Canadian Cannabis 

Matt Bottomley, CPA, CA, CBV | Analyst |  Canaccord Genuity Corp. (Canada) |  mbottomley@canaccordgenuity.com |
Canadian Equity Research  1.416.867.2394
8 January 2018 Neil Maruoka, MSc, MBA | Analyst |  Canaccord Genuity Corp. (Canada) |  nmaruoka@canaccordgenuity.com |
 1.416.869.3073
Jenny Wang | Associate |  Canaccord Genuity Corp. (Canada) |  jwang@canaccordgenuity.com |  1.416.869.3643

Industry Update

Cannabis Monthly, January 2018

Cannabis stocks continued to increase sharply during the month of December, with our
Canaccord Genuity Cannabis Index up over +50% during the month and +29% in the
last week of December alone. For the full year, our Index increased +277%, compared to
the S&P/TSX Composite at +11% and the S&P/TSX Venture Composite up +41%. Given
the strong momentum, we would not have been surprised to see stocks take a breather
into the New Year; however, quite unexpectedly, our Cannabis Index increased +21%
in only the first few trading days of 2018. US Attorney General Jeff Sessions’ decision
to rescind the Cole Memo was taken in stride by investors, as it appears that existing
federal legislation may be difficult to implement in legalized states. Moreover, we note
that these changes to US regulations are likely to have limited, if any, impact on most
Canadian LPs.
While excitement is clearly building around the pending legalization of recreational
cannabis in Canada, we are growing increasingly wary that the fundamentals may not
support the rapid share price increases that we have witnessed. Because sector stock
prices are moving in tandem (there seems to be limited stock-specific news that could
be driving the sector to this degree), we believe that positive industry-wide fund flows are
the main driver. Despite our growing caution, we note that we see few if any imminent
negative catalysts that could slow or reverse this momentum; as such, we believe sector
multiple expansion could continue in the near term. It’s not until the rubber hits the road
in the second half of the year with the roll-out of legal adult-use marijuana in Canada
that we envision potential negative operational catalysts (rapid capacity expansion,
execution of provincial retail distribution frameworks) that could slow current trends.
Below is our Cannabis Company Watch List, where we highlight selected up-and-coming
companies in the Canadian and US cannabis space.
• ABcann Global Corporation (ABCN:TSX-V | Not rated). ABcann is a Canadian LP
that is currently licensed to produce and sell dried bud under the ACMPR and also
just recently received its oils production license. The company utilizes what it believes
to be an extremely sophisticated proprietary growing technology that encompasses
environmentally controlled chambers capable of monitoring and regulating a large
number of variables in the growing process, including nutrient demands that are
customized for particular strains of cannabis. The company believes this approach
allows for the production of high-yielding plants that are consistent from batch
to batch. In addition to its Napanee operations, ABcann is expanding its existing
footprint by 2x to ~30,000 sq. ft., while looking to build out a new 150,000 sq. ft.
facility. The company is on track to complete its Vanluven facility by mid-2018 while
it continues to look for expansion alternatives capable of producing >15,000 kg of
annual incremental capacity. Continues on page 2.

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX)
The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all
the companies and securities that are the subject of this report discussed herein.

For important information, please see the Important Disclosures beginning on page 13 of this document.
 Canadian Cannabis
Industry Update

