Fueling the Global Cannabinoid Oil Industry Company Presentation
Š 2019 Instadose Pharma Corp. All Rights Reserved.
Company Presentation 2019
Legal Disclaimer and Forward-Looking Statements This Presentation is for Information Purposes Only The information contained in this presentation (“Presentation”) is being offered by Instadose Pharma Corp. (“Instadose Pharma”) for information purposes only. This Presentation may not be reproduced or further distributed or published in whole or in part by any other person into the United States or any other jurisdiction where applicable laws prohibit its release, distribution, or publication. Any failure to comply with this restriction may constitute a violation of applicable securities law. This Presentation is not an Invitation or Offer to Purchase Securities This Presentation is not a prospectus, offering memorandum, advertisement, or solicitation 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 of Instadose Pharma in Canada, the United States, or any other jurisdiction. Neither this Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any securities of Instadose Pharma. No representation or warranty, expressed or implied, is given by or on behalf of Instadose Pharma, its directors, officers, employees, and affiliates or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation. No liability whatsoever is accepted by Instadose Pharma, its directors, officers, and/ or affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.
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No Investment Advice is Being Provided in this Presentation No investment advice is offered or deemed to be offered under this Presentation, and any future prospective purchasers of securities of Instadose Pharma should consult with his or her own legal, investment, accounting, and tax advisors for determination of, among other things, suitability of investing in securities of Instadose Pharma. If made available in the future, any decision to purchaser securities of Instadose Pharma should be considered a risky investment as the securities are speculative in nature and are appropriate only for investors who are prepared to have their money invested for a long period of time and have the capacity to absorb a loss of some or all of their investment. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this Presentation or on its completeness, accuracy, or fairness. Readers should not treat the contents of this Presentation as advice relating to legal, taxation, or investment matters, and must make their own assessments concerning these and other consequences of various investments, including the merits of future investing and the risks. Readers are advised to consult their own personal, legal, tax, and accounting advisors and to conduct their own due diligence and agree to be bound by the limitations of this disclaimer. This Presentation Contains Forward-Look Statements Certain statements in this Presentation may constitute forward-looking information, including future-oriented financial information and financial outlooks, within the meaning of applicable securities laws. Forward-looking information may relate to Instadose Pharma’s future outlook and anticipated events or results and may include statements regarding Instadose Pharma’s expected financial results, future financial position, expected growth of cash flows, business strategy, budgets, projected
Company Presentation 2019
costs, projected capital expenditures, taxes, plans, objectives, potential synergies, industry trends and growth opportunities. Often but not always, forward-looking information can be identified by the use of words such as “anticipate”, believe”, target”, “plan” and other similar expressions or variations (including negative variations) of such words and phrases. Forward-looking information contained in this Presentation is based on certain assumptions regarding expected growth, results of operations, performance, industry trends and growth opportunities. While management considers these assumptions to be reasonable, based on information available, they may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Instadose Pharma to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to risks associated with general economic conditions; adverse industry events; loss of markets; changes in political conditions in The Democratic Republic of the Congo, future legislative and regulatory developments involving medical marijuana and derivative oils; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the medical marijuana and derivative oil industry across the globe generally, income tax and regulatory matters; the ability of Instadose Pharma to implement its business strategies; competition; crop loss; currency and interest rate fluctuations, and the other risks. The foregoing factors are not intended to be exhaustive. Although Instadose Pharma has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forwardlooking statements, there may be other factors that cause actions, events or results to differ from those
anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date hereof and Instadose Pharma and its directors, officers and employees disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forwardlooking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on forwardlooking statements due to the inherent uncertainty therein. All forward-looking information is expressly qualified in its entirety by this cautionary statement. Forward-looking information and other information contained herein concerning management’s general expectations concerning the medical marijuana and derivative oil industry are based on good faith estimates prepared by management using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which management believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware of any misstatements regarding any industry data presented herein, industry data is subject to change based on various factors. United States Matters The securities of Instadose Pharma have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), as amended. Any offerings of securities of Instadose Pharma may only be offered in the future to persons within the United States that are “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act. Instadose Pharma does not have a class of securities registered with the Securities and Exchange Commission.
