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Aurora Investor presentation December 2017
- 1. DE CE MBER 2 0 1 7 AGILITY INNOVATION EXECUTION AND EXPANSION Building a globally dominant cannabis company
- 2. Forward Looking Statements ThisPresentation (the “Document”) by Aurora Cannabis Inc. (“Aurora” or the “Company”) has been compiled by management of the Company solely for information purposes. The Document has been prepared and dated as of March 31, 2017, and the information contained herein is current as of such date only. The Document under no circumstances is to be construed to be an offering of securities. Neither this Document, nor its delivery to the recipient shall constitute an offer to sell, or the solicitation of an offer to buy the assets described herein. It is provided solely for use by prospective investors in considering their interest. The information contained herein has been prepared to assist interested parties in making their own evaluation of the Company and its business and does not purport to contain all the information that prospective investors may require. Prospective investors should conduct their own investigation and analysis of the Company and its business and the information contained in this Document as well as any additional information provided by the Company. This Document includes forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the Securities Act (Ontario, Alberta and British Colombia) and other provincial securities law in Canada. These forward-looking statements include, among others, statements with respect to our objectives, goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward- looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. The Company strongly cautions readers not to place undue reliance on these statements, as a number of important factors, many of which are beyond our control, could cause the Company’s actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: general economic conditions; pending and proposed legislative or regulatory developments in Canada including the impact of changes in laws, regulations and the enforcement thereof; reliance on funding models in Canada; operational and infrastructure risks including possible equipment failure and performance of information technology systems; intensifying competition resulting from established competitors and new entrants in the businesses in which the Company operates; insurance coverage of sufficient scope to satisfy any liability claims; fluctuations in total patients and customers; technological change and obsolescence; loss of services of key senior management personnel; privacy laws; structural subordination of common shares; leverage and restrictive covenants; fluctuations in cash timing and amount of capital expenditures; tax-related risks; unpredictability and volatility of the price of the Company’s securities; dilution; and future sales of the Company’s securities. The foregoing list of important factors that may affect future results is not exhaustive. When reviewing the Company’s forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by Canadian securities law, the Company does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the Company or on the Company’s behalf. Such statements speak only as of the date made. The forward-looking statements contained in this Document should not be relied upon as representing the view of the Company or its management as of any date subsequent to the date of this Document. Neither the Company nor its management is under any obligation, and neither undertakes, to update any of this information at any particular time. Neither the Company nor its management assumes any obligation to update or revise forward-looking statements should circumstances or estimates or opinions changes. None of the Company or its affiliated or related partnerships and corporations or their respective directors, officers, partners, employees, agents or representatives makes any representation or warranty as to the accuracy or completeness of the Document or any statements, estimates or projections, and none will assume any liability for any representations (express or implied) contained in, or for any omissions from, the Document, or for any other written or oral communications transmitted to prospective investors in the course of their evaluation of the Company and its business. An investor will only be entitled to rely on those representations and warranties contained in the definitive agreement or agreements which constitute the financing. This presentation can not be copied, reproduced or distributed in whole or in part to others, at any time, without the prior express written consent of the Company. To the extent that they are included in this document, certain financial metrics can be reported as non-IFRS measures, such as EBITDA (earnings before interest, taxes, depreciation and amortization). For the purposes of this Document, EBITDA is calculated as revenue less cost of sales and operating expenses. The Company believes that these non-IFRS measures are appropriate measures of the operating performance of the Company. The Company’s calculation of these measures may differ from the methodology used by other issuers and, accordingly, may not be comparable to such other issuers. The Company believes that these measures are appropriate measures of the Company’s operating performance because they facilitate an understanding of operating performance without giving effect to certain non-cash and overhead expenses. None of these measures are equivalent to net income or cash flow from operating activities determined in accordance with IFRS. Aurora Cannabis Inc. Management Presentation 2
