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CSE: J FRA: LV9 OTC: LTTSF Corporate Presentation Fall 2019 VENTURES INC.

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Page 1: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

CSE: J FRA: LV9 OTC: LTTSF

Corporate PresentationFall 2019

VEN T U R E S INC.

Page 2: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

The information contained within this document has been compiled and prepared by Lotus Ventures Inc. management. LotusVentures Inc. is the parent company for Lotus Cannabis Co., a premium cannabis brand in Canada. This document includes certainstatements that are not descriptions of historical facts, but are forward-looking statements. Such statements include, among others,those concerning our expected financial performance and strategic and operational plans, our future operating results, ourexpectations regarding the market for medical and recreational cannabis products, our expectations regarding the continued growthof the medical and recreational cannabis market, as well as all assumptions, expectations, predictions, intentions or beliefs aboutfuture events. Users are cautioned that any such forward-looking statements are not guarantees of future performance and that anumber of risks and uncertainties could cause our actual results to differ materially from those anticipated, expressed or implied in theforward-looking statements. These risks and uncertainties have not been documented or mentioned in this document nor othercommunications made by the company. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will"or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact arestatements that could be deemed forward-looking statements. The Company assumes no obligation and does not intend to updateany forward-looking statements, except as required by law.

Disclaimer

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Page 3: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

November,2014

Formed by an Amalgamation of Strachan and Private Lotus

December,2014

Listed on the Canadian Securities Exchange

November,2014

Filed its Cannabis Licence Application with Health Canada

March,2019

Received Health Canada Cultivation and Medical Sales licences

Purchased 23-Acre Property in Spallumcheen, BC

June,2018

Received Confirmation of Readiness Notice Subsequent to meeting Health Canada’s Licence Application Requirements

April,2018

Phase 1A Construction Commenced

September,2017

Canadian Federal Legalization of Adult-Use Cannabis

October17,2018

Company History

May,2019

Imported Initial Plants/Seeds into the Facility

September,2019

Initial Production Harvest

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Page 4: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Corporate Overview

• Raised over $18M through equity

• Capital used to purchase land, build infrastructure and increase production yield.

• Received a Cultivation and Medical Sales licence in March, 2019.

• Fully owns facility and 23-acre property.

• Low production cost facility design.

• Complete environmental control.

• Consistent high quality production.

• Proprietary cultivation program.

2. Proven Execution 3. A Scaled Craft Operation

• Capital Market Professionals.

• Medical-Grade Growers.

• Real Estate Developers.

• Sales & Marketers.

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1. Diverse Skillset

Page 5: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

The Flower Market Continues to Grow

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Oregon Arizona Colorado Nevada

1. Data Source: BDS Analytics; NCV Newswire, 20192. Lotus does not operate in the USA, the data above is a representation of market trends that we expect Canada to follow.

Retail flower sales continued to command the highest percentage of sales in these mature American markets during July 2019 .

41%

30%

16%

7% 3%

1% DollarSharebyCategory

43%

39%

12%

3% 1%

0.20% DollarSharebyCategory

40%

34%

17%

6% 1%

0% DollarSharebyCategory

42%

28%

14%

14% 2%

0% DollarSharebyCategory

AllAccessories Flower Pre-RolledJoints Concentrates Ingestibles OtherCannabis

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Page 6: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Our Dedication to Quality Comes From

Standardized Production Procedures

Exclusive GeneticsAn Experienced Cultivation Team

Having Complete Control of the Environment

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• MMAR-ACMPR growers.

• Passionate about quality.

• Locally-formed team with existing synergies.

• Over 200 proprietary SOP’s.

• Production cycle designed for low-cost and efficiency.

• Custom perpetual harvesting schedule.

• 229 varieties of seeds.

• Medical-grade & award winning strains.

• Higher resistance to pests and diseases.

• Lighting that mimics the sunrise and sunset.

• Consistent environment all year round without relying on sunlight.

• Uniform, reliable and consistent crops with higher yields.

