iAnthus Capital Holdings, Inc. BUSINESS OVERVIEW September 2016 - PowerPoint PPT Presentation

iAnthus Capital Holdings, Inc. BUSINESS OVERVIEW September 2016

Disclaimer This presentation has been prepared for informational purposes only and does not constitute an offer or solicitation to sell shares or securities in the Company or any related or associated company. None of the information or analyses presented are intended to form the basis for any investment decision, and no specific recommendations are intended. Accordingly this presentation does not constitute investment advice or counsel or solicitation for investment in any security. This presentation does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. The Company expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained herein, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom. Business Overview • September 2016 2

The iAnthus Mission iAnthus Capital Holdings, Inc. (CSE: IAN), delivers a comprehensive solution for financing and managing licensed cannabis cultivators, processors and dispensaries throughout the United States 1 NOTES (1) iAnthus Capital Holdings, Inc. operates in the United States through its wholly-owned subsidiary iAnthus Capital Management. Business Overview • September 2016 3

Cannabis in 2016 • Huge, proven $50 billion market for cannabis in the U.S. • Active state-led legalization Market • Industry is extremely underfunded, driving potential for high returns • Best-in-class management team and strategic partners • Investments in three states and a large pipeline of opportunities iAnthus • Pure play, public company diversified across multiple states and operators Business Overview • September 2016 4

Huge Market Opportunity Total estimated annual demand for Legal cannabis sales are projected to grow at recreational cannabis in 2015 exceeds that of 31% per year from 2014 to 2020 with sales wine, organic food, chocolate, and craft beer. 1 quadrupling in the next five years. 2 $25.0 Beer $101.5 $22.8 Tobacco $80.0 Cannabis Demand $50.0 $20.0 Compound Annual $18.2 Wine $37.6 Growth Rate Organic Food $35.9 31% $15.0 Chocolate $21.0 Sales (Billions) $12.5 Craft Beer $19.6 National Football League $12.0 $10.0 $8.5 Textbooks $10.0 $7.1 2015 Legal Cannabis Sales $5.7 $5.7 $4.6 $5.0 E-Cigarettes $1.5 Girl Scout Cookies $0.8 $0.0 $50.0 $100.0 $0.0 2014 2015 2016 2017 2018 2019 2020 Sales (Billions) NOTES (1) Source: The Marijuana Business Factbook 2016; CDC – Economic Factbook; Mckinsey & Company – The Future of Textbooks; Industry Leaders Magazine (2) Source: 2016 Arcview Market Research & New Frontier . Business Overview • September 2016 5

A State-Driven Legalization… Market Highlights • Medical use in 25 states and recreational use in four states • Currently 40 states have allowed some degree of legal cannabis use • 86% of Americans live in a state that allows some degree of legal cannabis use 1 Recreational Use & Medical CBD Only 2 Medical Only No Laws NOTES (1) Source: 2016 Arcview Market Research & New Frontier (2) CBD Only states permits medicinal use of cannabis products that have little or no THC. . Business Overview • September 2016 6

…and a Cautious Federal Approach… The federal government has set a cautious framework that has allowed the states to move forward • "Cole Memo” from U.S. Dept. of Justice in 2013: Licensed cannabis businesses will not be federally prosecuted in states with strictly regulated legal cannabis programs. Federal • Bipartisan U.S. Congressional Support: Government 2015 U.S. Federal Budget: DOJ prohibited from using federal funds to interfere in the implementation of state medical cannabis laws. • CARERS Act: Proposed senate legislation would alleviate federal banking and tax code constraints. NOTES Source: The Marijuana Business Factbook 2015, CannaBusinessMedia Business Overview • September 2016 7

…has Kept Traditional Capital Sources on the Sidelines By “leading from Commercial and behind,” the Federal investment banks, private government has kept equity and venture capital the usual providers of firms have all been growth capital on the extremely cautious in sidelines providing capital or services to the cannabis industry Business Overview • September 2016 8