- 3. EXCEPTIONALLY WELL POSITIONED TO CAPITALIZEON THE GLOBAL CANNABIS OPPORTUNITY 1VIII Capital, Cannabis Sector, July 2017 CANADA $12 B1 EU $37 B1 U.S. $20 B1 ROW $110 B1 PROJECTED MARKET POTENTIAL
- 4. 4 AGILITY INNOVATION EXECUTIONEXPANSION Talented, experienced management team driving the sector's fastest growth in customers, revenues and shareholder value
- 5. Agility • Fastest rampup, execution and sales growth achieved relative to other LP’s • Focused strategy aimed at capitalizing on vertical and horizontal integration opportunities internationally and domestically Aurora Cannabis Inc. Management Presentation 5 0 310 3,000 7,700 12,000 13,100 16,000 20,000 0 5,000 10,000 15,000 20,000 25,000 Jan '16 Feb '16 May '16 Aug '16 Dec '16 Mar '17 Jun '17 Sep '17 Aurora Active Registered Patients Source: SEDAR filings Fastest Growing LP’s – Sales License to 650kg/quarter
- 6. Aurora Cannabis Inc.Management Presentation 6 AURORA SKY • World’s largest and most technologically advanced cannabis cultivation facility • Optimized for highest yield and lowest cost per gram produced AURORA VIE • Specialty strains • Yield-optimized indoor facility AURORA MOUNTAIN • First fully purpose-built indoor cannabis facility CUSTOMER SERVICE • The Aurora Standard: leading edge customer care • Only LP with mobile app for purchasing medical cannabis • Same-day delivery in Calgary, Edmonton and surrounding areas • e-Commerce • Product differentiation RADIENT TECHNOLOGIES (Strategic Partnership, 19.18% owned) • Joint development of superior, proprietary oil extraction process • Faster, more efficient and higher throughput • Better terpene preservation Establishing a world-leading brand, scale and efficiencies Innovation Across all Operational Areas CUSTOMER EXPERIENCE CULTIVATION CONCENTRATES PRODUCTION
- 7. 7 STRONG REVENUE GROWTH CAPITALIZATION DOMESTICEXPANSION CAPITAL MARKETS PROGRESSION GLOBAL EXPANSION HORIZONTAL INTEGRATION Scale, Reach & Differentiation • Year on Year revenue growth 169% • > $460M raised since August 2016 for capacity expansion and M&A activities • Graduated from TSX-V to TSX July 2017 • Construction of industry-leading facilities on schedule • Pedanios acquisition - largest German distributor • BC Northern Lights acquisition – proprietary systems for indoor cultivation of cannabis • H2 Biopharma acquisition – additional capacity with potential sizeable expansion in Quebec • Urban Cultivator acquisition – state-of-the art indoor gardening appliances for indoor cultivation • Cann Group strategic stake - first licensed cannabis company in Australia • Radient partnership – superior extraction technology • Hempco investment – ancillary product offerings and potential access to substantial supply of low-cost CBD • Namaste strategic supply agreement – exclusive e-Commerce distribution of leading edge hardware for smokeless cannabis consumption (e.g. vaporizers) and BCNL products EXECUTION
- 8. Domestic Expansion 8 MOUNTAIN SKYVIE LACHUTE Footprint (square footage) 55,200 822,000 40,800 48,000 Status Operational since 2015 Completion by mid-2018 First planting by Dec 2017 Completion by end of 2017 First harvest Jan/Feb 2017 Completion Q1 calendar 2018 Capacity 4,800 kg/yr 100,000+ kg/yr 4,000+ kg/yr 4,500+ kg/yr Key features First purpose built cannabis facility EU GMP certified Highly automated, technologically advanced cannabis facility for optimized yield and low cost production built to EU GMP standards. Located at Edmonton international airport for superior domestic and global distribution logistics Technologically advanced, specialty strains for premium products and medical research Completed to EU GMP standards Nearly completed, state-of-the art facility to be completed to EU GMP standards $ 3.0 Billion medical cannabis market opportunity in Canada1 $ 9.0+ Billion adult consumer market opportunity in Canada1 3.4 million Canadian marijuana users*** Nationwide legalization Potential for new product forms & devices Positioned for rapid growth of medical and adult consumer markets Aurora Mountain one of only a few EU GMP Certified cannabis production facilities 1 VIII Capital, Cannabis Sector, July 2017
- 9. 9 Pedanios – Aurora’sGateway to the EU Cannabis Market 82 million population Germany >400 million population EU • Largest medical cannabis distributor in EU • EU GMP certified for import, release and distribution of cannabis • Currently servicing >2,000 pharmacies in Germany (exclusive suppliers of patients) • Access to single largest federally legalized medical cannabis market with population > 82 million • Broad insurance coverage for prescribed medical cannabis • Limited number of EU GMP certified international producers currently serving the German market • Cornerstone acquisition for European expansion strategy • In phase 2 of tender process for German cultivation license
