april 201 9 · 2019-04-16 · april 201 9. this presentation ... except as otherwise indicated,...

BUILDING AMERICA’S LARGEST CANNABIS COMPANY

APRIL 2019

This presentation contains “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of theUnited States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefsregarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative of those forms or other comparable terms. The Company’s forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance orachievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under "Risk Factors" in the company’s CSE Listing Statement filed with SEDAR; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company’s forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco’s shares, nor as to the Company’s financial performance in future financial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Company’s forward-looking statements contained herein, whether as a result of new information, any future event or otherwise. Except as otherwise indicated, this presentation speaks as of the datehereof. The distribution of this presentation does not imply that there has been no change in the affairs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this presentation or otherwise.

DISCLAIMER

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KEY TRENDS IMPACTING THE U.S. CANNABIS MARKET

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1.

$80 Billion by 2030

$24 Billion Profit

U.S. cannabis market is becoming EVEN more attractive

2.

Regulated State-by-State

Regulatory complexity

4.

62% of Americans Support Legalization

Rapidly changing consumer perceptions

5.

Demand for Product Consistency, Quality and Availability

Greater expectations of the industry

3.

Full Spectrum from Medical to Health & Wellness to Play & Recreation

Evolution and blurring of consumer needs

6.

More States will Issue Retail Licenses

Retail will become ubiquitous

7.

The Key to Winning is Access to Retail Shelves

Scale & population reach

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2013 22 $5.5BYEAR FOUNDED OPERATING RETAIL LOCATIONS MARKET CAP ($CAD)

1,100+ 56 $16.3M EMPLOYEES RETAIL LICENSES 3Q18 PROFORMA REVENUE

11 725+ $5.3MSTATES DISPENSARIES

WITH OUR PRODUCTS3Q18 ADJ EBITDA

151M / 70% 56+ $35.1M US ADDRESSABLE MARKET / % BRANDS Q3 YTD PROFORMA REVENUE

23 500+ 388%PRODUCTION FACILITIES PRODUCTS IN

PRODUCTIONYOY REVENUE GROWTH

1.8M 5,000+ $8.1MTOTAL FACILTIY SQUARE FOOTAGE

SKU'S IN PRODUCTION Q3 YTD ADJ EBITDA

* Management estimates and subject to closing pending transactions in CA, NY, MA, MD & FL. Market cap as of March 29, 2019 – Includes the potential impact from the recently announced Origin House acquisition

SUMMARY COMPANY INFORMATION*

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DECADES OF EXPERIENCE WITHIN OUR MANAGEMENT TEAM

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$5,763

$5,535

$4,902

$3,388

$3,202

$1,935

$1,791

$1,595

$869

Curaleaf

Cresco Labs + OH

Harvest

GTI

Acreage

Trulieve

MedMen

iAnthus

GGB

CRESCO LABS IS ONE OF THE LARGEST, VERTICALLY INTEGRATED, MULTI-STATE OPERATORS

CULTIVATE & MANUFACTURE BRANDS & PRODUCTS

RETAIL WHOLESALE DISTRIBUTION

Current Market Capitalization1

$CAD

By Market Capitalization

#2

Note: As of close April 12, 2019. Adjusted for subsequent events from most recent filingsSource: Company Filings, Capital IQ, Bloomberg, Public Disclosure, as at March 29, 2019 6

Capabilities to Drive Long-Term Value though Vertical Integration across States

OUR CORE ADVANTAGE

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CULTIVATION & PRODUCTION

Germination

Seeding

Vegetation

Flowering

Extraction

BRANDED PRODUCTS

Brands

Distinctive messaging

CustomPackaging

Proprietary Production

OWNED RETAIL WHOLESALE/DISTRIBUTION

Consumer & patient reach

Category performance insights

Trade marketing & programming

Customer data

Competitive insights

Test & Learn platform

WE EXECUTE

1. We win competitive licenses to open new markets

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2. We acquire to enter existing markets

Unmatched success in competitive states

Acquire assets to drive growth and footprint

3. We get to market faster

Operational faster than competitors

4. We establish dominant positions

Achieve 100% penetration and dominant market share

With cultivation becoming a commodity, our long-term focus is on brands and retail partnerships

