CANN GROUP LIMITED — AGM Information 2020

Nov 23, 2020

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ASX ANNOUNCEMENT

24 November 2020

AGM Presentation

24 November 2020: In advance of this morning’s Annual General Meeting of shareholders to be held at 10:00am, Cann Group Limited (CAN:ASX) is pleased to provide a copy of the presentation that will be made to shareholders at the AGM.

This presentation has been authorised for release by the Board of Directors, Cann Group Limited.

For further information please contact:

Peter Crock Clive Fanning Matthew Wright CEO Head of Investor Relations NWR Communications Cann Group Limited Cann Group Limited +61 451 896 420 +61 3 9095 7088 +61 3 9095 7088 matt@nwrcommunications.com.au contact@canngrouplimited.com clive.fanning@canngrouplimited.com

About Cann Group

Cann Group Limited (ABN 25 603 949 739) is building a world-class business focused on breeding, cultivating, manufacturing and supplying medicinal cannabis for sale and use within Australia and for approved overseas export markets. The company has established research and cultivation facilities in Melbourne and is developing a state-of-the-art cultivation facility near Mildura, Victoria. Cann Group has executed collaboration agreements that have enabled it to establish a leading position in plant genetics, breeding, extraction, analysis and production techniques required to facilitate the supply of medicinal cannabis for a range of diseases and medical conditions. The Company is commercialising a range of imported and locally sourced and manufactured medicinal cannabis products. Learn more about Cann Group at www.canngrouplimited.com

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AGM presentation 10:00am Tuesday, 24 November 2020 Allan McCallum, AO – Chairman Peter Crock – CEO

1

Disclaimer

This AGM presentation (Presentation) has been prepared by Cann Group Limited (ABN 25 603 949 739) (Cann).

Summary information

This Presentation contains summary information about Cann and its activities which is current as at the date of this Presentation. The information provided in this Presentation pertaining to Cann and its business assets, strategy and operations is for general informational purposes only.

Future performance

This Presentation contains certain ‘forward looking statements’, including but not limited to projections, guidance on future revenues and other potential synergies and estimates about the future performance of Cann. Forward looking statements can generally be identified by the use of forward-looking words such as, ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’ ‘outlook’, ‘guidance’, ‘potential’ and other similar expressions within the meaning of securities laws of applicable jurisdictions.

The forward-looking statements contained in this Presentation are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of Cann, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. No representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statement by any person (including Cann). There can be no assurance that actual outcomes will not differ materially from these forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements. The forward-looking statements are based on information available to Cann as at the date of this Presentation.

Except as required by law or regulation (including the ASX Listing Rules), Cann undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements.

Past performance

Investors should note that past performance, including any historical information in this Presentation cannot be relied upon as an indicator of (and provides no guidance as to) future Cann performance including future share price performance.

All rights reserved

Several photographs contained in this Presentation are the property of Cann and are protected under copyright laws. No part of this Presentation may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the Company, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.

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2

Chairman’s address

Allan McCallum AO Chairman Refer to ASX Announcement lodged 24 November 2020

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3

Strategy & focus

• Continued focus on robust, vertically integrated businessto-business (B2B) model that meets growing Australian demand & building export opportunities

• Despite COVID-related disruptions, Cann has continued to meaningfully progress cultivation, manufacturing & R&D

• Remains on track to achieve forecast revenue target of ~$15m for FY21

• Establishing presence as Australia’s leading scaled producer of GMP certified product that meets international standard

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4

Industry status

• Australian momentum continues to be positive

• Consistent growth in SAS approvals – now more than 6,000 per month

• Level of demand expected to require 40,000kg of dry flower production within five years - Proposed regulatory reform, including CBD becoming available over-the-counter, could improve patient access

• Global market expansion continues

• Shortage of GMP compliant product in key markets

• Supply demand imbalance of recreational product in North America impacting industry

• New international markets continue to open up including Europe (Germany, France, Poland), UK & NZ

• Acceptance & body of evidence increasing

• Growing number of medical professionals prescribing medicinal cannabis

• Clinical trials & medical evidence continues to build

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5

Debt finance, capital raising & sell-down

• Completed $40.2m institutional placement & SPP in July 2020

• Credit approval received from NAB for $50m secured debt facility - Construction facility – amortising 8-year loan

• Strong financial position to execute on the company’s expansion plans

• Aurora Cannabis exits shareholding in Cann Group

• Part of Aurora’s divestment of non-core assets

• Technical services agreement between Aurora & Cann remains active

• Work on Mildura facility with Aurora Larssen Projects not impacted

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6

Outlook

• Primary focus remains execution of growth strategy & delivery on commercial offtake contracts & revenue target

