OTCQX: VAPNF Public Deck CSE: VAPN August 2019 I N V E S T O R P R E S E N TAT I O N 2 0 1 9
DISCLAIMER FORWARD LOOKING STATEMENTS This Presentation contains forward-looking statements that relate to the Company's execute its plans and intentions; (v) the availability of financing on reasonable terms; current expectations and views of future events and should be read together with the (vi) the Company's ability to attract and retain skilled staff; (vii) market competition; more detailed information and financial data and statements. This Presentation does (viii) the products and technology offered by the Company's competitors; and (ix) that not contain all of the information you should consider before purchasing securities of our current good relationships with our suppliers, service providers and other third the Company. In some cases, these forward-looking statements can be identified by parties will be maintained. Although we believe that the assumptions underlying these words or phrases such as "may", "might", "will", "expect", "anticipate", "estimate", statements are reasonable, they may prove to be incorrect, and we cannot assure that "intend", "plan", "indicate", "seek", "believe", "predict" or "likely", or the negative of actual results will be consistent with these forward-looking statements. Given these these terms, or other similar expressions intended to identify forward-looking risks, uncertainties and assumptions, prospective purchasers of the Company's statements. The Company has based these forward-looking statements on its current securities should not place undue reliance on these forward-looking statements. expectations and projections about future events and financial trends that it believes Whether actual results, performance or achievements will conform to the Company's might affect its financial condition, results of operations, business strategy and expectations and predictions is subject to a number of known and unknown risks, financial needs. These forward-looking statements include, among other things, uncertainties, assumptions and other factors. statements relating to: the Company's expectations regarding its revenue, expenses and operations; The Company's expectations regarding timing of the completion of the The Company's forward-looking statements are based on the reasonable beliefs, construction and related construction costs; the Company's anticipated cash needs and expectations and opinions of management. Although the Company has attempted to its needs for additional financing; the Company's intention and ability to grow the identify important factors that could cause actual results to differ materially from those business and its operations; including its ability to complete business development and contained in forward-looking statements, there may be other factors that cause results integrate multi-state operations; the Company's expectations regarding harvesting of not to be as anticipated, estimated or intended. There is no assurance that such products and product sales prices; expectations with respect to future production costs statements will prove to be accurate, as actual results and future events could differ and capacity; expectations regarding our growth rates and growth plans and materially from those anticipated in such statements. Accordingly, readers should not strategies; expectations with respect to the approval of the Company's cannabis place undue reliance on forward-looking statements. We do not undertake to update or license holders; expectations with respect to the future growth of its medical and revise any forward-looking statements, except as, and to the extent required by, recreational cannabis services with license holders, any commentary related to the applicable securities laws in Canada. legalization of adult-use, recreational cannabis and the timing related to such legalization; the Company's expected business objectives for the next twelve months. The common shares have not been and will not be registered under the U.S. Securities Forward-looking statements are based on certain assumptions and analyses made by Act of 1933, as amended (the "U.S. Securities Act") or any other securities laws. As a the Company in light of the experience and perception of historical trends, current result, the common stock may not be offered or sold within the United States or to, or conditions and expected future developments and other factors it believes are for the account or benefit of, "U.S. persons" (as defined in Regulation S under the U.S. appropriate and are subject to risks and uncertainties. In making the forward looking Securities Act), except pursuant to an exemption from, or in a transaction not subject statements included in this Presentation, the Company has made various material to, the registration requirements of the U.S. Securities Act and any other applicable assumptions, including but not limited to (i) obtaining the necessary regulatory securities laws. approvals; (ii) that regulatory requirements will be maintained; (iii) general business and economic conditions; (iv) the Company's ability to successfully 1
