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Gilla Inc.Investor Presentation

OTCQB: GLLA

This presentation provides a summary description of Gilla Inc. (“Gilla”) and its business, all of

which is available in the public disclosure record of management, but does not purport to be

complete. Prospective investors are encouraged to obtain independent legal advice concerning

any investment in securities of Gilla and should not base their decision on whether to invest in

either Company upon the material provided herein. There are no representations or warranties

made herein by Gilla or any financial advisors and agents of Gilla (the “Agents”).

There are certain risks inherent in an investment in the securities of Gilla which prospective

investors should carefully consider before investing in the securities of Gilla. This presentation is

not, and under no circumstances is it to be construed as, an advertisement or a public offering of

securities of Gilla. No securities regulatory authority or similar authority has reviewed or in any

way passed upon the presentation or the merits of these securities and any representation to the

contrary is an offence.

This presentation has been prepared for information purposes only in an effort by management

to summarize the public disclosure record of Gilla.

No representation, warranty or undertaking, express or implied, is made and no responsibility or

liability is accepted by Gilla or any of its Agents as to the accuracy or completeness of the

information contained herein or any other information, representation, warranty or undertaking,

express or implied, made by Gilla in connection with the offering of securities described herein.

2

Safe Harbor

Private and Confidential - Gilla Inc. (OTCQB:GLLA)

To become a global leader in the

manufacturing and distribution of E-liquid brands and

proprietary recipes for the vapor industry.

3Private and Confidential - Gilla Inc. (OTCQB:GLLA)

High growth global E-liquid industry

• Consumers have shifted to vaporizers & E-liquids from E-cigarettes

• A well developed U.S. market expected to grow to $2.8B by 2025

• Accelerating growth in Europe with a solid base currently

• Early stage Asian markets providing huge growth potential

Uniquely positioned to leverage growing E-liquid industry

• Established global sales and distribution platform

• North American sales led by an industry veteran with a proven success record

• International sales and distribution built to access over 25 countries and 30 languages

• Established Chinese partner to distribute brands across Asia

• Offering a portfolio of 14 E-liquid brands to cater to differing global tastes

• Proven and well-suited management team with international experience

• Opportunity to expand product verticals, grow revenues and profitability by

leveraging expertise and consolidating operations

Pure play investment vehicle

• Listed in the U.S. on the OTCQB: GLLA

• Only public company focused on E-liquids

• Plans to up-list to the NASDAQ and dual list in Canada to improve liquidity and

valuation

• Company is well positioned to be the industry consolidator

4

Key Investment Highlights


Gain shelf space in vape shops globally by replicating successful

business models of other bottling and distribution companies such as

Diageo and Coca Cola

1. Offer a comprehensive solution to vape shops

• Provide a broad portfolio of premium E-liquid brands

• Aggressively price and market value brands as a replacement for “house juice”

• Continue to develop and acquire new brands

2. Leverage global distribution partners to reach vape shops

• Provide innovative pricing and terms to develop long-term partnerships

• Build global and local brands through marketing support

• Leverage multiple brand platform to satisfy a broad range of customer needs

3. Provide a marketing platform unique to the vape industry

• Establish an account management model to service clients locally

• Further hone sales and product offerings to cater to unique geographic needs

• Improve and maintain an unparalleled level of customer service

• Global marketing support, targeted sales programs and best-in-class point-of-sale

marketing


The Strategy

Key Milestones

Acquire Scalable Manufacturing Platform• E Vapor Labs: Daytona Beach, FL based E-liquid facility

Establish Global Sales & Distribution Platform• Gilla Europe: Multinational distribution platform• Built strong North American sales team

6

Establish Gilla’s Brand Portfolio• Developed and acquired 14 brands


Focus On Operational Synergies • Spread marketing costs across multiple brands

• Take advantage of low-cost jurisdictions for talent retention

Diversify Manufacturing Platforms• Reduce jurisdictional risk

• Efficiency in distribution/logistics

Expand Global Reach• Further Gilla’s broad brand portfolio

• Enter new geographies: Russia, Middle East, Asia

1. Win premium E-liquid in every market

• Aggressive push in early stage European and International markets

• Premium E-liquid brands can generate >70% gross margins

2. Strengthen and accelerate growth of value brands

• Aggressively price value brands to strengthen recurring sales

• Market value brands as a replacement for “house juice”

