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ABOUT THE COMPANY
Canada Marijuana Growers Alliance
The company will be structured through an OTCQB corporation, which will be
reorganized into a Business Development Company headquartered in New York,
NY.
Mission Statement
To grow the highest quality marijuana flowers with the highest cost efficiency and
recuperation best-practices for wholesale to global markets.
Opportunity
There are hundreds of financially distressed applicants for commercial licenses.
Health Canada’s lack of preparedness has resulted in delays and massive
infrastructure costs to under capitalized groups.
In the same manner as housing developers that run dry of capital and are
purchased at cost prices by other groups, we at CMGA will purchase controlling
equity of the applicants corporations. This will inject the needed funds and
knowledge to complete the application process greatly increasing the valuations
of each license.
KEY MANAGEMENT
John Karroll
Chairman of the board
Mr Karoll has vast knowledge of the cannabis industry and deep ties to Health Canada
having sat on the boards that created past and current regulations as well as the coming
recreational regulations. He is currently the founder and CEO of Trichome Consulting Services
which specializes in assisting applicants in navigating the regulatory requirements for license
approval. Trichome Consulting Services currently counts as customers the federal and state
governments of Canada, Australia and South Africa among others.
Eric Liboiron, Serial Entrepreneur
CEO and board member
Mr Liboiron has been launching companies for the past two decades ranging from a fashion
retail chain to pershibale international logistics since his departure from McGill University’s
BComm program in 2004. Recently Mr Liboiron took a two year hiatus to create an
accelerated learning program for pre-school children within a progressive daycare for his two
young children. This has evolved into a franchise launch with three new properties planned
for 2018. Current endeavours include a virtual business incubator called www.zero404.com
KEY MANAGEMENT
Jonathane Seguin, Master Grower
COO and board member
Mr Seguin is a pioneer of the medical marijuana industry and was an early adopter of the
original and currently accepted Canadian regulations. He counts hundreds of patients as
clients for whom he has consulted, trained and assisted in designing and building there grow-
ops. grows marijuana under more than 1000 hydroponic lights. He has developed efficient
growing techniques over the decades and more importantly highly cost-effective
recuperation and reuse techniques to extract every last drop from the waste left over after
trimming. He is currently selling his products through Medical Marijuana Research Society
Dewey Lotoski, BComm,CPA,CA
CFO and board member
Mr Lotoski obtained a BComm from the University of British Columbia in 1989 and has since
1992 founded and operated his practice as a CPA/CA in the city of Kelowna. His knowledge
and network run as deep as Mr Karroll and Mr Seguin since he is the the glue that binds them.
Their professional relationship dates back decades, including profound chapter in their lives
when Mr Lotoski was the director of the non-profit Stop the Violence Face the Music Society,
and Mr Karroll was an active militant. As an established father and upstanding member of
the community Mr Lotoski is the currently the Director and Treasurer of the Kelowna
Snowmobile Club after having cofounded the Kelowna Visual Performing Center Society.