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Company Presentation 2019
PRESENTATION ROADMAP
Today’s Global Cannabis Inudstry
6
The Global Market Opportunity
7
About Instadose Pharma
8
Leading Global Disruption
18
A Comparative Analysis 20 The Democratic Republic of the Congo
24
Instadose Pharma - The DRC Story
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Company Projections 32
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Company Presentation 2019
Eight years ago I embarked upon a joint mission with the government of The Democratic Republic of the Congo (the “DRC”) to establish the largest local and global food securitization program the world had ever seen. With global food demand expected to increase anywhere from 59% to 98% by 2050, a unique opportunity existed to be able to contribute significantly to the resurrection of food stabilization locally in the DRC as well as on a global level. Today, this program is providing job securitization to families in the DRC and is directly improving the lives of more than 300,000 people. By June of 2018, my existing agricultural presence in the DRC made capitalizing upon the rapidly growing global cannabis and Cannabinoid oil industry a simple extension to our joint efforts in food securitization. In a monumental 50-year partnership with the DRC Government, Instadose Pharma was formed and given the only license to grow and produce cannabis and Cannabinoid oil in the DRC. Today, Instadose Pharma has established the largest production platform on earth ever created agriculturally for cannabis and Cannabinoid oil. In doing so, Instadose Pharma is disrupting today’s “licensed producer (“LP”) industry monopoly” in favor of a new mass-scale production platform capable of opening the gateway for the world’s largest pharmaceutical (“Big Pharma”) and food and beverage (“F&B”) companies to enter the global marketplace for the first time. This opening is only made possible by Instadose Pharma’s unique and exclusive ability to guarantee Big Pharma and F&Bs secure and consistent supplies of cannabis and Cannabinoid oil at prices they can control. To all of our shareholders, we thank you for your trust and continued participation in our program. We look forward to bringing you great value and return on your investment with us. Sincerely,
Grant F. Sanders Chairman & CEO Instadose Pharma Corp. 5
Today’s Global Cannabis Industry LPs today have monopolized the global production, sale, and distribution of cannabis and Cannabinoid oil with little to no participation from Big Pharma and multinational F&B companies. Today’s LPs are nowhere near capable of producing enough cannabis or Cannabinoid oil to enable Big Pharma and F&Bs to enter the marketplace due to:
1
Massive world shortages of cannabis biomass;
2
Significant inefficiencies in processing Cannabinoid oil; and
3
Exhorbitantly high costs of production and processing of Cannabinoid oil
The Global Cannabis Industry Needs Disruption 6
Company Presentation 2019
The Global Market Opportunity
A potential
$500bn+
Global Industry by 2021 Full participation by Big Pharma and F&Bs in the global cannabis and Cannabinoid oil market is required to unlock the full potential of this global market opportunity Global Top 10 Big Pharma & F&Bs
USD$1 trillion in Revenue (2018)2
(1) Overtime, Source: Eight Capital: “The Value case for Investing in the Cannabis Sector�; Source ISRW; Source - Allied Market Research; Source O Grand View research (2) Based on market research conducted by Instadose Pharma
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Company Presentation 2019
About Instadose Pharma: Executive Summary
Monumental 50-year agreement with the DRC Government making Instadose Pharma the only company in the DRC licensed to grow, purchase from local farmers, possess, produce, and process medicinal cannabis into Cannabinoid oil for global export and sale ›› Related company of GlobAgro Corporation, the largest grower of agricultural food products in the DRC
›› Proprietary ethanol-based oil extraction process with near capacity to produce 20,000 litres of Cannabinoid oil per day
›› Exclusive rights to grow and process medicinal cannabis on 10,000 hectares (ha) of government-owned land at the Bukanga-Lonzo Agro Park (“Agro Park”)
›› Signed supply agreements exceeding $5.0bn in future expected revenues
›› Exclusive rights to grow medicinal cannabis on 1,000,000 ha of cooperative (“Co-op Lands”) lands throughout the DRC ›› EU-GMP Certified production and processing facility 8
›› Significant working relationship with the University of Kinshasa and Franco American University for staff training and the importing of worldclass talent, skill, and experience into the DRC ›› Experienced management team with a world-class advisory board ›› Canadian company headquartered in Burlington, Ontario, Canada
Company Presentation 2019
Partners in Growth 20% Net Profit Share “Instadose Pharma’s political and economic standing in the DRC is securely embedded at the highest levels of government” Grant F. Sanders Chairman & CEO
›› Paid by Instadose Pharma to the DRC Government and its people from the sale and export of cannabis biomass and Cannabinoid oil for a term of up to 50 Years ›› Net Profit Share used to build schools, churches, hospitals, community centers, and homes
Significant Roles in Advancing Education ›› Instadose Pharma’s Dr. Luc Duchesne plays a significant role as President of the DRC’s Franco America University as well as the role of Contributor at the University of Kinshasa
Eradication of Illicit Cannabis Growing ›› Instadose Pharma’s cannabis license is eradicating the illicit growing of cannabis in the DRC unless performed under sub-license from Instadose Pharma
The University of Kinshasa
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Company Presentation 2019
Business Model
Farming & Purchasing Cannabis
Products
Processing ›› Cannabis into cannabis biomass; or ›› Cannabis into Cannabinoid oil
Sale & Export ›› Cannabis biomass for buyer self-processing into Cannabinoid oil; or ›› Processed Cannabinoid oil
Customer Base & Product Use
Bulk Cannabis Biomass
Q3 2019
Cannabis Biomass: self-extraction
Cannabinoid Oil Full spectrum
Q4 2019 CBD Oil
Pharmaceutical Companies Food & Beverage Companies
Full spectrum – 85% / 90% Purity
Q1 2020 THC Oil
Full spectrum – 85% / 90% Purity
Q1 2020
Custom Cannabinoid Blends
Q2 2020 10
Licensed Producers
Global Market Brokers
Foreign Governments
Cannabinoid Oil: Product Production
Product Resale
Product Research
Company Presentation 2019
Product Distribution Starting with Canada, the UK, and the EU in Q4 2019, 2020 will see Instadose Pharma expand product distribution into other regions of the world as political movements to decriminalize cannabis and Cannabinoid oil for medical and recreational use gain popularity Fully legal (3) https://www.nature.com/articles/d41586-018-07037-1
