Canadian CANNAINVESTOR Magazine January 2019 | Page 268

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Cannabinoid Receptors 101: Why Do We Have Them?

Visualization of the endocannabinoid signaling system.

https://www.canabomedicalclinic.com/blog/

And with that … Aleafia and Emblem ..

On December 19th, the planned merger was formally announced. Key highlights of that merger include:

• Combination will create Canada’s largest medical cannabis clinic network with access to 40 medical clinics and education centres;

• Aleafia patients to access Emblem’s differentiated, high margin derivative products including capsules, oils and oral sprays, along with award-winning customer service and eCommerce platform;

• Regulatory acceleration with Aleafia leveraging Emblem’s Health Canada License to extract and process medical cannabis products and sell them directly to patients;

Aleafia to become among national leaders in production capacity (including committed supply agreements);

• Expansion of Aleafia’s national and global distribution platform;

• Increased scale of the combined company will enhance its capital markets profile and increase trading liquidity; and the combination results in current cash resources of approximately $70 million.

The Leading Canadian Clinic Network: Combining Canabo Medical Clinic and GrowWise Health creates the leading Canadian clinic network with access to 40 national medical clinics and education centres that have served almost 60,000 patients, with increases in patient visits and referrals since October 17, 2018. In addition, Aleafia will be able to leverage Emblem’s extraction, and product innovation to, for the first time, sell high-margin medical cannabis directly to Aleafia’s patient base.

High-Margin, Highly Differentiated Medical Product Portfolio: Aleafia’s patient base will enjoy access to Emblem’s differentiated, high margin derivative products including capsules, oils and oral sprays, with among industry leading recognized revenue per gram rates. Patients will also access Emblem’s award-winning customer service, schedule home delivery and eCommerce platform.

Scaled Production Capacity and Leading Supply: Aleafia will be a leading licensed producer of cannabis with approximately 138,000 kg of production and supply across three Ontario facilities and the industry’s largest LP to LP cannabis supply agreement.

National and Global Distribution Platform: Aleafia expects to leverage Emblem’s approval to supply to the Provinces of Ontario, Saskatchewan, British Columbia and Alberta; national medical distribution through Shoppers Drug Mart; and national retail distribution through Fire & Flower, Starbuds and the emerging OnePlant network. In addition, through Emblem’s joint venture with German pharmaceutical wholesaler Acnos Pharma GmbH, Aleafia expects to access the world’s largest medical cannabis market serving more than 82 million people, with access to approximately 20,000 pharmacies, along with access to Australia’s burgeoning medical cannabis market upon completion of Aleafia’s previously announced transaction with CannaPacific Pty Ltd.

Industry Leading Adult-use Brands: Complementing Aleafia’s adult-use strategy via the transactions with Serruya Private Equity, Aleafia will leverage Emblem’s flagship brand Symbl, which is ranked one of the top selling recreational brands.

Focus on Product Development: Aleafia will build on Emblem’s product development success. Based out of Emblem’s state-of-the-art Product Innovation Centre, product development will focus on potential innovations in high-margin, branded beverages, edibles, vape pens, topicals and concentrates for the medical and adult-use markets.

Improved Capital Markets Profile: Aleafia will be a leading licensed producer appealing to a broader shareholder base, with greater access to capital and improved trading liquidity.

Robust Cash Position: Aleafia and Emblem currently have access to a combined CAD $69.9 million in cash, to be used for continued product innovation and brand building, construction and development of their cultivation facilities and outdoor grow operations, to support expansion efforts and to pursue strategic opportunities and investments that maximize shareholder value.

Planned annual capacity of approximately 138,000 kg (including committed supply agreements).