3. Innovate to meet new customer needs

• Develop and acquire new brands to capitalize on emerging trends

• Provide best-in-class point-of-sale marketing

4. Maintain and improve customer service

• Increase account management to extend global coverage

• Improve and maintain an unparalleled level of customer service

5. Drive out costs to invest in growth

• Improve productivity and efficiency while leveraging economies of scale

• Consolidation of operating activities

6. Attract and retain talent

• Identify, attract and retain talented, highly-motivated and team-oriented individuals

7

Performance Drivers


Six Key Drivers of Growth

United States

• Regulated by the U.S. Federal Food and Drug Administration (FDA)

• U.S. market became regulated under the final “Deeming

Regulation” on August 8, 2016 which extended the FDA’s authority

to include the regulation of electronic nicotine delivery systems

(such as E-liquid, E-cigarettes and other vapor products)

• Market is effectively frozen as no new products can be marketed or

sold in the U.S. without the prior approval of the FDA through a Pre-

Market Tobacco Application, a costly and potentially impossible

endeavour

European Union

• Directive 2014/40/EU (known as “TPD”) became effective on May

20, 2016

• TPD introduced legal requirements at the EU level that specifically

regulate E-liquid and E-cigarettes and EU Member States were

required to adopt national legislation implementing the TPD

provisions

• New products can be introduced into the EU after filing a notification

to each Member State Competent Authority

8

Global Regulation


A Net Positive For Gilla

Cig-a-like• Limited power

• Limited flavor capacity

• Lower conversion rate (5.6%)

compared to vaporizers (9.6%)

• Big tobacco is a large player

in the E-cig space with control

over c-store distribution channel

Vaporizers• Better performance

• Better affordability

• Attractive “vaping lifestyle”

Vape Shops• More than 19,000 globally

• ½ in the United States

• Robust assortment of flavors

and products

• Vaping experts are educating

users

E-Liquid Demand• US E-liquid industry is

expected to grow to $2.8B

by 2025

• Growing demand for US

manufactured E-liquid

9

Shifting Landscape

$2.8Bby 2025


Consumer demand has drastically shifted from “cig-a-like”

E-cigarettes to Vaporizers, Tanks and Mods

Diversified E-liquid Portfolio

• Developed and acquired 14 brands

• Broad portfolio across categories and

price points

Global Geographic Reach

• Current reach of 30 countries

• Multilingual call center

• International logistics and supply chain

management platform

Efficient Supply & Procurement

• 10,000 sq. ft. manufacturing facility in

Florida

• In-house capacity of 30,000 bottles / day

• Co-pack manufacturing partners in the

U.K., Hungary and U.S.

Leading Capabilities

• Strong board and management team

• Industry-leading customer service


Our BusinessMultinational Platform


Our BusinessBroad Product Portfolio

Premium Brands

An E-Liquid Portfolio Built To Win!

Value Brands


Our BusinessE-Liquid Business Economics

Private Label30%-65% Margins

Distributor60%-75% Margins

Wholesale70%-85% Margins

Retail85%-95% Margins

Gilla’s Primary Focus• Distribution partners

• Wholesale buying groups

• Vape shops

OEM / Private Label

• Negative regulatory

pressure

• Low margin business

• Minimal control of

distribution channels

Online / Retail

• Competes with

distributor and

wholesale strategy

• Saturated marketplace


A 1% increase in shelf space equates to an additional $672 - $1,344

in revenue per vape shop annually

Our BusinessA Scalable Revenue Model

Vape Shops Bottles/Month Shelf Space Revenue/Year Gross Margin/Year

1 1K - 2K 10% $9.6K - $19.2K $6.7K - $13.4K

100 100K - 200K 10% $960K - $1.9M $672K - $1.3M

500 500K - 1.0M 10% $4.8M - $9.6M $3.4M - $6.7M

2,000 2.0M - 4.0M 10% $19.2M - $38.4M $13.4M - $26.9M

Toronto, Canada

(Corporate Office)

70 York St.

Suite 1610

Toronto, ON

M5J 1S9

California, U.S.A.

(North America Sales)

1100 Quail St.

Suite 202

Newport Beach, CA

92660

Graham SimmondsChairman & Chief Executive Officer

T: 1 416 843 2281

E: [email protected]

Ashish KapoorChief Financial Officer

T: 1 416 523 3350


14

Contact


Budapest, Hungary

(International Sales)

Horvat Utca 14-27

1027 Budapest

Hungary

Daytona Beach, U.S.A.

