Alphacanna

THE OPPORTUNITY
• Creating a groundbreaking dispensary experience by relocating the existing retail dispensary to a site with increased visibility and accessibility, ideally located along Malibu’s iconic stretch of Pacific Coast Highway.
• In addition to retail distribution, Alphacanna has the ability to utilize 99 High Tide’s license to deliver cannabis in Malibu.
• Leveraging the existing establishment to create educational programs and interactive courses to become a tourist attraction in Malibu.
• With 2020A revenue of $4.1+ million, the Company has demonstrated the ability to operate profitably and is well positioned for significant growth.
• Alphacanna has signed a purchase agreement to acquire 99 High Tide’s assets and is currently seeking to raise $6 million of series A equity in exchange for a majority stake in the SPV.


MALIBU, CA OVERVIEW
• California is the largest cannabis market in the US, with 2020 retail sales of 8 billion dollars.
• 99 High Tide has 1 of 2 retail and delivery licenses granted in Malibu under measure G,
no current legislation proposed for additional licenses in the region.
• Malibu enjoys over 13 million annual tourists.
• Lowest municipal tax rate (1%) in the state of California.  Other municipalities tack on an additional businesses tax of up to 15%.

INVESTMENT HIGHLIGHTS

PREMIUM LOCATION
• Pacific Coast Highway is the region’s primary east/west access road. The California Department of Transportation estimates average daily traffic on the Pacific Coast Highway in Malibu at approximately 45,000 vehicles per day.
• Located directly across the street from Nobu and SoHo house, the proposed new location of 99 High Tide is approximately 1,500 feet from Malibu Pier, naturally attracting a wealthier customer base.

STRONG COMMUNITY PRESENCE
• With over 70% of current sales to local residents, 99 High Tide developed relationships with thousands of local residents and the City Council of Malibu.
• As the primary source of legal cannabis in Malibu, Alphacanna will manage every part of the supply chain (i.e. cultivators, processors, extractors and brands).

RISK-MITIGATED FINANCIAL STABILITY
• 99 High Tide has demonstrated profitability and growth YOY sales in all years since opening as a community collective in 2015.
• Deemed an “essential business” and operated profitably through the COVID-19 pandemic.

UNPARALLELED OPPORTUNITY FOR GROWTH
• Alphacanna will expand delivery, add new products, leverage data and create strategic opportunities through the purchase, development and integration of correlated lines of business. Significant improvements in marketing and public relations will drive additional growth for retail and brand sales.
• With 2020A Net Income margins of 8%, 99 High Tide currently operates at 36% of average Net Income for a dispensary in the State of California.

ATTRACTIVE INVESTMENT OPPORTUNITY
• Implied valuation multiple of 2.4x 2020A and 1.35x 2021E Revenue.
• Strong operating team bringing broad based experience in finance, marketing, business development and PR.