- 10. International Expansion 10 CANN GROUP:Australian Market Opportunity • 22.9% stake in Cann Group Ltd for $6.6 million (initial investment at AUS $0.30/share) • Significant appreciation of initial investment since listing • Technical Services Agreement in place • Possession of one of the first two Licenses issued in Australia • Cultivation, Sales, and R&D licenses • 3 facilities contemplated • First harvest completed • Australia is a new market with significant development potential >24 million population AUSTRALIA Aurora Cannabis Inc. Management Presentation Initial investment at AUD $0.30 Jun. 15, 2017 Sept. 15, 2017 ASX: CAN 1.25 1 .75 . 5 . 25
- 11. Vertical Integration –Aurora Larssen Projects Ltd. • Formed following acquisition of Larssen Ltd. • Global leading greenhouse engineering and design consultancy • Responsible for Aurora Sky • Currently engaged by 15 cannabis companies globally, including 5 LPs • 30 year track-record delivering technologically advanced, yield-optimized greenhouse facilities for cannabis and other horticultural sectors • Tracking for $6M in Fiscal 2018 revenues Aurora Cannabis Inc. Management Presentation 11 Creating a Global Turnkey Cannabis Cultivation Powerhouse
- 12. Horizontal Integration -Strategic Relationships Hempco Food and Fiber Investment • Potential future ownership > 50% • Well-established, pioneer distributors of hemp products • Provides access to hemp – a large, low-cost and sustainable source of CBD to support growing demand for cannabis products • Ancillary product offerings for horizontal integration - nutritional supplements and health- lifestyle products Namaste Supply Agreement • Leading e-Commerce supplier of cannabis vaporizers • No capital outlay for Aurora required • Serves growing need for smokeless solutions and growing demand for ancillary products • Promotes wider brand recognition in anticipation of legalization of the adult recreational market • Now also acting as third-party distributor for BCNL products Aurora Cannabis Inc. Management Presentation 12
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- 14. Operating Metrics andAssumptions AURORA MOUNTAIN: • Consistent production at capacity during the last two quarters • Continued production expected at 4,800 kg/yr AURORA SKY: • First planting expected by end of calendar year 2017 • First harvest and inventory build expected by April 2018 • Capacity of 100,000 + kg/yr expected by June 2019 VIE: • First planting expected by end of calendar year 2017 • First harvest and sales expected by April 2018 • Capacity of approx 3,900 kg/yr expected by early 2019 LACHUTE FACILITY • Further exposure to underserved Quebec market with additional 4,500 kgéyr capacity and significant expansion potential • Facility to be completed to EU GMP standards • First harvest expected Q2 calendar 2018 SALES PRICES: • Sales prices in Canadian and Germany medical markets expected to remain steady for several years • Selling prices in Canadian adult consumer market may vary by province depending on distribution model CASH PRODUCTION COST PER GRAM: • As Aurora Sky ramps up, ACB’s average cash production cost per gram expected to fall to below $1.00/g
- 15. 15 UNIT ECONOMICS Current AuroraMetrics Sales Price per Gram/Gram equivalent Canada – CAD $9/g Europe - > € 8/g (~CAD11.80/g) Cash cost to produce (Q4 2017) $1.91/g Cash cost to sell (Q4 2017) $2.09/g Outlook Sales price per gram/gram equivalent for dried cannabis products expected to be stable with global demand exceeding supply. Higher margin expected on concentrates and other derivative cannabis products. Cost per gram expected to decrease with automation, scale and yield expertise realized. Long term SG&A costs not expected to escalate at the same rapid pace of projected revenue and market growth given regulatory marketing restrictions and economies of scale.
- 16. Aurora Cannabis Inc.Management Presentation 16 $0.2 $1.2 $3.1 $3.9 $5.2 $5.9 $8.2 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Sequential Growth (%) 169% YoY growth for Q1 2018 457.1% 151.7% 26.5% 33.2% 14.7% 39.0% Strong Revenue Growth Revenue ($M)
- 17. Aurora Cannabis Inc.Management Presentation 17 Q1 2018 Q4 2017 Q3 2017 Q2 2017 # # # # Active registered patients (1) 19,280 16,400 13,110 12,200 Grams sold 889,965 755,059 653,008 538,045 Grams produced (2) 1,009,585 1,164,683 846,849 670,322 (In CDN $000’s unless otherwise noted) $ $ $ $ Average net selling price per gram 8.22 7.45 6.64 5.96 Cash cost of sales per gram 1.92 2.09 2.31 2.56 Cash cost to produce per gram 1.73 1.91 1.91 2.13 Cash and cash equivalents 127,915 159,796 111,116 55,846 Working capital 169,674 170,142 126,530 60,060 Continuously Improving Metrics
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- 19. Aurora Mountain –First Large-Scale Purpose-Built Medical Cannabis Facility sq. ft. purpose-built, state of the art facility State of the art, scalable production facility 55,200 15,000+ 4,800kg 13 Patients can be supported by current facility Current annual capacity Licensed grow rooms: 10 flower, 1 clone, 1 mother, 1 micro-propagation sq. ft. of land available for facility expansion Fully licensed producer in Alberta Of the largest production facilities in Canada 7.7M Only One
- 20. Aurora Sky willbe the world’s most technologically advanced and largest capacity cannabis facility • World leading design & supply partners • First bays ready for planting prior to year-end 2017 • Highest-yielding greenhouse per kWh of energy consumed • World’s first facility located at international airport • Estimated capital cost $120 million • At full capacity, Aurora Sky is estimated to produce over 100,000 kg per year 20 ~800,000 square feet 100,000+ kg p.a.