Medical
Illegal
Federally illegal / legal on a regional basis
In process of legalizing medical use / exploring legalization
Product Process Processing Cannabis Biomass ›› Strict SOPs for cultivation & harvesting ›› Traceability of biomass from field to facility ›› COAs provided for all batches
Cannabinoid Oil ›› Strict SOPs for processing ›› Orders stamped by lot number with traceability to a corresponding COA and master lot documentation
Packaging Cannabis Biomass ›› Vacuum sealed into light proof, vapor proof, and water proof packaging ›› Minimum shipment of 100kg
Cannabinoid Oil ›› Packaged into water tight, vapor tight, tamper evident, and optically-clean pharmaceutical containers ›› Containers certified in accordance with FDA, UN, and GMP requirements for the global import and export market of pharmaceutical products ›› Minimum shipment of 100L
Logistics ›› Shipping cost paid by the buyer ›› Transport logistics determined by carrier SOPs for the safe delivery of pharmaceutical products ›› Packaged product taken from packaging storage facility and delivered to logistics provider assigned by the buyer ›› Internationally shipped products will be FCA Kinshasa ›› Buyer required to comply with import requirements set by their country’s global regulations with regards to the import and export of cannabis and Cannabinoid oil
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Company Presentation 2019
A strong Executive Leadership Team
Grant F. Sanders Chairman & CEO
• Expertise in financing, developing, and operating large scale farming operations • Expertise in corporate finance and business development • Strong political relationships throughout the DRC
Lawrence M. Acton
COO – Global Mergers & Acquisitions • Expertise in global banking and mergers & acquisitions • Previously Managing Director at CIBC World Markets – Head Equity Trading • Previously Managing Director at UBS – Head Cash Trading
Dr. Luc C. Duchesne, PhD Chief Science Officer
• Led successful Canadian LP under ACMPR • Author of 85 peer-reviewed scientific publications • PhD (Plant Biochemistry/Botany), M.Sc. (Forest Pathology/Forest Sciences), B.Sc. (Forest Ecology/ Forest Engineering)
Gareth Wiggan
Director of Operations - DRC • Extensive agricultural experience in Africa • Financial expertise in insurance • Relationships with key DRC leaders, land owners, and local co-operatives
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Company Presentation 2019
Ann Barnes
Executive VP, Global Product Development • Founder of Peace Naturals, the first Canadian Licensed Medical Cannabis Company, which was later sold to Cronos Group • Extensive knowledge in product development in the cannabis and hemp sectors • Significant expertise in the development of super-food products
Eman Pulis
CMO - Europe • Founder & CEO, Medical Cannabiz World • Founder & CEO, Malta AI & Blockchain Summit • Founder & CEO, SiGMA
Loren S. Greenspoon, JD, LLB General Counsel
• Legal background specializing in corporate law, securities, corporate finance & mergers and acquisitions • Experienced entrepreneur across multiple industries including technology, media, mining, and cannabis • U.S. law degree from Michigan State University Canadian legal degree from University of Ottawa
Justin Mayala
Operations Manager, DRC • Operations & Engineering experience in machine, equipment, process design & material handling. • Knowledgeable of all phases of project work including plant layout, process and instrument diagrams, equipment specifications/bid packages, and project scheduling • Relationships with key DRC leaders
Terry Wilshire
Chief Risk Officer • Former Director at TransUnion Canada where he specialized in crisis management, risk management, fraud and identity management, and enterprise issue management • Designated the only Industry Expert in Canada 13
Company Presentation 2019
Advisory Board
Geoffrey S. Belsher, LL.B
Former Co-Head of Wholesale Banking, CIBC World Markets Geoffrey Belsher has over 30 years experience as an investment banker and corporate lawyer. Today Geoffrey serves on a number of company boards and is President of Resurgam Financial. From 2009-2015 Geoffrey served CIBC World Markets as Co-Head of Wholesale Banking where he was responsible for the firm’s investment banking business, including its mergers and acquisitions, public equity, and debt financing activities. In this role, Geoffrey managed approximately 500 professionals in Canada and key offices around the world. In addition to overseeing the firm’s corporate loan book, Geoffrey was responsible for the investment banking business of CIBC.
Prior to joining CIBC, Geoffrey held senior positions at a number of Canadian and global investment banks including BMO Capital Markets and Lehman Brothers Canada. During this time, Geoffrey advised on a wide range of significant domestic and cross-border transactions. Before his career in investment banking, Geoffrey was a lawyer at a major Canadian law firm from 1984-1997 where he practiced in the area of corporate law with a focus on corporate finance and mergers and acquisitions. Geoffrey holds an LL.B from Osgoode Hall Law School and a B.A. from the University of Toronto.
Lieutenant-General (retired) the Honourable Andrew Leslie, PC, CMM, MSC, MSM, CD, MA, ICD.D Former Commander/CEO of the Canadian Army Andrew Leslie has been a soldier, business leader, Federal parliamentarian and board director with corporate, charitable and government organizations. His value proposition is extensive training and practical experience in leadership, governance, succession planning/leader selection/mentoring, strategic planning and risk and crisis management. He has extensive knowledge of Canada’s place in the world, international trade, Canada-US relations and cyber security. His career in the Canadian Armed Forces culminated as the Commander/CEO of the Canadian Army for four years during the Afghan War, where he was responsible for the leadership of 57,000 people, their equipment, training, a multi-billion dollar budget and related equipment programs. He was also responsible for DND’s electronic warfare, cyber security and IT, managing one of the largest such budgets in Canada. Over a 25 year period he developed extensive experience on executive boards in such areas as financial allocations, budget preparations, expenditure controls, personnel selection and promotion, human resource management, information technology development, infrastructure renewal, transportation oversight committees, risk management, strategic targeting, equipment acquisition, visions for the future and transformation, public relations and labour-management boards.