• Namaste Technologies Inc. (N:CSE | Not rated). After recently divesting its US
assets and re-focusing on its Canadian business, Namaste began its revitalized
strategy by inking an agreement with O Cannabis (private) for patient consulting
services to its NamasteMD business. O Cannabis will provide patient education,
strain recommendations, and medical documentation through NamasteMD to the
company’s medical customers. Subsequent to this, Namaste also signed a letter
of intent with Supreme Cannabis Company (FIRE-TSX-V:$3.04 | SPECULATIVE BUY,
C$2.30 target price) to supply Namaste’s wholly owned subsidiary CannMart with
premium-quality dried cannabis flower. Under the terms of the agreement, Supreme
will become a preferred vendor as it relates to the development of possible branded
partnerships, including the development of Namaste’s own in-house branded medical
cannabis.
• Delta 9 Cannabis, Inc. (NINE:TSX-V | Not rated). Delta 9 is a licensed producer of
dried bud medical marijuana pursuant to the ACMPR and recently began trading on
the TSXV on November 6. The company operates out of a 80,000 sq. ft. facility in
Winnipeg, Manitoba (one of only two LPs in the province) and has plans to build out
its pod-based cultivation with a goal to increase its annual capacity to >17,000kg. In
addition to this capacity, the company is considering leasing or acquiring a 350,000
sq. ft. building adjacent to its licensed facility that it believes could accommodate at
further ~38,000 kg of capacity.
• MPX Bioceutical Corp. (MPX:CSE | Not rated). MPX Bioceutical Corporation
(previously Canadian Bioceutical Corp (BCC-CSE)) provides management, staffing,
procurement, advisory, financial, real estate rental, logistics and administrative
services to cannabis operators in the United States. The company currently
provides services in Arizona (with a number of successful brands launched to date);
Massachusetts (a state that is planning to implement legal recreational sales in
mid-2018); and recently signed a definite agreement to expand into the growing
Nevada and Maryland markets. In addition, the company also has an application with
Health Canada for a cannabis production and sales license under the ACMPR.
• WeedMD, Inc. (WMD:TSX-V | Not rated). WeedMD Inc. is licensed under the ACMPR
to cultivate and sell dried bud as well as the production of oil products. The company
is located in Aylmer, Ontario, and currently operates a 26,000 square foot indoor
facility that includes space for future expansion, including space for additional grow
rooms and a large commercial scale extraction lab. WeedMD is looking to target
the long-term care and assisted living markets in Canada through what it believes
is a comprehensive platform tailored for the industry. The company has announced
a 610,000 sq. ft. greenhouse expansion initiative as part of a lease and purchase
option agreement with Perfect Pick Farms Ltd. The company believes the first phase
of this expansion (~220,000 sq. ft.) will increase its capacity to 21,000 kg, with the
potential to reach >50,000 kg down the road.
• DOJA Cannabis Company Limited (DOJA:CSE | Not rated). With its first harvest
nearing completion and a pending cannabis sales license under ACMPR regulations,
DJOA announced a merger agreement whereby the company would acquire all
outstanding shares of Tokyo Smoke. This combination will bring together two of the
premier lifestyle brands in Canadian cannabis: DOJA, as a craft grower of premium
cannabis, and Tokyo Smoke, a retail-focused cannabis brand. The company will
rename itself Hiku Brands company once the merger is complete. DOJA is a premium
cannabis lifestyle brand operating out of the Okanagan valley in British Columbia.
Leveraging its high-quality cannabis brand, DOJA intends to open multiple Culture
Café retail cannabis stores to market appealing lifestyle products and to provide
information on its cannabis.
• InMed Pharmaceuticals Inc. (IN:CSE | Not rated). During the month of December,
InMed announced a non-brokered private placement in which the company raised
a total of $9.4 million. The proceeds will be used to advance the company’s clinical
programs, including INM-750 for epidermolysis bullosa, INM-085 for glaucoma, and
INM-405 for pain. InMed is a soon-to-be clinical-stage biopharmaceutical company
focusing on the development of cannabinoids for the treatment of disease. The
company’s lead product is INM-750 for the treatment of epidermolysis bullosa, a
rare dermatology condition addressing a total market potential of ~US$1 billion.

8 January 2018 2
 Canadian Cannabis
Industry Update

InMed leverages its biosynthesis platform for the efficient and low-cost manufacturing
of cannabinoids, providing greater purity and the potential to develop minor
cannabinoids into drugs, which would not be feasible using conventional methods.
• Kalytera Therapeutics Inc. (KALY:TSX-V | Not rated). Kalytera has announced the
initiation of a Phase II study of cannabidiol (CBD) in the treatment of graft versus
host disease (GvHD). The Phase II will enroll 36 GvHD patients and will evaluate the
pharmacokinetics and safety of CBD, with results expected in the third quarter of this
year. Following the completion of this study, Kalytera plans to quickly move its CBD
development into a Phase III study in this indication. Kalytera is a biotech company
developing CBD in the treatment of graft versus host disease. In two separate Phase
IIa studies, Kalytera has demonstrated that CBD treatment can result in substantial
improvements compared to what would be expected with the standard of care.
Kalytera has identified a 505(b)2 pathway to approval confirmed by the FDA, and has
received Orphan Drug designation for GvHD.

