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Request an Investor Kit: Vodis Pharmaceuticals

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This profile is part of an investor education campaign. The profile provides detailed information which was sourced and approved by Vodis Pharmaceuticals Inc. in order to help investors make better investment decisions. The Company’s support of Investing News Network ensures we can continue to bring you unbiased, independent news and information.

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Vodis Pharmaceuticals—Building a Leading North American Cannabis Brand

Overview

Vodis Pharmaceuticals Inc. (CSE:VP,FSE:1JV1) is an established North American medical and marijuana company with operations in both Canada and the United States. The company’s facility in Delta, British Columbia is a late-stage applicant under Health Canada’s Access to Cannabis Medical Purposes Regulations (ACMPR). Through its facility in Bellingham, Washington, Vodis has developed a turn-key cannabis operations model with three separate streams of revenue:

  • Facility Rental: Under tenancy agreements, Vodis rents facility space to licensed U.S. cannabis companies for a fixed charge per square foot of the total operation.
  • Branding and Marketing: Vodis licenses its established brand to U.S. cannabis companies and works with partners to help market products under the Vodis USA brand, charging a range of fees on gross earnings.
  • Consulting Services: With the expertise of its award-winning master growers, Vodis provides fee-based consulting services including standard operating procedures, yield optimization, and quality assurance.

Vodis Pharmaceuticals is executing a multi-phase growth strategy focused on building out a client portfolio of licensed U.S. cannabis producers, increasing production at its revenue-generating Washington facility, and pursuing opportunities in other US-based cannabis markets.

Investment Highlights

  • Late Stage Canadian ACMPR with production ready facility in Delta, British Columbia.
  • Bellingham, Washington facility with 12+ months of operations.
    • Low production cost
    • Positive cash flow
  • Three-prong, scalable turn-key business model:
    • Facility rental
    • Branding and Marketing
    • Consulting services
  • Annual revenues for OCI expected to reach $6.4 million by 2018.
  • High Potency Award Winning Genetics.
  • Attractive Capital Structure; invested and committed diverse management team and board.

Significant Growth Opportunity in North American Cannabis Market

The Canadian medical marijuana market alone is forecast to reach $316 million in 2017, and $1.1 billion by 2020. Prime Minister Justin Trudeau is set to introduce legislation to legalize marijuana in Parliament in the spring of 2017. A recent Deloitte report estimates the total market size potential for legalized marijuana in Canada at $22.6 billion.

In Washington, one of the largest marijuana markets in the United States, cannabis sales reached $1.1 billion in 2016. By 2020, that figure is expected to reach $2.4 billion.

Seven other states (California, Nevada, Alaska, Colorado, Oregon, Massachusetts, and Maine) have approved cannabis production and sale for recreational use, representing large potential markets. Cannabis market research firm New Frontier Data projects the U.S. cannabis market will reach $24.5 billion by 2025.

United States: Expanding Production in Bellingham, Washington

Vodis Pharmaceutical’s 17,000 square foot Bellingham facility is operational and generating cash flow. Vodis has tenancy, consultancy, product licensing and marketing agreements with Our Church International LLC (OCI), a Tier 2 licensed Washington cannabis producer.

In February 2017, OCI received Phase 2 expansion approval from the Washington State Liquor and Cannabis Board, allowing the grower to increase its licensed cultivation canopy to 5,500 square. In March, Vodis received municipal building permits to complete the construction of the full 10,000 square foot production canopy space.  The expansion is expected to be completed by August 2017.  At full production capacity, OCI’s estimated yearly revenue is $6.4 million.

Vodis estimates its rental revenues for a full year of production under OCI’s expanded canopy will reach $2 million plus an additional $500,000 to $750,000 in revenue for consultancy services.

