Investor Presentation
Investor Presentation

Perth, Oct 22, 2018 AEST (ABN Newswire) - MMJ Group Holdings Limited (googlechartASX:MMJ) (googlechartMMJJF:OTCMKTS) (MMJ) is pleased to provide the following speaker notes and attach a copy of the presentation that will be given by its CEO Jason Conroy today at Proactive Investors' CEO Spotlight Investor Session in Sydney.

Speaker notes

"Welcome to the presentation.

My name is Jason Conroy and I am the CEO of MMJ Group Holdings Limited.

Slide #2

Before we start, I would like to draw your attention to the disclaimer dealing with various important matters including forecasts, forward looking statements and assumptions made in this presentation.

Slide #3

MMJ is a global cannabis investment company listed on the ASX.

With recent shareholder approval, MMJ is set to become a Listed Investment Company, or "LIC". This is subject to receiving approval from the ASX, which we hope to receive in the coming weeks and during which time MMJ's shares will remain suspended from trading. Most importantly, this process is not expected to affect MMJ's activities and it will be business as usual.

Our business model is simple. We back experienced and highly motivated management teams and seek opportunities to create liquidity and value for shareholders through active portfolio management.

Slide #4

As you can see on the map, the global cannabis sector is a large, diverse and emerging market opportunity.

MMJ has a portfolio of 9 minority investments: 7 in Canada and 2 in Australia.

We are focused on Canadian investment opportunities because Canada is the first G7 nation to federally legalise the supply and use of recreational cannabis.

Slide #5

Canada is a large, multi-billion-dollar cannabis market.

Deloitte estimates that the total recreational cannabis market opportunity is close to 23 billion Canadian dollars. In addition, they estimate that medical cannabis sales next year could be up to 1.8 billion Canadian dollars.

Slide #6

As this key cannabis sector index demonstrates, over the past 12 months there has been strong investor demand for publicly-listed North American cannabis companies. This is an investment theme that MMJ aims to capitalise on.

Slide #7

We believe that MMJ can create and sustain a significant competitive advantage in global cannabis investment by backing experienced and highly motivated management teams.

The leaders driving results for each of our investments are presented on this slide.

You can see that we are building valuable global relationships and networks in the cannabis sector.

Slide #8

With MMJ's exposure to a large and attractive market opportunity, shareholders often ask me "What is going to happen in the cannabis sector?" and my response has been "How many post-prohibition markets have you experienced in their early stages of development?"

This point is crucial to our strategic approach to invest across the cannabis value chain, with strong management teams that can give us a good chance of picking winners in the sector.

In being diversified, we believe that we will be better-placed to respond to, and capitalise on, significant changes as the cannabis sector expands, then matures and ultimately consolidates through mergers and acquisitions activity.

This market consolidation is expected to provide us with opportunities to recycle capital from within our portfolio which will fund new investment opportunities.

As you can see in the bar chart on the left-hand side, we have two public companies in our portfolio and the rest are private companies at various stages of development.

Given investor appetite for North American public cannabis companies, and in addition to the recently announced proposal by Fire & Flower to list on the TSX Venture Exchange, which we refer to as "TSX-V", we are expecting many of our private company investments to have announced, or have well advanced, plans to list on stock exchanges in the coming months.

The KPI's for MMJ are net tangible assets, or "NTA", per share, and the multiple on invested capital, or "MOIC", that we can achieve from our portfolio.

Whilst our current MOIC of 1.6 times is a solid performance, we are targeting significantly higher returns over the next 12 months which I will outline in a few moments.

We can choose to participate in the future growth of some of our investments through the exercise of warrants. As you can see in the table on the top right-hand side, most of the warrants held by MMJ are currently in the money with expiry dates of a few years from now. This provides significant flexibility about how and when we look to optimise and realise returns from individual investments.

We have been fully-invested since the end of July this year. Our focus remains on optimising returns from our portfolio and recycling capital as opportunities arise for new investments. Consistent with this, we recently announced our intention to sell up to 5 million of our Harvest One shares at a future time and price that suits our requirements.