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After international tours with both the UN and NATO in peacekeeping and war, he joined a large Canadian corporation as a senior Vice President, working on network operations and cyber security with U.S. and Canadian clients. He was subsequently involved in various cyber security companies as a board director and mentor, and larger ones for corporate strategy and governance as a consultant; as well as a half dozen charitable boards. Elected as the Federal MP representing Orleans in 2015, he was Chief Government Whip and a member of the Privy Council of Canada, attending the Results and Risk Management Cabinet Committee. In January 2017, the Prime Minister of Canada focused him on Canada-U.S. relations as Parliament Secretary for Global Affairs, and he attended the relevant cabinet committee on Trade. He has spent considerable time in the U.S. and across Canada interacting with business leaders, Governors and Congress on trade-related issues. A graduate of numerous military courses on leadership, governance, ethics, strategy, equipment acquisition, and risk management, General Leslie’s education includes the University of Ottawa(Economics), the Royal Military College (MA/Strategic Studies), as well as executive courses at the Harvard Business School and the Canadian Forces Colleges, and he is a recent graduate of the Institute of Directors Education from the Rotman School of Management.
Company Presentation 2019
Michael Gaouette
Former Leader of Largest U.N. Peacekeeping Team in Darfur, Sudan Michael Gaouette has spent the last three decades working internationally as a public servant and entrepreneur. His career has taken him to more than two-dozen countries in Africa, to the Middle East, South and Central Asia and the Balkans. Today, Michael is a member of the faculty of Columbia University’s School of International and Public Affairs, where he specializes in International Conflict Resolution. For the first twenty years of his working life, Michael served in the United Nations and with well-known NGOs. During that period he acquired a wide range of experience: leading earthquake response teams in India, coordinating humanitarian assistance in Liberia, organizing care for Kosovar refugee children in Macedonia, mobilizing food aid in East Africa, designing policing interventions in Chad,
evaluating UN operations in Angola, Sierra Leone and Ivory Coast, developing global security policy for relief workers and negotiating with senior military and government officials in Europe, Africa and the Middle East. His final job with the United Nations was to lead the headquarters group that ran what was, at that time, the largest peacekeeping mission in the world, which was deployed to Darfur, Sudan. After leaving the United Nations, Michael turned his attention to generating jobs for regular people in struggling or emerging economies. He has started two small-scale agriculture businesses – one in the Ivory Coast and one in Tanzania. Both enterprises are run with local partners and focus on creating economic stability and steady, well-paid jobs for working families. He graduated from Harvard College with high honors and has an MPhil from Cambridge, University.
Richard M. Wise, MCBA, CVA, FASA, FCA, CPA, CA, FRICS, CA-IFA, CFE, C.Arb Former Partner, MNP LLP
Richard M. Wise is a partner in MNP’s Montreal office specializing in business valuation and financial litigation. He performs valuations for crossborder transactions, tax planning, shareholder and matrimonial disputes, and damage quantification. Mr. Wise writes and lectures extensively across the U.S. and Canada and has presented over 200 papers in both countries, including conferences of the American Bar Association, AICPA, NACVA, IBA, and the American Society of Appraisers (ASA), among others. He is co-author of Guide to Canadian Business Valuations. Mr. Wise was President of The Canadian Institute of Chartered Business Valuators and an International Governor of ASA. He has been valuation advisor to the Canadian Justice Department, the Canada Revenue Agency, the Québec Financial Markets Authority and Attorney General of Ontario. He frequently gives expert court testimony across Canada and in the U.S. and is listed and recognized as an Expert Witness in Tax Litigation by Who’s Who Legal: Corporate Tax 2015.
Mr. Wise was designated a Chartered Professional Accountant (CPA) in 1965 and elected a Fellow (FCA) in 1984. He also holds the designations of Investigative and Forensic Accountant (CA•IFA), Chartered Business Valuator (FCBV), Accredited Senior Appraiser (FASA), Master Certified Business Appraiser (MCBA), Certified Valuation Analyst (CVA), Fellow of the Royal Institution of Chartered Surveyors (FRICS), and Chartered Arbitrator (C.Arb.). He has served on several boards and committees of professional societies and charitable organizations and was inducted into ASA’S College of Fellows in 2006. He was recently Chair of the ASA Business Valuation Standards Committee, a member NACVA’s Litigation Forensics Board and currently serves on NACVA’s Executive Advisory Board. In 2012, he was awarded the Queen Elizabeth II Diamond Jubilee Medal by the Queen, which was presented to him by the Governor General of Canada.
