Corporate Presentation - Zenabisrecipient with access to any additional information or to update...
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TSX: ZENA Corporate Presentation February 25, 2020 TSX: ZENA
Transcript of Corporate Presentation - Zenabisrecipient with access to any additional information or to update...
TSX: ZENA
Corporate PresentationFebruary 25, 2020
TSX: ZENA
TSX: ZENA1
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
the Company that any person make an investment in the Company.
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
activity may expose an individual to significant risk of losing all of the property or other assets invested
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
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 the Company. Recipients of this Presentation who are considering acquiring securities of the Company are reminded that any such purchase or subscription must not
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 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
presentation or ascertained from the underlying economic assumptions relied upon by such sources. The Company and its agents hereby disclaim any responsibility or liability whatsoever in respect of any third party
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
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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, 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
transmission. You are responsible for protecting against viruses and other destructive items. Your receipt of this document by electronic transmission is at your own risk and it is your responsibility to take precautions to
ensure that it is free from viruses and other items of a destructive nature. As a consequence of the above, neither the Company nor any director, officer, employee or agent of any of them or any affiliate of any such person
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.
TSX: ZENA2
COMPANY SNAPSHOT
Note: 1) FY means the fiscal year ended June 30 of Bevo Agro Inc.
Zenabis Global Inc. is a significant Canadian cultivator
of medical and adult-use recreational cannabis, and a
propagator and cultivator of floral and vegetable
products.
▪ Founded in 1985
▪ Wholly-owned subsidiary of Zenabis Global Inc.
▪ Successful 30+ year growing history in British Columbia,
Canada, specialized in the propagation of hundreds of unique
non-cannabis 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
▪ Over 650,000 sq ft. of operating space between two facilities
▪ Zenabis Pitt Meadows
▪ Zenabis Aldergrove
▪ Significant Canadian Licensed Producer with a licensed annual
production capacity of 96,400 kg
▪ In December 2019, actual harvests from Zenabis Atholville
totaled 3,841 kg of dried cannabis, representing an annualized
steady state production of 46,092 kg.
▪ Operates three state-of-the-art facilities dedicated to cannabis
cultivation and processing
▪ Zenabis Atholville: One of the largest indoor facilities in
Canada
▪ Zenabis Langley: Large scale closed greenhouse
facility
▪ Zenabis Stellarton: Fulfillment, processing and
cannabis derivative products manufacturing centre
TSX: ZENA
TSX: ZENA3
COMPANY PROGRESS TO DATE
Zenabis continues to expand its licensed production footprint, achieve success in cultivation and processing, and drive sales
through strong customer relationships.
Licensing
Increased licensed capacity from 5,700 kg to 96,400 kg in 2019 across three
facilities.
Packaging
Processing excellence in bud jar filling and pre roll production.
Pre-roll production capacity at Zenabis Stellarton reached peak daily output of
40,000 units3.
Cultivation
Outperformed original design
capacity of Zenabis Atholville by 35% in Q2 2019, resulting
in an upward revision of design capacity by 12,000
kg.
Product Development
One of five LPs to offer vape
cartridges in the form of PAX Era
pods. Available in stores.
Cannabis-infused beverages expected to
become available in Q2 2020.
Financing
From October 2018 to now, Zenabis
has secured over $200M+ of financing1.
Construction
Completed Zenabis Atholville
substantially2 on time and >$8M under budget.
Many of the Company’s significant
construction projects are completed.
Drying & Trimming
Have achieved strong, consistent output from drying
and trimming teams as ramp-up
has occurred at Zenabis Atholville
and Zenabis Stellarton.
Sales
One of six LPs with distribution to
ten or more provinces and
territories.
Notes: 1) Approximately $13m of the BMO credit facilities was incremental capital. 2) Substantially complete means the ability to undertake (subject to licensing) all production activities within the design capacity of the facility. 3)
Assuming operations for 30 days a month, Zenabis Stellarton has the potential to produce 1.2 million pre-rolls per month.