8 January 2018 3
 Canadian Cannabis
Industry Update

Cannabis Monthly
A significant number of transactions closed during 2017.
Figure 1: Selected transactions in the cannabis space
Closing Deal Issue
Price Private
Company Name Date Size ($) ($/share) Description Issue Terms Placement
Delta 9 Cannabis Inc. 12/28/2017 23,008,050 2.70 Share and warrant Bought Underwritten No
MJardin Group 12/27/2017 20,000,000 N/A Units N/A Yes
Cannabis Strategies Acquisition Corp 12/21/2017 125,000,000 10.00 Units IPO No
Village Farms International Inc. 12/21/2017 13,500,000 5.40 Common Shares Bought Underwritten No
OrganiGram Holdings Inc. 12/18/2017 57,500,000 3.50 Share and warrant Bought Underwritten No
Merrco Payments Inc. 12/12/2017 10,000,000 10.00 Common Shares Marketed Best Efforts Agency Yes
DOJA Cannabis Company Ltd. 12/7/2017 15,000,000 1000.00 Conv. Debs Bought Underwritten Yes
Beleave Inc. 12/5/2017 9,950,000 1.50 Units Non-Brokered Yes
MedReleaf Corp 12/4/2017 100,500,000 16.55 Common Shares Bought Underwritten No
CannTrust Holdings 11/30/2017 20,000,000 5.00 Common Shares Bought Underwritten Yes
ICC International Cannabis Corp 11/22/2017 20,000,000 1.00 Share and warrant Marketed Best Efforts Agency No
iAnthus Capital Holdings, Inc. 11/21/2017 12,023,250 1.70 Units Marketed Best Efforts Agency Yes
Hydropothecary Corp 11/17/2017 60,000,000 1000.00 Warrants and Conv. Debs Bought Underwritten No
Emblem Corp. 11/16/2017 13,800,000 1.75 Units Bought Underwritten Yes
Cronos Group Inc. 11/14/2017 15,000,000 3.15 Common Shares Bought Underwritten No
Supreme Pharmaceuticals Inc. 11/9/2017 35,000,000 1000.00 Convert Debs. Bought Underwritten Yes
Aphria Inc. 11/7/2017 80,000,000 7.25 Common Shares Bought Underwritten No
Nuuvera Corp. 11/2/2017 20,000,000 TBD Sub. Receipts Marketed Best Efforts Agency Yes
Aurora Cannabis Inc. 11/2/2017 115,000,000 1000.00 Convert Debs. Bought Underwritten No
Golden Leaf Holdings 11/2/2017 15,000,000 1000.00 Convert Debs. Marketed Best Efforts Agency Yes
Maricann Group Inc 10/27/2017 26,000,000 1000.00 Units Marketed Best Efforts Agency Yes
Cronos Group 9/26/2017 15,000,000 2.25 Common Shares Marketed Best Efforts Agency Yes
CannTrust Holdings 8/21/2017 25,200,000 2.00 Common Shares IPO No
Canopy Growth Corporation 7/26/2017 25,000,000 8.05 Common Shares Marketed Best Efforts Agency Yes
Hydropothecary Corp 7/18/2017 25,000,000 1000.00 Convert Debs. Bought Underwritten Yes
Cannabis Wheaton Income Corp. 6/29/2017 50,200,000 1.00 Warrants and Conv. Debs Marketed Best Efforts Agency Yes
Sunniva Holdings Corp 6/27/2017 5,851,575 6.75 Units Marketed Best Efforts Agency Yes
Canopy Rivers Corp 6/16/2017 36,230,000 0.60 Common Shares Marketed Best Efforts Agency Yes
MedReleaf Corp 6/7/2017 100,000,000 9.50 Common Shares IPO No
Golden Leaf Holdings 6/2/2017 35,000,000 0.28 Sub. Receipts Marketed Best Efforts Agency Yes
High Hampton Holdings 6/1/2017 5,635,000 0.50 Units Marketed Best Efforts Agency Yes
InMed Pharmaceuticals 5/31/2017 5,004,000 0.45 Common Shares Marketed Best Efforts Agency No
Invictus MD Strategies Corp. 5/24/2017 25,000,000 1.35 Units Bought Underwritten Yes
National Access Cannabis Corp 5/17/2017 4,500,000 0.25 Sub. Receipts Marketed Best Efforts Agency Yes
Aphria Inc. 5/9/2017 75,000,120 6.50 Common Shares Bought Underwritten No
ABcann Medicinals (Panda Capital Inc) 5/3/2017 15,000,000 0.80 Convert Debs. Marketed Best Efforts Agency Yes
ABcann Medicinals (Panda Capital Inc) 5/3/2017 11,800,000 0.80 Sub. Receipts Marketed Best Efforts Agency Yes
Aurora Cannabis Inc. 5/2/2017 75,000,000 1000.00 Convert Debs. Bought Underwritten Yes
Emerald Health Therapeutics, Inc. 4/20/2017 24,364,500 2.60 Common Shares Bought Underwritten No
Resolve 3/28/2017 5,000,000 N/A Common Shares Series A Yes
Cronos Group 3/9/2017 17,336,250 2.25 Common Shares Bought Underwritten No
Aequus Pharmaceuticals Inc. 3/2/2017 15,000,000 0.30 Units Bought Underwritten No
Invictus MD Strategies Corp. 3/2/2017 15,015,000 1.65 Units Bought Underwritten Yes
Aurora Cannabis Inc. 2/28/2017 75,000,053 2.25 Units Bought Underwritten Yes
iAnthus Capital Holdings, Inc. 2/28/2017 20,000,000 100.00 Convert Debs. Bought Underwritten Yes
Aphria Inc. 2/24/2017 50,000,000 5.00 Common Shares Bought Underwritten No
Harvest One Capital 2/22/2017 25,000,500 0.75 Units Marketed Best Efforts Agency Yes
Kalytera 2/16/2017 15,000,000 0.45 Common Shares Marketed Best Efforts Agency Yes
CannaRoyalty Corp. 2/15/2017 15,000,000 3.00 Units Bought Underwritten No
Emerald Health Therapeutics, Inc. 2/10/2017 12,015,000 1.35 Units Bought Underwritten No
Emblem Corp. 1/31/2017 13,913,042 3.63 Units Bought Underwritten No
Source: Company Reports, Canaccord Genuity, FP Infomart

2
8 January 2018 4
 Canadian Cannabis
Industry Update

Financing activity increased substantially in Q4 of 2017, reaching an all-time high of

over $800M. The value of transactions announced in Q1 2018 has reached ~$230M,
showing continuing signs of momentum.
Figure 2: Total financing transactions in the cannabis industry since July 2014 ($ millions)

900

800

700

Capital Raised (in $Millions)

600

500

400

300

200

100

*Partial quarter to date

Source: Company Reports, Canaccord Genuity, FP Infomart

3
8 January 2018 5
 Canadian Cannabis
Industry Update

Figure 3: Returns for selected cannabis companies over indicated periods

One Week Price Return One Month Price Return

35.0% 32.8% 160.0% 151.0%
30.0% 28.1% 140.0%
26.4%
120.0% 97.1%
25.0% 20.6% 100.0% 81.2%
19.5% 75.5%
20.0% 16.6% 80.0% 57.5%
14.3% 54.9% 55.2%
15.0% 13.1% 12.4% 60.0% 41.6% 39.8% 41.7%
33.6%
40.0%
10.0% 8.2% 14.3%
5.3% 20.0%
4.4%
5.0% 2.5% 0.0%
-20.0%
0.0%
-40.0% -21.8%
Emblem
Aphria