Hélyette German, MA, PhD
Director, Commodity Finance Centre, Univ. of London & John Hopkins University Hélyette Geman is a Professor of Mathematical Finance at Birkbeck, University of London where she is the Director of the Commodity Finance Centre and Research Professor at Johns Hopkins University. She is a graduate of Ecole Normale Superieure in Mathematics, holds a Masters degree in Theoretical Physics and a PhD in Probability from the University Pierre et Marie Curie and a PhD in Finance from the University Pantheon Sorbonne. In 1993, she became ‘Professeur Agrege des Universites’ in Management Sciences. From 1988 to 1995, Hélyette Geman was Chair of the Finance Department at ESSEC Business School; from 1995 to 2005, she was the Director of the Masters program ‘Security Markets, Commodity Markets and Risk Management’ at the University Paris Dauphine. For the past 21 years, Professor Geman has consulted major banks, energy and mining companies as well as commodity houses, covering the spectrum of interest rates, catastrophic risk, crude oil and electricity, metals and agriculturals. She was previously the Head of Research
at Caisse des Depots in Paris. Professor Geman was the first president of the Bachelier Finance Society and has published more than 140 papers in top international finance and insurance Journals including the Journal of Finance, Mathematical Finance, Geneva Papers on Insurance, Journal of Financial Economics. She was named in 1993 Member of Honor of the French Society of Actuaries. Professor Geman’s research includes interest rates and catastrophic insurance, asset price and commodity forward curve modeling, valuation of physical assets in the commodity industry, as well as exotic option pricing for which she won the first prize of the Merrill Lynch Awards in 1995. Her book Commodities and Commodity Derivatives: Energy, Metals and Agriculturals published by Wiley Finance in January 2005 has become the reference book in the field. She edited in 2008 the book Risk Management in Commodity Markets: from Shipping to Agriculturals and Energy and was in 2010 the first Wilmar-International Invited Professor of Commodities Business at Singapore Management University. Professor Geman is a Member of the Board of the UBS-Bloomberg Commodity Index.
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Company Presentation 2019
Risk Mitigation
Instadose has insured its entire business model from “seed to sale�
Type of Insurance
Insurance Provider (4)
Property & Casualty Equipment/Machinery Breakdown Crop & Weather Completion Guarantee Performance Bond Political Risk Buyer Non-Payment
(4) Based upon insurance providers selected to date. Instadose Pharma retains the right to change insurance providers as is required in the best interests of the company
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Company Presentation 2019
Instadose Pharma is establishing safeguards to protect itself from events of force majeure Strategic Use of Private Lands in the DRC
Relationship & Monetary Control
• Instadose Pharma possesses 1,000,000 hectares of privately held SACCOS Lands immune from government intervention
• Instadose Pharma controls all contractual relationships with buyers as well as the flow of all funds for all product purchase orders
Global establishment of Fulfillment Partnerships
Offshore Cannabinoid Oil Reserves
• Instadose Pharma plans to establish reserve growing, harvesting, and processing partnerships across multiple regions starting with the Caribbean and South America
• Instadose Pharma plans to store substantial reserves of cannabis biomass and Cannabinoid oil outside of the DRC for emergency shipping needs
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Leading Global Disruption
Instadose Pharma is achieving global disruption by:
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1
Establishing the world’s greatest commercial growing and production capacity; and
2
Shattering the industry standard production cost for cannabis and Cannabinoid oil
Company Presentation 2019
PRODUCTION COST
PRODUCTION CAPACITY
Factors Enabling Production Capacity and Cost
Growing Platform
• 10,000ha at the Agro Park • 1,000,000ha on SACCOS Lands • Optimal climatic farming conditions at the equator • 200,000+ registered local farmers
Proprietary Technology
• Ethanol based system of extraction capable of producing up to 20,000L of Cannabinoid oil per day
Government Partnership
• Government agreement to subsidize all utility costs at the Agro Park
Infrastructure & Equipment
• USD$300 million of inherited production facilities and farming equipment • Little to no construction costs required to expand growing platform • Favorable business relationships with equipment manufacturers
Cost of Labor
• Lower costs of employing and retaining employees and personnel in the DRC as opposed to N.A.
Business Model
• Business limited to the outdoor production and wholesale of cannabis biomass & Cannabinoid oil • No costs associated with retail marketing
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Company Presentation 2019
A Comparative Analysis:
THE AGRO PARK LANDS Total Growing Space
398x
215x
207x
Production Capacity
622x
171x
69x
Production Cost
96.55+%
Cheaper cost per gram than
96.15+%
Cheaper cost per gram than
90.00+% 20
*Limited to 10,000 ha at the Agro Park
96.15+%
Cheaper cost per gram than
cheaper cost per litre of Cannabinoid Oil than the average market cost
Company Presentation 2019
Total Growing Space
Square Feet (sq.ft.)
SQUARE FEET (SQ.FT.)
1 200 000 000
1 000 000 000
800 000 000
430,556,000 Sq. ft. planted today
1,076,390,000
Sq.ft. of growing capacity at the Agro Park
600 000 000
400 000 000
200 000 000
5,200,000
(5)
Sq.ft.
5,000,000 Sq.ft.
(6)
2,700,000
(7)
Sq.ft.