TSX: ZENA
142
3
4
OUR FACILITIES
Notes: 1) The greenhouse to the right of the Zenabis Langley photo is not part of Zenabis Langley. 2) In relation to its design capacity of 46,300 kg compared to other currently licensed indoor facilities based on publicly available
information in Canada as of October 2019.
2. Zenabis Langley1
Langley, British Columbia
▪ 2,100,000 sq. ft. greenhouse
▪ Licensed capacity: 49,300 kg
▪ Licensed for cultivation and
processing
3. Zenabis StellartonStellarton, Nova Scotia
▪ 255,000 sq. ft. indoor facility
▪ Licensed capacity: 800 kg
▪ Licensed for cultivation and
processing.
▪ License submitted for sales in
Q3 2019.
▪ 380,000 sq. ft. indoor facility
▪ Licensed capacity: 46,300 kg
▪ Licensed for cultivation,
processing, and sales
1. Zenabis AtholvilleAtholville, New Brunswick
▪ 25,000 sq. ft. indoor facility
▪ Licensed for cultivation,
processing, and sales
4. Zenabis DeltaDelta, British Columbia
Zenabis Atholville is one of the largest indoor facilities in Canada2
▪ 218,000 sq. ft. greenhouse
▪ Used for non-cannabis
propagation business
▪ Licensed for industrial hemp
cultivation
Zenabis Pitt MeadowsPitt Meadows, British Columbia
▪ 453,000 sq. ft. greenhouse
▪ Used for non-cannabis
propagation business
▪ Licensed for industrial hemp
cultivation
Zenabis AldergroveAldergrove, British Columbia
TSX: ZENA
Zenabis
AtholvilleAtholville, NB
Zenabis
LangleyLangley, BC
Zenabis
StellartonStellarton, NS
Zenabis Pitt
MeadowsPitt Meadows, BC
Zenabis
AldergroveAldergrove, BC
Parcel Size 871,000 sq. ft. 4,279,000 sq. ft. 547,000 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. 218,000 sq. ft. 453,000 sq. ft.
Expected Capacity under
Existing Capital Program46,300 kg 64,100 kg 800 kg N/A N/A
Design Capacity(if facilities fully built out and
converted as planned)
46,300 kg 96,100 kg 2 800 kg N/A N/A
Extraction Design Capacity3
(if facilities fully built out and
converted as planned)
15,000 kg N/A N/A N/A N/A
Cultivation Cost $1.09/gram4 TBD5 $1.30/gram6 N/A N/A
UtilizationCannabis
Cultivation7 +
Extraction
Cannabis
Cultivation7 +
Hemp +
Propagation
Cannabis
Cultivation7 +
Manufacturing8
Propagation +
Floral + Hemp
Propagation +
Floral + Hemp
Cultivation Format
5
PRODUCTION FOOTPRINT
G HIndoor Indoor
8.8m sq. ft.
(2.4m sq. ft. available for hemp
cultivation)
Total Available Land
0.7m / 2.8m / 3.5m sq. ft.
Total Max Development
Indoor / GH / Total
143,200 kg
Total Design Capacity
Notes: 1) Includes facility space under glass only; excludes additional warehouse space. 450,000 sq. ft. of Bevo’s existing greenhouses is expected to be initially converted to cannabis production space. The remainder is expected to continue to be used for Bevo’s
propagation business, and may be converted into cannabis cultivation space on an as needed basis. 2) If all facilities are built out and converted as planned. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final
Base Shelf Prospectus dated April 9, 2019 and filed on SEDAR. 3) Extraction estimates are annual, based on 20 days a month and based on kilograms of input material. 4) Year to date average cost per gram as of September 30, 2019. 5) Zenabis Langley is currently in
ramp-up phase of production and further license amendments from Health Canada are pending. 6) Estimated cost per gram. 7) Includes the packaging of cannabis product. 8) Manufacturing of value-add products.
