4Front Ventures Corp. · OTC:FFNTF
4Front Ventures — Investor Presentation (December 2020)
50 slides from 4Front Ventures's investor presentation, December 2020
Slide 1: 4Front Ventures Investor Presentation
4Front | A mass market for consumer cannabis | 1 4Front Ventures Investor Presentation December 2020 CSE: FFNT / OTCQX: FFNTF
Slide 2: Disclaimer
4Front | A mass market for consumer cannabis | 2 Disclaimer Information in this presentation is about 4Front (“4Front”), its principals, its business and the industry in which it is a participant. The information is presented for informational purposes only and does not constitute an offering of sec
Slide 3: Agenda
4Front | A mass market for consumer cannabis | 3 Agenda 1. Our mission 2. Our belief 3. Our approach 4. Business strategy 5. Action plan 6. Investment highlights 7. Financials 8. Contact
Slide 4: Our mission
4Front | A mass market for consumer cannabis | 4 Our mission
Slide 5: Our mission
4Front | A mass market for consumer cannabis | 5 Our mission To use our proven low-cost cultivation and production methodologies, together with our in-depth and closely-monitored knowledge of consumer preferences, to provide the products & brands that consumers love.
Slide 6: Our belief
4Front | A mass market for consumer cannabis | 6 Our belief
Slide 7: Our belief
4Front | A mass market for consumer cannabis | 7 Our belief At 4Front, we believe the way the market values cannabis companies has moved on from a focus on arbitrary land grabs to a focus on strategy execution and operations.
Slide 8: Ability to execute
4Front | A mass market for consumer cannabis | 8 Ability to execute Companies that can prove they can execute at scale in highly competitive markets will thrive in this environment, and those that are held back by inefficiencies and poor management are rapidly losing market share.
Slide 9: Low cost production
4Front | A mass market for consumer cannabis | 9 Low cost production We believe low cost production and distribution of cannabis consumer packaged goods is the best opportunity in the cannabis industry.
Slide 10: Business overview
4Front | A mass market for consumer cannabis | 10 Business overview Operating one of the most efficient cannabis Washington SOP’s successfully replicated companies in North America. Founded in 2011. in Massachusetts, Illinois, California* and Michigan Winning in Washington 76M / 23% 7.6M 380 Yields
Slide 11: Asset overview
4Front | A mass market for consumer cannabis | 11 Asset overview Washington – medical & Illinois – medical & adult Massachusetts – medical Michigan – medical & California – medical & adult use market use market & adult use market adult use market adult use market Cultivation & Production: Cultivatio
Slide 12: Our approach
4Front | A mass market for consumer cannabis | 12 Our approach
Slide 13: 4Front is a low-cost production leader
4Front | A mass market for consumer cannabis | 13 4Front is a low-cost production leader We do this by a commitment to operational excellence: Products Expansion Leadership 4Front produces over 2800 Developed and refined in SKUs of branded product. Washington, 4Front’s scaled, Expert leadership and
Slide 14: A leading producer for leading states
4Front | A mass market for consumer cannabis | 14 A leading producer for leading states 4Front is replicating our tried and true production capabilities, supported by our retail stores, in 7.6M large and nascent recreational 9.9M cannabis markets. 12.8M 6.8M 39.5M We serve an addressable market of 7
Slide 15: Winning in Washington
4Front | A mass market for consumer cannabis | 15 Winning in Washington For the past six years, 4Front has created a dominant position in Washington State--one of the most competitive and low-priced markets in the country while maintaining very attractive margins and profitability. 260 * #1 #2 #2 Re
Slide 16: Winning in Washington, a proving ground for operations
4Front | A mass market for consumer cannabis | 16 Winning in Washington, a proving ground for operations 3. Company turns to 5. #2 in Market Share. 1. Legalized in 2012 - improving throughput Over 1400 cultivation Company becomes and reducing labor licenses issued. Plus one of the highest costs to m
Slide 17: Winning in Washington
4Front | A mass market for consumer cannabis | 17 Winning in Washington * 60,000 sq ft of canopy Average of 737,800 Average of Average clear yielding over grams flower material 130,000 grams (distillate) produced 380g/sq ft 1 used per month for crude oil monthly – 70,000 40,000 sq ft production extr
Slide 18: Efficiency at scale
4Front | A mass market for consumer cannabis | 18 Efficiency at scale We believe efficient, low-cost production will enable 4Front to own the largest market share in a state-by-state basis. Our proven systems and processes are replicated across our sites, resulting in industry leading yields and con
Slide 19: Our process yields results
4Front | A mass market for consumer cannabis | 19 Our process yields results We increase yields by transferring knowledge from our industry leading proprietary processes for facility design, growing and cultivation developed in Washington, in each state of 4Front operation. Up to 400g per sq ft -- H
Slide 20: Operational leadership
4Front | A mass market for consumer cannabis | 20 Operational leadership Leo Gontmakher Karl Chowscano Kris Krane Andrew Thut Joe Feltham CEO Strategy & Operations President, 4Front & Mission CIO, 4Front COO Leo co-founded Northwest Cannabis Karl joined 4Front in 2015 as a major Prior to co-founding
Slide 21: Our formula for product development
4Front | A mass market for consumer cannabis | 21 Our formula for product development The Future is Evaluating Speed and finished goods. customer agility. demand.