As a Result, 3rd Party Capital is Scarce… 79% of Cannabis Companies are backed by the founders’ savings and personal debt Source of Capital to Launch a Cannabis Business 79% Founders' Own Savings/Personal Debt 22% Friends & Family Investment(s) 13% Running Funds/Profit 10% Angel Investor(s) 8% Venture Capital/Private Equity 4% Other Sources 1% Bank or State Agency Loan 1% Donations From Industry Advocates 0% Crowdfunding Site 0% 20% 40% 60% 80% 100% Percent of Businesses NOTES Source: The Marijuana Business Factbook 2016, 2016 Marijuana Business Daily Business Overview • September 2016 9

…and in Demand Over 50% of medical dispensaries and recreational stores are either actively seeking or planning to seek funding in 2016 Percent of Cannabis Businesses Seeking Funding in 2016 70% 61% 60% 52% 48% 50% 24% 11% 13% 40% 30% 41% 20% 37% 35% 10% 0% Medical Dispensaries / Recreational Infused Product Manufacturers Wholesale Cultivators Stores Actively Seeking Funding Plan to Seek Funding This Year NOTES Source: The Marijuana Business Factbook 2016 Business Overview • September 2016 10

Leading to High Returns with Limited Risk for Capital Providers Return Highlights • The average ROI realized by investors in privately held cannabis businesses is 36%. • 9% of investors in privately held cannabis businesses are achieving 100%+ ROI’s . Limited Investor Risks • The average length of time to break-even for MMJ dispensaries is under 6 months. • The average length of time to break-even for rec stores is under 12 months . • Markets have a high barrier to entrance due to limited licenses in most states. NOTES Source: The Marijuana Business Factbook 2016 Business Overview • September 2016 11

The iAnthus Solution iAnthus combines real world management expertise with access to institutional capital iAnthus Capital Management Capital Expertise Combine capital and operating • Cannabis investment • Licensed cannabis experience: “Value-added capital” vehicle for professional operations and fund managers, family regulatory compliance Current Portfolio: offices, and select • Healthcare management, Massachusetts angel investors policy, and finance Vermont • Access to institutional • Cannabis cultivation, testing, New Mexico capital for cannabis extraction, and derivative partners product formulation Business Overview • September 2016 12

We Invest in Cash Flow As our partner grows, so does our cash flow Illustrative Deal Model $15.0 $13.5 Uses $13.0 $11.3 • Start-up and growth capital $11.0 $9.4 • Buy-outs $9.0 $7.8 • Acquisitions $7.0 Millions $3.9 $5.0 $3.4 $3.0 Structure $1.0 • Senior secured debt -$1.0 FY'1 FY'2 FY'3 FY'4 FY'5 FY'6 FY'7 • Preferred equity • Service contracts -$3.0 Investment -$5.0 Services or Cash Flow Distribution Loan Payment or Preference Interest or Dividend We “front load” our cash flow Revenue to enhance returns and reduce risk Business Overview • September 2016 13

Unparalleled Ability to Execute Healthcare Industry Experts in Cannabis Cultivation Regulatory Compliance, Veterans & Dispensary Operations Real Estate & Finance • HADLEY FORD • JAIME LEWIS RANDY MASLOW Co-founder & Managing Director Operations & Public Co-founder & Managing Director Co-Founder and CEO of ProCure Senior Vice President for Advocacy Advisor Treatment Centers, Inc. Business Development and Founder & CEO of Mountain General Counsel at XO Medicine and chair of the National Communications, Inc. Cannabis Industry Association • DR. RICHARD BOXER • ALEX FORD • JOHN HENDERSON Medical Advisor Managing Director Operations Advisor Finalist for position of Surgeon Founder & Executive Director Chief Operating Officer & General of the United States in the of Grassroots Vermont, a licensed Chief Development Officer at Clinton and Bush administrations cannabis dispensary ProCure Treatment Centers, Inc. • CRAIG ZWERLING • JULIUS KALCEVICH • CHRIS HUDALLA Vice President of Finance Financial Advisor Science Advisor Director, Corporate & Project Partner at Bellotti Goodman Co-Founder of ProVerde Finance & Reimbursement sponsor of Hydropothecary, a Laboratories, industry leader in at ProCure Treatment leading Canadian cannabis cannabis testing and product Centers, Inc. company formulation ADAM COHEN Cultivation Advisor Co-Founder & Managing Director of MJardin, the largest commercial cannabis cultivator in the U.S. Business Overview • September 2016 14