SALES AND OPERATIONS
Key focus areas of the company will be:
Financing and consulting in all aspects of launching and operating marijuana
indoor indoor faciltiy
This may include but is not limited to:
High quality standard and exotic flowers and extracts
Sales Funnels :
Wholesale medical flowers and extracts
Wholesale recreational flowers and extracts*
Wholesale exportation flowers and extracts
*This will occur when the government of Canada and others finalize the regulatory framework
SETUP COSTS
*amounts are in $usd using the current $0.67 exchange rate
Source: NHP Consulting - Costs of Construction
Assumptions
Construction costs $100/sq.ft
*includes FFE, growing equipment and miscelaneous
*price is per facility
Size of facility 40,000 sq.ft
Startup cost per facility
Construction $4,000,000
License applicant $350,000
Legal costs $30,000
TOTAL $4,380,000
Production capacity per facility
Production floor 20,000 sq.ft
Harvest per sq.ft 2 oz
Harvests 5 / year
Yearly production 10 oz / sq.ft
200,000 oz
12,500 lbs
Revenue
Sale price $76/oz
$1,216/ lb
$760 / sq.ft
Total Yearly Sales $15,200,000/facility
SALES
*amounts are in $usd using the current $0.67 exchange rate
Source Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals
EXPENSES
*amounts are in $usd using the current $0.67 exchange rate
Source Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals
COG’s in percentage of revenue
Administrative Costs
Seeds/Sprouts 20%
Salaries/Expenses $478,000
Soil/Nutrients/Pestisides/Co2 5%
Utilities 7%
Office lease $96,000
Labour/Trimmers 8%
Lighting/Heating 10%
Marketing $120,000
Miscelaneous 7%
Security/Compliance $140,000
TOTAL 58%
Marketing
$120,000
COG’S in dollars $43.81 / oz
$701 / lb
PROFIT/LOSS
*amounts are in $usd using the current $0.67 exchange rate
Source Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals
Gross profit per facility $6,438,720
EBITDA $5,593,720
EBITDA % 36.80%
Depriciation 5%
Tax Rate 12.%
Earnings
$4,722,473.60
Series A $1,500,000
Series B $6,000,000
Series C $10,000,000
Use of proceeds Series A
ITEM
COST %
1. Purchase of our first applicant step 6/7 of which CMGA will own 1
100% of the equity, IP, leases and all current assets which
includes the application
$380,000 25.3%
1. Purchase of the public vehicle of which CMGA will own 90% of the
outstanding shares
$500,000 33.3%
1. Legal startup
$50,000 3.3%
2. Lease improvement
$80,000 5.3%
3. 7 months of administrative expenses
$490,000 32.6%
Total
$1,500,000 100%
FUNDING ROUNDS
*amounts are in $usd
Series A $1,500,000
• OLB Group controlling shares
• License for SCM, ERP and POS software from Omnisoft (3 years)
• Distressed applicant for medical marijuana growers license (CDN)
• Medical Marijuana Research Society online operational storefront
ASSET ACQUISITION
*amounts are in $usd
VALUATIONS MARKET COMPARABLES
Source Echelon Wealth Partners February 2017
EV Sales
EV EBITDA PE
2018 2019
2018 2019 2018 2019
Canopy Growth corporation 4.2 2.8 16.1
21.1 43.2
Aurora Cannabis Inc 2.6 1.7 6
3.6 8.3 5
Aphira Inc 6.4 4.6
17.8 12.5 30.6
Emblem Corp. 13.2 7
74.4 22.1 360
Supreme pharma 7.6 3.1
31.8 8.4 44.5
Cronos Group 7 3.9
29.6 13.3 32.7
Organigram Holding Inc 5.6 16.2
15.8 28.5 9.4
Cannimed therapeutics Inc 4.2 2.2 15.3
5.7 25.9
Emerald health therapeutics 18.3
Median multiples 6.4 3.1
17 12.9 31.65 19.67
PE multiple for the year 2019 comes out to be 7.2 (taking into account median multiple). But study of sales and EBITDA multiples
shows 51% and 24% decline as compared PE multiple for the year 2019 comes out to be 7.2 (taking into account median multiple).
But study of sales and EBITDA multiples shows 51% and 24% decline as compared
Average decline rate year over year -38%
PROJECTED VALUATIONS
YEAR 2
Sales $ 15,200,000
EBITDA $ 5,593,720
Earnings $ 4,722,474
Market Cap based on sales $ 97,280,000
Market Cap based on EBITDA $ 95,093,240
Market Cap based on PE $ 149,466,289
Average Market Cap (2018) $ 113,946,510
YEAR 3
Sales
EBITDA
Earnings
Market Cap based on sales $ 94,240,000
Market Cap based on EBITDA $ 144,317,976
Market Cap based on PE $ 185,816,2
Average Market Cap (2019) $ 141,458,082
*2 facilities
**anticipated change in valuations -38%
These are forward looking statements based on our financial forecasts and
market comparables from various sources including investment studies from
Dundee Wealth Management and Echelon Wealth Mangent from 2017
Sequential growth of over 31% in
each quarter of 2016 represents an
annualized growth rate of almost
200%.
Patients Sept 2016: 98,000
Market size:
$260M
Anticipat patients 2018:
450,000
Market size:
1.2B
CANADIAN MEDICAL MARKET
Source: Echelon Wealth Partners
Inventory stocks have been declining since
it’s peak of March 2015
Canadian agencies and investment banks have evaluated the global market at
$17 billion by 2036.
