Valens Groworks Corp (CNSX:VGW)

17,000 sf state-of-the-art research Cannabis Cultivation Facility

• Health Canada Level 7 security (Receipt of Dealer's Licence)
  $6.125M of controlled substance capacity = 625 kg of Cannabis)
  Unique medical strain genetics (Cannabinoid/Terpene optimization)

Customized Derivative Production

• Quality Oil Extract process: Solvent-free, Organic, 100% Cannabis
  Custom extraction - quality oil for NHP: Essential Oils & Terpenes
  GMP & ISO 9001 derivative production – NHP’s, Edibles
  Custom packaging & authentication (RFID tags, Chemical Fingerprint)

Contract R&D Operations

• 3rd Party Clinical trials management, Custom formulation & production
  Derivative formulations, Extraction technology, etc.
  Pharmacology absorption optimization
  Add-on LP application
  Licensed Producer infrastructure in place for premium production

Leading Edge Analytical Services & Research

Analytical Services:

• Sector Leading Analytical Instrumentation Infrastructure
  Centre of Excellence in “Plant Based Medicines”
  ISO 17025 accreditation (pending)

Consulting Services:

• Lab Set-Up, QA/QC
  Government Funding: NSERC, MITACS, IRAP, SR&ED
  Chemometrics and Big Data Statistical Experience
  Expert Support Provider: BIKA LIMS Systems

Research and Development:

• Collaboration with: NRC, UBC, TRU, and UofA
  Custom Product Development
  Clinical Studies, Molecular Epidemiology
  Biomarker Tracking

Supra is licensed by Health Canada to conduct research, provide chemical analysis and produce extracts and derivatives of cannabis materials in addition to offering analytical services to the wider natural health product sector. Our corporate mandate is to provide scientific leadership and to support the production of the highest quality herbal medicinal products on the market.

Facilities Build Out, Licensing & Production (under LOI)

Phase 1 ($2.5M all-in capital cost):

• 50,000 sf of Indoor Cultivation
  1,000 sf yields 133 lbs\crop x 5 crops\year
  50 x 5 crops x 133lbs\crop = 33,250 lbs\yr
  COP for indoor = $600 to $800\lb
  Sale Price = $2,000 to $2,500\lb
  Projected net cash flow +$40,000,000\yr

Phase 2 ($60\sf all-in capital cost):

• 131,000 sf of Green House Cultivation
  1,000 sf yields 133 lbs\crop x 5 crops\year
  131 x 5 crops x 133 lbs\crop = 87,115 lbs\yr
  COP for Green House = $200 to $300\lb
  Sale Price = $1,600 to $2,000\lb
  Projected net cash flow +$113,000,000\yr

Phase 3 ($60\sf all-in capital cost):

• 435,000 sf of Green House Cultivation

Additional Expansion Capability Available

MKV Ventures 1, LLC (“MKV”), a wholly-owned subsidiary of MKHS, LLC, has engaged VGW to help manage and fund expansion on its 9.5 acre operating site:

• MKV completing VGW-funded 28,000-sf Farmtek Greenhouse Expansion
  VGW funded $1,628,266 (US$1,212,500) secured by a promissory note (the “Loan”)
  The Loan accrues interest effective May 15, 2016 @ 15% p.a.
  Loan repayment + $30,000 in fees starts with first crop, P+I, 5-year term
  Unconditionally guaranteed by established licenced operator MKHS
  VGW has 5-year, renewable, Professional Services Agreement (the “PSA”) with MKV
  VGW collects US$60,000/mo under the PSA after buildout for management services
  VGW bills additional consulting services, to be invoiced monthly
  VGW is reimbursed for approved out-of-pocket expenses and sub-contracted services
  Buildout is currently under construction; Cash flow expected by late 2017