BEER

COFFEE

TOBACCO

BRANDS AND RETAIL PARTNERSHIPS = FUTURE GROWTH

9CPG APPROACH TO BRAND BUILDING

OVERALL MARKET CRESCOLABS BRANDS

Medicinal

W e l l n e s s /L i f e s t y l e

Holistic Medicine

Regular Lifestyle

Connoisseur

F u n , F r u i t y , L e s s E x p e n s i v e

C h o c o l a t e F o r w a r d H i g h e r Q u a l i t y

CURRENT CONSUMER LANDSCAPE AND PORTFOLIO

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RULE #1: KNOW YOUR AUDIENCE

BRAND ETHOS: with familiar formats and precise delivery systems, remedi products provide a safe, consistent and trusted alternative to traditional medicines.

BRAND ETHOS: Cresco elevates everyday cannabis. High quality. True consistency. Remarkable value. Cresco is cannabis you can count on that delivers consistent cannabis products every time.

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BRAND ETHOS: high quality desserts with no cannabis flavor, created by the acclaimed pastry chef, Mindy Segal

BRAND ETHOS: fans of RESERVE are highly selective and turn to RESERVE for a luxury experience in cannabis. They are knowledgeable about cultivation and lineage, extraction and hardware. RESERVE delivers a superior cannabis experience for those who are looking for truly top shelf cannabis

BRAND ETHOS: Fun, fruity confections for everyday enjoyability and effectiveness

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HOUSE OF BRANDS TO PLAY ACROSS SEGMENTS

HEAL WELLNESS PLAY

GOOD

BETTER

BEST

CONSUMER NEEDS

PR

ICE

PO

INT

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Alternative for exiting prescription products

Enhancing recreational occasions

Promoting holistic health and wellness

*Owned, invested in and distributed brands, includes the potential impact from the recently announced Origin House acquisition

WHOLESALE & DISTRIBUTION

Wholesale gives our products greater reach

• One-stop-shop for dispensaries drives footprint growth

• Sales team drives sales growth

• Consumer insight drives product improvement

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ACCESSING FLORIDA’S 200K PATIENTS

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• One of the largest vertically-integrated providers of medical cannabis in Florida

• Able to open 35 dispensaries. Currently operates 8 dispensaries with plans to have 14 by the end of June 2019, expecting 20 by the end of 2019

• 95% of the population of Florida is within 50 miles of a VidaCann dispensary

• Cultivation facility with a state-of-the-art cGMP-certified processing and analytical lab

• 70,000 ft2 cultivation and processing facility scheduled to double by the end of 2019

LAUNCHING IN MICHIGAN –THE 10th LARGEST STATE IN THE COUNTRY

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Michigan Market OverviewOne of the largest medical cannabis markets in the country

• Nearly 300K registered medical cannabis patients

• Steadily moving towards adult-use implementation (anticipated January 2020)

• $869M market size in 2018 projected to $1.4B by 20221

Cresco Michigan Expansion• Cleared pre-qualification regulatory hurdle on March 25, 2019

• Retrofitting existing 100K+ square foot cultivation and processing facility

• 2 dispensary applications pending, 4 more anticipated

• Focus on increasing retail presencePlanned cultivation and production facility –Marshall, MI

1. Based on Arcview Market Research/BDS Analytics

Source: Arcview Market Research/BDS Analytics

• 684,000 sq. ft. of cultivation

• 600 Dispensaries in distribution network, 60% penetration

• 11 Processing and distribution facilities

• We will be the leading multi-state operator in California, with a team and asset base that has a proven track record and ample room to grow

• We will be the largest distributor in California, with more access to consumer data and retail storefronts than any other player in the industry

• We will fill our dominant distribution pipeline with California brands, driving national and global opportunities as well as sustained competitive advantages

State Revenue Projections

$7.7 Billion by 2022

WE WILL WIN CALIFORNIA, THE MOST INFLUENTIAL CANNABIS MARKET IN THE WORLD

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Bolsters Leading

Position in California

Market

Expanded Distribution

Infrastructure

Increased Scale & Capital Markets

Presence

Strong & Expanding Multi-State Presence

Increased North

American Footprint

Superior Existing Retail

and Distribution

Model

One of a Kind Brand

Acceleration Platform

Strong Pro-Forma

Cash PositionOrigin House’s proven track record of leveraging their California-wide distribution footprint and key retailer relationships in the largest cannabis market in the world