As you can see in the table on the bottom right-hand side, whilst it is still early days for MMJ as an investment company, we are patiently building a track record in value accretive, active portfolio management.

I will now take a few minutes to step you through descriptions of each of our portfolio companies.

Slide #9

Our largest investment, Harvest One, is in the early stages of a turnaround with the appointment of a new CEO a few months ago.

Harvest One is a house of brands, spanning cultivation, medical cannabis, consumer products and retail store distribution.

Slide #10

With a highly experienced CEO in place with access to 50 million Canadian dollars of cash to fund committed projects, we are confident of an improved medium-term outlook for Harvest One.

Slide #11

One of our most recent investments, MediPharm Labs, listed on TSX-V earlier this month.

We are delighted by their performance to date with their current share price more than double our entry price.

With current processing capacity of 100,000 kilograms of dry cannabis flower per year, MediPharm Labs has one of the largest extraction capacities in Canada.

What is most exciting from our perspective is that their fully funded expansion is underway to increase customised processing capacity to 250,000 kilograms of dry cannabis per year by mid next year.

Slide #12

Weed Me is a cultivation business based in Ontario.

With future funding rounds they are expected to have the ability to produce up to 40,000 kilograms of cannabis per year.

Slide #13

Fire & Flower are building and acquiring retail cannabis stores across Canada.

They are expected to list on the TSX-V in the coming months.

Slide #14

BevCanna is a Vancouver-based manufacturer of cannabis-infused beverages.

We view this consumer goods category as a potentially large market opportunity.

Slide #15

Bien aims to develop proprietary formulations of nanoemulsions and powdered forms of cannabis and a wide range of other organic loads that can be used in food and drink products.

Slide #16

Embark Health is aiming to build a state-of-the-art cannabis extraction facility in British Columbia.

The business is led by Bruce Dawson-Scully and it is his first commercial foray since leaving Weed MD after its merger with Hiku Brands earlier this year.

Slide #17

Cannabis Access is one of our two Australian investments.

They are busy rolling out cannabis access clinics across Australia and already have clinics in the major cities on the east coast.

Slide #18

Our second Australian investment is Martha Jane Medical.

They are aiming to design and construct a world class growing, extract and manufacturing facility with the academic and research assistance of the University of Tasmania.

Slide #19

Now that you have a snapshot of our performance to date and our portfolio investments, we now move to MMJ's short-term performance goals.

As I mentioned, whilst we are at 1.6 times MOIC now, we are targeting 2 to 3 times within the next 12 months which, if achieved, will produce a significantly higher NTA per share for MMJ's shareholders.

The performance incentives for me and my CFO are directly aligned with our shareholders and easy to measure. Each of us will receive tranches of shares only with significant and sustained increases in MMJ's share price.

Slide #20

The outlook for our investments for the remainder of 2018 and into 2019 is positive.

Harvest One recently stated a targeted increase in its cultivation capacity, an expected ramp-up in revenue from each of its Satipharm and Dream Water brands and confirmed that its current projects are fully-funded.

As I mentioned, MediPharm Labs is expected to increase its fully-funded processing capacity to 250,000 kilograms per annum by the second half of next year.

You can expect to see further announcements regarding the proposed listing of Fire & Flower on the TSX-V and stock exchange listing announcements and liquidity events for many of our other private company investments.

And you can expect to see MMJ continue to recycle and reinvest capital into other exciting opportunities in the global cannabis sector.

Slide #21

That concludes my presentation and I thank you for your interest in MMJ."

To view the presentation, please visit:
http://abnnewswire.net/lnk/0QY12POS


About MMJ Group Holdings Ltd

Phytotech Medical ASX:PYL

MMJ Group Holdings Ltd (ASX:MMJ) is a global cannabis investment company. MMJ owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail. For MMJ's latest investor presentation and news, please visit: https://www.mmjphytotech.com.au/investors/

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Contact

Investor and Media Enquiries:
Jason Conroy
Chief Executive Officer
T: +61-2-8098-0819
E: info@mmjgh.com.au



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