Cronos

TSX Venture
Canopy Growth

OrganiGram

iAnthus

Invictus MD
CannTrust
MedReleaf

CanniMed

CannaRoyalty
Supreme

Emblem
Aphria

Cronos
OrganiGram

iAnthus

TSX Venture
Canopy Growth

Invictus MD
CannTrust

CannaRoyalty
MedReleaf

CanniMed
Supreme
Three Month Price Return One Year Price Return
300%
256% 600%
250% 506%
500%
200% 178% 400% 314%
172%
157% 300% 244% 266% 268%
150% 135% 134%
200%
94% 70% 81%
100% 100% 34% 43% 13%
0% 0% 4%
60% 59%
43% 0%
50% 21% 19% 14%
0%
Aphria

Emblem

Cronos

iAnthus

TSX Venture
Canopy Growth

OrganiGram

Invictus MD
CannTrust

CannaRoyalty
MedReleaf

CanniMed
Supreme
Emblem
Growth

Aphria

Cronos

TSX Venture
OrganiGram

iAnthus

Invictus MD
MedReleaf

CannTrust

CanniMed

CannaRoyalty
Canopy

Supreme

*Light blue indicates partial period returns

Source: Factset

In the graph below, we have looked at the relative performance of the top eight
Canadian-listed cannabis companies (by market cap) over the past six months.
Figure 4: Stock performance of top eight companies, by market cap
475%

425%

375%

325%

275%

225%

175%

125%

75%

25%

-25%Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Canopy Growth (WEED) Aphria (APH) Aurora Cannabis (ACB) OrganiGram (OGI)
Cronos (MJN) CanniMed (CMED) MedReleaf (LEAF) CannTrust* (TRST)

* CannTrust Holdings Inc. became public on August 21, 2017

Source: FactSet, Bloomberg Finance L.P., Canaccord Genuity

4
8 January 2018 6
 Canadian Cannabis
Industry Update

Canaccord Genuity Cannabis Index

We have constructed a market cap-weighted index (Canaccord Genuity Cannabis
Index) comprising key cannabis companies that trade on the TSX, TSXV and CSE. This
index takes into account the daily changes in market capitalization and new
companies that became public throughout the six-month period.
Figure 5: Canaccord Genuity Cannabis Index constituents, current market cap weighting as at
January 5, 2018
2.2%

Canopy Growth
11.4%
Aphria
1.0%
Aurora Cannabis
28.6%
1.0% 2.9%
OrganiGram

Supreme
6.9% Emblem

0.7% Cronos
2.9% Hydropothecary
2.6% Cannimed

Maricann
13.5%
MedReleaf

CannTrust
26.3%

Source: Company Reports, Bloomberg Finance L.P., Canaccord Genuity

The Canaccord Genuity Cannabis Index has substantially outperformed the S&P/TSX
Venture Composite Index (rebased) over the past 12 months, providing a 277% return
relative to the S&P/TSX Venture Composite Index at ~41% over that period.
Figure 6: Canaccord Genuity Cannabis Index performance, one-year return vs. S&P/TSX Venture Composite Index

Canaccord Genuity Cannabis Index S&P/TSX Venture Composite Index

280%

230%

180%

130%

80%

30%

-20%
Dec-16

Dec-17
May-17
Feb-17

Sep-17

Oct-17
Jun-17
Mar-17

Nov-17
Apr-17
Jan-17

Jul-17

Aug-17

Source: Bloomberg Finance L.P., Canaccord Genuity

5
8 January 2018 7
 Canadian Cannabis
Industry Update

Figure 7: Canaccord Genuity cannabis coverage universe

Company Ticker Analyst Rating Target ($) Price ($) Shares Outstanding (M) Market Cap ($M) Implied Return Avg Vol (K)
Canopy Growth Corp. WEED-TSX Neil Maruoka Hold 18.50 34.00 220 7490 -46% 9,517
Aphria Inc. APH-TSX Matt Bottomley Spec Buy 14.00 19.16 160 3066 -27% 5,467
OrganiGram Holdings Inc. OGI-TSX Matt Bottomley Spec Buy 5.25 4.78 139 664 10% 3,542
Supreme Cannabis Co. Inc. FIRE-TSX Matt Bottomley Spec Buy 2.30 3.04 323 981 -24% 5,828
Maricann Group Inc. MARI-CNQ Neil Maruoka Restricted
Aurora Cannabis Inc. ACB-TSX Neil Maruoka Restricted
Emblem Corp. EMC-TSX Neil Maruoka Spec Buy 2.50 2.38 121 288 5% 1,451
CannTrust Holdings Inc. TRST-CNQ Neil Maruoka Spec Buy 9.50 10.35 96 990 -8% 775
Hydropothecary Corp. THCX-TSX Matt Bottomley Restricted
MedReleaf Corp. LEAF-TSX Matt Bottomley Spec Buy 21.50 27.20 98 2652 -21% 1,108
Cronos Group Inc. MJN-TSX Matt Bottomley Hold 4.15 10.54 198 2084 -61% 2,163
Invictus MD Strategies Corp. IMH-TSX Matt Bottomley Hold 1.65 2.20 94 207 -25% 5701
iAnthus Capital Holdings Inc. IAN-CNQ Matt Bottomley Spec Buy 3.90 3.16 45 143 23% 697
CannaRoyalty Corp. CRZ-CNQ Matt Bottomley Spec Buy 5.50 4.50 50 225 22% 1225
*Priced as of January 5, 2018

