otcqb: phot investor summary 5400 carillon …...cannabis production •estimated cagr 33.5% through...

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OTCQB: PHOT Investor Summary 5400 Carillon Point Kirkland, WA 98033 CONFIDENTIAL

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Page 1: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

OTCQB: PHOT Investor Summary5400 Carillon Point Kirkland, WA 98033

CONFIDENTIAL

Page 2: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

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ABOUT

GrowLife, Inc. (OTC QB: PHOT) is a nationally recognized

cultivation brand, with an estimated 100,000 shareholders,

providing world-class hydroponic equipment to commercial

and consumer grow operations. With a complete selection of

cultivation products combined with consultative and

distribution services, GrowLife can help cultivation operations

efficiently control supply costs, manage build-out investments,

track supply usage and streamline workflows.

PRODUCTS CONSULTING INNOVATION

GrowLife brings the highestquality products to the indoorplant cultivation market.

GrowLife is comprised ofindustry experts prepared tohelp our customers with any sizegrow project.

GrowLife believes in innovationas the key to success for ourcompany and clients.

Page 3: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

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COMPANY GOALS & STRATEGY

MISSIONGrowLife measures its success by its customer’s success;

serving cultivators of all sizes as a reliable business partner

and its shareholders with value and trust.

• Consultative direct sales force – Provide sales and services to

large B2B growing operations

• Develop and license GrowLife-branded products at lowest cost

to maximize margins at competitive prices

• E-Commerce – Lower cost of sales to reach remote markets with

self-service fulfillment

• Optimization system for most cost-effective production pricing

and logistics

• GrowLife Consumer Subscriptions – B2C starter kits with

recurring revenue stream from consumable supplies

• Points of Sale – Build and support nationwide store-within-store

hydroponic sales network

• Retail store – Replaced company stores with licensed retailers

from fixed to variable cost strategy

GOALS• Offer leading indoor cultivation platform, necessary

cultivation products/services, for stakeholders

• Operate four divisions to leverage channel management

and customer depth to support GrowLife platform

• Deliver lowest production cost for our customers in

hydroponics while maximizing customer footprint

Page 4: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

CLONE TO HARVEST

IMPACT ANALYSIS

GOALS:

✓ Maximum Yield

✓ Lowest Cost

✓ Highest Quality

Page 5: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

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NORTH AMERICAN COVERAGE STRATEGY

Market SizeUnited States:

Cannabis Production

• Estimated CAGR 33.5% through 2021

General Indoor Cultivation

• $689.7 million in gross revenue

Luxury Vinyl Tile

• In 2016, the U.S. flooring market grew an estimated 5.1%, according

to Market Insights, with total revenues of $21.174 billion.

• LVT now accounts for 16.5% of the total flooring market in dollars and

18.8% in volume

Canada:

• Number of Cultivators Continually Increasing – up 20% this year

• Home Grow Legal – 36MM potential consumers

Combined Industry Size: $12.63B

Why GrowLife?• Industry expertise, reliable product offering at best price

• Professional bidding on commercial installations

• Multiple channels offering to serve all indoor cultivation consumer groups

Reaching Customers• Commercial Grow Consulting – Direct Sales Force

• Fully integrated e-commerce platform with back-end logistics

• Retail License Agreements - Reach geographic specific cultivators (2,472+)

with brand and "store-within-a-store”

Page 6: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

GROWLIFE COMMERICAL (B2B SALES)

Role• Work with medium-large scale cultivators in facility build out and on-going support

• Lead generation programs: Traditional marketing activities (Mail/email, advertising,

digital media), trade show/events, referral programs, etc.

Structure• Features industry leading owned and partnered product offering sold in large

quantities to B2B customers

• Distribution business division built around direct consulting sales force with core

competencies in large scale cultivation design

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Recent Acquisitions: EZ-Clone Enterprises, Inc. & FreeFit Floors

Page 7: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

GROWLIFE INNOVATIONS (R & D)

Role• Develop and bring to market GrowLife-branded products and services to deliver enhanced

gross margin for profitability

• Control of 35%+ gross margin offerings with profitability and discount flexibility

• Unique feature and benefit controls differentiation and competitive advantage

GrowLife Branded OfferingsGrowLife

• GrowLife Soil – Nutrient enriched soil in two forms: Standard and Custom Recipes

• GrowLife Cube – Consumer “home grow” solution – high margin

• GrowLife Exo

EZ Clone

• Leading cloning system to maximize the quality of plants

FreeFit® Flooring

• Custom flooring solution – few competitors

GrowLife Commercial Vertical Growing System

• Patent-pending vertical growing methodology

• Value Proposition: Verifying $0.35/gram (75% reduction in production cost)

Procedures• Identify and confirm customer need, identify and select supplier, Proof of concept

• Description, go-to-market timeline, budget, sales forecast, etc.7

Page 8: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

Role• ShopGrowLife.com and GrowLifeHyrdo.ca are GrowLife’s online distribution channel for remote access

with zero inventory to purchase products

• Provide broadest customer reach, product depth, best pricing and 24-hour turn-around

• Re-order portal for commercial clients

• Education source with analytical decision support system

Value Propositions• Customer Acquisition awareness with free shipping for starting purchase

• Customer Retention marketing with better margins

• Purchase analysis and predictive logic for repeat sales with larger orders from logistics

GROWLIFE HYDROPONICS (CONSUMER)

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Page 9: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

GROWLIFE RETAIL (LICENSING)

Role• Goal: National coverage GrowLife Retail License retailers with store-within-a-store

• Provide GrowLife marketing support: signage, training and national marketing

• Local cultivator presence to enable direct sales bids

Value Propositions• Reach: Identify, mail and call non-hydroponic hardware/gardening retailers on

a weekly basis

• Value proposition: Best practices in hydroponics to supplement store sales and

offer rev share on bids

• Licensees send in bid (B2B) information to inside Sales rep and retail GrowLife Cube

• Immediate (<24 hour) fulfillment

• Gross Margin share goes to store, inventory sales to same customer belong to Bid fee

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Page 10: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

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THE FUTURE: GROWLIFE COMMERCIAL GROW SYSTEMS

Complete Commercial Grow Rooms• Lower supply, equipment, labor and electrical costs

• Drive down complete production cost from $1.50+ to $0.35 per gram

Turnkey Process• Consulting services provides assessment of costs and savings

opportunities

• Design and costs estimates including capital equipment versus on-going

production cost

• Estimated expansion and forecast models at varying market prices

Status• Two provisional patents filed

• Design and proof of concept underway

• Primary use of proceeds

• Consulting sales force staffing

• Further patent filings underway

Page 11: OTCQB: PHOT Investor Summary 5400 Carillon …...Cannabis Production •Estimated CAGR 33.5% through 2021 General Indoor Cultivation •$689.7 million in gross revenue Luxury Vinyl

OTCQB: PHOT Investor Summary5400 Carillon Point Kirkland, WA 98033

CONFIDENTIAL