Nutritional High

Developing High-Grade Extracts for the Global Cannabis Market

This profile is part of a paid investor education campaign.*

Overview

Nutritional High (CSE:EAT, OTCQB:SPLIF, FWB:2NU) is focused on developing, manufacturing and distributing premium and consistently dosed products in the cannabis-infused products industry, including edibles and oil extracts for nutritional, medical and adult recreational use. The Company works exclusively through licensed facilities in jurisdictions where such activity is permitted and regulated by state law.

Nutritional High entered the US market by developing a presence in Colorado, where the company has a fully operational team of specialists in one of the state’s largest and most automated oil extraction and infused edibles facilities. Through agreements with Palo Verde LLC, Nutritional High has access to a marijuana-infused products (MIP) manufacturing license. Under this, the company has developed a production and distribution foothold for its FLÏ brand, which includes vape pen cartridges, oil syringes and edibles aimed at nutritional, medical and adult recreational use.

The company’s current priority is establishing a dominant foothold in California, a state with a cannabis market expected to exceed $5 billion in revenue by 2019. To help meet the state’s demand for cannabis, Nutritional High has acquired a cannabis distribution company, an extraction and toll facility and companies specializing in cannabis-infused edibles and drinks in the state. Nutritional High’s acquisitions allow it to process and distribute its own FLÏ branded products.

The company utilizes a process of mechanical separation, cold ethanol extraction and short path distillation to produce its vaporizer cartridges. By using ethanol, Nutritional High removes the risk of combustion which is a result of using butane extraction.

Expanding its footprint beyond California and Colorado, Nutritional High has also acquired cultivation and processing facilities in Nevada and Oregon and also operates the only dispensary within a 60-mile radius in Illinois.

Canada’s cannabis market is another of Nutritional High’s targets: the Canadian cannabis market is expected to be worth $2.5 billion by 2020. As a result, Nutritional High has partnered with Abba Medix, a subsidiary of Canadian cannabis company, Canada House (CSE:CHV), to distribute oils under Nutritional High’s FLI brand and construct a 2,000 square foot extraction facility in Ontario.

An added benefit of acquiring an extraction license in Canada is that Nutritional High is now free to export internationally, with European countries and potentially Asian markets on the horizon.

Company Highlights

  • Established ethanol extraction methods that filter out contaminants and remove additional risk
  • Strategic partnerships with various cannabis-related companies
  • Established presence in Colorado in one of largest oil extraction facilities in the state having launched FLÏ brand
  • Long standing relations with experienced California cannabis industry players
  • Extracts with largest profit margins in the cannabis industry
  • Partnership with licensed Canadian extraction company providing international exportation opportunities
  • Acquisitions in California provide control over distribution and extraction
  • Nutritional High is currently operating in five US states

Addressing Demand in the California Market

Nutritional High’s main focus is to supply the Californian consumer market and distribution is key to their operations. To this effect, the company has conducted numerous acquisitions within the state, establishing a model of production and distribution across California to meet a demand which accounts for up to half of all legal cannabis sales in the United States.

Acquisitions and partnerships in the state

Their acquisition of the California distribution company, Calyx Brands, in late 2017 gives Nutritional High increased market penetration for their extracts and oil-products in-state. Calyx Brands is a leading distributor to legal dispensaries in-state which will serve as the link between producers, retailers and Nutritional High. In May 2018, Nutritional High acquired a 7,000 square-foot facility in Long Beach California. The building is fully compliant with local and state licensing regulations. The company has set aside 3,000 square-feet to lease to a cannabis testing company and the remain square-feet will be used by Calyx.

In addition to Calyx Brands, Nutritional High also announced in April 2018 that they had acquired 100 percent of Pasa Verde LLC, a leading cannabis extraction and toll processing facility in Sacramento, California.

Pasa Verde Labs received an extension on its Cannabis Manufacturing License in May, 2018, while its application Annual Cannabis Manufacturing License is still under review. The 17,600 square feet extraction facility is aiming to achieve full production capacity by the second quarter of 2018. Its revenue since 2018 has exceeded $200,000, a number expected to rise with the recent addition of new equipment. Nutritional High’s list of acquisitions also includes TKO Products, a manufacturer of cannabis cookies, brownies, chocolate, Krispy treats and vaporizer cartridges.

With both a distributor, an extraction facility, and the impending 2018 launch of their FLÏ branded products in California, Nutritional High is poised to supply the entire state with high-quality products. The company has also entered into a purchase agreement for a 9,000 square foot industrial building in Northern California for further cannabis oil extraction and manufacturing, adding to their fast-growing foothold in the Golden State.

Nutritional High’s latest acquisition happened in July 2018, when they signed a LOI to acquire a 51 percent interest in Bright Green Lights LLC, better known as J:MEDS, and can purchase the remaining 49 percent in J:MEDS at a later date. J:MEDS produces high-quality cannabis-infused products and distributes them across California.