- 21. Facility features aimedat yield and cost optimization • Forced air, over pressurized with tailored filters on inlet/outlet • Sealed greenhouse enables energy conservation, minimizes disease pressure • Design supports unsurpassed light availability and penetration • Best-in-class uniform climate control throughout grow zones • Specialized irrigation system supports health, minimizes waste • Focus on optimized yield, quality, flavor/aroma • Fully integrated computer monitoring & control across entire life cycle • Mobile bench system and automated plant movement • Integrated visual monitoring systems to identify pests, disease and other problems • Harvest to dry provides small-batch quality with mass scale throughput • Custom process-flow supports production under strict GMP/GPP standards Aurora Cannabis Inc. Management Presentation 21
- 22. Optimal logistics atEdmonton International Airport (EIA) Advantages • Unparalleled access to transportation for domestic and international distribution of products servicing Aurora’s expanding footprint • Access to industrial infrastructure, power, water and gas • Federal security monitoring • Co-location with bonded warehousing and courier services • Edmonton has the lowest corporate tax rate in North America • Property taxes at the Edmonton International airport are approximately half of those charged in Edmonton Aurora Cannabis Inc. Management Presentation 22 AURORA SKY
- 23. Aurora VIE andLachute Quebec facilities • Acquired Peloton Pharmaceuticals for $7 million • 40,800 square feet facility, completion and first planting by end of 2017 • Completed build-out and received license in November 2017, reflecting unparalleled execution in sector • Provides direct access to Quebec market • Provides operations base to target, and shortens supply lines to serve, Atlantic Provinces • Delivers additional supply • Certain technologies proposed for Aurora Sky to be tested at Pointe-Claire facility Aurora Cannabis Inc. Management Presentation 23 • H2 Biopharma acquired December 2017 • 48,000 sqft nearly completed facility • 4,500 kg/yr capacity • 46 acres expansion land under option to acquire for $136,000
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- 25. Aurora Dried FlowerProducts Recognized for High Quality WIDE RANGE OF HIGH-DEMAND PRODUCTS • Highest CBD Strain in Canada • Highest THC Strain in Canada • Mid-range THC Strains • Balanced THC/CBD Strains The Aurora brand resonates with the Canadian Medical Cannabis Community and Adult Use Culture 24 10+ 24 0 $9 per Gram; $6/gram compassionate pricing Distinct Strains in Production ► Dried Bud and Oils Flagship Strains Differentiated by: THC%: < 1% – 32% (Highest reported in Canada) CBD%: < 0.5% – 20+% (Highest reported in Canada) Types: Indica, Sativa, Hybrid, Blend Product Strains Launched to Date Pesticides and Gamma-irradiation ► Natural, Differentiated Sundance (Borealis Blend) Ambition (Blue Dream) Sentinel (Cannatonic)
- 26. Cannabis Oils –Sales & Continued Innovation • Sales license received January 2017 • Sales of three product lines commenced in April 2017 • Sales price - $95 per 30ml bottle ($65 compassionate pricing) • Game-changing collaboration with Radient • Proprietary technology with the potential for: • Better Terpene preservation • Significantly reduced extraction times (minutes vs hours for current benchmark) • Lower production costs • Higher active ingredient purity • Increased recovery of actives from scarce biomass • Utilization of significantly less energy and material inputs than current benchmark processes • Collaboration grants exclusivity related to the use of the technology in Canada Aurora Cannabis Inc. Management Presentation 26
- 27. Product Differentiation –Enabling The Homegrow Market Aurora Cannabis Inc. Management Presentation 27 Industry-leading grow boxes for the homegrow market Urban cultivators for microgreens for both the residential and commercial kitchen markets Endorsed by celebrities and corporations
- 28. HEMPCO – NEWPRODUCTS, NEW MARKETS, LOW COST CBD SUPPLY Aurora Cannabis Inc. Management Presentation 28 One of the world’s largest industrial producers of hemp products • Primary product lines: • Bulk and packaged food products (e.g. hemp protein powder, hemp seeds or hearts, hemp oil • Hemp fibre • Nutraceuticals • Animal feed supplement product line launched • Hemp contains significant amounts of Omega fatty acids with proven health benefits • Hempco’s line of packaged foods are sold under the brand “Planet Hemp” and are distributed globally in seven countries • Hemp is a potential source of CBD Health Canada proposals would allow for whole-plant utilization model, making hemp low-cost source of CBD material