Slide 22: Our formula for product development
4Front | A mass market for consumer cannabis | 22 Our formula for product development The Future is finished goods. We are focused on long-term brand success by developing finished goods, such as edibles, vapes, tinctures and capsules, as well as flower.
Slide 23: Our formula for product development
4Front | A mass market for consumer cannabis | 23 Our formula for product development Evaluating customer demand is key to efficient product development. We develop multiple flavours of edibles, and analyze market data to determine the best performing flavours and products. We use these insights to
Slide 24: Our formula for product development
4Front | A mass market for consumer cannabis | 24 Our formula for product development Speed and agility in getting products to market is key. 4Front actively monitors the market for product gaps, and using our skillsets and standardized process, we can quickly capitalize, creating a finished product
Slide 25: The 4Front brand family
4Front | A mass market for consumer cannabis | 25 The 4Front brand family We produce over 25 recreational Brands for flower, edibles, tinctures, concentrates and topicals and approximately 2800 SKUs
Slide 26: Our brands are trusted
4Front | A mass market for consumer cannabis | 26 Our brands are trusted Consistency is key Customers want predictability in their purchases, and this is especially true in the cannabis industry. We believe consistency is an important predictor of overall customer experience and loyalty. That’s why
Slide 27: Flower
4Front | A mass market for consumer cannabis | 27 Flower $ $$$ Focusing on quality, catering to everybody From the lower and mid-price point offerings of Mini Budz and Legends to original premium brand, Private Reserve, and our newest top shelf phenotype Funky Monkey, we’re creating ever-better flow
Slide 28: Flower
4Front | A mass market for consumer cannabis | 28 Flower Brand spotlight Our premium flower brand features the best and brightest phenotypes in our gardens. The cheeky chimps at Funky Monkey Cannabis Company cultivate buds with a focus on quality, catering to cannabis enthusiasts who enjoy rare stra
Slide 29: Edibles
4Front | A mass market for consumer cannabis | 29 Edibles Brand spotlight Born in the Pacific Northwest, Marmas quickly grew into one of the most popular edibles in Washington state where they've been delighting cannabis enthusiasts ever since. As opposed to traditional gummies, Marmas do not contai
Slide 30: Concentrates
4Front | A mass market for consumer cannabis | 30 Concentrates Brand spotlight Crystal Clear delivers a great high every time because we are obsessive about our quality control. Each of our proprietary blends replicates a flower's terpene profile to create the same high without tars and resins. We o
Slide 31: Wellness
4Front | A mass market for consumer cannabis | 31 Wellness 4Front | A mass market for consumer cannabis | 31 Founded in 2015, Pure Ratios focuses on holistic wellness products that marry cannabinoids with traditional Eastern medicine ingredients, as well as hemp-derived CBD products that are sold na
Slide 32: Mission retail
4Front | A mass market for consumer cannabis | 32 Mission retail
Slide 33: A mission to serve
4Front | A mass market for consumer cannabis | 33 A mission to serve 4Front | A mass market for consumer cannabis | 33 Mission Dispensaries serves as the retail component in our vertically integrated model. These storefronts provide a high- touch venue for building brand awareness of our products, n
Slide 34: We stand for our mission
4Front | A mass market for consumer cannabis | 34 We stand for our mission Our commitment to social justice 4Front is the largest cannabis industry supporter of Students for Sensible Drug Policy. In additional to a substantial annual financial donation, 4Front maintains close ties to SSDP’s network
Slide 35: Business strategy
4Front | A mass market for consumer cannabis | 35 Business strategy
Slide 36: Leveraging knowledge, growing business