• Consolidation & rationalisation of the sector expected

• Cann monitoring sector & potential M&A opportunities

• Intention to firmly establish Cann as an Australian industry leader during FY21

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7

CEO’s address

Peter Crock CEO Refer to ASX Announcement lodged 24 November 2020

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8

Regulatory & commercial progress

• COVID-19 causing regulatory delays locally & overseas

• Has pushed some sales revenues from H1 into H2 FY21

• As expected, projected revenues weighted to H2

• More than 10,000 bottles due to ship to Germany & the UK in the next two months – subject to regulatory approvals

• Will be the largest export of Australian grown & manufactured product to date

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• NZ sales to Zalm expected early in 2021 – subject to submitted regulatory applications

• Maintaining revenue guidance of ~$15 million for FY21

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9

Consolidated European approach

• Collaboration with German partner iuvo to streamline export pathway into Europe

• iuvo is a German pharmaceutical distribution company focusing on medicinal cannabis

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• iuvo to spearhead business development activities into European markets

• Removes challenges associated with separate audit & regulatory requirements with each country / customer

• Given likelihood of Brexit, Cann maintains supply & distribution agreement with LYPHE Group for the UK

• Cann supporting LYPHE’s participation in the UK’s Project Twenty21, which has already enrolled more than 8,000 patients

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10

GMP certified production capability

• Vision to be Australia’s leading scaled producer of GMP certified medicinal cannabis for supply to domestic & overseas markets

• Vertically integrated business-to-business (B2B) model supports business case for Mildura expansion

• Potential to extend into direct-to-consumer markets

• Ongoing product development expected to lead to the launch of unique & proprietary formulations

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11

Debt funding & Mildura expansion

• Cann has received debt financing from NAB for construction of the Mildura project

• $50m amortising facility over a term of 8 years

• Validation of Cann’s strategic growth plans

• Stage 1a proposed to include capacity to produce 12,500kgs of dry flower

• Expected timeline:

• Remobilisation of construction team February 2021

• Commissioning November 2021

• First material to be processed & released by March 2022

• Mildura facility will provide substantial technology & efficiency gains

• Expansion provides scale & cost base to enable Cann to be globally competitive

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12

Financials & operating costs

• Various actions taken to reduce base operating costs

• Equity raising costs & accumulated manufacturing costs were considerable in calendar year to date

• Current monthly expenditure ~$1.65m excluding cap ex

• Monthly corporate/overheads – ~$665k / month - Production inc cultivation & manufacturing – ~$865k / month - R&D – ~$112k / month

• Production costs have seen Cann produce biomass, resin & oil products to satisfy customer orders/demand

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13

Strategic partnerships & R&D

Partner	Key Outcomes to date	Impact for company
Agriculture Victoria	Utilisation of chemotypic, genotypic and phenotypic data to optimise the accelerated breeding project	• Novel cultivars with improved yields and/or chemotypic profiles
ARC Research Hub for Medicinal Agriculture (with La Trobe University)	Valuable data generated on impact of physiology and nutrient status on cannabinoid profiles, yield and disease Stabilisation of genetics in sterile tissue culture conditions Development of novel methods for extraction of cannabinoids and terpenes	• Improved cost of production • Risk mitigation of Cann’s genetics • Novel extraction methods (new IP)
CSIRO	Improved cannabinoid analysis techniques and manufacturing processes being utilised byCann	• Improved cost of production • Reduced footprint for Mildura
Cooperative Research Centres Program (with NSW Dept of Primary Industry)	Improvements in propagation of root establishment, shorter cycle times and higher yields	• Improved cost of production • Improved cultivation practices and effective IPDM strategies
Medicines Manufacturing Innovation Centre (Monash University)	Development of novel formulations and new medicines	• Creation of pipeline assets • New IP
Olivia Newton John Cancer Research Institute and Austin Health	Preparation of Investigational Brochure for clinical trial and provision of first batch of product to Olivia Newton John Cancer Research Institute	• Substantial data on Cann’s formulation in a patient cohort

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14

A vertically integrated medicinal cannabis producer, supplying markets in Australia & overseas

Production

Existing facilities currently provide 1,200kg p.a in capacity with Stage 1A of Mildura allowing for an additional 12,500kg p.a

Manufacturing

Arrangements for the manufacture of Active Pharmaceutical Ingredients (resin & oils) and finished products under GMP

Distribution

Distribution agreements in place in Australia with Symbion and in key European markets (Germany & UK) with iuvo & LYPHE Group to deliver Cann manufactured product through pharmacies to patients

Collaborations

R&D capabilities bolstered by work alongside Agriculture Victoria, CSIRO, La Trobe University, NSW DPI & Monash Medical Innovation Centre

Supply

Agreements in place to supply customers in Australia & overseas markets including New Zealand, Canada, the UK, and Germany

Cultivars

Testing & developing strains with improved attributes for cultivation at scale

Products

Expanding range of value-added locally produced & imported products launched to Australian patients

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15

FORMAL BUSINESS OF AGM

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16

Formal business of AGM

Item 1 – Financial Statements and Reports

To receive the financial report, directors’ report and auditor’s report for the Company and its controlled entities for the financial year ended 30 June 2020.