0
Hectares (ha) 10 000 9 000
HECTARES (HA)
8 000 7 000 6 000 5 000
4,000
Hectares planted today
10,000
Hectares of growing capacity at the Agro Park
4 000 3 000 2 000 1 000
49
Hectares (8)
47
Hectares (8)
26
Hectares (8)
0
(5) Aurora Cannabis Inc. – August 2019 Investor Presentation (6) Canopy Growth Corporation – July 2019 Investor Presentation (7) Aphria Inc. – April 2019 Investor Presentation (8) Determined by converting sq. ft. to hectares
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Company Presentation 2019
Production Capacity
PRODUCTION CAPACITY (KG / YEAR)
Cannabis (kg / year) 50 000 000
40 000 000
30 000 000
40,824,000 KG / Year
20 000 000
10 000 000
5 000 000
625,000
(9)
Kg / year
255,000 Kg / year
(10)
(11)
70,000 Kg / year
0
Cannabinoid Oil ( L / year) 5 000 000 4 500 000
HECTARES (HA)
4 000 000 3 500 000 3 000 000
3,919,104 Litres / year
2 500 000 2 000 000 1 500 000 1 000 000 500 000
56,250 (12)
Litres / year
0
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(9) Aurora Cannabis Inc. – August 2019 Investor Presentation (10) Aphria Inc. – April 2019 Investor Presentation (11) Canopy Growth Corporation – July 2019 Investor Presentation (12) Determined by assuming all kg of cannabis is converted to Cannabinoid oil
22,900 (12)
Litres / year
6,300
Litres / year
(12)
Company Presentation 2019
Production Cost Production Cost (g) $1.45/g
$1,60
$1.25/g. (13)
CANNABIS
$1,40
$1.30/g
(15)
(14)
$1,20 $1,00 $0,80 $0,60 $0,40 $0,20
Less than
$0.05/g
$0,00
Production Cost (L) $ 3 000,00
CANNABINOID OIL
$ 2 500,00
Other competing LPs
$2,800/L
(16)
$ 2 000,00
90%+
(17)
Reduction in Production Cost / Litre
$ 1 500,00
$ 1 000,00
Less than
$280.00/L
$ 500,00
$0
(13) Canopy Growth Corporation. – July 2019 Investor Presentation (14) Aphria Inc. – April 2019 Investor Presentation (15) Aurora Cannabis Inc. – August 2019 Investor Presentation (16) Based on generally accepted industry standard production cost (17) Based upon Instadose Pharma’s average production cost
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Company Presentation 2019
The Democratic Republic of the Congo: untapped potential (18)
›› Mining industry in the DRC is a significant factor in the world’s production of cobalt, copper, diamond, tantalum, tin, and gold ›› In 2009, the DRC had an estimated $24 trillion in untapped mineral deposits, including the world’s largest reserves of coltan and significant quantities of the world’s cobalt
Until now, the DRC’s vast potential when it comes to agriculture production has been relatively ignored
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(18) https://en.wikipedia.org/wiki/Mining_industry_of_the_Democratic_Republic_of_the_Congo
Company Presentation 2019
A promising future as the African Leader in Agriculture ›› The DRC has tremendous potential when it comes to agricultural production with abundant land (80 million ha of arable farm land), nutrient rich soil, ample rainfall and a yearround growing season (19) ›› Today, the DRC is dedicated to becoming an agricultural leader in spurring economic growth and new innovative industries in Africa
“We want to build a strong DRC, turned toward its development in peace and security. A DRC for all, in which everyone has a place.” President Félix Tshisekedi
(19) https://en.wikipedia.org/wiki/Mining_industry_of_the_Democratic_Republic_of_the_Congo
›› The DRC’s National Program of Agriculture has sponsored the capital and resources necessary to spearhead these efforts ›› In October of 2018, the DRC legalized the growing and processing of cannabis and Cannabinoid oil for medical pharmaceutical purposes (“Legalization”)
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Instadose Pharma: the DRC Story An Introduction For the better part of the past decade, members of Instadose Pharma’s management team have been deeply engaged in establishing strong relations with the DRC Government on a number of levels, most relevant of which has been the securing of the only license and right to produce, cultivate, and process medical cannabis and Cannabinoid oil for global export and sale. This license opened the door for Instadose Pharma to work with both the DRC Government as well as private DRC land rights holders in order to maximize its agricultural footprint throughout the country. Starting in October of 2018, Instadose Pharma began entering into agreements with the DRC Government and other private DRC land rights holders for the purpose of jumpstarting the building of Instadose Pharma’s cannabis and Cannabinoid oil platform as well as putting the DRC on its path to becoming the African Leader in Agriculture.
26
Company Presentation 2019
Agreement and Licensing Timeline
October 4, 2018
Instadose Pharma Signs Protocol Agreement Provided Instadose Pharma with the legal right and license to cultivate cannabis in the DRC exclusively for medicinal and scientific purposes. This Protocol Agreement followed The Minister of Agriculture’s agreement, in accordance with the relevant provisions of Ordinance-Law No. 72-046 and Ordinance No. 72-359, to issue an authorization for the cultivation of cannabis exclusively for medicinal and scientific purposes by Instadose Pharma.
February 11, 2019
Instadose Pharma Signs Partnership Agreement Confirmed the allocation of 10,000 hectares of land and all infrastructure and equipment situated at the Bukanga-Lonzo Agro-Industrial Park (the Agro-Park) to Instadose for up to 50 years for the purpose of growing and processing medicinal cannabis into Cannabinoid oil for export and sale.
July 18, 2019
Instadose Pharma Signs SACCOS Land Rights Agreement Secured the allocation of up to 1,000,000 hectares of privately owned SACCOS lands for up to 50 years for the purpose of growing and processing medicinal cannabis into Cannabinoid oil for export and sale.
