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CronosGroup Investor Deck Jan 17
CronosGroup Investor Deck Jan 17
Cronos Group, is a geographically diversified and vertically integrated cannabis company that operates two wholly-owned Licensed Producers ("LPs") regulated within Health
Canada's Access to Cannabis for Medical Purposes Regulations (the "ACMPR") and holds a portfolio of minority investments in other Licensed Producers and ACMPR applicants.
DISCLAIMERS AND CAUTIONARY STATEMENTS
The information found herein, and any other materials provided by Cronos Group (the Company), are intended solely for discussion
purposes and are not intended as, and do not constitute, an offer to sell or a solicitation of an offer to buy any security, and should not
be relied upon by you in evaluating the merits of investing in any securities. These materials are not intended for distribution to, or use
by, any person or entity in any jurisdiction or country where such distribution or use is contrary to local law or regulation. This
information is confidential and should not be distributed, in whole or in part, beyond the recipient and its advisors.
The Company believes the information contained in this document to be reliable but makes no warranty or representation, whether
express or implied, and assumes no legal liability for the accuracy, completeness or usefulness of any information disclosed. Any
estimates, investment strategies, and views expressed in this document are based upon current market conditions and/or data and
information provided by unaffiliated third parties and is subject to change without notice.
This document may contain forward-looking information and forward-looking statements within the meaning of applicable Canadian
securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, including the
Company's ability to implement its business development strategy. Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Forward-looking statements involve known and unknown risks, uncertainties and other
factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results,
performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not
guarantees of future performance. All forward-looking information contained herein are given as of the date hereof and are based upon
the opinions and estimates of management and information available to management as at the date hereof. Except as required by law,
the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information,
events or otherwise. Readers are cautioned not to put undue reliance on these forward-looking statements. This news release contains
information obtained by the Company from third parties, including but not limited to market data. The Company believes such
information to be accurate but has not independently verified such information. To the extent such information was obtained from third
party sources, there is a risk that the assumptions made and conclusions drawn by the Company based on such representations are not
accurate.
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CANNABIS REGULATION IN CANADA
Court mandated Section 56 Exemptions to the Controlled Drugs And Substances Act
1999 2001 Right to possess marijuana for medical purposes
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COMPANY OVERVIEW
Cronos is a geographically diversified and vertically integrated cannabis company with one of the largest and most
scalable operating platforms in the global medical cannabis industry.
The newly implemented management teams mandate is to capture market share in the emerging cannabis industry by
expanding its existing production platform, developing its brands and exportable intellectual property, and pursuing
incremental distribution channels.
Two Geographically Diversified Management Team with Proven Minority Investments Provide
Canadian Licensed Producers Transaction Capabilities Significant Optionality
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MANAGEMENT TEAM
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THE PEACE NATURALS PROJECT
OVERVIEW
Cronos Group acquired 100% of The Peace Naturals Project (PNP) in
September 2016
PNP has to date registered 3,400 patients and is licensed to sell 2,500
kg of medical cannabis per year
PNP is situated on over 90 acres of land with three production
buildings
Largest site of any LP in Ontario
~4,200 kg of capacity within existing infrastructure
Three production buildings with 40,000+ sq. ft.
Over 100 unique genetics in seed bank
CURRENT INFRASTRUCTURE
Over 40,000 sq. ft. of established operating space
Building 1 8,720 sq. ft. original licensed production space
Building 2 & 3 30,000 sq. ft. of total production space
Additional 80+ acres of flat land, appropriately zoned for development
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IN THE ZONE PRODUCE
OVERVIEW
In The Zone is a licensed producer based in Okanagan Valley, BC
Currently licensed to sell 100 kg per annum
Situated on 31 acres of agricultural land zoned appropriately for
cannabis production
Current pilot facility of approximately 2,000 sq. ft.
Premium genetics sourced from Whistler Medical Marijuana
Company (WMMC)
On-site artesian well providing free source of water for cannabis
production (200+ gallon per minute capacity) Recently acquired incremental 17 acres
RECENT INITIATIVES
Completed multiple harvests in newly renovated facility
Completed Health Canada sales license inspection
Purchased adjacent 17 acre property to merge with existing 14 acres
Ongoing engineering and design work for onsite expansion facility
Entered industry first strategic joint venture with Canadian First
Nations, Indigenous Roots
Newly renovated facility
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INDIGENOUS ROOTS
On December 6, 2016, Cronos announced an industry first strategic joint venture with Canadian First Nations, and the
formation of a new company and brand, Indigenous Roots
The joint venture provides Cronos with access to non-dilutive growth capital, significant economic exposure to a new
consumer demographic, and provides opportunities for incremental domestic and international expansion opportunities on
First Nation reserves
INDIGENOUS ROOTS
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PEDANIOS
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NEAR-TERM MILESTONES AND CATALYSTS
Cronos Group is focused on executing its rebranding and global commercialization strategy
Obtain sales license at In The Zone (Complete) Leverage expansion optionality at Peace
Naturals and In The Zone
Optimize Peace Naturals production facilities
Review and evaluate minority investments
Develop exportable intellectual property,
expertise, and know-how
Establish domestic and international distribution
relationships and strategic joint ventures
Explore opportunities to monetize non-core
assets
Develop additional brands to pre-position for the
potential recreational market
Pursue additional international partnership,
export relationships, and joint venture
opportunities
Re-branding of and launch of In The Zone sales
platform
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APPENDIX
APPENDIX A
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APPENDIX B
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APPENDIX C
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APPENDIX D
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APPENDIX E
Since beginning the implementation of the new executive team in May of 2016, Cronos has streamlined the portfolio and
negotiated/executed multiple value creating transactions
TRANSACTIONS
Consolidated Peace Naturals Project; acquired remaining 74% for $9.5m funded
September 6, 2016
with $15m concurrent non-brokered private placement (at a premium to market)
Exported first shipment of medical cannabis co-branded with Pedanios GmbH for
October 11, 2016
distribution to medical patients in Germany
Divested minority stake in Vert Medical. $422,933 of debt repaid and 7,334 shares
November 1, 2016
of CGC with up to 29,498 CGC shares payable under certain circumstances
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