J:MEDS holds a patent that optimizes the therapeutic effects provided by CBD and the psychotropic effects provided by THC in medications. This patent can help with precision and control of the dosage patients can get when taking cannabis for medicinal purposes.

“We are very pleased to be acquiring J:MEDS, bringing another dynamic California brand into our product portfolio,” said Nutritional High CEO Jim Frazier. “We see significant synergies in this transaction, as J:MEDS offers high quality products and faces a capacity gap to meet current and future demand, which we will be able to bridge and scale up significantly. Going forward we will continue to seek to acquire high quality assets and further implement our California strategy to create additional value for our shareholders.”

Canada

Nutritional High’s entry into the Canadian market is key for two reasons: legislation to legalize Cannabis presents an enormous market for cannabis, with the Canadian market for cannabis estimated to be worth over $2.5 billion by 2020; and because Nutritional High’s access to Canada also allows for access to other international markets such as Europe and, potentially, Asia.

The company was able to bypass the process of becoming a licensed Access to Cannabis for Medical Purposes Regulations (ACMPR) manufacturer under Canadian law through a strategic partnership with Canada House’s (CSE:CHV) fully-licensed cannabis manufacturing subsidiary Abba Medix to manufacture oil extracts under Nutritional High’s FLI brand in Canada. As part of its joint venture, Nutritional High and its partner are constructing a 2,000 square foot facility in Pickering, Ontario to extract cannabis oil and extracts currently permitted under ACMPR regulations.

US Operations

Palo Verde, Colorado

Nutritional High began its entry to the US through a partnership with the Pueblo-based company Palo Verde LLC in Colorado. Through a strategic relationship, the company has access to Palo Verde’s MIP license as well as one of the largest automated cannabis oil extraction facilities in Colorado. In May 2017, the facility proved its capability by achieving over 95 percent THC content in its extracts.

nutritional-high-colorado-project

One of the few states to have rolled out regulations for a legal recreational market, Colorado has acted as a research and development hub for Nutritional High to establish its product line and strategically plan for roll out into additional states.

Now fully operational, Nutritional High’s team of cannabis and marketing experts is currently manufacturing and distributing FLÏ branded products across the state. This includes vape cartridges, oil extracts and infused chocolate bars.

Green Therapeutics, Nevada

In March 2018, Nutritional High announced it had entered into a non-binding LOI to acquire 75 percent of Green Therapeutics, an established cannabis producer and processor in the state of Nevada. Green Therapeutics will assist in distributing Nutritional High’s FLI branded products in the state.

In July 2016, the company completed the construction of its facilities while also completing its first harvest. Green Therapeutics produces premium cannabis flower in addition to concentrates, oils, creams and sprays.

The company’s asset base includes four Nevada licenses with two cultivation facilities and two production facilities in Clark County and North Las Vegas. In Clark County, Green Therapeutics has 8,000 square feet of licensed and operational cultivation and production space, which generates approximately $400,000 per month.

Green Therapeutics’ North Las Vegas facility has a 5,400-square-foot production laboratory with Ultra performance liquid chromatography–tandem mass spectrometer and Gas chromatography–mass spectrometry testing capabilities.

Additionally, Green Therapeutics has both an approved cultivation license in North Las Vegas which is set to move to a new greenhouse facility and a 9.8-acre parcel of land capable of supporting 500,000 square feet of cultivation space.

Nutritional High also has plans to purchase real estate owned by Meridian Companies, a company with land and facilities for cannabis cultivation currently utilized by Green Therapeutics.

The Clinic Effingham, Illinois

In 2016, total retail sales for cannabis within the state of Illinois exceeded $36 million. Since beginning operations in the state since 2016, Nutritional High is one of the few companies to access this market. Their 50 percent owned dispensary, The Clinic Effingham, is the only dispensary within a 60-mile radius.

The Clinic Effingham is also one of only 52 applicants to receive a dispensary license in Illinois and the only dispensary in Illinois State Police District 12. The dispensary achieved a monthly returning patient rate of over 90 percent, experiencing strong month-to-month sales growth, thanks to an extensive patient outreach program.

Strategic Partnerships

As part of its business model, Nutritional High has entered into a number of strategic partnerships with companies playing various roles across the cannabis industry. These include a recent partnership with Xanthic Biopharma (CSE:XTHC), under which Nutritional High’s California-based subsidiaries will manufacture and distribute Xanthic’s water-soluble, cannabis-infused beverage powder products.

Another important partnership for the company took the form of a signed letter of intent (LOI) with Lineage Grow Company Ltd., a cannabis company refining cultivation techniques and best-of-breed genetics. As part of the agreement, Nutritional High will assist Lineage in conducting transactions as it works to develop its cannabis operations within the US. The first of these transactions will take the form of a joint venture (JV) between Lineage, Nutritional High and its Colorado-based partner, Palo Verde. The JV will cover the expansion of of the Palo Verde facility, and Nutritional High will receive 100,000 Lineage shares for providing consulting services.