INVESTMENT HIGHLIGHTS VAPEN BRAND GROWTH VAPEN BRAND Executing multi-state revenue and profit share arrangements with Leading Arizona extracts brand sold in the majority of license holders and hemp farms in CA, NV, OK, OH, MA, KY, AR, 100+ AZ dispensaries HI & more. RETAIL GROWTH AZ MARKET POTENTIAL Expanding cultivation $4 MM 2019 and 2020. Target Largest medical market in the U.S. ($500MM) 3 RD acquisition of retail dispensaries with significant revenue and expected to go recreational 2020 and bottom-line growth potential. HIGHLY PROFITABLE & GROWING BUSINESS $ 14.8 million revenues 2017 with $6.1 million EBITDA and VAPEN CBD SPECIFIC GROWTH $18.5 million revenues in 2018 and EBITDA of $6.2 million International and Domestic expansion. VERTICALLY INTEGRATED CELEBRIT Y INFLUENCERS Cultivation, extraction, edibles infusion, wholesale, and Vapen has aligned itself with some of today's hottest hip- retail dispensary hop artists with millions of followers. 2
• Expand outside of AZ with multi-state revenue and profit share arrangements in negotiation with license holders in: 1. Cultivation: Connoisseur Grade Indoor Flower • California: THC distillate for Vapen Brand and white label 2. Extraction • Nevada: THC distillate for Vapen Brand • Oklahoma: THC distillate for Vapen Brand 3. Edibles Infusion • Massachusetts: THC distillate for Vapen Brand 4. Wholesale - Vapen To The Majority Of AZ Dispensaries • Ohio: THC distillate for Vapen Brand 5. Retail Dispensary - Herbal Wellness Center • Kentucky: CBD oil for wholesale distribution • Arkansas: CBD oil for wholesale distribution • Hawaii: CBD oil for wholesale distribution • Vapen Clear: THC Based Cartridges • Vapen Extracts: Shatter And Wax • Vapen Kitchens: THC Infused Edibles& CBD Infused Edibles Vapen MJ will target an AZ acquisition with good value • Vapen CBD: CBD Inf used Lotions, propositions related to revenue and EBITDA. Tinctures, Balms, And CBD Cartridges • Vapen Inhaler: THC & CBD 3
Identify existing MJ License Holders The new LLC will manage wholesale with retail and cultivation operations distribution to state dispensaries with Vapen trained sales staff. Propose strategic alliance related to extraction & Vapen Brand Revenue and profit share for the Vapen Alliance LLC dependent upon Vapen Alliance LLC formed the parties' contributions ranges expected: 50% - 60% Vapen portion Vapen agrees to supply SOPs, equipment & branding Partner agrees to supply building, biomass & retail 4
QUICKER TO MARKET ENTERING A PROVEN MARKET LOW RISK BUILT-IN VETTED ACQUISITION TARGETS LESS CAPITAL REQUIRED ESTABLISH MJ CONNECTED PROFESSIONALS BY VAPEN BRAND – MULTI-STATE FOOT PRINT REGION FOR DEALFLOW ALLIANCE RETURN ON INVESTMENT 6 – 12 VAPEN ADV & SOCIAL MEDIA LEVERAGED MONTHS VS 48-60 FOR DISPENSARY ACQUSITIONS 5
• Arizona is the 3rd largest medical cannabis market in the US • Annual state sales of $500MM • Number of allowable dispensaries is capped at 131 • Recreational Expected Nov 2020 • • CALIFORNIA KENTUCKY • • NEVADA MICHIGAN • • OKLAHOMA MASSACHUSETTS • • MISSOURI ARKANSAS • • VERMONT HAWAII • • CONNECTICUT JAMAICA 6
• Distillate with or without terpene flavors • Fastest growing segment for discreet ingestion • Any Cannabis Biomass can be used irrespective of quality 7
• Produced from premium biomass • About 20% of the overall sales • Increasing loyal customer base to consistent, branded quality product at retail and wholesale • High profit margins 8
• Compliment to Vapen Brand Expansion - multi- state • Aggressive affiliate • International distribution relationships • Japan market approved supplier – 1 of 5 9
• Edibles are a growing market • Recreational use has seen a disproportionate increase in Edibles Sales • Premium quality taste • Experienced Chef - Product Launch • Recognized in late 2018 as fastest growing edible brand in AZ 10
• Unique customized accessories • Vapen Branded 11
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