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This presentation is confidential and private. Distribution is restricted. It may not be reproduced, copied or replicated in any form without the express and written authorization of Cannabis funding Group LP.
Disclaimer confidential2 This presentation contains statements about future events and expectations that can be characterized as forward-looking statements, including, in particular, statements about Cannabis Funding Group (“Company”) plans, strategies and prospects. The use of the words “anticipate,” “estimate,” “expect,” “may,” “project,” “believe” and similar expressions are intended to identify forward-looking statements. Although the Company believes that the plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties, and the Company cannot assure you that those expectations will prove to have been correct. Actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors described in this presentation. Many of these factors are beyond the Company’s ability to control or predict. The Company cannot assure you that its future results will meet its expectations and parties are cautioned not to place undue reliance on any forward-looking statement made by the Company or its authorized representatives. All subsequent written and oral forward-looking statements attributable to the Company and persons acting on its behalf are qualified in their entirety by the cautionary statements contained in this paragraph and elsewhere in this presentation. The Company does not have any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this presentation or the admission document to reflect any change in the Company’s expectations about the statement or any change in events, conditions or circumstances on which the statement is based. Presentation material and any proposals are subject to market change and political change. Anything in the following pages do not constitute a contract or binding agreement. Any recipient of this document acknowledges and agrees with following: (1) Company disclaims any and all liability and responsibility for the quality, accuracy, completeness and materiality of this document; (2) Recipient will conduct its own independent evaluation and analysis of the information contained herein.
Fund Overview 4confidential The Fund, CANNABIS FUNDING GROUP, LP., is a limited partnership formed under the laws of the State of Texas. The Fund’s parent company is Smart Ventures, Inc. a Nevada public corporation which owns 100% of the common stock of Cannabis Funding Group, Inc. Cannabis Funding Group, Inc. owns 1% of Cannabis Funding Group, LP as General Partner and Smart Ventures, Inc. owns 99% of the LP currently because of the seed capital invested by Smart Ventures. Cannabis Funding Group, LP will be selling limited partnership units which will proportionately reduce the ownership of Smart Ventures to its pro-rata ownership of the LP. The General Partner will receive a 2% management fee and 20% performance fee. Management Fee: 2% of total capitalization Performance Fee: 20% of all returns after Pay Back of Seed Capital CFG, LP Investment GP GFG, Inc 20% LP LP Investors 80% LP 100% Member Interest Executive Summary Ownership Wire Diagram Cash Distribution
Investment Summary – Offering Terms 5confidential Cannabis Funding Group, LP. $10,000,000 Limited Partnership Units Issuer:Cannabis Funding Group, LP,. a Texas Limited Partnership (the Company) Securities Offered:Limited partnership Units in Cannabis Funding Group, LP,. Size of Offering: 10,000 Limited Partnership Units Price Per Unit: $1,000 (the "Purchase Price") Minimum Investment:$10,000 (10 LP Units) Fund Term:1 year with 90 day redemptions (Offering made by prospectus only, this appears as a matter of record only)
Cannabis Funding Group – Overview 7confidential Cannabis Funding Group, LP, a private equity sponsor, is a wholly owned subsidiary of Smart Ventures, Inc. (SMVR) a Nevada public company listed on the OTC Market. We are a source of private capital and strategic support to the legal cannabis industry. We create value by providing growth capital to experienced management teams, established markets and proven business models. We feel our investment philosophy provides a method for a conservative, risk mitigated, and disciplined approach to consistently provide value to our investors. We will attempt to increase the value of these investments by: Improving management/marketing Lowering expense through economies of scale Investing into experienced management teams and proven business models CFG will target the following opportunities: Providing growth capital Venture Capital to start-ups with proven management Public and Private investments using a PIPES transaction, public equities, or fixed income Real-Estate Buy and Lease Back Opportunities Cannabis Funding Group Strategy Targeted Opportunities About Us and Our Philosophy Sourcing/ Due Diligence Value Building Management/ Exit Investment Process
Targeted Opportunities – PIPES, Growth and Venture Capital 8confidential Purchasing, managing and selling common shares of stock in public companies and private companies contemplating a PIPES transaction, and may invest in fixed income assets such as bonds or notes of cannabis related businesses in states licensed to conduct said business. The Fund will generally invest in Micro Cap Stocks of issuing corporations involved in a wide range of industries in an effort to diversify. The fund will typically purchase micro-cap stocks at a significant discount to market price such as a discount of 5-50% of its market value, and purchase bonds and notes with an interest rate of 8%-16% interest rates. Target Returns: 8 – 20% PIPES Growth Capital Growth Capital description: - Proven management teams - Established business models Target Returns: 12 – 20% Venture Capital Venture Capital description – - High growth opportunities - Established management teams with track record Target Returns: 15 – 33%
Targeted Opportunities – Real Estate 9confidential Colorado has 450 licensed dispensaries using nearly 1,000 commercial properties and is occupying over 5 million square feet of space. Annualized ROI of 25% - 35% NNN Leases Purchase of existing growing facilities Design and Build new growing facilities Both Indoor and Light Deprivation Greenhouse properties Projects sized from $500k to $6.5 million Summary & Targeted Returns Real Estate
Current Legal Overview by State 11confidential SOURCE: Marijuana Policy Project In Alaska, the courts have found that the state constitution’s right to privacy includes the right to posses modest amounts of marijuana in one’s home Marijuana is legal for adult use and the state will regulate and tax marijuana sales, Colorado and Washington also have medical marijuana laws States that both have a medical marijuana law and have Removed jail time for possessing small amounts of marijuana States that have removed jail time for possessing small amounts of marijuana States and district with Medical marijuana laws
Industry Timeline 12confidential Industry Timeline 1996 - California becomes the first state to legalize Medical Marijuana 2000 - Colorado legalizes Medical Marijiuana 2010 - Colorado creates legal framework and laws for the operation of for profit Medical Marijuana dispensaries 2012 - CO and WA citizens vote to legalize marijuana sales for adult use 2013 - Colorado formalizes laws for adult use sales 2014 – January, CO becomes first state to open up for adult use retail sales to CO residents and tourists. 2014 – Washington 2014-Nevada The US Medical Marijuana Industry size is estimated to be $1.8b in 2013 CO and WA Adult Use sales will likely top $400m in 2014. Oct 2013 Gallup Poll shows 58% of Americans support marijuana legalization
Industry Projections 13confidential The US national legal marijuana market value is now assessed at $1.53 billion, comprising all states that have active and open sales of cannabis to people legally allowed to possess it under state law. The national market is projected to grow 68 percent from current levels to $2.57 billion by 2014. The five-year national market potential is $10.2 billion, which is more than a 700 percent increase above the current national market value. Gains will come in the form of increased demand in existing state markets, as well as from new state markets coming online within a five- year horizon. Current Projections SOURCE: Arcview Research
Public Market 14confidential Medical Marijuana Inc. – MJNA - $.22 share price (06-06-2014) Market Capitalization: $128.7 million CannaVest Corp. – CANV - $16.25 share price (06-06-2014) Market Capitalization: $533.8 million Cannabis Sciences – CBIS - $0.12 share price (06-06-2014) Market Capitalization: $97.6 million Cannabis-Rx Inc. – CANA – $0.38 share price (06-06-2014) Market Capitalization - $62.4 million Cannabis Capital Corp – CBCA - $12.99 share price (06-06-2014) Market Capitalization - $1,750 million Publicly Traded Cannabis Industry Companies
Contact Info 15confidential Roger AT Smith Fund Manager Roger@smartventuresinc.us www.cannabisfundinggrouplp.com