G H Outdoor G H Outdoor
TSX: ZENA
-
0.50
1.00
1.50
2.00
2.50
Sundial Aphria Zenabis Aurora OrganiGram WeedMD
($/gram)
-
50,000
100,000
150,000
200,000
250,000
300,000
VIVO TGOD Supreme Village Farms Cronos CannTrust Sundial OrganiGram Zenabis Aurora Aphria
(kg)
6
COMPARABLE PRODUCTION METRICS1
96,400 kg
Current Licensed Annual Production Capacity
Notes: 1) All metrics obtained as of pre-market February 13, 2020 and sources have been listed on slide 28. 2) Calculated weighted average cost for the trailing nine months as per each company’s disclosures. 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.
Cash Cost of Cultivation2
$1.09/gram
TSX: ZENA7
COMPARABLE PRODUCTION MULTIPLES1
Notes: 1) All production and financial metrics obtained as of February 13, 2020 and sources have been listed on slide 28. 2) Enterprise value as of February 12, 2020. 3) Amount of cannabis produced on a dried flower equivalent basis as disclosed in the most recent financial
reports.4) Net Revenue of Cannabis Segment as of three months ending September 30, 2019.
Current Licensed Annual Production Capacity
Last Three Months Production3
Metrics ACB APHA CRON OGI VFF SNDL FIRE TGOD ZENA ALEF TRST VIVO
Enterprise Value2
($m)2,839 1486 1,119 529 371 239 196 176 150 144 124 45
Current Capacity
(kg)150,000 255,000 40,150 89,000 37,500 60,000 33,580 12,000 96,400 32,600 50,000 12,000
EV/Current Capacity
($m/tonne)18.9 5.8 27.9 5.9 9.9 4.0 5.8 14.7 1.6 4.4 2.5 3.8
Metrics WEED ACB TLRY APHA OGI HEXO SNDL ZENA FLWR WMD EMH
Enterprise Value2
($m)8,392 2,839 2,583 1,486 529 363 239 150 143 138 67
Last Three Months
Production (kg)29,920 30,691 15,498 13,866 12,759 16,824 11,668 11,017 447 3,056 229
EV/Last Three Months
Production
($m/tonne)
280.5 92.5 166.7 107.2 41.5 21.6 20.5 13.6 319.9 45.2 292.6
Quarter End Net Revenue
Metrics ACB TLRY APHA CRON OGI VFF HEXO SNDL FIRE TGOD ZENA
Enterprise Value2
($m)2,839 2,583 1,486 1,119 529 371 363 239 196 176 150
Net Revenue
($m)56.02 43.25 33.71 11.78 25.15 50.93 15.40 28.02 9.06 2.61 7.09 4
EV/Net Revenue
($m/$m)50.7 59.7 44.1 95.1 21.0 7.3 23.6 8.6 21.7 67.7 21.2
TSX: ZENA8
BRANDS
Existing Brands
Type: Medical brand
Sales Channels: Online / Pharmacy
Current Products: Dried cannabis,
gelcaps, sprays
Near-Term Products: Oils
Future Products: Food products,
hemp products
Type: Premium, micro-cultivation
recreational brand
Sales Channels: Online and retail
Current Products: N/A
Near-Term Products: Dried cannabis,
pre-rolls
Type: Premium, high THC,
recreational brand
Sales Channels: Online and retail
Current Products: Pre-rolls
Type: Value recreational brand
Sales Channels: Online and retail
Current Products: Pre-rolls and dried
cannabis
TSX: ZENA9
CANNABIS 2.0 PORTFOLIO
Cannabis-infused Beverages1
▪ Zenabis entered into a definitive agreement with HYTN
Beverages Inc. to produce a line of cannabis-infused
beverages
▪ Initial products. 355 ml sparkling water with 10 mg of THC,
with flavours to include:
▪ Blood Orange
▪ Lemongrass Ginger
▪ Rosewater Lemonade
▪ Watermelon Mint
▪ Expected shipments to commence in Q2 2020
▪ Currently listed in 9 Provinces and one Territory
Vaporizing Cartridges
▪ Zenabis is one of five Licensed Producers to launch PAX
Era Pods (vaporizing cartridges) for PAX Labs Inc.’s high-
tech oil vaporizers
▪ Dependable, leak-resistant and clog-free, PAX Era Pods
are designed for use in PAX Era vaporizer devices
▪ Listed in 8 Provinces
▪ Available in stores
Note: 1) Final products may differ.