Source: Company Reports, Canaccord Genuity estimates

Figure 8: Selected private cannabis (or cannabis-related) companies

Private Cannabis Companies HQ Description
Broken Coast Cannabis Ltd Ladysmith, Canada ACMPR licensed producer of medical cannabis products
Canna Farms Ltd. Maple Ridge, Canada Family-owned, ACMPR licensed producer of medical cannabis
Canveda Inc. Toronto, Canada ACMPR licensed cultivator of medical marijuana
Experion Biotechnologies Inc. Abbotsford, Canada Biotech company focused of medical products derived fom cannabis, ACMPR licensed.
Green Relief Inc. Puslinch, Canada ACMPR licensed producer fo medical cannabis
Green Thumb Industries LLC Auburn, USA Illinois based medical cannabis cultivator
High Street Capital Partners New York, USA Holding company with ownership interests in US cannabis industry
HydRx Farms Ltd. Whitby, Canada ACMPR licensed producer of medical cannabis with focus on pharmaceutical-grade cannabinoid
derivative products
Illumitex Austin, USA Texas-based provider of horicultural and industrial LED lighting used in cannabis cultivation
International Herbs Medical Marijuana Ltd. Athoville, Canada Licensed producer of medical cannabis
Indiva Inc. London, Canada Wholly-owned subsidiary is licensed under ACMPR, plan to RTO through Rainmaker Resources
Ltd.
MJardin Management Denver, USA Colorado-based management company providing turnkey cultivation, licensure support, facility
design, systems implementation and operational management
Resolve Digital Health Toronto, Canada Develops smart inhaler for medical cannabis
RockGarden Medicinals Inc Carleton Place, Canada ACMPR licensed company for the cultivation of medical marijuana
rTrees Producers Ltd. Yorkton, Canada ACMPR licensed cultivator of medical cannabis, acquired by Canopy Growth in April 2017
Sundial Growers Inc. Airdrie, Canada Licensed producer of medical cannabis
Sunniva Medical Inc. Okanagan, Canada Cultivator and distributor of medical cannabis and accessories wholesaler focused on Canada
and California
SYQE Medical Ltd. Tel Aviv, Insrael Technology company focusing on developing selective-dose cannabis inhalers
Tantalus Pharmaceuticals Ltd. Vancouver, Canada ACMPR licensed cultivator of medical marijuana; currently operates environmentally controlled
greenhouse
The Green Organic Dutchman Holdings Ltd. Ancaster, Canada Cannabis producer focusing on small batch all natural and organic cannabis
Tilray Nanaimo, Canada Producer and distributor of medical cannabis and cannabis accessories
Tokyo Smoke Toronto, Canada Coffee shop chain offering high end coffee, retail experience and smoking goods
Whistler Medical Marijuana Corp. Whistler, Canada Focused on organic cannabis cultivation, and operates an online store for medical cannabis
We Grow BC Ltd Creston BC, Canada ACMPR licensed cultivator of medical marijuana
Source: Company Reports