Page 7: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Growing What We Have Experience With

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Our Indoor – Consistently Higher Quality

Outdoor – Consistently Lower Quality

Greenhouse – Consistently Mid-Grade

• Low-cost, low-quality.• Used for bio-mass and extractions.

• High level of skill needed to consistently produce high quality in a greenhouse.• Only a few LP’s have proven greenhouse quality can be grown at scale.• Commonly used for extraction products.

• Low-cost, standardized production.• Used to grow premium flower.

Page 8: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

The Need for More Local Supply

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• Only 36 producers in BC hold a Cultivation licence.

• Only 12 BC based producers currently supplying retail.

• 16 in BC are indoor focused. 10 are greenhouse focused with the remaining undisclosed and/or private.

• 9/36 (25%) of BC producers are located in the Okanagan.

Our team has spoken with the BC Cannabis Store and with private retailers in BC and both have expressed that they would like to supply more locally grown product.

We believe the new regulations make it harder for new entrants to compete while limiting the amount of future competition.

Currently:

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1

1. Data sourced from Health Canada as of September 15, 2019

Page 9: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Premium Flower Producers in BC by Region

Fraser Valley (10) Okanagan (9) Vancouver Island (12) Whistler (2)

1. The number next to each region indicates total producers in that area.2. The companies listed above are considered to be direct premium competitors in BC. 9

1

Page 10: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

BC Premium Production Comparison

0

2000

4000

6000

8000

10000

12000

BlissCo BrokenCoast CannaFarms Lotus Qwest Tantalus Whistler

Annual Production Capacity (kg)

CurrentExpectedAnnualCapacity(kg) ExpectedCapacitybytheEndofEachExpansionPhase(kg)

1. Expected capacity for BlissCo, Qwest, and Whistler unavailable due to the company being private.2. BlissCo, Broken Coast, Canna Farms and Whistler have been acquired by larger Licensed Producers because they offer an added value with their quality production. 10

Page 11: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Our Indoor Cultivation

• Fully built and licensed facility with a Cultivationand Medical Sales licence.

• Situated on 23-acres in the Okanagan Valley, a major agricultural region in Canada.

• Expected annual production of 2,000 kg of dried cannabis.

• 6 production rooms on a perpetual cycle harvesting one room every two weeks.

• Aims to be one of the lowest cost producers.

• Automated lighting, watering and environmental controls. Reduces labor costs and improves crop yield and quality.

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Page 12: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Indoor Phase 2

• Up to an additional 30,000 sq. ft.

• Expected to add a minimum of 4,000 kg of dried cannabis per year.

• Expected to add an additional 6-10 production rooms.

• Building will adjoin to Phase 1. More efficient construction timeline.

• Improved automated hydroponic growing method to increase production yield.

• HVAC system from Phase 1 already installed and to be used in Phase 2.

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Page 13: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Distribution Channels

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• Standard Cultivation, Medical Sales and Plant/Seed Sales.• Standard Cultivation licence permits sales to any entity holding a Processing licence.

Current Licences Held

Retail Channels

Wholesale Channels• Off-take agreement with Auxly Cannabis Group Inc.• Commitment from Auxly to purchase 50% of production with option to purchase the

remaining 50% of production at wholesale prices sourced by Lotus.

• Currently in the process of obtaining an amended Sales licence to permit retail sales.

Page 14: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Management

Dale McClanaghanPresident, CEO

Carl CorreiaCOO

Jason BrownMaster Grower

Tracy EdwardsQuality Assurance (QA)Manager

Jarrod StinnQuality AssuranceAssistant

Dale is an experienced real estate developer and corporate banker in Vancouver, and has built Lotus’ $13M purpose-built facility from scratch.

*To read full biographies, visit our website at lotuscannabis.ca/investors.

Jason alongside Carl was a very successful grower under Health Canada’s previous medical regime. His standard for quality is unmatched, and expertly manages the production at Lotus.