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PRODUCT PORTFOLIO
Current Products
Softgel CapsulesOils
Currently Intended Future Products
Dried Flower
Tinctures and Sprays
Pre-Rolls
KombuchaEdiblesFlavoured and Sparkling Water
Vapes and Concentrates
TSX: ZENA11
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”)
Supply 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
InvestorOpportunities 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.
Ontario Cannabis
Retail Corporation
(“OCS”)
Supply
Agreement
TSX: ZENA12
GROWING INTERNATIONAL DISTRIBUTION
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
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
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
TSX: ZENA
December 11
Appointment of
Interim Chief
Executive
Officer
▪ Zenabis appoints Kevin Coft as new Interim Chief
Executive Officer
13
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.
January 16
Partial
Conversion of
Secured
Convertible
Notes
▪ Zenabis appoints Eric Rasmussen as new Chief
Financial Officer
November 14
Released Third
Quarter 2019
Financial
Results
▪ Zenabis released its third quarter financial results;
during the three months ended June 30, 2019
Zenabis achieved gross revenues of $13.4m and
net revenues of $12.0m after excise taxes
▪ Zenabis cultivated 5,239kg of dried cannabis in the
quarter, outperforming revised design capacity by
25.7% and representing a yield increase of 112%
over the previous quarter
November 28
Completed
Over-
subscribed
Rights Offering
▪ Zenabis successfully completed a Rights Offering
for a total of approximately $20.8M in proceeds
▪ Strong insider participation and vote of confidence
from shareholders
January 2
Appointment of
new Chief
Financial
Officer
▪ Partial conversion of $6,040,176 of the principal
amount of the convertible notes at $0.155 per
common share. Zenabis issued an aggregate of
38,968,874 shares pursuant to the conversion
▪ Zenabis issued to converting noteholders an
aggregate of 20,129,338 three-year common share
purchase warrants having an exercise price of
$0.20
December 13
Received
License
Amendment for
Zenabis
Langley
▪ Zenabis received key license amendment for
Zenabis Langley for an additional 39,400kg of
annual cultivation capacity
▪ Zenabis Langley licensed annual cultivation
capacity from 9,900 kg to 49,300 kg, an increase of
approximately 400%
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
14
MANAGEMENT
Eric Rasmussen
Chief Financial Officer
Kevin Coft
Chief Executive OfficerLeo Benne
Chief Growing Officer
▪ Formerly Chief Facilities Officer of Zenabis, and
one of the founding members of the Zenabis
team
▪ 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
▪ Extensive senior management experience in
publicly-listed companies, both in North
America and Europe
▪ Strong corporate and operations finance,
internal audit, M&A, and strategic investment
experience over a 20-year leadership career
within Shawcor
▪ Strategic consultant for Canadian large- and
mid-size clients, advising on corporate strategic
and financial planning, post-merger integration
▪ 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
Mandeep Khara
Chief Marketing Officer
▪ An inaugural member of the Zenabis executive
team, plays a key role in the conceptualization,
establishment, and subsequent growth of the
Zenabis brand
▪ A key contributor in guiding several companies
from initial market entrance to multimillion-dollar
revenue streams.
