Lowell Farms, Inc. · OTC:LOWLF
Lowell Farms — Investor Presentation (June 2022)
16 slides from Lowell Farms's investor presentation, Jun 7, 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: An Industry Disruptor: Lowell 35's
4 An Industry Disruptor LOWELL 35’S
Slide 5: Enhancing product set with a revolutionary pre-roll pack
5 IN 2022, LOWELL IS ENHANCING ITS PRODUCT SET WITH A REVOLUTIONARY PRE - ROLL PACK TO OFFER THE MOST DISCERNING CANNABIS CONSUMER A COMPELLING ALTERNATIVE TO THE STATUS QUO
Slide 6: Executive Summary
6 Executive Summary Lowell is uniquely positioned to exploit this innovation 03 ● Lowell has built all the upstream infrastructure - quality flower from our farm, value flower from LFS and the best sales and distro team in California - to best support this product and prevent competitors from compet
Slide 7: Strategic Rationale
7 Strategic Rationale 1 90% of cannabis is consumed by daily users (a) who are highly price sensitive Prerolls have largely been inaccessible to this community because they are over - priced relative to flower (due to the labor involved in manufacturing of prerolls) 2 3 With large - scale automation
Slide 8: Introducing Lowell 35's
8 Lowell 35’s bring the cannabis consumer everything they want - a high quality, flower - based product with the most convenient form factor at an extremely affordable price. We anticipate this becoming the go - to form factor for the majority of the most valuable customers - heavy, inhalable - cent
Slide 9: Trends in Consumer Behaviour
9 Question: How often do you use cannabis? Answer: 62% of cannabis users report: At least once per day ● This “daily consumer” consumes at - least 90% of the cannabis in America (a) ● …and growing (62% is up from 50% only 18 months ago) What does it mean ● Cannabis is a “need”, not a “want” ● Price
Slide 10: Lowell 35's vs. Traditional Flower
10 The 35’s give Lowell the opportunity to significantly steal share from packaged flower in a way that nearly mirrors the shift from loose leaf tobacco to cigarettes during the 20th century Traditional Flower Lowell 35’s Commentary 1 Perceived Value and Price Point ● The cost to produce 35’s is les
Slide 11: Frictionless Production
11 FRICTIONLESS PRODUCTION ● Lowell 35’s will transform the cannabis market by bringing high quality cannabis in a pre - roll format at a cheaper price than flower ● Automation of both stick production and packaging allows for infinite scalability without additional labor and overhead ● Simplified p
Slide 12: Why It Will Work
12 Lowell’s Unparalleled Infrastructure ● Access to flower, scaled manufacturing capacity, and sales and distribution 3 Reasons: Lowell’s Brand Recognition and Customer Loyalty ● Lowell commanded 5.7% of the California market’s pre - roll sales in Q4 ‘21 History: The Impact of Automation on Tobacco
Slide 13: Impact of Automation on the Tobacco Industry
13 The introduction of scaled pre - rolls will cause a similar shift in the market, stealing share from the largest category that exists - packaged flower Evolution of the Tobacco Industry - The Impact of Automation ● The tobacco industry went through a seismic shift when cigarette production evolve
Slide 14: The Canadian Case Study
14 The Canadian Case Study: An illustration of potential History: ● Cigarette company Redecann introduced cigarette style prerolls in late 2019 ● The price - point was competitive to Flower, but the product was inferior: ○ Low potency due to shortcomings in manufacturing technique ● Despite shortcom
Slide 15: Lowell's Competitive Advantage
15 Lowell’s competitive advantage is driven by: Lowell’s Unparalleled Infrastructure 1 Captive access to ~40,000 LBS of high quality flower production per year Access to additional biomass above and beyond our captive supply via Lowell Farms Services, which offers the lowest marginal cost of produci
Slide 16: Estimating a Massive Market Opportunity
16 ● Total Estimated Cannabis Sales in the US including illicit market = $55B ○ Assuming flower is ~46% share and pre - rolls are ~14% we can estimate a TAM of 47% of cannabis sales or $25.85B ● Using MJ Biz Daily 2022 projection for legal flower ($14.1B) and pre - rolls ($2.8B) sales we estimate a