Nutritional High

Developing High-Grade Extracts for the Global Cannabis Market

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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 cannabis-infused products 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 recreational use.

The company’s current priority is establishing a dominant foothold in California. To help meet the state’s demand for cannabis, Nutritional High has acquired Calyx Brands, a cannabis distribution company; Pasa Verde LLC, an extraction and toll facility; and various companies specializing in cannabis-infused edibles and drinks. 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.

Canada’s cannabis market is another of Nutritional High’s targets as 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 FLÏ brand and has constructed 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 to the markets in Europe and, potentially, Asia.

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
  • Launched a FLÏ branded cannabis awareness campaign
  • Long-standing relations with experienced California cannabis industry players
  • Extracts with the largest profit margins in the cannabis industry
  • Calyx has generated $7.4 million in top line revenue and incurred approximately $6.1 million in cost of sales over a six-and-a-half-month period
  • 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 three US states

Addressing Demand in the California Market

Nutritional High’s main focus is to supply the California cannabis market and distribution is key to their operations, as the cannabis market expected to exceed $5 billion in revenue by 2019. 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 US.

Acquisitions and partnerships in the state

Calyx Brands

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.

Since Nutritional High acquired Calyx, the company has generated $7.4 million in top line revenue and incurred approximately $6.1 million in cost of sales over a six-and-a-half-month period. Calyx also services over 450 dispensaries throughout the state and Nutritional High intends to expand its distribution infrastructure.

Pasa Verde Labs

In addition to Calyx Brands, Nutritional High also announced in April 2018 that they had acquired 100 percent of Pasa Verde, a leading cannabis extraction and toll processing facility in Sacramento, California. The company closed their acquisition of Pasa Verde three months later.

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-foot extraction facility is aiming to achieve full production capacity in the near future. 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 purchased 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.

Bright Green Lights

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 JMEDS, and can purchase the remaining 49 percent in JMEDS at a later date. Nutritional High obtained a controlling interest in the company in November 2018. JMEDS produces high-quality cannabis-infused products and distributes them across California.

JMEDS 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 JMEDS, bringing another dynamic California brand into our product portfolio,” said Nutritional High CEO Jim Frazier. “We see significant synergies in this transaction, as JMEDS 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.”

Expanding into 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 FLÏ 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.

FLÏ Brand

FLÏ is Nutritional High’s flagship brand and product portfolio. The brand offers consumers high-quality cannabis concentrates and edibles. The company manufactures their branded products through their subsidiary Pasa Verde at their facilities in Sacramento, California. The products are then distributed by their partners and found in dispensaries throughout California, Colorado, Nevada and Canada.

The company is always developing new formulations and products to launch under this brand and has partnered with KMG International Ltd., a consumer product design and production company with extensive relationships across Asia, to design the company’s dabbing products. To date, the FLÏ brand offers consumers vaporizer products and accessories, pre-rolls, oil syringes, dab jars and cannabis-infused chocolates, gummies and truffles.

FLÏ Safe

In July 2018, Nutritional High launched FLÏ Safe, a cannabis awareness program that focuses on promoting responsible cannabis consumption and education through research. The campaign will be targeting cannabis advocates with online and offline activities.

“Today, more than ever, it is important for a brand to not only create great products but create a platform that help educate consumers and have fundamental impacts on supporting the sales, marketing, and the vision we have for Nutritional High,” said Frazier. “Corporate responsibility is going to be an integral part behind federal legalization and it benefits not only our brand but also the industry in general to create this kind of well-researched awareness.”

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. 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.

nutritional-high-colorado-project

Green Therapeutics, Nevada

In October 2018, Nutritional High signed a definitive agreement to acquire a 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 FLÏ 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.

In December 2018, Green Therapeutics was granted conditional approval of a retail store license from Nevada’s Department of Taxation, enabling the company to operate a retail cannabis store in Douglas County, Nevada.

“The Nevada market is a priority for Nutritional High,” commented Frazier. “We are very pleased with Green Therapeutics’ success in receiving the conditional approval, especially given that it was a competitive process with few but established retailers winning multiple licenses. This further demonstrates that the Green Therapeutics team can compete with other market leaders.”

Strategic Partnerships

Xanthic

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:GGB), under which Nutritional High’s California-based subsidiaries will manufacture and distribute Xanthic’s water-soluble, cannabis-infused beverage powder products.

NeutriSci

Nutritional High has also partnered with NeutriSci International Inc. (TSXV:NU), a company that specializes in the innovation, production and formulation of nutraceutical products. As part of their agreement, Nutritional High and its partner will develop, manufacture and distribute THC- and CBD-infused sublingual tablets using NeutriScis patent-pending technology and proprietary ingredients and formulations.

In early-July 2018, Nutritional High and NeutriSci commenced the production of Nu Energy tablets,  a chewable sublingual THC product, for sale and distribution in California. The tablets are produced at the Pasa Verde manufacturing facility in Sacramento, California. The partners will initially distribute the tablets to approximately 400 dispensaries across the state.

Lineage Grow

Another important partnership for the company took the form of a signed letter of intent (LOI) with Lineage Grow Company Ltd. (CSE:BUDD), 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 between Lineage, Nutritional High and its Colorado-based partner, Palo Verde.

The joint venture will cover the expansion 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.

Aura Health

The company has also acquired a strategic 17 percent interest in Aura Health Corp. (CSE:BUZZ), 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. Nutritional High is also working with Aura Health to bring their extraction and edibles technology and products to the European and Israeli cannabis markets.

Management

David Posner—Chairman of the Board and 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.

Tom Siciliano—President

Tom Siciliano joins Nutritional High from Canna Security America, where he served as President and Chief Financial Officer for the past last three (3) years, turning the company into the second largest security company within the cannabis industry. Mr. Siciliano was consecutively nominated in 2016 and 2017 as the “Executive of the Year” within the cannabis industry.  Prior to his most recent appointments, Mr. Siciliano had a distinguished career and an outstanding record of revenue and profit growth with a background in sales, finance and operational performance improvement initiatives as a senior leader within start-up companies, private equity and Fortune 500 companies with extensive public company experience. Mr. Siciliano holds a bachelor’s degree in Business Administration from Columbus University and a certificate in leadership excellence from Penn State University.

Michael DiNapoli—CFO

Michael DiNapoli joins Nutritional High from family owned Clos Du Val Winery, where he served as Chief Financial Officer since January 2018. Mr. DiNapoli is a senior executive with over twenty (20) years’ experience managing all aspects of operations, finance and long-term strategic planning for a number of medium-size to large companies and spent the last ten (10) years exclusively focused in the wine and spirits industry. In addition, Mr. DiNapoli has extensive experience in M&A and capital markets financial advisory. Mr. DiNapoli holds a bachelor’s degree in Business Administration in Accounting from Pace University.

Billy Morrison—CTO and Director

Billy Morrison founded Peloton Pharmaceuticals, where he designed, developed, and deployed nearly autonomous grow system that mitigates labor and reduces cost. 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 percent THC and other cannabinoids.

Adam K. Szweras—Corporate Secretary and 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—Strategic Advisor and Consultant

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, Honors, 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 and 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 a CFA Charter holder.

Jeremy Pace—SVP Operations

Jeremy Pace is an accomplished manager operations executive with extensive experience leading and managing a variety of strategic facilities, manufacturing, logistics, security, HR, finance, IT and general business operations across the world. He has developed a comprehensive understanding of international cultures and global perspectives during his time with the US government. He provides the company with exceptional leadership, coordination, integration and organizational capabilities and has an aptitude for building and motivating cross-functional teams into a cohesive, high-performing organization.


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