(Manufacturing)

475 Fentress Blvd.

Unit L

Daytona Beach, FL

32114

Don FentonVP of Communications

T: 1 416 434 3681


J. Graham Simmonds, Chairman of the Board of Directors and CEO

Mr. Simmonds has served as Chairman of the Board of Directors since May 14, 2015 and as Chief Executive Officer of the Company since

November 15, 2012. Mr. Simmonds has over 18 years of experience in public company management and business development projects

within both the gaming and technology sectors. Mr. Simmonds is licensed and/or has previously been licensed/registered with a number of

horse racing and gaming commissions in the United States and Canada. Mr. Simmonds developed and launched the first in-home digital

video horseracing service in North America and is a former director and partner in eBet Technologies Inc., a licensed ADW operator and

software developer for the online horse racing industry in the United States. eBet Technologies Inc. was successfully sold to Sportech PLC

in December of 2012. He is the former chairman and CEO of DealNet Capital Corp., a consumer finance company listed on the TSX

Venture Exchange in Toronto, Canada.

Ashish Kapoor, Chief Financial Officer

Mr. Kapoor has served as the Company’s Chief Financial Officer since November 15, 2012. Mr. Kapoor has over 15 years of experience in

providing capital markets advisory and assurance services as a finance professional. After obtaining his Chartered Accountant designation

at Ernst & Young, Mr. Kapoor has gained over 10 years of experience in investment banking, advising client across various industries. As a

senior vice president at Macquarie Capital Markets Canada Ltd., Mr. Kapoor was responsible for the Canadian telecom, media,

entertainment and technology investment banking and principal investing group. During his 10 years at Macquarie, Mr. Kapoor completed

in excess of $3B in successful principal investments and advised on a further $4B of mergers and acquisitions for third party clients. Mr.

Kapoor was formerly the CFO of DealNet Capital Corp., a consumer finance company, and Transeastern Power Trust, an independent

power producer focused on renewable energy sources. Mr. Kapoor obtained his Chartered Accountant designation as part of the Ernst &

Young’s Toronto practice and was awarded the Gold Medal for first place in Ontario, and the Bronze Medal for third place in Canada on the

2000 Chartered Accountancy Uniform Final Examination. Mr. Kapoor is also a CFA Charter holder and holds a Masters of Accounting and

a Bachelor of Arts degree from University of Waterloo.

Don Fenton, Vice President of Communications

Mr. Fenton has served as the Company’s Vice President of Communications since March 1, 2016. Mr. Fenton is an award-winning

communications professional (Financial World, National Post) with 25 years of experience directing marketing campaigns in North

America, South America, Europe and Asia Pacific for corporations on the NYSE, LSE and TSX. Mr. Fenton has experience in the tobacco

industry (RJR, Imperial), financial services, real estate and mining. Mr. Fenton has placed business stories with the WSJ, NYT, IHT, BBC

and CNN and teaches marketing at the University of Toronto.


AppendixManagement & Board

Balint Antal, Managing Director of Europe

Mr. Antal has served as the Company’s Managing Director of Europe since January 6, 2016. Mr. Antal has over 14 years of experience in

logistics and distribution, business development and management in IT, real estate and international commerce sectors. After a few years

as a quality manager of an IT company providing services for the largest international bank, Mr. Antal successfully built and operated his

own companies; including E-Distribution Kft., a leading European E-cigarette distributor where he built a 20-plus-person team in Hungary

providing customer service, E-commerce, IT services and the logistics, warehousing and distribution services generating sales of over $3M

per year. In the Hungarian real estate sector, Mr. Antal built over $5M of annual income through the development of commercial properties

providing land development, financial, sales and rental, and management services. Mr. Antal holds a Masters of Business Administration

and Management from Corvinas University.

Austin Hopper, Managing Director of North America

Mr. Hopper has served as the Company’s Managing Director of North America since February 22, 2016. In 2002, Mr. Hopper found himself

at the epicenter of the emerging vaping industry when he began working at Space Jam. This new and dynamic market was the perfect fit

for Mr. Hopper’s personal sales approach and natural showmanship, and soon Space Jam was a stratospheric success. Mr. Hopper

repeated the trick by helping to launch Cosmic Fog, before turning his attention to the just launched Cuttwood. Within a year, Mr. Hopper

helped turn that struggling start-up into arguably the world’s biggest E-liquid brand.

Danny Yuranyi, Director, Chief Procurement Officer

Mr. Yuranyi has served as a director of the Company since November 15, 2012. Prior to that, he was president of DY Consulting, a

consulting firm. Mr. Yuranyi has over 30 years of experience in the transportation, logistics, and distribution businesses having successfully

built and operated his own companies on a number of occasions. Mr. Yuranyi has held senior positions with Loomis and Gelco Express

which was later sold to Air Canada. After helping build a division of Gelco Express from $1M to more than $12M in annualized sales, Mr.