July 24, 2019
Instadose Pharma Issued Possession License
July 26, 2019
Instadose Pharma Issued Ethanol License
July 29, 2019
Instadose Pharma Issued Export Permit 27
Company Presentation 2019
The Agro Park
(20)
$500B+ by 202113
75,000 hectares
›› Covers 75,000 ha of arable land watered by the Kwongo and Lonzo rivers (“Agro Park Lands”) ›› Located in the district of Bukanga-Lonzo approx. 260 km South-East of Kinshasa ›› Opened in July 2014 representing the DRC’s first step towards agro-reform ›› The DRC Government first entered into a partnership with a private South African company for the purpose of establishing and managing the large-scale farm production of traditional produce. This partnership ended in 2016 with the company returning to South Africa leaving the Agro Park uninhabited ›› As confirmed by Ernst & Young in its August 2017 audit of the Agro Park, approximately USD$300 Million was invested into the Agro Park by the Ministry of Agriculture 28
(20) http://www.parcagro.com
Agro Park Highlights Include: ›› ›› ›› ›› ›› ›› ›› ›› ›› ›› ›› ›› ›› ››
Multi-silo complex 12 greenhouses Irrigation system Pump station Power station Machinery Feed mill Training center Drainage system Pivot dam Airport strip Farming housing Church School
Company Presentation 2019
Partnership Agreement Highlights
The following key rights and benefits were granted to Instadose Pharma under the Partnership Agreement: ›› Exclusive right and license to grow, harvest, and process cannabis into Cannabinoid oil on 10,000 ha of Agro Park Lands for a term of up to 50 years ›› Exclusive rights over and access to USD$300m in existing infrastructure and equipment at the Agro Park ›› Government subsidization of all utility costs at the Agro Park ›› Access to local police and/or military personnel for security purposes at the Agro Park ›› Rights to store cannabis and Cannabinoid oil at or outside of the Agro Park for future export and sale ›› Rights to export and store cannabis and Cannabinoid oil outside the DRC for future sale
29
The SACCOS Lands
The Church Farm Africa Savings and Credit Co-operative Society (SACCOS)
›› One of the largest ›› Congolese co-operatives registered under the Co-operative Societies Act of the DRC.
››
30
GlobAgro Corporation (“Globagro”) is an international agriculture property developer maintaining the capacity and resources necessary to promote, develop, finance, and operate large scale produce farming projects
Represents large group of ›› private landowners who are contributing up to 10,000,000 ha of arable farm land to the SACCOS across multiple locations in the DRC (“SACCOS Lands”).
SACCOS Lands presently being farmed for local sale by 200,000+ local registered farmers
››
Globagro holds exclusive rights to use & develop the SACCOS Lands for agricultural farming and commercial sale purposes for a period of up to 50 years (“SACCOS Land Rights”)
››
10% net profit share to be paid to the SACCOS from sale of farming produce
››
Additional profits are utilized to build community housing, schools, churches, and other types of infrastructure
Company Presentation 2019
SACCOS Land Rights Highlights
Instadose Pharma entered into an irrevocable assignment agreement with GlobAgro providing for: ›› Exclusive rights for Instadose Pharma to grow and harvest cannabis over up to 1,000,000 ha of unused SACCOS Lands for a period of up to 50 years ›› Access by Instadose Pharma to 200,000+ local registered farmers for employment purposes ›› Instadose Pharma to provide the SACCOS with a 10% net profit share on the sale and export of all cannabis and Cannabinoid oil originating from the SACCOS Lands
31
Company Presentation 2019
Company Projections: Production Matrix Matrix Variables
(21)
• Number of Hectares - 10,000 • Plants per Hectare - 15,000 • Kg of Biomass per Plant - 30g • Kg of Biomass per Hectare - 450,000g • Per Extract Yield (from kg to L) - 9.6% • Number of Harvests per Twelve-Month Period - 3 • Harvesting Cycle - 16 Weeks
Production Matrix is Limited to Cannabis Planted & Cultivated on the 10,000 Hectares of Land Making up the Agro Park Lands
Variable (21) Based upon present strains of cannabis farmed and harvested
# Plants
Per Harvest 10,000 ha
Three Harvests 10,000 ha
15,000
150,000,000
450,000,000
450,000
4,500,000,000
13,500,000,000
Cannabis Biomass
450
4,500,000
13,500,000
Cannabinoid Oil (L)
40.5
405,000
1,215,000
Cannabis Biomass (grams) (converted to kg)
1 gram = 0.001kg
32
Per hectare
Company Presentation 2019
Cultivation & Production Plan The Cultivation & Production Plan illustrates the timeline to plant cannabis and complete three full harvests on all 10,000 hectares of Agro Park Lands
Assumptions • A rotating crop - Cultivated hectares are replanted first before new hectares are planted (a 16-week cultivation cycle) • Hectares planted and biomass purchased from local farmers are direct functions of existing equipment capacity which can be increased at any time • Assumed crop loss of 10% New Hectares Planted – Hectares planted for the first time Cumulative Hectares Planted – New Hectares Planted plus Hectares replanted