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- 30. Experienced Leadership Team AuroraCannabis Inc. Management Presentation 30 Terry Booth CEO CEO of 6 successful companies 25 years experience in highly regulated industries Cam Battley Executive Vice President Deep experience in pharma and cannabis sectors Board member Cannabis Canada Steve Dobler President Successful entrepreneur, member of many public companies’ board of directors. Responsible for raising substantial funds for Aurora Glen Ibbott CFO Strong senior financial executive with deep life sciences sector experience Neil Belot Chief Global Business Development Officer Former executive director of Cannabis Canada - Canada's trade association for Licensed Producers Allan Cleiren COO Experienced operational executive with nearly three decades leadership experience at private and public companies Darryl Vleeming Chief Information Officer over 20 years of experience in Senior IT leadership, project delivery, and IT strategic planning at publicly traded international corporations, with a specific focus on driving business value.
- 31. Board of Directors AuroraCannabis Inc. Management Presentation 31 Steve Dobler President, Aurora Successful entrepreneur, member of many public companies’ board of directors. Responsible for raising substantial funds for Aurora Adam Szweras Partner, Fogler, Rubinoff LLP Experienced securities lawyer. Founder of a US developer of marijuana and hemp oil, and edible products. Michael Singer Chairman CFO, Clementia Pharmaceuticals Former CFO, Bedrocan Cannabis Corp. Terry Booth CEO, Aurora CEO of 6 successful companies 25 years experience in highly regulated industries Dr. Jason Dyck Professor, Department of Pediatrics and Director of Cardiovascular Research Centre, University of Alberta Joseph del Moral President, CanvasRx Experienced executive in regulated industries Exited last company to Just Energy (JE.TO) Diane Jang A business consultant, specializing in strategic planning for sustainable success, growth and profitability, with over 27 years of business experience in the Consumer Packaged Goods industry
- 32. HIGHLIGHTS 32 Fastest patient signup rate in industry Scale to service both rapidly growing medical market and seize legalization opportunity Extremely well capitalized to pursue global expansion opportunity • Upon completion, three facilities >>100,000 kg per annum cultivation capacity • Technologically most advanced facilities => ultra low cost of production • Global reach • Pedanios - Germany & EU • Cann Group - Australia SCALE • Disruptive extraction technology • First mobile app for ordering medical cannabis • Customer care: same day delivery in two metropolitan areas INNOVATION • High quality products • BC Northern Lights & Urban Cultivator: addressing home grow and micro green markets • Hempco Food & Fiber: new products, new health life-style markets, low-cost source of CBD materia • Namaste partnership delivering product differentiation DIFFERENTIATI ON
- 33. 33 AGILITY INNOVATION EXECUTIONEXPANSION Talented, experienced management team driving the sector's fastest growth in customers, revenues and shareholder value
- 34. Aurora Information Establishe d 2013 ~420 Employees 7Directors Head Office 1500 -1199 West Hastings St. Vancouver, BC V6E 3T5 TSX: ACB OTCQX: ACBFF Aurora Cannabis Inc. Management Presentation 34
- 35. Capital Summary Market Cap- Basic $3.2 Billion Share Price - December 8, 2017 $7.09 Aurora Cannabis Inc. Management Presentation 35 Strong balance sheet with pro-forma Cash position > $340 million December 8, 2017 TSX listed, ticker symbol ACB Securities Issued & Outstanding Shares 454,989,771 Options 20,133,606 Warrants 23,062,592 Compensation options/warrants 186,525 Convertible debentures shares reserved for issuance 20,749,283 Fully Diluted 521,101,777
- 36. Contact Information Cam Battley,EVP +1 (905) 878-5525 cam@auroramj.com 36 Marc Lakmaaker, Director IR & Corporate Development +1 (647) 269-5523 Marc.lakmaaker@auroramj.com