6
8 January 2018 8
 Canadian Cannabis
Industry Update

Figure 9: Selected public cannabis (or cannabis-related) companies

Company Ticker Market Cap ($M) Price ($) Currency HQ Description
ABcann Medicinals Inc. ABCN-TSX 189.3 1.90 CAD Napanee, Canada ACMPR licensed medical cannabis cultivator and distributor
Aequus Pharmaceuticals Inc. AQS-TSXV 22.8 0.32 CAD Vancouver, Canada Pharmaceutical company with cannabinoid infused products in the pipeline targeting neurology,
ophthalmology and transplant
Affinor Growers Inc. AFI-CNQ 25.0 0.25 CAD Vancouver, Canada Focused on acquiring and commercializing vertical growing technology to increase crop production
including medical cannabis
Alliance Growers Corp ACG-CNQ 62.4 1.14 CAD Vancouver, Canada Operates a cannabis botany center with investments in LPs and also cannabis oil supply and
distribution
Beleave Inc. BE-CNQ 119.0 3.00 CAD Hamilton, Canada Biotech company focused on the production of medical marijuana. Fully owns First Access Medical,
licensed cultivator of medical marijuana
Canabo Medical Inc. CMM-TSX 25.8 0.68 CAD Vancouver, Canada Owns and operates referral-only clinics for medical cannabis across Canada
Canada House Wellness Group CHV-CNQ 85.9 0.69 CAD Pickering, Canada Operates wellness centers to assist clients in identifying LPs and medical marijuana strains
Canadian Cannabis Corp CCAN-USA 22.5 0.72 USD Brampton, Canada Cultivating, marketing and manufacturing medical marijuana products
Cannabics Pharmaceuticals Inc. CNBX-USA 243.9 2.04 USD Maryland, USA Utilizes cannabis to provide natural therapies for cancer patients. R&D based in Israel
Cannabix Technologies BLO-CNQ 298.6 3.27 CAD Vancouver, Canada Develops tools for detection of THC in breath
CanniMed Therapeutics, Inc. CMED-TSE 658.5 26.95 CAD Saskatoon, Canada Biopharmaceutical and medical cannabis company. Supplier to Health Canada
Cannabis Wheaton Income Corp CBW-TSX 668.1 2.53 CAD Vancouver, Canada Provides financing to private and public cannabis producers and LPs in exchange for a percentage
of their future production
CBD Med Research Corp. CBM.H-TSX 3.8 0.50 CAD Vancouver, Canada Intends to operate as a medical device and cannabinoid infused medicine development company
Delta 9 Bio-Tech Inc NINE-TSXV 165.8 2.70 CAD Winnipeg, Canada Producer and retailer of medical cannabis
DOJA Cannabis Company DOJA-CNQ 164.5 2.80 CAD Vancouver, Canada ACMPR licensed producer of medical cannabis
Emerald Health Therapeutics, Inc. EMH-TSX 757.0 7.17 CAD Victoria, Canada Focused on cultivation and distribution of medical cannabis
Friday Night Inc. TGIF-CNQ 51.0 0.98 CAD Las Vegas, USA Focused on the production and sales of medical marijuana and cannabis products
General Cannabis Corp CANN-USA 181.2 8.06 USD Colorado, USA Provides facility leasing to licensed producers in Colorado
Golden Leaf Holdings GLH-CNQ 213.7 0.49 CAD Toronto, Canada One of the largest cannabis oil and solution providers in North America
GW Pharmaceuticals PLC GWPH-USA 3753.4 133.43 USD Salisbury, UK Focused on plant-derived cannabinoid therapeutics and prescription medicine for epilepsy
syndromes and multiple sclerosis
Harvest One Capital HVST-CNQ 159.0 1.78 CAD Vancouver, Canada Capital pool company invested in Canadian LP (United Greeneries) and Swiss Medical Cannabis
Company (Satipharm)
HempCo Food and Fiber Inc. HEMP-TSX 98.1 1.98 CAD Burnaby, Canada Manufactures and distributes hemp food products
High Hampton Holdings HC-CNQ 29.5 1.10 CAD Vancouver, Canada Focused on strategic alliances with existing LPs or entities offering products and services in the
marijuana sector
InMed Pharmaceuticals Inc. IN-CNQ 315.3 2.17 CAD Vancouver, Canada Pre-clinical stage biopharmaceutical company specialized in developing therapies using
cannabinoids
International Cannabis Corp ICC-TSX 166.5 1.21 CAD Montevideo, Uruguay Cannabis producer in Uruguay for medical and recreational uses
Kalytera Therapeutics Inc. KALY-TSX 57.4 0.44 CAD Massachusetts, USA Clinical-stage pharmaceutical company in the development of cannabinoid therapeutics
Kush Bottles KSHB-OTC 252.0 4.20 USD Woodinville, USA Wholesaler of cannabis and dispensary supplies
Lexaria Bioscience Corp LXX-CNQ 156.9 2.26 CAD Vancouver, Canada Food sciences company focused on cannabinoid infused food products.
Liberty Leaf Holdings LIB-CNQ 69.3 0.73 CAD Vancouver, Canada Intend to produce medical marijuana with ACMPR license currently in approval process
Liberty Health Sciences LHS-CNQ 644.7 2.27 CAD Toronto, Canada Focused on acquiring and operating US-based medical cannabis companies
Lifestyle Delivery Systems LDS-CNQ 86.0 0.93 CAD Vancouver, Canada Producer of cannabis infused strips
Maple Leaf Green World Inc. MGW-TSX 223.6 1.52 CAD Calgary, Canada Operates in eco-agriculture and renewable energy industry. Looking to obtain ACMPR license.
Marapharm Ventures Inc. MDM-CNQ 90.1 0.96 CAD Kelowna, Canada Operates facility for medical and recreational marijuana in the US. Canadian facility is awaiting
license
Namaste Technologies Inc. N-CNQ 760.1 3.25 CAD Toronto, Canada Global leader in vaporizer product manufacturing and distribution
Naturally Splendid Enterprises Ltd. NSP-TSX 39.3 0.41 CAD Vancouver, Canada Biotechnology company developing, producing and selling hemp-derived food enhancers
Neptune Technologies & NEPT-TSX 293.3 3.73 CAD Laval, Canada Nutrition products company looking to obtain Health Canada license for extraction
Bioressources Inc.
New Age Farm Inc. NF-CNQ 32.8 0.25 CAD North Vancouver, Canada Operates agri-campuses for licensed marijuana growers in BC and Washington State
Newstrike Ltd. HIP-TSX 588.2 1.51 CAD Toronto, Canada ACMPR licensed producer of medical cannabis, partnered with Tragically Hip
Nutritional High International Inc. EAT-CNQ 170.8 0.68 CAD Toronto, Canada Focused on oil extract and edibles cannabis market
PUF Ventures Inc. PUF-CNQ 80.8 1.55 CAD Vancouver, Canada Diversified holding company with ownership of a subsidiary currently in process of obtaining
ACMPR license
Quadron Capital QCC-CNQ 45.8 0.83 CAD Vancouver, Canada Automated extraction and processing of cannabis
Radient Technologies Inc. RTI-TSX 351.3 1.83 CAD Edmonton, Canada Extractor of natural compounds from biological materials using their patented technology
Revive Therapeutics Ltd. RVV-TSX 25.4 0.46 CAD Woodbridge, Canada Research, development, and commercialization of medical treatments using cannabinoids
TerrAscend Corp. TER-CN 348.0 3.69 CAD Mississauga, Canada Wholly-owned subsidiary has its cultivation license under ACMPR
Terra Tech Corp. TRTC-USA 315.1 0.34 USD California, USA Vertically integrated cannabis-focused agriculture company focused on medical cannabis
production
Tetra Bio-Pharma Inc. TBP-CNQ 162.2 1.31 CAD Orleans, Canada Developer of bio pharmaceuticals and natural health products containing cannabis
THC BioMed Intl. Ltd. THC-CNQ 282.6 2.55 CAD Kelowna, Canada Provides scientific and biotechnological support services to LPs
The Tinley Beverage Company Inc. TNY-CNQ 104.6 1.43 CAD Toronto, Canada Producer of hemp-infused beverages and supplements
True Leaf Medicine Intl Inc. MJ-CNQ 124.8 1.77 CAD Vernon, Canada Produces hemp-focused pet chews and supplements.
Valens Groworks Corp. VGW-CNQ 152.3 2.50 CAD Vancouver, Canada Biotechnology company focused on cannabis cultivation and research
Vodis Pharmaceuticals Inc. VP-CNQ 21.6 0.71 CAD Vancouver, Canada Producer of medical and recreational cannibis with facilities in BC and Washington State
WeedMD WMD-CNQ 223.8 2.87 CAD Aylmer, Canada ACMPR licensed medical cannabis producer focused on retirement sector
Wildflower Marijuana Inc. SUN-CNQ 113.2 2.13 CAD Vancouver, Canada Retailer of vaporizers and cannabidiol-infused products
*Priced as of January 5, 2018

