabis Langley may be converted to cannabis
cultivation on an as needed basis
‒ This portion of greenhouse will continue to be used for Zenabis’
propagation business until conversion commences
Notes: 1) Assuming full conversion of the 2.1m sq. ft. of available space as planned. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final Base Shelf Prospectus dated April 10, 2019 and
filed on SEDAR. The design capacity of the 450,000 sq. ft. to be initially converted is 96,100kg per annum. 2) 450,000 sq. ft. of Bevo’s existing greenhouses is expected to be initially converted to cannabis production space. The remainder is expected to
continue to be used for Bevo’s propagation business, and may be converted into cannabis cultivation space on an as needed basis. 3) Estimated expenditures as of June 30, 2019.
28. TSX: ZENA
27
ZENABIS STELLARTON
Zenabis Stellarton is a licensed indoor facility located in Stellarton, Nova Scotia. The facility can produce 18,500kg1 of dried cannabis
equivalent per year upon full buildout.
Facility Details Description
Location Stellarton, Nova Scotia
Type and Size 255k sq. ft. indoor cannabis
Status Partially operational
Remaining Conversion Cost N/A
Design Capacity 18,500kg1
Extraction Design Capacity N/A
Current Licenses Cultivation
Pending Licenses Processing
Capacity Milestones1
▪ Current – 800kg
▪ Q3 2019 – 800kg
▪ Full Buildout – 18,500kg
Summary
▪ Zenabis Stellarton is Zenabis’ second largest indoor facility situated on a
547,000 sq. ft. parcel of land
▪ The first phase of construction at Zenabis Stellarton is complete and the
initial operational area was licensed in early March 2019
‒ Zenabis Stellarton is currently partially operational (800kg capacity);
timing for the full build out is to be determined by management
Note: 1) If all facilities are fully built out and converted as planned. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final Base Shelf Prospectus dated April 10, 2019 and filed on SEDAR.
29. TSX: ZENA
28
ZENABIS DELTA
Zenabis Delta is an indoor facility located in the Greater Vancouver Area. This facility is expected to be used primarily as a lab for extraction
and R&D activities.
Facility Details Description
Location Delta, British Columbia
Type and Size 25k sq. ft. Indoor cannabis
Status Lab conversion ongoing
Remaining Conversion Cost $1.6m1
Design Capacity N/A
Extraction Design Capacity 165,600kg2
Current Licenses
Cultivation, processing, medical sales,
recreational sales
Pending Licenses Analytical testing
Summary
▪ Zenabis Delta is an indoor facility strategically located near several urban
centres and transportation terminals
▪ Zenabis Delta is currently undergoing conversion into an extraction, post-
processing and analytical testing lab
‒ Zenabis expects the conversion project, along with completion of a full
ISO certified analytical laboratory, to be complete in Q4 2019
Notes: 1) Estimated expenditures as of June 30, 2019. 2) Extraction estimates are annual, based on 24 hours of operations per day and based on kilograms of input material.
30. TSX: ZENA
-
1,000
2,000
3,000
4,000
5,000
6,000
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
(kg)
Forecast Harvest Amount Actual Harvest Amount Additional Actual Harvest Amount
Forecast Harvest Schedule
Aug
2019
Sept
2019
Oct
2019
Nov
2019
Dec
2019
Continuous
Monthly Harvest
Zenabis Atholville + Zenabis Stellarton 1,579 kg 1,731 kg 3,758 kg 3,549 kg 4,200 kg 3,925 kg
Plus: Zenabis Langley Site A – Part 1 Nil Nil Nil 1,650 kg Nil 825 kg
Equals: Total Forecast 1,579 kg 1,731 kg 3,758 kg 5,199 kg 4,200 kg 4,750 kg
29
2019 HARVEST SCHEDULE
Note: 1) This forward-looking estimate of future harvest results is based on the following material assumptions: (1) Zenabis Stellarton and Zenabis Langley Site A – Part 1 operate at their published design capacity on a room by room basis for the
cultivation space that is licensed and in cultivation at the forward-looking periods noted; (2) Atholville rooms operate based on the current flower schedule and at revised design capacity (a 35% increase relative to original design capacity); and (3)
Cultivation commencement at Zenabis Langley Site A – Part 1 in August 2019.