Nutritional High will also advise Lineage as it enters into a strategic partnership with Mt. Baker Greeneries LLC, a cannabis producer based in Washington State. As part of this agreement, Lineage will issue Nutritional High with 400,000 shares for having introduced the two companies to each other.

The company has also acquired a strategic interest of 17 percent in Aura Health Corp, a company that has been involved in the development and acquisition of health clinics across the US and owns interests in clinics in Nevada and Arizona. These operations test prospective patients and, when applicable, apply to the state for medical-use certificates on behalf of the patient.

Management

David Posner—Chairman of the Board, Director

David Posner brought “Hempen Gold,” the first hemp-infused beer to Canada.  He imported and created marketing and branding initiatives for various other alcoholic products in Canada. He was formerly the acquisitions manager for Stonegate Properties Inc where he managed real estate properties and brokered deals in Canada and Oklahoma.

Billy Morrison—CTO

Billy Morrison founded Peloton Pharmaceuticals, where he designed, developed, and deployed nearly autonomous grow system that mitigates labor and reduces cost. Billy has been with the Company in the role VP, Extraction since March 2015 and has helped shape the Company’s strategy since then. He is a deeply knowledgeable cannabis industry figure, having previously founded an ACMPR-licensed facility in Quebec, established the Union Collective, a prominent California dispensary, and a prominent extraction lab which continues to operate in Southern California. He has developed Nutritional High’s proprietary cryoethanol extraction processes which has shown to yield cannabis oil containing 100% THC and other cannabinoids.

Adam K. Szweras—Corporate Secretary, Director

Adam Szweras is a partner with the law firm Fogler, Rubinoff LLP. He is the chairman and founder of Foundation Markets Inc, a Toronto-based investment bank, and exempt market dealer. Expertise in recreational and medicinal marijuana laws in the US and Canada. He has practiced securities law since 1997.

Andres Tinajero—Director

Andres Tinajero has over 20 years of business experience, having supported a broad range of industries, including mining, manufacturing, and technology. He has served as CFO and vice president of finance of several medium-sized public companies across Canada.

He holds a degree in business administration and an MBA, and is also a member of the Canadian Institute of Certified Management Accountants, the Certified Practicing Accountants of Australia and he is a certified member of the Institute of Corporate Directors.

Brian Presement—Director

Brian Presement is president and CEO of Unite Communications Corp, which he has grown from a regional telecom provider offering a narrow set of services to a full scale telecom provider offering services to companies of all sizes all across Canada.

He has over 20 years of business operations and marketing experience. He was previously vice president of business development for VOXX Corporation responsible for the sales and marketing of VOXX’s Telecommunications Services.

Jim Frazier—CEO

Jim Frazier has over 23 years of experience in the food industry and a proven track record of developing and implementing branded and private label programs and driving profits.

He owns and operates a successful Florida-based candy and chocolate business which has been a well-known manufacturer of confectioneries for over 40 years.

He managed the expansion of his plant facilities and significantly expanded sales and developed new customer bases across all retail channels.

Aaron Johnson—Director

Aaron Johnson is a partner and member of the business department of JRG Attorneys at Law, LLP, where he has substantial experience in the fields of cannabis business entity formation and regulation, business transactions (formation, operation, mergers and acquisitions), real estate transactions, and land use (CEQA) law.

Sonia Agustina—CFO

Sonia Agustina possesses over 15 years of experience, 10 of which were in public accounting within the public market sector. She specializes in providing management advisory services, accounting and regulatory compliance to listed as well as non-listed companies in a number of industries including mining, oil and gas, manufacturing, technology, real estate and pharmaceutical.

She is a chartered professional accountant (CPA, CA) and holds a Bachelor of Administrative Studies, Honours, from York University.

Alex Storcheus—SVP, Corporate Development

Alex Storcheus has been involved with Nutritional High since its inception in 2014 and is currently an SVP, corporate finance at Foundation Markets – a Toronto-based merchant/investment bank.

In his current capacity, he assists Nutritional High with expansion efforts in various jurisdictions and financial advisory projects.

He has previously worked at the Department of National Defense, holds a BBA from the Schulich School of Business at York University, and is also a CFA Charterholder

Chris Ryan—VP Acquisitions, Brand Management

Chris Ryan is a results-driven entrepreneur with 25 years diverse experience in hospitality, consumable goods manufacturing, tourism and education. He began his career in sales and marketing at Molson Ontario Breweries and later went on to create, develop and operate seven hospitality establishments in Southwestern Ontario.

He served as head of hospitality, procurement for the Canadian leg of the Red Bull Air Races. He recently served as director, entrepreneurship and innovation at St Clair College as well as fulfilling the role of chief operating officer for startup craft brewer, Walkerville Brewery and chief operating officer for newly formed regional destination marketing organization, Windsor Essex Pelee Island.


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