CANACCORD GENUITY - GROWTH INVESTOR...

CANACCORD GENUITY - GROWTH INVESTOR DAY JANUARY 22, 2019 - VANCOUVER BC

Charlie BachtellCEO & COFOUNDER

Joe CaltabianoPRESIDENT & COFOUNDER

CRESCO LABS TODAY’S PRESENTERS

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DISCLAIMER

CRESCO LABS LEGAL DISCLAIMER

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CRESCO LABS AGENDA

Today’s agenda

Our Company

Industry Trends

Cresco Competitive Advantage

Final Thoughts and Q&A

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Our mission is to normalize and professionalize cannabis

CRESCO LABS OUR MISS ION

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CRESCO LABS OUR COMPANY

CRESCO LABS IS A VERTICALLY INTEGRATED, MULTI-STATE OPERATOR

Cultivate& Manufacture

Brands& Products Retail

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Wholesale Distribution

$3.0B

$2.1B

$2.0B

$2.0B

$1.8B

$1.5B

$1.0B

$0.6B

$0.5B

Curaleaf

Acreage

Cresco Labs

GTI

MedMen

Harvest

Green Growth

iAnthus

MPX

CRESCO LABS OUR COMPANY

Market Capitalization

Current Market Capitalization1

US dollars

#3

1 . CSE MARKET CAPITALIZATION AS OF JANUARY 14, 2019 7

ONE OF THE LARGEST OPERATORS IN THE U.S.

CRESCO LABS MACRO TRENDS

Key trends impacting the U.S. Cannabis

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$80 Billion1

BY 2030

$24 Billion2

PROFIT

$196B

$114B$102B

$80B $75B $71B$57B $51B

$30B

Frozen

Alcohol

General Food

Cannabis

Home Care

Health

Refridgerated

Beverages

Beauty

Bill

ion

U.S

. Dol

lars

Cannabis will become a top consumer category by 20303

CRESCO LABS MACRO TRENDS

1 . COWEN CANNABIS ESTIMATE JANUARY 20192. INTERNAL ESTIMATE3. STATISTA 2017 RETAIL $ VOLUME AND COWEN CANNABIS ESTIMATE JANUARY 2019

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THE OPPORTUNITYU.S. CANNABIS MARKET IS BECOMING EVEN MORE ATTRACTIVE

CRESCO LABS MACRO TRENDS

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KEY MACRO TRENDS

REGULATION ACCESS EXPECTATIONS

CRESCO LABS KEY TRENDS

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LEVELS OF COMPLEXITY

FEDERAL

NEW STATE

EXISTING STATE

MACRO TREND: REGULATIONMORE SUPPORT, BUT MORE COMPLEXITY

LEVELS OF SUPPORT

62% OF AMERICANS

74% OF MILLENNIALS

BI-PARTISAN LEGISLATION

PEW RESEARCH CENTER OCTOBER 2018

9 additional states looking to legalize in 2019CT, IL, MN, NH, NJ, NM, NY, RI, VT

More retail options and home delivery (DTC)

CRESCO LABS RETAIL LANDSCAPE

MACRO TREND: ACCESSRETAIL WILL BECOME UBIQUITOUS

12BDI STATES TO WATCH IN 2019

MACRO TREND: EXPECTATIONSEVOLUTION AND BLURRING OF CONSUMER NEEDS

HEAL WELLNESS PLAY

CRESCO LABS EVOLVING CONSUMER TRENDS

Promoting holistic health and wellness

Alternative for existing prescription products

Enhancing recreational occasions

Product Consistency &

Quality

Good/Better/BestAvailability

CRESCO LABS INDUSTRY EXPECTATIONS

MACRO TREND: EXPECTATIONSGREATER EXPECTATIONS OF THE INDUSTRY

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Our opportunity to deliver growth

CRESCO LABS OUR OPPORTUNITY

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Highly Effective Execution

Scale SellingSystem

House of Brands

Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGECAPABILITIES TO DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-TierManagement Team

16CRESCO LABS COMPETIT IVE ADVANTAGE

Highly Effective Execution

Scale SellingSystem

House of Brands

Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGECAPABILITIES TO DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-TierManagement Team

17CRESCO LABS COMPETIT IVE ADVANTAGE

UNMATCHED SUCCESS IN COMPETITIVE STATES

1. We win competitive licenses to open new markets

2. We acquire to enter existing markets

3. We get to market faster

4. We establish dominant positions

ACQUIRE ASSETS TO DRIVE GROWTH AND FOOTPRINT

OPERATIONAL FASTER THAN COMPETITORS

ACHIEVE 100% PENETRATION AND DOMINANT MARKET SHARE

CRESCO LABS HIGHLY EFFICIENT EXECUTION

WE EXECUTE

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Highly Effective Execution

Scale SellingSystem

House of Brands

Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGECAPABILITIES TO DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-TierManagement Team