The following highlights the forecast harvest schedule for Zenabis’ existing licensed facilities1. This forecast assumes Part 1 of Zenabis
Langley Site A is licensed and assumes Zenabis Atholville is fully licensed by August 2019.
Note: All forecasts exclude harvests from Zenabis Langley Site A – Part 2. Zenabis intends to provide a forecast harvest schedule for Zenabis Langley Site A – Part 2 upon
receipt of the requisite cultivation license amendment.
16,467 kg production forecast from
existing licensed facilities from August
to December 2019 (excluding Zenabis
Langley Site A – Part 2)
Monthly Harvest Schedule for Existing Licensed Facilities
First Harvest from Zenabis Atholville Phase 2A
First Harvest from Zenabis Atholville Phase 2B
First Harvest from Zenabis Atholville Phase 2C
First Harvest from Zenabis Langley Site A – Part 1
31. TSX: ZENA
30
INCREASING LICENSED PRODUCTION CAPACITY
Notes: 1) (22,300 kg + 9,800kg) x 35% = an approximate 11,200 kg increase in licensed production capacity as a result of the Zenabis Atholville Capacity Amendment outlined in the Zenabis press release dated August 14, 2019.
Date
Zenabis
Atholville
Zenabis
Langley
Zenabis
Stellarton
Zenabis Delta Total
Capacity at RTO January 8, 2019 5,600kg - - 100kg 5700kg
Phase 1B License Amendment January 11, 2019 +1,600kg - - - +1,600kg
Stellarton Cultivation License March 1, 2019 - - +800kg - +800kg
Phase 1D License Amendment March 15, 2019 +2,100kg - - - +2,100kg
End of Q1 2019 March 31, 2019 9,300kg - 800kg 100kg 10,200kg
Phase 2A License Amendment May 10, 2019 +3,200kg - - - +3,200kg
Phase 2B License Amendment June 21, 2019 +9,800kg - - - +9,800kg
Cessation of Growing Activities at Delta June 24, 2019 - - - (100kg) (100kg)
End of Q2 2019 June 30, 2019 22,300kg - 800kg - 23,100kg
Phase 2C – Part 1 License Amendment July 26, 2019 +9,800kg - - - +9,800kg
Site A – Part 1 Cultivation License August 2, 2019 - +9,900kg - - +9,900kg
Zenabis Atholville Capacity Amendment1 August 14, 2019 +11,200kg - - - +11,200kg
Current 43,300kg 9,900kg 800kg - 54,000kg
Phase 2C – Part 2 License Amendment TBD +3,000kg - - - +3,000kg
Current and Submitted 46,300kg 9,900kg 800kg - 57,000kg
Site A – Part 2 License Amendment TBD - +86,200kg - - +86,200kg
Current, Submitted and Under Construction 46,300kg 96,100kg 800kg - 143,200kg
33. TSX: ZENA
32
CAPITALIZATION
The following outlines the capitalization of Zenabis.
Notes: 1) As of August 21, 2019. 2) As of market close August 23, 2019. 3) Debt includes all non-convertible financing and out-of-the-money convertible financing based on the amounts listed on slide 33. 4) Cash balance of $8.7m as outlined in the
Zenabis Global Inc. Financial Statements as at June 30, 2019 has been adjusted to take into account the impact of the $30.0m prepaid advance from Tilray on July 20, 2019 and the expected $23.0m net proceeds to be received from R.C. Morris shortly
after closing on August 21, 2019. The negative value indicates a subtracted value, rather than a negative cash balance.
Fully Diluted Shares Outstanding1 Value
Basic Shares Outstanding 208,623,737
Plus: Options 19,048,395
Plus: Warrants 24,481,901
Plus: Convertible Note Conversion Shares 20,135,570
Equals: Fully-Diluted Shares Outstanding 272,289,603
Capitalization Enterprise Value
Enterprise Value Calculation Value
Basic Shares Outstanding 208,623,737
Plus: ITM Options1 971,439
Plus: ITM Conversion Shares1 Nil
Equals: Fully-Diluted, ITM Shares Outstanding 209,595,176
Times: Zenabis Share Price2 $0.98
Equals: Fully-Diluted Market Capitalization $205m
Add: Debt3 $142m
Less: Cash4 ($62m)
Equals: Enterprise Value $285m
34. TSX: ZENA
33
DEBT OUTSTANDING
The following outlines Zenabis’ debt outstanding.