Tracy is a seasoned QAM that has over 20 years in the brewing industry. She is a key-component to our team and understands the importance of quality standards.

Jarrod double majored in Chemistry and Biology and leverages his extensive scientific knowledge in multiple divisions at Lotus, including QA, genetic selection and breeding.

Carl is invaluable and was the lead for our Health Canada application process. He worked with qualified engineers and designed our low-cost, high-quality operation in its entirety.

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Page 15: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Directors

Dale McClanaghanDirector

Carl CorreiaDirector

Dale is an experienced real estate developer and corporate banker in Vancouver, and has built Lotus’ $13M purpose-built facility from scratch.

Simon DavieDirector

Jeff TungDirector

Simon is a certified Project Management Professional with expertise in social purpose real estate. He currently serves as the COO and Managing Partner for the Terra Group of Companies, with over $600 Million in assets under development.

Jeff sits on Lotus’ Board of Directors and brings significant senior leadership and finance expertise from the Auxly team, with previous experience personally managing over USD $3 billion in business transactions and investments.

*To read full biographies, visit our website at lotuscannabis.ca/investors. 15

Carl is invaluable and was the lead for our Health Canada application process. He worked with qualified engineers and designed our low-cost, high-quality operation in its entirety.

Page 16: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Financial History

Closed $5M definitive agreement with Auxly Cannabis Group Inc.

September,2018

January,2017

Entered interim agreement with Auxly Cannabis Group Inc. to subscribe for $5M in common shares of Lotus

Purchased 23-acre Spallumcheen property for $1.1M

June,2018

Raised $2.8MOctober,2018

Raised $1.9MApril,2019

Raised $5M January,2018

Raised $265KSeptember,2017

Total Capital Raised: $18,116,908

161. Visit sedar.com for interim financial statements and MD&A.

Page 17: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Capital Expenditures

76%

20%

3% 1%

PPE Consulting Sales & Marketing Other

1. During Lotus’ pre-revenue stage, management has dedicated a majority of capital to completing the initial buildout, purchasing its property and to the costs associated with licensing.

2. Once Lotus starts generating revenue, management intends to increase its marketing expenditures.

171. Data taken from the company’s most recent financial statements.2. PPE: Property Plant & Equipment

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Page 18: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Share Structure

Outstanding Shares: 84,074,799Fully Diluted: 134,435,563

CSE: JFrankfurt: LV9OTC: LTTSF

Cash: $542KMarket Cap: $15.2MTotal Assets: $15.4MRaised to Date: $18M+

Source: Stockwatch

(9 mo. end May 31, 2019)Closed definitive agreement with Auxly

Received federal cultivation and medical sales licence

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Page 19: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Investment Highlights

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• Raised over $18M to fund construction, land purchase and licensing costs.• Received $5M investment and off-take agreement from Auxly Cannabis.

Clean Balance Sheet

Built and Licensed Low-Cost Purpose-Built Facility

Announced Expansion Plans

Experienced Team with Proven Execution

• Obtained Cultivation, Medical Sales and Plant/Seed Sales licences.• Facility designed for low-cost of production, high quality product with maximum yield growth.

• Up to 30,000 square feet adjoining to Phase 1.• Expected to add an additional 4,000 kg of premium flower per year.• HVAC unit from Phase 1 already set up and to-be-used for Phase 2.

• Money raised to date through equity private placements.• Continued to keep overhead low - Intends to keep operating expenses efficient moving forward.

Page 20: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Operational Photos

1. Photos taken September 15, 2019 20

Page 21: Corporate Presentation - MailChimp · Corporate Presentation Fall 2019 VENTURES INC. ... Qwest, and Whistler unavailable due to the company being private. 2. BlissCo, Broken Coast,

Contact

Lotus Ventures Inc.1010 – 1030 West Georgia StreetVancouver, BC V6E 2Y3

Daniel McRobertInvestor Relations [email protected]

We’re Growing Something Special.Reach out for more information.

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lotuscannabis.ca

CSE: J FRA: LV9 OTC: LTTSF