TSX: ZENA
▪ 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
15
Adam Spears
Independent DirectorLarry 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
Independent 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
BOARD OF DIRECTORS
▪ Currently the Vice President of
Finance for the Richberry Group of
Companies, part of the executive
management team that oversees
over 1,100 acres of Ocean Spray
cranberry bogs
▪ Previously, he oversaw a team of
lending professionals in Farm
Credit Canada and managed a
portfolio >$1bn
Vincent Quan
Independent Director
TSX: ZENA16
SELECTED FINANCIAL INFORMATION
Notes: 1) Debt is based on the amounts listed on slide 25. Cash balance of $27.9m as outlined in the Zenabis Global Inc. Financial Statements as at September 30, 2019. 2) Market capitalization and enterprise value are calculated on a fully-diluted, in-the-
money basis as of January 16, 2020 as calculated on slide 24. 3) For the three months ended September 30, 2019. 4) Calculation of adjusted EBITDA is shown on slide 27. 5) Tangible assets of $310.3m as of September 30, 2019. 6) As at February 12,
2020.
Selected Financial Metrics Value
Adjusted Cash $28m1
Debt $135.3m1
Market Capitalization $42.5m2
Enterprise Value $149.8m2
Financial Results Q3 20193
Gross Revenue $13.4m
Net Revenue $12.0m
Net Loss ($5.8m)
Adjusted EBITDA4 ($9.2m)
Balance Sheet
Total Assets5 $378.4m
Total Non-Current Liabilities $88.8m
Property, Plant and Equipment $220.2m
Shares and Ownership Summary Value
Common Shares Outstanding 386,685,4356
Fully-Diluted Shares Outstanding 506,314,2826
As of September 30, 2019
TSX: ZENA17
CORPORATE HIGHLIGHTS
100 Years of Industrial-Scale Cultivation Expertise
Extensive Industry Expertise and Proven Execution Capabilities
Distribution to 10 Provincial Governments and Territories
Low Production Costs at Scale
Operates 3 Licenced Facilities
Highly Recognizable Brands
Extensive Domestic Distribution Network
TSX: ZENA
Appendix A – Facilities
TSX: ZENA20
ZENABIS ATHOLVILLE
Zenabis Atholville is Zenabis’ largest indoor facility. This facility is expected to produce 46,300kg of dried cannabis equivalent per year
operating at a steady state.
Facility Details Description
Location Atholville, New Brunswick
Type and Size 380k sq. ft. indoor cannabis
Status Fully operational
Remaining Conversion Cost <$1.0m1
Design Capacity 46,300kg2
Extraction Design Capacity 15,000kg3
Current LicensesCultivation, processing, medical sales,
recreational sales, oil sales
Pending Licenses N/A
Capacity Milestones1▪ Current (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 operating at design capacity (46,300kg
capacity)
▪ Zenabis has worked closely with the Government of New Brunswick, which
invested $4.0m in Zenabis, to construct Zenabis Atholville
▪ Zenabis Atholville is a major employer in New Brunswick
‒ It currently employs approximately 450 workers
Notes: 1) Estimated expenditures as of September 30, 2019. 2) 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. 3) Extraction estimates
are annual, based on 20 days a month and based on kilograms of input material.
TSX: ZENA21
ZENABIS LANGLEY
Zenabis Langley is one of the largest greenhouses in Canada with advanced propagation technology. The facility is expected to produce
96,100kg1 of dried cannabis equivalent per year upon full buildout and operates at a steady state.
Facility Details Description
Location Langley, British Columbia
Type and Size 2.1m sq. ft.2 greenhouse cannabis
StatusPartially operational/conversion ongoing
(for the first 10 acres)
Remaining Conversion Cost $11.1m (first 10 acres)3
Design Capacity 96,100kg1
Extraction Design Capacity N/A
Current Licenses Cultivation, processing
Pending Licenses N/A
Capacity Milestones▪ Currently Licensed – 49,300kg4
▪ Full buildout – 96,100kg1
Summary
▪ Initial cannabis conversion activities have commenced for the first 10 acres
of greenhouse and is expected to be complete in 2020
‒ Construction and licensing of Part 1 and Part 2A have been completed
(49,300kg capacity), and construction of rooms in Part 2B is
substantially complete. Part 2C is expected to be substantially
completed in 2020
▪ 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 commencesNotes: 1) The design capacity of the 450,000 sq. ft. to be initially converted is 96,100kg per annum. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis Global Inc. Final Base Shelf Prospectus dated April 9,
2019 and filed on SEDAR. 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 September 30, 2019. 4) Actual Capacity versus design capacity or licensed capacity will be assessed following upcoming harvests. Due to seasonality, actual capacity
versus design capacity may differ. November harvest indicated significantly lower actual capacity.