GLOBAL MEDICAL MARIJUANA MARKET
FUTURE OPPORTUNITIES
Future acquisitions:
419 applications are in process with the majority stuck in bureaucratic red tape
creating vast opportunities for well connected groups to controlling interests for
fractions of their operating valuations
Expansion in other countries:
US Market: 1 million Americans have registered for access to cannabis-based
products for medical purposes. Sales are expected to climb from US$4-5.5 Billion in
2017 to US$6.1-11.0 Billion in 2020
European Market: Approximately 22 million adults in the EU have consumed
cannabis in the past year. The cannabis industry is virtually non-existent as seen in
2016 when Canada exported its first orders to German pharmaceuticals
Recreational Framework:
The Canadian government and many others around the world have made
headway and have gone so far as to announce plans to legalize recreational use
A complete reversal in global initiatives to combat organized crime by reversing policies of
legalizing marijuana.
A complete reversal in Canadian initiatives to combat organized crime and the
criminalization of youth by reversing it’s decision to legalize recreational marijuana
Seizure of shares by a US investor by the Federal government for investing in a federally illegal
industry
The seizure of assets in CMGA by the US Federal government for operating in the Marijuana
industry
The reversal of the SEC’s policies about qualifying companies that that fund and operate in
geographical areas where the marijuana industry is legal
The reversal of the SEC’s policies about allowing the buy and selling of stock by US retail
investors in the marijuana industry
RISK FACTORS
Supreme Pharmaceuticals Inc.
The first wholesale centric LP in Canada.
Dundee Wealth Management - Report on CDN LP Valuations
Page 43
Case Study
Government of Washington State - Cannabis Yields Study
NHP Consulting - Costs of Construction
Government of Canada - Legalized Canabis Fiscal Considerations
Dundee Wealth Management - Report On CDN LP's Valuations - Supreme
Pharmaceuticals
Price of Weed - Market Studies North American Price Fluctuations
Global News Study on Cannabis
Canada Revenue Agency Study
Echelon Wealth Partners study Feb 2017 ( Available on .pdf)
SOURCES

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CMGA

  • 1.
  • 2. ABOUT THE COMPANY Canada Marijuana Growers Alliance The company will be structured through an OTCQB corporation, which will be reorganized into a Business Development Company headquartered in New York, NY. Mission Statement To grow the highest quality marijuana flowers with the highest cost efficiency and recuperation best-practices for wholesale to global markets.
  • 3. Opportunity There are hundreds of financially distressed applicants for commercial licenses. Health Canada’s lack of preparedness has resulted in delays and massive infrastructure costs to under capitalized groups. In the same manner as housing developers that run dry of capital and are purchased at cost prices by other groups, we at CMGA will purchase controlling equity of the applicants corporations. This will inject the needed funds and knowledge to complete the application process greatly increasing the valuations of each license.
  • 4. KEY MANAGEMENT John Karroll Chairman of the board Mr Karoll has vast knowledge of the cannabis industry and deep ties to Health Canada having sat on the boards that created past and current regulations as well as the coming recreational regulations. He is currently the founder and CEO of Trichome Consulting Services which specializes in assisting applicants in navigating the regulatory requirements for license approval. Trichome Consulting Services currently counts as customers the federal and state governments of Canada, Australia and South Africa among others. Eric Liboiron, Serial Entrepreneur CEO and board member Mr Liboiron has been launching companies for the past two decades ranging from a fashion retail chain to pershibale international logistics since his departure from McGill University’s BComm program in 2004. Recently Mr Liboiron took a two year hiatus to create an accelerated learning program for pre-school children within a progressive daycare for his two young children. This has evolved into a franchise launch with three new properties planned for 2018. Current endeavours include a virtual business incubator called www.zero404.com
  • 5. KEY MANAGEMENT Jonathane Seguin, Master Grower COO and board member Mr Seguin is a pioneer of the medical marijuana industry and was an early adopter of the original and currently accepted Canadian regulations. He counts hundreds of patients as clients for whom he has consulted, trained and assisted in designing and building there grow- ops. grows marijuana under more than 1000 hydroponic lights. He has developed efficient growing techniques over the decades and more importantly highly cost-effective recuperation and reuse techniques to extract every last drop from the waste left over after trimming. He is currently selling his products through Medical Marijuana Research Society Dewey Lotoski, BComm,CPA,CA CFO and board member Mr Lotoski obtained a BComm from the University of British Columbia in 1989 and has since 1992 founded and operated his practice as a CPA/CA in the city of Kelowna. His knowledge and network run as deep as Mr Karroll and Mr Seguin since he is the the glue that binds them. Their professional relationship dates back decades, including profound chapter in their lives when Mr Lotoski was the director of the non-profit Stop the Violence Face the Music Society, and Mr Karroll was an active militant. As an established father and upstanding member of the community Mr Lotoski is the currently the Director and Treasurer of the Kelowna Snowmobile Club after having cofounded the Kelowna Visual Performing Center Society.
