INVESTOR PRESENTATION A European Medical Cannabis Investment Company Q2 2019
Safe Harbour This Presentation contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are based upon the Company’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Forward-looking information in this Presentation is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances as at the date hereof. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. In particular, we have made assumptions in respect of the build-out of the Bradford Facility; our competitive advantages; the expected legalization of cannabis use in Canada; the growth of our business and expansion into new markets; the development of new products and product formats for our cannabis-based pharmaceutical products; our ability to retain key personnel; our ability to continue investing in our infrastructure to support our growth; our ability to obtain and maintain financing on acceptable terms; the impact of competition; the changes and trends in the medical cannabis industry; and changes in laws, rules and regulations. Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of the date hereof, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual actions, events, results, performance or achievements to differ materially from what is projected in forward-looking information, including but not limited to the risks described in greater detail in the section entitled “Risk Factors” in our most recent annual information form available on SEDAR at www.sedar.com. Although we have attempted to identify important factors that could cause actual actions, events, results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors not presently known to us or that we presently believe are not material that may cause actions, events, results, performance or achievements to differ from those anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking information prove incorrect, actual actions, events, results, performance or achievements may vary materially from those expressed and implied by such statements contained in this Presentation. The purpose of forward-looking information is to provide the reader with a description of management’s expectations, and such statements may not be appropriate for any other purpose. Accordingly, readers should not place undue reliance on forward-looking information. Although the Company believes that the expectations reflected in statements containing forward-looking information are reasonable, it can give no assurance that such expectations will prove to be correct. The Company disclaims any obligation to update any forward-looking information, whether as a result of new information or future events or results, except to the extent required by applicable securities laws.
Chinook Tyee Industry Limited (The “Company” or “Chinook”) (TSXV: XCX) is a European investment holding company listed on the TSX Venture Exchange whose primary investment is AMP Alternative Medical Products GmbH, a German importer of EU-GMP medical cannabis. Chinook’s goal is to provide medical cannabis formulations and dose delivery systems for German patients.
Capitalizing on the opportunity German demand for medical cannabis will outstrip supply for the next five years (2023) due to the • high quality standards (EU-GMP) and complicated local regulations. German domestic production will not be available until 2021 at the earliest and will provide less than 10% of the overall demand. As a first mover, Chinook can quickly establish market leadership in Germany due to its proven European • management team, unique import model and ability to meet supply shortages through multiple suppliers in different countries. Chinook’s investment subsidiaries focused on medical cannabis: • AMP Germany purchases and imports EU-GMP medical cannabis into Germany predominantly from • licensed producers (“LP”) from Canada, the biggest cannabis producer in the world. AMP Switzerland has begun to source EU-GMP medical cannabis grown in Switzerland for domestic • use and export to Germany when legalized. Non-medical cannabis investments are held through a Maltese investment holding company and consist • of German real estate and public and private investments and will be sold or spun-off to Chinook shareholders.
Europe will be the largest cannabis market in the world With a market of over 742 million people and total healthcare spend of € 2.3-trillion, Europe is set to become the world's largest legal cannabis market over the next five years (2023). Throughout Europe, countries are beginning to legalizing medical cannabis. It is expected that all of Europe will have legalized medical cannabis by 2023. Germany is leading the way in Europe to expand medical programs and insurance coverage for medical cannabis. € 2.3T €8.33 C$12.60 743M € 16.6T Total EU healthcare Average price per gram of Average price per gram of EU population EU GDP expenditure rec. cannabis in EU rec. cannabis in EU
Germany is the largest medical cannabis market in Europe Germany has the largest economy in Europe and is the third largest Market Overview cannabis market after Canada and the US. The projected market value of medical cannabis in Germany will be € 7.7B by 2028. 82.2 Population 3.1 GDP Germany has permitted the use of cannabis flowers for medicinal coalition- Social Democratic Ruling Government purposes since 2017. The medical cannabis programs and the state’s Party, christian Democratic, Party Union and christian social union obligation to cover medical prescriptions are still being developed but In favour of medical legalisation Party Stance on but recreational is unlikely before cannabis will be among the most robust and set the standards for Europe. 2022 Total Healthcare 325 (€B) Expenditure Patient demand has grown from 1,000 in 2017 to over 40,000 in 2018 Total Beauty & Wellbeing forcing the German government to rely on imports. 252 (€B) Expenditure 13.4 (€B) Alcohol consumptions Prevalence of Tobacco 30.6 (€B) Users Number of cannabis 3.3 Users Average Price Per Gram 9.4 of cannabis Total Pharmaceutical 60.7 (€B) Spending INVESTOR PRESENTATION
AMP Alternative Medical Products GmbH Based in Erfurt, Germany, AMP Germany purchases EU-GMP medical cannabis from third-party suppliers from Canada and other countries, and arranges transportation, logistics and storage services for ultimate distribution through pharmaceutical distributors to pharmacists in Germany. All of AMP Germany’s suppliers are audited by German auditors to ensure they meet the stringent EU-GMP standards. Meeting the EU-GMP standard is the biggest obstacle for licensed producer of cannabis (LP) trying to export to Germany. As the majority of LP’s in Canada are not EU-GMP, AMP Germany assists LP’s in their audit and arranges EU-GMP certification in Germany to allow importation. Germany Canada LPs enter into MOU supply agreement with AMP. AMP arranges secure transportation for narcotics. * * AMP conducts EU-GMP gap analysis which identifies deficiencies. MMJ is stored at AMP’s licensed narcotic storage facility. * * LPs make upgrades with oversight by AMP. Doctors prescribe MMJ medication to their patients. * * AMP conducts EU-GMP audit. AMP’s wholesalers supply to pharmacies. * * LPs enter into definitive supply agreement with AMP. Pharmacies fulfill MMJ prescription written by doctors. * * AMP arranges German State Official EU-GMP certification. Patients’ prescription costs are reimbursed by government * * AMP secures required import and export licenses. insurance. *
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