(22) A detailed cultivation and production plan can be provided upon request Hectares Cultivated
Cannabis Biomass Produced (kg)
Cannabis Biomass Purchased (kg)
Crop Loss, Damage & Unsold (kg)
Cannabinoid Oil Produced (L)
Phase Start Date
Phase End Date
1
Sept. 1, 2019
Aug. 31, 2020
2,900
4,675
1,775
798,750
3,124,890
392,364
339,002
2
Sept. 1, 2020
Aug. 31, 2021
6,100
24,300
18,200
8,190,000
13,718,880
2,190,888
1,892,927
3
Sept. 1, 2021
Aug. 31, 2022
1,000
33,800
32,800
14,760,000
18,171,360
3,293,136
2,845,270
4
Sept. 1, 2022
Aug. 31, 2023
0
38,400
38,400
17,280,000
23,544,000
4,082,400
3,527,194
Sept 1, 2019
Aug 31, 2023
10,000
101,175
91,175
41,028,750
58,559,130
9,958,788
8,334,393
TOTAL
New Hectares Planted
Cumulative Hectares planted
Phase
33
Company Presentation 2019
Cashflow Assumptions
›› Based upon the sale of Cannabinoid Oil (no biomass sales) ›› Cannabis grown (and not purchased) by Instadose Pharma is limited to that grown on the 10,000 hectares of land making up the Agro Park Lands ›› Based on the conservative projected Cultivation & Production Plan for the Agro Park Lands included on page 32 ›› Net profit to be shared as follows:
40%
Instadose
40%
Other DRC stakeholders
20%
DRC Government
›› Costs of Canadian headquarters are reflected post-profit share
34
›› Analysis does not include projections for the sale of cannabis biomass or any revenue to be generated by Instadose Pharma’s subsidiaries
Company Presentation 2019
Cashflow Analysis Matrix Variables • Number of Hectares - 10,000
• Biomass Purchase Price - $3.50 per Kg
• Plants per Hectare - 15,000
• Per Extract Yield (from kg to L) - 9.6%
• Crop Loss - 10%
• Number of Harvests per 12-Month Period - 3
• Kg of Biomass per Plant - 30g
• Harvesting Cycle - 16 Weeks
• Kg of Biomass per Hectare - 450,000g
• Sale Price per Litre of Cannabinoid Oil USD$4,500
Sale of Cannabinoid Oil Only Phase 1
Phase 2
(23)
Phase 3
Phase 4
TOTAL
Gross Revenue: Cannabinoid Oil
$1,525,511,232
$8,518,172,544
$12,803,712,768
$15,872,371,200
$38,719,767,744
Less: Total Costs
$44,106,845
$210,696,353
$320,223,818
$407,587,560
$982,614,576
$1,481,404,387
$8,307,476,191
$12,483,488,950
$15,464,783,640
$37,737,153,168
$888,842,632
$4,984,485,714
$7,490,093,450
$9,278,870,184
$22,642,291,980
$592,561,755
$3,322,990,477
$4,993,395,500
$6,185,913,456
$15,094,861,188
$3,021,354
$6,313,693
$8,633,213
$12,185,953
$30,154,213
$589,540,401
$3,316,676,783
$4,984,762,367
$6,173,727,503
$15,064,707,054
Net Income: Operations Less: Net Profit Share Net Profit: Post-Profit Share Less: Cost of CDN Headquarters (USD$) EBITDA (USD$)
Full cash-flow analysis available upon request (23) Cash flow analysis reflects Instadose Pharma’s best estimates of production and sale
35
Company Presentation 2019
The SACCOS Lands
(24)
1,000,000 ha of SACCOS Lands provides Instadose Pharma with up to 100x scalability and growth potential Restricted to Cannabis Biomass Grown & Cultivated by Instadose Pharma
Agro Park Lands Three harvests # Plants
100,000 hectares Three harvests
500,000 hectares Three harvests
1,000,000 hectares Three harvests
450,000,000
4,500,000,000
15,000,000,000
30,000,000,000
Cannabis Biomass (grams)
13,500,000,000
135,000,000,000
3,750,000,000,000
7,500,000,000,000
Cannabis Biomass (converted to kg)
13,500,000
135,000,000
3,750,000,000
7,500,000,000
Post-crop Loss (10%)
1,350,000
13,500,000
3,375,000,000
6,750,000,000
Cannabinoid Oil (L)
1,093,500
10,935,000
303,750,000
607,500,000
Total Revenue (USD)
$4,920,750,000
$49,207,500,000
$246,037,500,000
$492,075,000,000
To Instadose Pharma
$1,968,300,000
$19,683,000,000
$98,415,000,000
$196,830,000,000
To DRC Stakeholders
$1,968,300,000
$19,683,000,000
$98,415,000,000
$196,830,000,000
To DRC Government
$984,150,000
$9,841,500,000
$49,207,500,000
$98,415,000,000
36
(24) Based upon Instadose Pharma’s best estimates of additional production and sale
We look forward to seeing you in the DRC
Instadose Pharma Corp.’s Dr. Luc Duchesne and Grant F. Sanders being introduced to the DRC media
Ceremonial approval of the Protocol Agreement legalizing cannabis in the DRC for medical and scientific purposes
The signing of the Protocol Agreement between Grant F. Sanders, CEO of Instadose Pharma and Kazadi Kabongo, Minister of Agriculture of the DRC
Left to Right: Dr. Luc Duchesne, Gareth Wiggan, Justin Mayala, President FĂŠlix Tshisekedi, Grant F. Sanders, and Benjamin Bajik
37
Company Presentation 2019
The Cannabis License: official documents The Maye International Group SARL is Instadose Pharma’s registered affiliate in the DRC
38
›› Official Journal
›› Partnership Letter
›› Export License
›› Cannabis License
›› Protocol Agreement
›› Joint Venture Agreement
JOINT VENTURE CONTRACT
THE MAYE INTERNATIONAL GROUP SARL
AND SOCIÉTÉ D'EXPLOITATION DU PARC AGRO− INDUSTRIEL DE BUKANGA−LONZO “SEPAGRI S.A.” FOOD AND AGRO−PHARMACEUTICAL FOR PRODUCTION IN THE DEMOCRATIC REPUBLIC OF CONGO
JANUARY 2019
Contact Information Instadose Pharma Corp. 5500 North Service Rd. Suite 301 Burlington, Ontario L7L 6W6
Contact: +1 905 218 3593 info@instadosepharma.com
www.instadosepharma.com