19CRESCO LABS COMPETIT IVE ADVANTAGE

21 retail locations1

and counting

OWNED RETAIL

1 Includes licenses awarded for additional locations and pending transactions.20

+120 MillionRESIDENTS

+866 MillionTOURISTS

Average Revenue Per Square Foot

$6,500 $5,546 $2,951 $2,951

CRESCOLABS INTERNAL UNAUDITED ANALYSISCOSTAR RETAIL ANALYSIS JULY 2017

ATTRACTIVE RETAIL PERFORMANCE

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+120 MillionRESIDENTS

+866 MillionTOURISTS

CURRENT OPERATIONS/LICENSED IN IL, PA, OH, NV, CA, AZTRANSACTION SUBJECT SOLELY TO REGULARITY. APPROVAL IN NY, MD, MA

PENDING LICENSE APPLICATION MI

MINDY’S EDIBLES LICENSING OPPORTUNITY IN OR, WA, CO, OK, NMTARGETING EXPANSION IN FL, NJ VA, CT

WE ARE BUILDING SCALE ACROSS THE U.S.

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100%MARKET PENETRATION

+28%MARKET SHARE

100%MARKET PENETRATION

+30%MARKET SHARE

WE DRIVE WHOLESALE DISTRIBUTION EFFECTIVENESS

Highly Effective Execution

Scale SellingSystem

House of Brands

Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGECAPABILITIES TO DEFEND THE BUSINESS AND DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-TierManagement Team

24CRESCO LABS COMPETIT IVE ADVANTAGE

We have taken a CPG approach to building brands

CRESCO LABS BRANDS

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CRESCO LABS TAILORED BRAND PORTFOLIO

OVERALL MARKET CRESCOLABS BRANDS

CURRENT CONSUMER LANDSCAPE AND PORTFOLIO

MEDICINAL

WELLNESS/LIFESTYLE

HOLISTIC MEDICINE

REGULAR LIFESTYLE

CONNOISSEUR

CRESCO

REMEDI RESERVE

RELIEF

RELIABLETRUST

REWARD

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R I SE REFRESH REST

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Highly Effective Execution

Scale SellingSystem

House of Brands

Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGECAPABILITIES TO DEFEND THE BUSINESS AND DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-TierManagement Team

31CRESCO LABS COMPETIT IVE ADVANTAGE

CRESCO LABS RAPID INNOVATION CAPABIL IT IES

RETAILINSIGHTS

DESIGN &DEVELOP

TEST &VALIDATE

OUR CAPABILITIES ALLOW US TO INNOVATE, LEARN, AND SCALE RAPIDLY

New Brands & Formats

Technology

Intellectual Property

New Product/Brand Trials

Evaluation and Improvements

Consumer Awareness

Trend Forecasting

Consumer Behaviors

Multi-states Access

Marketing Awareness

Continued Consumer and Patient Feedback

SCALE

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Highly Effective Execution

Scale SellingSystem

House of Brands

Rapid Innovation Capabilities

THE CRESCO LABS ADVANTAGECAPABILITIES TO DEFEND THE BUSINESS AND DRIVE LONG-TERM VALUE

WHAT WE DO HOW WE DO IT

Top-TierManagement Team

33CRESCO LABS COMPETIT IVE ADVANTAGE

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DIVERSITY OF TOP-TIER EXPERIENCES ACROSS THE TEAM

SUSTAINABLE FINANCIAL PERFORMANCEQ3 & YTD 2018 FINANCIAL RESULTS

NOTE: EBITDA IS A NON-IFRS MEASURE. PLEASE REFER TO INVESTORS.CRESCOLABS.COM FOR THE DEFINITION

$12.2MREVENUE

+335% YOY

$3.9MNET INCOME

UP COMPARED TO A NET LOSS OF $0.2M IN Q3 2017

$5.3MADJ. EBITDA

UP COMPARED TO ADJUSTED EBITDA OF $0.1M IN Q3 2017

YTD 2018NINE MONTHS ENDED 9/30/18

REVENUE

$25.1MNET INCOME

$6.5MADJ. EBITDA

$8.1M

Q3 2018THREE MONTHS ENDED 9/30/18

+248% YOY UP COMPARED TO A NET LOSS OF $0.9M IN YTD 2017

UP COMPARED TO ADJUSTED EBITDA OF -$0.8M IN YTD 2017

OPPORTUNITY TO EXPAND MULTIPLE

5X

61X

EV/2019 REV

EV/2019 EBITDA

9X

37X

EV/2019 REV

EV/2019 EBITDA

9X

37X

EV/2019 REV

EV/2019 EBITDA

7X

19X

EV/2019 REV

EV/2019 EBITDA

1 . MANAGEMENT ESTIMATES2. CORMARK SECURITIES INC 36

1 2 2 2 2

CRESCO LABS PRO FORMA F INANCIAL

6X

16X

EV/2019 REV

EV/2019 EBITDA

VA

LU

AT

ION

MU

LT

IPL

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Q&A

THANK YOU