4Front | A mass market for consumer cannabis | 36 Leveraging knowledge, growing business Our strategy is to replicate our success building one Operational Excellence of the most efficient and profitable cannabis We take considered and decisive operators in Washington in the targeted states of measur
Slide 37: Action plan
4Front | A mass market for consumer cannabis | 37 Action plan
Slide 38: State by state strategy & update: Illinois
4Front | A mass market for consumer cannabis | 38 State by state strategy & update Illinois – medical & adult use market Total market (medical and adult-use) expected to grow from $1.0B (2020E) to $3.0B (2024E)* Illinois • Mission Calumet City 9,072 sq ft Elk Grove Mission South Population: retail s
Slide 39: State by state strategy & update: Massachusetts
4Front | A mass market for consumer cannabis | 39 State by state strategy & update Massachusetts – medical & adult use market Total market (medical and adult-use) expected to grow from $955M (2020E) to $2.2B (2024E) Massachusetts 13,020 sq ft • Mission Worcester • Mission Brookline Q2 Population: Wo
Slide 40: State by state strategy & update: California
4Front | A mass market for consumer cannabis | 40 State by state strategy & update California – medical & adult use market Total market (medical and adult-use) expected to grow from $3.1B (2020E) to $7.4B (2025E) * California Population: Fully funded 185,000 sq ft Commerce 39.5 million manufacturing
Slide 41: State by state strategy & update: Washington
4Front | A mass market for consumer cannabis | 41 State by state strategy & update Washington – medical & adult use market Washington State's adult-use market represents the nation's third-largest in revenue, behind California and Colorado. Washington Tumwater (30,000 sq ft) Tumwater production & Po
Slide 42: State by state strategy & update: Michigan
4Front | A mass market for consumer cannabis | 42 State by state strategy & update Michigan – medical & adult use market Total market (medical and adult-use) expected to grow from ~$803M (2020E) to ~$2.5B (2024E) Michigan Om of Medicine recreational and medical licensed retail store is the longest P
Slide 43: Investment highlights
4Front | A mass market for consumer cannabis | 43 Investment highlights
Slide 44: The opportunity to execute
4Front | A mass market for consumer cannabis | 44 The opportunity to execute 4Front is at an inflection point Growing footprint and brand Proven low-cost Streamlined operational recognition in major cultivation and production cost structure cannabis markets model Recent restructuring has Sharpened c
Slide 45: Financials
4Front | A mass market for consumer cannabis | 45 Financials
Slide 46: Q3 2020 highlights
4Front | A mass market for consumer cannabis | 46 Q3 2020 highlights Entered into a US$30 Funded expansion plans million sale-leaseback underway at California of its cultivation and Massachusetts, and Illinois production facilities in production facilities Washington state July August September 4Fro
Slide 47: Capitalization table
4Front | A mass market for consumer cannabis | 47 Capitalization table 4Front Shares I/O Fully Diluted Share Count Subordinate Voting Common (As-Converted) 384,362,367 Proportionate Subordinate Voting Common (As-Converted) 148,538,800 Multiple Voting Shares (As-Converted) 1,276,208 TOTAL Basic Share
Slide 48: Cannabis industry
4Front | A mass market for consumer cannabis | 48 Cannabis industry
Slide 49: Cannabis market overview
4Front | A mass market for consumer cannabis | 49 Cannabis market overview Worldwide spending is 15 states now legal Bipartisan support for forecast to grow 38% to for adult use and 34 legalization among The legal US 20.4 billion in 2020. states legal for residents of the US Cannabis market medical
Slide 50: Contact
4Front | A mass market for consumer cannabis | 50 Contact Andrew Thut Leo Gontmakher Chief Investment Officer, 4Front Chief Executive Officer 617.413.0069 425.633.0799 Andrew.thut@4frontventures.com leo@4frontventures.com www.4frontventures.com
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