Source: Company Reports, Bloomberg Finance L.P., Factset

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Health Canada statistics

We estimate that less than 4% of all producer applications have been approved by
Health Canada.
Figure 10: LP Application Status Figure 11: LP Application Status

Province # of LPs
Ontario 47
Applications refused British Columbia 18
Alberta 4
5% 16% Saskatchewan 4
Applications in
Manitoba 2
process
25% New Brunswick 2
Applications Prince Edward Island 1
50% withdrawn Quebec 4
Applications Newfoundland and Labrador 0
returned Northwest Territories 0
Licenses granted Nova Scotia 2
Nunavut 0
4% Yukon 0
Total 84

Source: Health Canada website www.hc.sc.gc.ca Source: Health Canada website www.hc.sc.gc.ca

Figure 12: Location of LPs

Source: Health Canada website www.hc.sc.gc.ca

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Valuation analysis for cannabis companies

Below is a valuation comparison for cannabis companies covered by Canaccord
Genuity, based on EV/EBITDA and EV/Revenue.
Figure 13: Comparables for Canaccord Genuity covered companies
Company Ticker Share Rating Shares Market EV/EBITDA EV/Revenue
Price ($) O/S (M) Cap (M) CY FWD1 FWD2 CY FWD1 FWD2
Canopy Growth WEED 34.00 HOLD 220 $ 7,490 545.7x 49.2x 24.8x 59.3x 13.8x 9.0x
Aphria Inc. APH 19.16 SPEC BUY 160 $ 3,066 138.2x 41.7x 26.0x 49.0x 15.3x 10.9x
OrganiGram Holdings OGI 4.78 SPEC BUY 139 $ 664 48.3x 10.5x 7.5x 16.2x 3.9x 2.9x
Supreme Cannabis Company FIRE 3.04 SPEC BUY 323 $ 981 245.7x 22.0x 13.6x 41.3x 6.3x 5.2x
Emblem Corp EMC 2.38 SPEC BUY 121 $ 288 N/A 44.7x 10.6x 80.9x 13.1x 3.7x
CannTrust TRST 10.35 SPEC BUY 96 $ 990 N/A 149.4x 54.4x 46.1x 19.0x 9.6x
MedReleaf Corporation LEAF 27.20 SPEC BUY 98 $ 2,652 240.1x 50.4x 23.8x 47.8x 15.2x 7.8x
Cronos Group Inc. MJN 10.54 HOLD 198 $ 2,084 N/A 158.6x 39.2x 365.8x 46.3x 13.0x
Invictus MD IMH 2.20 HOLD 94 $ 207 N/A 24.9x 9.2x 70.4x 6.3x 3.1x
Average 21.3x 7.1x
As at January 5, 2018, market close

Source: Company Reports, Canaccord Genuity, Factset

We have devised a market cap/funded capacity analysis to compare LPs based on

each company’s longer-term expansion plans as well as its ability to fund this capacity
growth from its balance sheet. This Funded Capacity multiple is supportive of our
fundamental strategic analyses and valuations.
Figure 14: Funded Capacity Table

Company Ticker Share Rating Shares Market Estimated Funded Market Cap/
Price ($) O/S (M) Cap (M) Capacity (tonnes) Funded Capacity (x)
Canopy Growth WEED 34.00 HOLD 220 $ 7,490 320 23.4x
Aphria Inc. APH 19.16 SPEC BUY 160 $ 3,066 100 30.7x
OrganiGram Holdings OGI 4.78 SPEC BUY 139 $ 664 46 14.4x
Supreme Cannabis Company FIRE 3.04 SPEC BUY 323 $ 981 75 13.1x
Emblem Corp EMC 2.38 SPEC BUY 121 $ 288 30 9.6x
CannTrust TRST 10.35 SPEC BUY 96 $ 990 43 23.0x
MedReleaf Corporation LEAF 27.20 SPEC BUY 98 $ 2,652 100 26.5x
Cronos Group Inc. MJN 10.54 HOLD 198 $ 2,084 60 34.7x
Invictus MD IMH 2.20 HOLD 94 $ 207 17 12.2x
Average 21.6x
As at January 5, 2018, market close