Under the product licensing and marketing agreement between Vodis and OCI, the Washington State marijuana licensee can use the Vodis name and related images for marketing and commercialization of OCI products. Vodis will also supply strategical and operational support. The agreement adds value for Vodis shareholders by:

  • creating an additional source of revenue;
  • capitalizing on the Phase 2 production expansion at the Bellingham facility; and
  • providing an opportunity to establish early consumer recognition of Vodis as a premium cannabis brand in the United States.

Vodis anticipates revenues from Vodis branded cannabis products sold by OCI (at full operational capacity) would be in excess of C$2 million annually based on today’s market prices.

Vodis estimates its rental revenues for a full year of production under OCI’s expanded canopy will reach $2 million plus an additional $500,000 to $750,000 in revenue for consultancy services.

Under the product licensing and marketing agreement between Vodis and OCI, the Washington State marijuana licensee can use the Vodis name and related images for marketing and commercialization of OCI products. Vodis will also supply strategical and operational support. The agreement adds value for Vodis shareholders by:

• creating an additional source of revenue;
• capitalizing on the Phase 2 production expansion at the Bellingham facility; and
• providing an opportunity to establish early consumer recognition of Vodis as a premium cannabis brand in the United States.

Vodis anticipates revenues from Vodis branded cannabis products sold by OCI (at full operational capacity) would be in excess of C$2 million annually based on today’s market prices.

Strategic US Expansion Underway: Washington and Beyond

Vodis Pharmaceuticals cannabis turn-key business model is highly scalable. With the success of its partnership with OCI, the company is now ready for the next stage of growth.  Vodis plans for its next Washington State partner to be a Tier 3 licensed producer (30,000 square feet of production canopy), which would yield 3 times the revenue of their current Tier 2 tenant.

Vodis Pharmaceuticals’ expansion strategy will also take the company outside of Washington and into other state cannabis markets including Oregon, which allows foreign entities to own cultivation and distribution licenses.

Canada: Late-stage ACMPR Facility in Delta, BC

Vodis Pharmaceutical’s 12,000 square foot facility in Delta, B.C. is currently awaiting pre-licensing inspection by Health Canada. The production-ready facility received its letter to build under the former Marihuana for Medical Purposes program and has since been completely renovated to adhere to the new standards under the new ACMPR legislation.

Once the cultivation license is granted, Vodis will have an international brand with export market access and significant expansion potential. The Delta facility currently has a production capacity of 150 to 200 pounds per month for estimated revenues of $8.7 million per year.

Management

Ivan Miliovski,Co-founder, CEO and Director

Ivan Miliovski brings a wealth of experience and knowledge about the growth and production of medical grade marijuana. He was COO at Canadian Cannabis Research and Technologies and has spent over 10 years refining his horticultural skills growing and scaling greenhouse and warehouse operations. He was part of the start-up team at Advanced Nutrients.

Mark Lotz, CFO

Mark Lotz, a Chartered Professional Accountant, has senior management experience in the brokerage, mining, manufacturing and digital media industries. He is a director and chair of the audit committees for a number of public companies. He also serves as the CFO of TrackX Holdings Inc.

Derek Good,Co-Founder and Director

Derek Good has over 10 years of experience in food production, food safety and development, and implementation of Standard Operating Procedures for production facilities. Good took his private food company from concept to sales exceeding $1,500,000 before successfully selling the business to multiple companies.

Plamen Ovagemov, Director

Plamen Ovagemov serves as CEO and Executive Director of multiple national and international European companies. He served eight years as CEO and Chairman of the Board to Ponsstroy Engineering EAD. He grew the company’s revenue significantly with revenues exceeding $45,000,000 annually.

Follow the Company

Vodis Pharmaceuticals provides periodic updates to its investors via its mailing list at Vodis.ca.  Investors can also follow the company on Twitter, Facebook, and Instagram.

Vodis USA, Inc. can be found at vodisusa.com.  Photos of Vodis USA-branded product, provided by OCI, can be seen by those ages 21+ on the Vodis USA Twitter, Facebook, and Instagram feeds.

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