Yuranyi left to start a new business of his own called United Messengers which quickly grew to become the largest same-day messenger

service in Canada. Most recently, Mr. Yuranyi has invested in building distribution relationships with European brands in the energy drink

and bottled water businesses.



Gerald Goldberg, Director and Chairman of the Audit Committee

Mr. Goldberg has served as a director of the Company since June 29, 2016 and is currently the Chairman of the Audit Committee. Mr.

Goldberg is a Chartered Professional Accountant and is a senior partner in the accounting firm of Schwartz Levitsky Feldman LLP, in

Toronto. Mr. Goldberg was previously a partner in Grant Thornton and its predecessor firm for over 15 years. Mr. Goldberg has over 30

years of experience in the service, distribution, retail, mining, natural resources and oil & gas, real estate, not-for-profit entities and

manufacturing industries, with a strong emphasis in taxation and business advisory services. He is also active in corporate finance and

development and has been involved in the structure and design of numerous innovative financing instruments, tax shelters and

syndications, both in Canada and the United States. He is actively involved with the audit of various publicly listed companies in both

Canada and abroad. Mr. Goldberg also has tremendous experience as an independent director, chairman and member of the audit

committee of publicly listed companies, non-for-profit companies, educational and other institutions, organizations and companies.

Henry J. Kloepper, Lead Independent Director

Mr. Kloepper has served as the Company’s Lead Independent Director since April 13, 2013 and is currently the Chairman of the

Compensation and Governance Committees. Mr. Kloepper is a leading financier and has been involved in investment banking and

corporate finance for over 30 years. He brings a rounded knowledge of the capital markets, strategic growth, and investments. Mr.

Kloepper is currently the CEO of Houston Lake Mining Inc., interim CEO of NWT Uranium Corp., and chair of Unique Broadband Systems

Inc. Mr. Kloepper was previously a director and president of Mogul Energy International Inc. and has held executive positions with Award

Capital, JP Morgan, Citibank, Bank of America, and North American Trust in the US, Canada, and Europe.

Dr. Blaise A. Aguirre, Director

Dr. Aguirre has served as a director of the Company since November 7, 2014. Dr. Aguirre, an internationally known expert, author and

lecturer in child and adolescent psychiatry, is the founding medical director of 3East at McLean Hospital, and is an assistant professor of

psychiatry at Harvard Medical School. He served as an independent director of Investors Capital Holdings Ltd. from October 28, 2011 until

its sale to RCS Capital Company (RCAP:NYSE) in 2014. Previously, Dr. Aguirre was a broker with Investors Capital Company having

obtained his series 7 and 63 securities licenses. Dr. Aguirre sits on the board of directors that oversees the annual running of the Illinois

Marathon in Champaign, IL. He was a member of the Medical Advisory Board of IVPCARE Inc. prior to their buyout by Walgreens. Dr.

Aguirre has developed and maintains enduring relationships with institutional money managers and venture capitalists and has developed

expertise as a small cap stock analyst.



Christopher Rich, Director

Mr. Rich has served as a director of the Company since November 7, 2014. Mr. Rich is a successful television, film and theater actor and

producer. He studied acting at the University of Texas and later at Cornell University, where he received a master’s degree in theater arts.

He began his performing career in New York performing on stage in many off-Broadway and regional productions. Mr. Rich has appeared

in many television series, most notably on Murphy Brown and Reba. On the big screen, he starred in The Joy Luck Club, Flight of the

Intruder, and the independent art film Prisoners of Inertia with Amanda Plummer. He has appeared in numerous television movies, with

credits including Going Home opposite Jason Robards in one of his last performances.

Stanley D. Robinson, Director

Mr. Robinson has served as a director of the Company since October 29, 2008. In addition, Mr. Robinson was most recently a

Geologist/Exploration Manager with Kilo Goldmines Ltd., a position he held since January 2007. He is an exploration geologist with over 30

years of experience in Africa (Angola, Democratic Republic of Congo, Ghana, Tanzania, Burkina Faso), Canada and South America. Mr.

Robinson’s principal technical expertise is in the management of gold and base metal exploration projects, from grassroots to feasibility

stage, geological interpretations with an emphasis on structure and alteration, and in the identification of projects with economic potential.

He has extensive experience in managing exploration projects in remote locations and in climatic environments that range from permafrost

to tropical and semi-desert.



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