Combining Cresco’s scale, expertise and brand portfolio with

will drive significant growth for the shareholders of both companies

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ORIGIN HOUSE ACQUISITION: CREATING A NORTH AMERICAN POWERHOUSE

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TOGETHER, WE ACCELERATE GROWTH

Cresco Lab’s Highly Efficient Execution Model

Multi-State Operations

Access to Capital

Origin House’s Focused California Brand

Development Engine

50+ Proven, Next-Gen Brands

500+Dispensaries

Branded products & access to shelf space are the keys to building long-term competitive advantage and shareholder value

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CA

ON

NV

AZ

IL OH

MI PA

NY MA

ILLINOIS

Total Sq. Ft. 139,000

Total lbs 67,360

# Stores 5

PENNSYLVANIA


Total lbs 51,563

# Stores 6OHIO


Total lbs 18,919

# Stores 1

CALIFORNIACRESCO LABS


Total lbs 182,692

NEVADA


Total lbs 13,578

# Stores 1

ARIZONA


Total lbs 34,265

# Stores 1

NEW YORK


Total lbs 44,123

# Stores 4

MASSACHUSETTS


Total lbs 35,039

# Stores 3

FLORIDA


Total lbs 67,940

# Stores 30

MICHIGAN


Total lbs 32,162

CANADA

# Vape Stores 23**

Facility 1

CALIFORNIAORIGIN HOUSE

Total Sq. Ft. 92,000*

Total lbs 13,224*

Dispensaries 500

Brands 50+

Facilities 8*

*PENDING ACQUISITION

* with pending acquisitions and regulatory approval ** one licensed locationNote: subject to current expansion projects

NEW YORK

# Vape Stores 1

22% OF STATES

70% OF ADDRESSABLE MARKET

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WE ARE BUILDING AMERICA’S LARGEST CANNABIS COMPANY

OUR CAPABILITIES ALLOW US TO INNOVATE, LEARN, AND SCALE RAPIDLY

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Promising Cannabis Consumer Product

Brand Support Infrastructure/

Product Acceleration

Feedback

DESIGN &DEVELOP

DISTRIBUTION 725+** DISPENSARIES

Retail Insights

SCALETEST & VALIDATE

Proprietary Data

You can get the exact same remedi brand vaporizer in California as you can in New York.

Building nation wide mindshare with a CPG approach to brand building

*In States Where Cannabis Is Currently Legal**Includes the potential impact from the recently announced Origin House acquisition

70% of the United States* has access to our products at their local dispensary

Expanded Institutional Shareholder Base Increased liquidity and trading - more outstanding shares available

Building the #1 North American Cannabis CPG CompanyIndustry Leading ScaleThe largest and most strategic distribution footprint of any U.S. cannabis company

Multi-State PresenceMore than 725 dispensaries across 11 states will carry our brands

Industry Leading Brand Development CapabilitiesLeading brand portfolio comprised of 50+ brands

Revenue & Cost SynergiesIncorporate Cresco’s brands into Origin House’s California distribution platform and bring Origin House’s brands into other states

Robust Portfolio of Proven Brands

Acquisition Expertise

1.5M Sq. Ft. of Cultivation**

725+ Dispensaries Supplied***

Brand Building Expertise

Cost of Capital Advantage

23 Facilities* 11 States*

+

++ Aligned & Experienced Management Team

Cannabis distribution built by the same team that built Southern Wine & Spirits, the largest distributor of liquor in the United States

*(with pending acquisitions and regulatory approval)**(with pending acquisitions and regulatory approval by EOY 2019)***(does not double count for dispensaries supplied by both Cresco and Origin House) 22

A WINNING FORMULA

THANK YOU

MediaJason Erkes, Cresco LabsChief Communications [email protected]

InvestorsAaron Miles, Cresco LabsVice President, Investor [email protected]

For general Cresco Labs [email protected]

For more information:

april 201 9 · 2019-04-16 · april 201 9. this presentation ... except as otherwise indicated,...

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