TSX: ZENA22
ZENABIS STELLARTON
Zenabis Stellarton is a licensed indoor facility located in Stellarton, Nova Scotia. The facility is intended to be utilized primarily as a
processing, packaging and fulfillment centre as well as a manufacturing facility for value-add products.
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 800kg1
Extraction Design Capacity N/A
Current Licenses Cultivation, processing
Pending Licenses Sales
Capacity Milestones1▪ Current – 800kg
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 has limited cultivation activities (800kg capacity);
Zenabis no longer intends to build out the remaining area for cultivation
purposes. Instead, Zenabis intends to utilize Zenabis Stellarton as a
processing, packaging and fulfillment centre, as well as a manufacturing
facility for value-add products
Note: 1) If all facilities are fully built out and converted as planned as outlined in the Zenabis MD&A for the three months ended September 30, 2019. Additional details on facility conversion, including additional assumptions are outlined in the Zenabis
Global Inc. Final Base Shelf Prospectus dated April 9, 2019 and filed on SEDAR.
TSX: ZENA23
ZENABIS DELTA
Zenabis Delta is an indoor facility located in the Greater Vancouver Area.
Facility Details Description
Location Delta, British Columbia
Type and Size 25k sq. ft. Indoor cannabis
Status TBD
Remaining Conversion Cost N/A
Design Capacity N/A1
Extraction Design Capacity N/A
Current LicensesCultivation, 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
▪ As the Company continues to focus on becoming cash flow positive, the
further conversion of Zenabis Delta is under review to assess whether its
analytical and laboratory services are justified by market demand. Zenabis
is also considering other plans for the Delta facility if it determines market
demand is insufficient.
Note: 1) currently not being operated for cannabis cultivation and processing.
TSX: ZENA
Appendix B – Financial Information
TSX: ZENA25
CAPITALIZATION
The following outlines the capitalization of Zenabis.
Fully Diluted Shares Outstanding1 Value
Basic Shares Outstanding 386,685,435
Plus: Options 24,328,714
Plus: Warrants 50,839,498
Plus: Convertible Note Conversion Shares 44,460,635
Equals: Fully-Diluted Shares Outstanding 506,314,282
Capitalization Enterprise Value
Enterprise Value Calculation Value
Basic Shares Outstanding 386,685,435
Plus: ITM Options1 Nil
Plus: ITM Conversion Shares1 Nil
Equals: Fully-Diluted, ITM Shares Outstanding 386,685,435
Times: Zenabis Share Price2 $0.11
Equals: Fully-Diluted Market Capitalization $42.5m
Add: Debt3 $135.3m
Less: Cash4 ($28m)
Equals: Enterprise Value $149.8m
Notes: 1) As of February 12, 2020. 2) As of market close February 12, 2020. 3) Debt includes all non-convertible financing and out-of-the-money convertible financing based on the amounts listed on slide 25. 4) Cash balance of $27.9m as outlined in the
Zenabis Global Inc. Financial Statements as at September 30, 2019. The negative value indicates a subtracted value, rather than a negative cash balance.