Facility
Principal Amount as
of June 30, 2019
Principal Amount as
of August 21, 2019
Description
Unsecured Convertible
Debentures
$15.0m $15.0m
▪ Unsecured convertible debentures with interest rate of 6.0%
▪ Convertible into Zenabis shares at $3.62 per share
▪ 825,000 warrants with exercise price of $3.62
▪ Matures on September 27, 2021
BMO Financing $46.1m $46.1m1
▪ $46.7m term credit facility, with interest payable quarterly at a rate of prime +
applicable margin based on grid pricing;
▪ Matures on January 21, 2022
RDC Mortgage $2.0m $2.0m
▪ $2.0m mortgage on Zenabis Atholville with interest rate of 6.0%
▪ Matures on August 31, 2027
Secured Debentures $25.0m $50.0m
▪ Senior debt financing with interest at a rate of 14.0%
▪ 2,593,283 warrants have been issued at an exercise price of $4.02 upon $20.8m
being drawn (50% warrant coverage)
▪ 6,009,615 warrants have been issued at an exercise price of $2.08 upon the
amendment and extension of the facility (50% warrant coverage)
▪ [896,147] warrants have been issued at an exercise price of $[1.39] upon the
amendment and advance of the second $25.0m tranche (5% warrant coverage)
▪ Matures on June 30, 2020
Secured Convertible
Note
$24.9m $17.4m
▪ Subordinated financing with interest rate of 11.0%
▪ May be converted into Zenabis common shares at ~$1.55 per share (11,255,497
additional Zenabis shares)
▪ 1,373,712 warrants have been issued at an exercise price of $1.82 upon the
extension and subordination of the notes
▪ Matures on June 30, 2020
Unsecured Convertible
Note
$11.9m $11.9m
▪ Subordinated financing with interest rate of 6.0%
▪ May be converted into Zenabis common shares at ~$2.52 per share (4,736,423
additional Zenabis shares)
▪ Matures on October 17, 2020
Total $124.9m $142.4m
Debt Summary
Notes: 1) Amount as of June 30, 2019.
36. TSX: ZENA
35
PERFORMANCE RATIO CALCULATION DESCRIPTION1
The following outlines the approach that Zenabis utilizes to calculate its performance relative to design capacity (the Performance Ratio
defined below).
▪ Zenabis prepared the design capacity of each of its facilities, as disclosed in the Management Information Circular, based on the intended or existing
square footage of flower room space, and the intended or existing canopy for each specific flower room. These square footage figures were then
converted into a kilograms per room per day figure (the “Design Capacity Yield Per Day”) based on Zenabis’ existing data at the time of preparation for
yield per harvest, and expectation at the time of preparation for harvests per year.
▪ After each harvest, Zenabis calculates the dry weight cannabis output for each room (the “Total Output”). Zenabis then takes into account the amount of
days in production through a combination of: (1) the amount of flower room days utilized (including turnaround time) for that room; and (2) the amount of
flower-room equivalent days required from other flower rooms in support of that harvest (together the “Effective Flower Room Equivalent Days”). Zenabis
then divides the Total Output by the Effective Flower Room Equivalent Days in order to produce the “Effective Yield Per Day” for each room. Zenabis then
divides the Effective Yield Per Day by the Design Capacity Yield Per Day for each room in order to determine performance versus the Design Capacity
Yield Per Day (the “Performance Ratio”). A sample calculation for one room is provided below:
▪ In order to provide results for each month, Zenabis completes the same calculation of the Performance Ratio, but first aggregates the Total Output for all
rooms where a harvest was completed, and compares that to the Design Capacity Yield Per Day on a square-footage weighted basis.
▪ Zenabis believes that the Performance Ratio is currently the most effective measure of overall cultivation performance, as it measures cultivation output
relative to two primary constraints: space and time. However, Zenabis may add additional cultivation performance measures over time. Zenabis intends to
restate the design capacity of each of its facilities, if necessary, after:
‒ One full harvest has been completed from each room of each facility; and
‒ Again after the Performance Ratio stabilizes from month to month.
