Lowell Farms, Inc. · OTC:LOWLF
Lowell Farms — Investor Presentation (September 2022)
27 slides from Lowell Farms's investor presentation, Sep 8, 2022
Slide 1: Investor Presentation
(CSE:LOWL; QTCQX: LOWLF) INVESTOR PRESENTATION
Slide 2: Use of Non-GAAP Measures and Forward-Looking Statements
USE OF NON - GAAP MEASURES This document refers to EBITDA because certain investors may use this information to assess the Company’ performance and also determine the Company’s ability to generate cash flow . This data is furnished to provide additional information and is a non - GAAP measure and doe
Slide 3: Company Snapshot
● California based, licensed cannabis operator ● Four primary segments: 1. CPG Sales: a fast growing, top - tier leader in the world’s most discerning market with six active brands across five cannabis categories 2. Out of State Licensing : our legendary CPG Products 3. Farm Services: supporting loc
Slide 4: Lowell: An Integrated Strategy Driving Long-Term Value
LOWELL: AN INTEGRATED STRATEGY DRIVING LONG - TERM VALUE We support our brands by reliably growing a consistent supply of flower, the best of which goes into our CPG brands, the balance of which we sell wholesale BULK FLOWER Integrating our business with a vast array of farmers allowing us to ensure
Slide 5: Lowell Farms CPG: Our Branded Portfolio
We delight our customers with products in the five largest categories in California across our six brands 1. JARRED FLOWER 2. PRE - ROLLS 3. EDIBLES 4. VAPE PRODUCTS 5. CONCENTRATES 5 LOWELL FARMS CPG: OUR BRANDED PORTFOLIO
Slide 6: CPG: Category Leadership as of Q4 2021
6 CPG: CATEGORY LEADERSHIP AS OF Q4 2021 #1 IN CA FLOWER SALES BY UNIT VOLUME (3.4% MARKET SHARE) #2 IN CA FLOWER SALES RECEIPTS BEHIND INDOOR BRAND CANNABIOTIX #3 IN CA PREROLL SALES RECEIPTS (5.7% MARKET SHARE) #2 IN CA CONCENTRATES SALES BY UNIT VOLUME (5.0% MARKET SHARE) #5 IN CA CONCENTRATES SA
Slide 7: Lowell Farms CPG: Strategy for Winning
● We participate in large established categories ● We win with scale and automation and passing savings to customers ● We win by leveraging our hybrid approach to flower sourcing ○ Growing at our greenhouse and buying 3rd party outdoor flower ● We win with vertical integration and full ownership of
Slide 8: Lowell Is Winning in the Largest Category in the Largest Market
LOWELL IS WINNING IN THE LARGEST CATEGORY IN THE LARGEST MARKET IN THE WORLD In Q4, Lowell became the largest vendor of Flower in CA by unit volume 8 LOWELL CPG: WINNING (a) Q4 Headset data: Aggregates all underlying brands by parent company. Lowell brands are Lowell Smokes and House Weed FLOWER SAL
Slide 9: CPG: Brand Health
All data, including market share data is based on 3rd party data provide Headset for the period 10/1/21 through 12/31/21 and does not represent GAAP sales or revenue figures Lowell is taking share in four out of the five product categories in which we compete The five categories that Lowell particip
Slide 10: There Is Only One Way to Do It: Quality
THERE IS ONLY ONE WAY TO DO IT: QUALITY . 10
Slide 11: CPG Brand Health: Relative Growth
(a) All data is based on 3rd party data provide Headset for the period 10/1/21 through 12/31/21 and does not represent GAAP sales or revenue figures. CPG sales are estimates and capture brand sales volume at retail. Growth percentages are from the same data set collected for the period from 7/1/21 t
Slide 12: Lowell Smokes: A California Icon Restored
Since the merger with Indus, the Lowell brand has doubled retail sales as measured by headset Shows the power in uniting infrastructure and capabilities with a strong brand Restoring Lowell to health in California allows us to take the brand elsewhere in the Country with authority LOWELL SMOKES: A C
Slide 13: Two of California's Fastest Growing Brands
TWO OF CALIFORNIA’S FASTEST GROWING BRANDS Lowell Farms has two of California’s fastest growing brands Lowell Herb Co. is now a top 10 brand and House Weed is the fastest growing brand among the top 30 brands CALIFORNIA’S TOP BRANDS & Y/Y GROWTH (Q4 SALES) (a) (a) All data is based on 3rd party data
Slide 14: Brand Expansion via Licensing
As our brands gain strength in California, we leverage that brand credibility onto shelves in other markets Nearly 100 million Americans live in markets with recreational weed outside of California New consumers are thirsting for products with appellation and California brands lend credibility What
Slide 15: Lowell Farm Services
LOWELL FARM SERVICES 15
Slide 16: Lowell Farm Services (LFS)
● LFS is the first of its kind in the country, a “midstream processing” facility for local growers in the most fertile environment in America ● LFS allows growers to variabalize their biggest costs so they can compete ● Allows for massive on - site reductions in labor for most growers ● How it works
Slide 17: LFS: A Winning Strategy
LFS: A WINNING STRATEGY ● Growers reduce opex (on - site labor and management) ● Farmers reduce contamination risks by reducing traffic at cultivation ● Farmers eliminate need for expensive facility upgrades to comply with processing space requirements 17 ● Lowell makes a profit margin through inves
Slide 18: Our Approach to Sourcing
OUR APPROACH TO SOURCING 18
Slide 19: California: Our View on Cultivation
19 ● There are over 2,600 different growers in California vying for shelf space within ~550 active flower brands in California ● As emerging commodity markets mature, wholesale prices tend to move toward the marginal cost of production ● Outdoor canopy had been delayed by regulators is now growing f
Slide 20: The Economics of Brand Licensing Supply
THE ECONOMICS OF BRAND LICENSING 20 SUPPLY: THE DEEPEST MARKET IS GETTING DEEPER Total canopy in CA has grown nearly 100% over the past 18 months whereas consumer demand has only increased by ~ 15% This has caused prices to fall substantially from last summer. Some operators are waiting for pricing
Slide 21: A Dual Track Sourcing Model
A DUEL TRACK SOURCING MODEL Using both sources of material, Lowell CPG has a longer - term insulation against commodity price volatility 21 ● A steady and consistent supply of award - winning cannabis ● Currently provides for more at least 150% of our CPG needs ● Insulates our CPG business from upwa
Slide 22: Financial Highlights
22 FINANCIAL HIGHLIGHTS
Slide 23: Components of Revenue
Revenues COMPONENTS OF REVENUE Lcensing Revenue TH Lowel Farms Services I BukReverue fl CPG Revenue 0321 421 an 02°22
Slide 24: Reported Financials
Q3 21 Q4 21 Q1 22 CPG Revenue $8,958 $8,219 $9,077 Bulk Revenue $2,008 $2,603 $1,758 Lowell Farm Services $800 $3,153 $851 Licensing Revenue $701 $1,098 $723 Total Net Revs $12,467 $15,072 $12,409 Gross Profit 2 $64 $992 $1,574 Gross Margin 1% 7% 13% Adj. EBITDA 1 ($5,187) ($3,605) ($900) 1 Adjusted
Slide 25: Balance Sheet
25 BALANCE SHEET
Slide 26: 8/31/2022 Capitalization Table
8/31/2022 26 CAPITALIZATION TABLE
Slide 27: $LOWL.CN & $LOWLF
27 $LOWL.CN & $LOWLF
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