TSX: ZENA26
DEBT OUTSTANDING
Facility Principal Amount as of
January 31, 2020Description
Unsecured Convertible
Debentures$15.0m
▪ Unsecured convertible debentures with interest rate of 6.0%
▪ Convertible into Zenabis shares at $2.6087 per share
▪ 825,000 warrants with exercise price of $3.62
▪ Matures on September 27, 2021
BMO Financing $44.4m
▪ $44.4m 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 mortgage on Zenabis Atholville with interest rate of 6.0%
▪ Matures on August 31, 2027
Secured Debentures $50.0m
▪ Senior secured financing with interest at a rate of the maximum of prime + 9.0% or 12.95% (50% of
facility) and 14% (residual facility)
▪ 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)
▪ 902,514 warrants were 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 $11.4m
▪ Subordinated financing with interest rate of 11.0%
▪ $4,064,558 may be converted into Zenabis common shares at $0.155 per share during the 30
calendar days following January 16, 2020 (26,222,947 additional Zenabis shares). If converted, an
additional 1,260,260 warrants will be issued at an exercise price of $0.20 per share
▪ The remaining outstanding principal amount may be converted into Zenabis common shares at
$1.17 per share (6,239,509 additional Zenabis shares)
▪ 20,129,338 warrants were issued at an exercise price of $0.20 upon the conversion on January 16
▪ 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
▪ Subordinated financing with interest rate of 6.0%
▪ May be converted into Zenabis common shares at ~$1.9067 per share (6,248,203 additional
Zenabis shares)
▪ Matures on October 17, 2020
Total $135.3m
Debt Summary
TSX: ZENA
Appendix C – Other Information
TSX: ZENA28
ADJUSTED EBITDA CALCULATION
The following outlines the calculation to arrive at adjusted EBITDA.
Adjusted EBITDA Calculation Q3 20191 Q2 20192 Q1 20193
Net Loss (5,831,279) (18,498,388) (4,005,815)
Plus: Realized Fair Value Amounts Included in Inventory Sold 6,760,956 10,013,747 3,402,319
Less: Unrealized Gain on Changes in Fair Value of Biological Assets (19,712,364) (12,652,546) (7,993,853)
Plus: Depreciation and Amortization 2,726,639 2,102,987 1,462,077
Plus: Share-Based Compensation 2,004,544 2,142,433 2,078,636
Plus: Acquisition Costs Nil Nil 4,919,978
Plus (Less): Loss (Gain) on Revaluation of Embedded Derivative Liability (497,789) 4,551,807 (7,891,451)
Plus: Interest Expense 4,689,124 3,751,166 4,553,828
Plus: Foreign Exchange Loss (61,994) 62,282 7,402
Plus (Less): Loss (Gain) on Sale of Assets 21,675 184,249 Nil
Plus (Less): Finance and Investment Expense (Income) 173,986 98,557 (1,116,320)
Plus: Loss due to Event 1,186,692 3,083,793 Nil
Less: Insurance Proceeds (492,995) (2,683,541) Nil
Plus: Income Tax Expense 342,758 521,371 61,447
Plus (Less): Deferred Income Tax Expense (Recovery) (511,145) 1,025,748 (1,903,454)
Equals: Adjusted EBITDA (9,201,192) (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 September 30, 2019. 2) For the three months ended June 30, 2019. 3) For the three months ended March 31, 2019.
TSX: ZENA29
COMPARABLE METRICS SOURCES
▪ Canopy Growth. Canopy Growth MD&A dated February 14, 2019.
▪ Aurora. Aurora MD&A February 13, 2020.
▪ Aphria. Aphria MD&A dated January 14, 2020.
▪ Tilray. Tilray MD&A dated November 12, 2019.
▪ Emerald. Emerald MD&A dated December 2, 2019.
▪ HEXO. Hexo MD&A dated November 12, 2019.
▪ Cronos. Cronos MD&A dated November 12, 2019.
▪ CannTrust. CannTrust MD&A dated May 13, 2019.
▪ OrganiGram. OrganiGram MD&A dated January 14, 2020.
▪ Supreme. Supreme MD&A dated September 17, 2019 and investor presentation.
▪ TGOD. TGOD MD&A for the period ending November 14, 2019.
▪ Village Farms. Village Farms MD&A dated November 15, 2019.
▪ Flowr. The Flowr Corporation MD&A dated November 7, 2019.
▪ Sundial. Sundial Growers Inc. prospectus dated July 31, 2019; Sundial Growers Inc. MD&A dated November 17, 2019.
▪ VIVO. VIVO MD&A dated November 14, 2019.
▪ WeedMD. WeedMD MD&A dated November 29, 2019