Design Capacity Estimate Value
Room Canopy Size 2,269 sq. ft.
Times: Yield Per Sq. Ft. Per Harvest 0.07 kg/sq. ft.
Divided by: Days Per Harvest 85 days
Equals: Design Capacity Yield Per Day 1.95 kg/day
Sample Harvest Value
Total Output 175 kg
Divided by: Effective Flower Room Equivalent Days 84 days
Equals: Sample Harvest Effective Yield Per Day 2.09 kg/day
Performance Ratio Value
Sample Harvest Effective Yield Per Day 2.09 kg/day
Divided by: Design Capacity Yield Per Day 1.95 kg/day
Equals: Performance Ratio 7.4%
Notes: 1) The approach described is applicable to the original design capacity for Zenabis Atholville disclosed prior to August 14, 2019, which has since been revised upwards by 35% as outlined in the press release dated August 14, 2019.
37. TSX: ZENA
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ADJUSTED EBITDA CALCULATION
The following outlines the calculation to arrive at adjusted EBITDA.
Adjusted EBITDA Calculation Q2 20191 Q1 20192
Net Loss (18,498,388) (4,005,815)
Plus: Realized Fair Value Amounts Included in Inventory Sold 10,013,747 3,402,319
Less: Unrealized Gain on Changes in Fair Value of Biological Assets (12,652,546) (7,993,853)
Plus: Depreciation and Amortization 2,102,987 1,462,077
Plus: Share-Based Compensation 2,142,433 2,078,636
Plus: Acquisition Costs Nil 4,919,978
Plus (Less): Gain (Loss) on Revaluation of Embedded Derivative Liability 4,551,807 (7,891,451)
Plus: Interest Expense 3,751,166 4,553,828
Plus: Foreign Exchange Loss 62,282 7,402
Plus (Less): Gain (Loss) on Sale of Assets 184,249 Nil
Plus (Less): Finance and Investment Income/Expense 98,557 (1,116,320)
Plus: Loss from Event 3,083,793 Nil
Less: Insurance Proceeds (2,683,541) Nil
Plus: Income Taxes 521,371 61,447
Less: Deferred Income Tax Recovery 1,025,748 (1,903,454)
Equals: Adjusted EBITDA (6,296,335) (6,425,716)
▪ Management believes adjusted EBITDA is a useful metric to assess the company’s operating performance before the impact of non-cash items and
acquisition related activities.
Notes: 1) For the three months ended June 30, 2019. 2) For the three months ended March 31, 2019.
38. TSX: ZENA
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COMPARABLE METRICS SOURCES
▪ Canopy. Canopy MD&A dated February 14, 2018 and June 21, 2019.
▪ Aurora. Aurora MD&A dated May 14, 2019.
▪ Aphria. Aphria MD&A dated April 15, 2019 and August 1, 2019.
▪ Tilray. Tilray MD&A dated August 13, 2019.
▪ Emerald. Emerald MD&A dated May 30, 2019.
▪ Hydropothecary (“HEXO”). Hexo MD&A dated October 26, 2018 and June 12, 2019.
▪ Cronos. Cronos MD&A dated August 13, 2018 and May 9, 2019
▪ CannTrust. CannTrust MD&A dated May 13, 2019.
▪ WeedMD. WeedMD MD&A dated May 30, 2019 .
▪ OrganiGram. OrganiGram MD&A dated July 12, 2019.
▪ Supreme. Supreme MD&A dated May 13, 2019.
▪ TGOD. TGOD MD&A dated May 14, 2019.
▪ Village Farms. Village Farms July 2019 investor presentation (http://villagefarms.com/wp-content/uploads/2014/08/VFF-Investor-Presentation-
July-for-Web-Site-Jul-17.pdf); Village Farms MD&A dated August 12, 2019.
▪ Flowr. The Flowr Corporation MD&A dated May 17, 2019.
▪ Sundial. Sundial Growers Inc. prospectus dated July 31, 2019; Sundial Growers Inc. MD&A dated August 13, 2019.
▪ VIVO. VIVO MD&A dated May 29, 2019.