  • 6. SALES AND OPERATIONS Key focus areas of the company will be: Financing and consulting in all aspects of launching and operating marijuana indoor indoor faciltiy This may include but is not limited to: High quality standard and exotic flowers and extracts Sales Funnels : Wholesale medical flowers and extracts Wholesale recreational flowers and extracts* Wholesale exportation flowers and extracts *This will occur when the government of Canada and others finalize the regulatory framework
  • 7. SETUP COSTS *amounts are in $usd using the current $0.67 exchange rate Source: NHP Consulting - Costs of Construction Assumptions Construction costs $100/sq.ft *includes FFE, growing equipment and miscelaneous *price is per facility Size of facility 40,000 sq.ft Startup cost per facility Construction $4,000,000 License applicant $350,000 Legal costs $30,000 TOTAL $4,380,000
  • 8. Production capacity per facility Production floor 20,000 sq.ft Harvest per sq.ft 2 oz Harvests 5 / year Yearly production 10 oz / sq.ft 200,000 oz 12,500 lbs Revenue Sale price $76/oz $1,216/ lb $760 / sq.ft Total Yearly Sales $15,200,000/facility SALES *amounts are in $usd using the current $0.67 exchange rate Source Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals
  • 9. EXPENSES *amounts are in $usd using the current $0.67 exchange rate Source Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals COG’s in percentage of revenue Administrative Costs Seeds/Sprouts 20% Salaries/Expenses $478,000 Soil/Nutrients/Pestisides/Co2 5% Utilities 7% Office lease $96,000 Labour/Trimmers 8% Lighting/Heating 10% Marketing $120,000 Miscelaneous 7% Security/Compliance $140,000 TOTAL 58% Marketing $120,000 COG’S in dollars $43.81 / oz $701 / lb
  • 10. PROFIT/LOSS *amounts are in $usd using the current $0.67 exchange rate Source Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals Gross profit per facility $6,438,720 EBITDA $5,593,720 EBITDA % 36.80% Depriciation 5% Tax Rate 12.% Earnings $4,722,473.60
  • 11. Series A $1,500,000 Series B $6,000,000 Series C $10,000,000 Use of proceeds Series A ITEM COST % 1. Purchase of our first applicant step 6/7 of which CMGA will own 1 100% of the equity, IP, leases and all current assets which includes the application $380,000 25.3% 1. Purchase of the public vehicle of which CMGA will own 90% of the outstanding shares $500,000 33.3% 1. Legal startup $50,000 3.3% 2. Lease improvement $80,000 5.3% 3. 7 months of administrative expenses $490,000 32.6% Total $1,500,000 100% FUNDING ROUNDS *amounts are in $usd
  • 12. Series A $1,500,000 • OLB Group controlling shares • License for SCM, ERP and POS software from Omnisoft (3 years) • Distressed applicant for medical marijuana growers license (CDN) • Medical Marijuana Research Society online operational storefront ASSET ACQUISITION *amounts are in $usd
  • 13. VALUATIONS MARKET COMPARABLES Source Echelon Wealth Partners February 2017 EV Sales EV EBITDA PE 2018 2019 2018 2019 2018 2019 Canopy Growth corporation 4.2 2.8 16.1 21.1 43.2 Aurora Cannabis Inc 2.6 1.7 6 3.6 8.3 5 Aphira Inc 6.4 4.6 17.8 12.5 30.6 Emblem Corp. 13.2 7 74.4 22.1 360 Supreme pharma 7.6 3.1 31.8 8.4 44.5 Cronos Group 7 3.9 29.6 13.3 32.7 Organigram Holding Inc 5.6 16.2 15.8 28.5 9.4 Cannimed therapeutics Inc 4.2 2.2 15.3 5.7 25.9 Emerald health therapeutics 18.3 Median multiples 6.4 3.1 17 12.9 31.65 19.67 PE multiple for the year 2019 comes out to be 7.2 (taking into account median multiple). But study of sales and EBITDA multiples shows 51% and 24% decline as compared PE multiple for the year 2019 comes out to be 7.2 (taking into account median multiple). But study of sales and EBITDA multiples shows 51% and 24% decline as compared Average decline rate year over year -38%