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RESOLUTIONS FOR VOTING Items 2 to 9

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18

Resolution 2 – Adoption of Remuneration Report

That, pursuant to and in accordance with section 250R(2) of the Corporations Act, the Remuneration Report for the financial year ending 30 June 2020 as set out in pages 19 to 25 (inclusive) of the Annual Report be adopted.

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	31,089,750	6,837,598	1,231,867	39,159,215	14.51%	288,027
Percentage	79.39%	17.46%	3.15%

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Resolution 3 – Re-election of Director

That Mr Geoffrey Ronald Pearce, a Director who retires from office in accordance with Rule 50.2 of the Company’s Constitution and being eligible for re-election, be re-elected a Director of the Company.

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	48,185,521	6,843,950	580,744	55,610,215	20.60%	145,662
Percentage	86.65%	12.31%	1.04%

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Resolution 4 – Re-election of Director

That Ms Jennifer Lee Pilcher, a Director who was appointed to fill a casual vacancy in accordance with Rule 49.1 of the Company’s Constitution until this Annual General Meeting and . being eligible for re-election, be re-elected a Director of the Company

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	49,865,989	6,822,518	555,393	57,243,900	21.21%	141,172
Percentage	87.11%	11.92%	0.97%

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Resolution 5 – Approval of issue of New Shares to CSIRO

That, for the purposes of Listing Rule 7.1, Shareholders approve the issue to the Commonwealth Scientific and Industrial Research Organisation (CSIRO) up to a maximum of 90,000 fully paid ordinary shares in the capital of the Company pursuant to the terms and conditions of the Share Purchase Agreement in relation to the provision of research and development services to the Company from CSIRO under the Research Services Agreement during the quarter ending on 30 September 2020.

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	49,775,515	5,606,096	823,735	56,205,346	20.82%	91,788
Percentage	88.56%	9.97%	1.47%

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Resolution 6 – Approval of Long-Term Incentive Plan

That pursuant to and in accordance with Listing Rule 7.2 (Exception 13) and sections 259B(2) and 260C(4) of the Corporations Act, the Cann Group Limited 2020 Long-Term Incentive Plan ("Long-Term Incentive Plan"), and the grant of and issue of all securities under the Long-Term Incentive Plan on the terms and conditions set out in the Explanatory Statement, are approved.

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	48,148,581	6,809,633	1,714,762	56,672,976	21.00%	151,244
Percentage	84.96%	12.02%	3.03%

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Resolution 7 – Approval of Employee Share Contribution Plan

That pursuant to and in accordance with Listing Rule 7.2 (Exception 13) and sections 259B(2) and 260C(4) of the Corporations Act, the Cann Group Employee Share Contribution Plan ("Employee Share Contribution Plan"), and the grant of and issue of all securities under the Employee Share Contribution Plan on the terms and conditions set out in the Explanatory Statement, are approved.

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	48,348,106	6,824,616	1,506,365	56,679,087	21.00%	145,133
Percentage	85.30%	12.04%	2.66%

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Resolution 8 – Approval of Employee Share Gift Plan

That pursuant to and in accordance with Listing Rule 7.2 (Exception 13) and sections 259B(2) and 260C(4) of the Corporations Act, the Cann Group Employee Share Gift Plan ("Employee Share Gift Plan"), and the grant of and issue of all securities under the Employee Share Gift Plan on the terms and conditions set out in the Explanatory Statement, are approved.

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	47,943,944	6,806,399	1,899,487	56,649,830	20.99%	174,390
Percentage	84.63%	12.01%	3.35%

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Resolution 9 – Approval of additional 10% placement capacity for 12 months

That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities, as that term is defined in the Listing Rules, totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula . prescribed in Listing Rule 7.1A.2

Proxy votes

	For	Open	Against	Total Valid Available Votes	% of Issued Capital	Abstain
Votes	35,200,167	6,808,400	15,291,819	57,300,386	21.23%	209,686
Percentage	61.43%	11.88%	26.69%

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QUESTIONS

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27

VOTING

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28

MEETING CLOSE CONTACTS:

Clive Fanning Head of Investor Relations Cann Group Limited +61 3 9095 7088 contact@canngrouplimited.com

Matthew Wright Investor / Media Relations NWR Communications +61 (0)451 896 420 matt@nwrcommunications.com.au