Source: Company Reports, Canaccord Genuity estimates, Factset

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 Canadian Cannabis
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We have also looked at selected publicly traded cannabis companies based on their
current EV/Revenue multiple against the projected two-year revenue CAGR. For
uncovered names, we have used the consensus estimates from FactSet. Although this
is not a perfect analysis (due to confounding factors including a very low base year
revenue forecast and the discrepancy between analyst estimates (particularly for
companies with limited analyst coverage)), we believe it is somewhat illustrative of
relative valuations.
Figure 15: Comparable analysis; EV/Revenue vs. two-year revenue CAGR

14.0x
Cronos

12.0x

Aphria

10.0x CannTrust

Canopy

8.0x MedReleaf
EV/Revenue

6.0x
Supreme

Emblem
4.0x
Hydropothecary CannaRoyalty

Invictus MD
iAnthus
2.0x OrganiGram

0.0x
0% 50% 100% 150% 200% 250% 300% 350% 400% 450%
2Yr Revenue CAGR

Source: FactSet, Canaccord Genuity estimates

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 Canadian Cannabis
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Appendix: Important Disclosures

Analyst Certification
Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the
recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and
objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring
analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the
specific recommendations or views expressed by the authoring analyst in the research.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of
Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications
with a subject company, public appearances and trading securities held by a research analyst account.
Sector Coverage
Individuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoring
analysts of the report.

Investment Recommendation
Date and time of first dissemination: January 08, 2018, 09:56 ET
Date and time of production: January 08, 2018, 09:56 ET
Compendium Report
This report covers six or more subject companies and therefore is a compendium report and Canaccord Genuity and its
affiliated companies hereby direct the reader to the specific disclosures related to the subject companies discussed in this
report, which may be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://
disclosures.canaccordgenuity.com/EN/Pages/default.aspx; or by sending a request to Canaccord Genuity Corp. Research, Attn:
Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2; or by sending a request
by email to disclosures@canaccordgenuity.com. The reader may also obtain a copy of Canaccord Genuity’s policies and procedures
regarding the dissemination of research by following the steps outlined above.
Past performance
In line with Article 44(4)(b), MiFID II Delegated Regulation, we disclose price performance for the preceding five years or the whole period
for which the financial instrument has been offered or investment service provided where less than five years. Please note price history
refers to actual past performance, and that past performance is not a reliable indicator of future price and/or performance.

Distribution of Ratings:
Global Stock Ratings (as of 01/08/18)
Rating Coverage Universe IB Clients
# % %
Buy 567 60.38% 40.92%
Hold 255 27.16% 28.24%
Sell 20 2.13% 15.00%
Speculative Buy 97 10.33% 67.01%
939* 100.0%
*Total includes stocks that are Under Review

Canaccord Genuity Ratings System

BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.
HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.
SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months.
NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer.
“Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or the
relevant issuer.
Risk Qualifier
SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the
stock may result in material loss.

8 January 2018 13
 Canadian Cannabis
Industry Update

12-Month Recommendation History (as of date same as the Global Stock Ratings table)
A list of all the recommendations on any issuer under coverage that was disseminated during the preceding 12-month period
may be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://disclosures-
mar.canaccordgenuity.com/EN/Pages/default.aspx
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report: manager or co-manager roles; 1% or other ownership; compensation for certain services; types of client relationships; research
analyst conflicts; managed/co-managed public offerings in prior periods; directorships; market making in equity securities and related
derivatives. For reports identified above as compendium reports, the foregoing required company-specific disclosures can be found in
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owned subsidiaries of Canaccord Genuity Group Inc., including Canaccord Genuity Inc., Canaccord Genuity Limited, Canaccord Genuity
Corp., and Canaccord Genuity (Australia) Limited, an affiliated company that is 50%-owned by Canaccord Genuity Group Inc.
The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadian
broker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal, or Canaccord Genuity Inc., a US broker-dealer
with principal offices located in New York, Boston, San Francisco and Houston, or Canaccord Genuity Limited., a UK broker-dealer with
principal offices located in London (UK) and Dublin (Ireland), or Canaccord Genuity (Australia) Limited, an Australian broker-dealer with
principal offices located in Sydney and Melbourne.
The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensation based upon
(among other factors) the Investment Banking revenues and general profits of Canaccord Genuity. However, such authoring analysts
have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Investment Banking
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short-term trade idea may differ from the price targets and recommendations in our published research reports that reflect the research

8 January 2018 14
 Canadian Cannabis
Industry Update

analyst's views of the longer-term (i.e. one-year or greater) prospects of the subject company, as a result of the differing time horizons,
methodologies and/or other factors. It is possible, for example, that a subject company's common equity that is considered a long-
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Copyright © Canaccord Genuity Inc. 2018 – Member FINRA/SIPC

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8 January 2018 16