  • 14. PROJECTED VALUATIONS YEAR 2 Sales $ 15,200,000 EBITDA $ 5,593,720 Earnings $ 4,722,474 Market Cap based on sales $ 97,280,000 Market Cap based on EBITDA $ 95,093,240 Market Cap based on PE $ 149,466,289 Average Market Cap (2018) $ 113,946,510 YEAR 3 Sales EBITDA Earnings Market Cap based on sales $ 94,240,000 Market Cap based on EBITDA $ 144,317,976 Market Cap based on PE $ 185,816,2 Average Market Cap (2019) $ 141,458,082 *2 facilities **anticipated change in valuations -38% These are forward looking statements based on our financial forecasts and market comparables from various sources including investment studies from Dundee Wealth Management and Echelon Wealth Mangent from 2017
  • 15. Sequential growth of over 31% in each quarter of 2016 represents an annualized growth rate of almost 200%. Patients Sept 2016: 98,000 Market size: $260M Anticipat patients 2018: 450,000 Market size: 1.2B CANADIAN MEDICAL MARKET Source: Echelon Wealth Partners Inventory stocks have been declining since it’s peak of March 2015
  • 16. Canadian agencies and investment banks have evaluated the global market at $17 billion by 2036. GLOBAL MEDICAL MARIJUANA MARKET
  • 17. FUTURE OPPORTUNITIES Future acquisitions: 419 applications are in process with the majority stuck in bureaucratic red tape creating vast opportunities for well connected groups to controlling interests for fractions of their operating valuations Expansion in other countries: US Market: 1 million Americans have registered for access to cannabis-based products for medical purposes. Sales are expected to climb from US$4-5.5 Billion in 2017 to US$6.1-11.0 Billion in 2020 European Market: Approximately 22 million adults in the EU have consumed cannabis in the past year. The cannabis industry is virtually non-existent as seen in 2016 when Canada exported its first orders to German pharmaceuticals Recreational Framework: The Canadian government and many others around the world have made headway and have gone so far as to announce plans to legalize recreational use
  • 18. A complete reversal in global initiatives to combat organized crime by reversing policies of legalizing marijuana. A complete reversal in Canadian initiatives to combat organized crime and the criminalization of youth by reversing it’s decision to legalize recreational marijuana Seizure of shares by a US investor by the Federal government for investing in a federally illegal industry The seizure of assets in CMGA by the US Federal government for operating in the Marijuana industry The reversal of the SEC’s policies about qualifying companies that that fund and operate in geographical areas where the marijuana industry is legal The reversal of the SEC’s policies about allowing the buy and selling of stock by US retail investors in the marijuana industry RISK FACTORS
  • 19. Supreme Pharmaceuticals Inc. The first wholesale centric LP in Canada. Dundee Wealth Management - Report on CDN LP Valuations Page 43 Case Study
  • 20. Government of Washington State - Cannabis Yields Study NHP Consulting - Costs of Construction Government of Canada - Legalized Canabis Fiscal Considerations Dundee Wealth Management - Report On CDN LP's Valuations - Supreme Pharmaceuticals Price of Weed - Market Studies North American Price Fluctuations Global News Study on Cannabis Canada Revenue Agency Study Echelon Wealth Partners study Feb 2017 ( Available on .pdf) SOURCES