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JohnCM Member Level  Sunday, 12/09/18 03:08:39 PM
Re: SmokeABull post# 8
Post # of 47 

October 17, 2018

Highlights of the Transaction

• CSAC has executed agreements to acquire 5 existing companies to create an anchor portfolio (the “Anchor Portfolio”) of vertically integrated operations in the Eastern and Western United States, pending regulatory approval on licensing and structure

• The Anchor Portfolio was assembled based on anticipated 2018 profitability and strength of the resulting platform for future growth

- The Anchor Portfolio consists of positive Adjusted EBITDA, vertically integrated operators in limited license states with large addressable consumer populations

- The Anchor Portfolio companies comprise proven operators with deep talent pools to contribute expertise to a broader cannabis roll-up

- The combined operations are expected to have over 325 employees across 3 cultivation and production facilities and 8 dispensaries

- The quality of the Anchor Portfolio is reflected in the fact that each acquisition target required processes and controls that are expected to be sufficient to pass a 3 year financial audit

• The Anchor Portfolio possesses a strong growth profile on top of existing positive Adjusted EBITDA

- Target pro forma revenue of Cdn.$100–110 million for 2018, targeted to grow to Cdn.$250–270 million for 2019 (excluding additional acquisitions)

- Pro forma Adjusted EBITDA targeted in the range of Cdn.$30-35 million in 2018, with a goal to grow to Cdn.$130–150 million Adjusted EBITDA1 for 2019 (excluding additional acquisitions)

- The Anchor Portfolio is anticipated to produce over 5,600 kilograms of finished flower and over 550,000 grams of cannabis oil extract in 2018, targeted to grow to over 31,000 kilograms of finished flower and 3,100,000 grams annually by 2020

• In connection with the Transaction, CSAC has built an outstanding executive team of proven leaders in marketing, operations and finance, areas essential for future CSAC success

• Over 35% of the total consideration (valued at share price as of 15 October 2018) to be paid in shares, demonstrating a strong confidence in CSAC’s value proposition and creating a strong alignment of incentives for all stakeholders.

• Going forward, CSAC expects to focus on building beyond its Anchor Portfolio with future acquisitions and organic growth, with a focus on brand and consumer experience

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