The Green Organic Dutchman Commences $20 Million Capital Raise

Over the last year, we have highlighted several attractive marijuana stock investment opportunities that have been able to generate significant returns for investors.

While we are very bullish on the public marijuana markets, some of the best long-term marijuana investment opportunities are privately held.

An Exclusive Opportunity

Today, TGOD announced its final pre-IPO non-brokered private placement at $1.65 per unit. This offering is slightly different from the prior two and in our eyes, it is just as attractive.

The shares will have a 6 month hold period from the day of the IPO (planned for January 2018) and the warrants have a $3 exercise price for a 3-year period. When it comes to the warrants, there is a great twist that make us so attracted to this financing…

The warrants will be freely trading from the day TGOD conducts its initial public offering (IPO).

In theory, this means that if the stock trades at $4.50, the warrant should trade at $1.50 ($4.50 – $3 = $1.50). And that is if you do not add any time value to the price. In this kind of scenario, an investor could pay $1.65 per unit and get back the equivalent of $0.75 per share giving us a purchase price of $0.90 per unit.

While we don’t really know where the IPO will be priced at or how big it will be, the track record of the team behind TGOD and the recent developments leave us very bullish on the long-term opportunity.

For information on this offering please email: financing@tgod.ca

TGOD: Continues to Execute Ahead of its IPO

In late 2016 and early 2017, we highlighted two private offerings through The Green Organic Dutchman Holdings, a Canadian licensed medical marijuana producer. If you acted on this opportunity, you have several reasons to be excited.

The last few months have been significant for TGOD as it has been able to further differentiate itself from the competition by strengthening its management team, securing a $5 million credit line, and expanding its reach through the acquisition of a 75-acre property in Quebec.

One of the most important recent developments for TGOD though, pertains to the company receiving its sales license from Health Canada. This is a major milestone for the licensed medical marijuana producer and will allow them to capitalize on a multi-billion-dollar market opportunity.

Makes Strategic Additions to its Management Team

TGOD is putting together an all-star caliber management team. In June, the company announced the appointment of Csaba Reider as the new President and Marc Bertrand as a new strategic advisor.

Prior to joining The Green Organic Dutchman Holdings Ltd., Reider held roles as President and CEO of SunPac Foods, President and CEO of Xyience Inc., and Vice President positions at Cott Corporation and Cott Beverages Canada. Additionally, he has held board member positions with Associate Brands GP Corporation, FoodCor Corporation and Iroquois Water Ltd. His experience growing both private and publicly traded companies along with his energy and dedication to lean manufacturing and focus on execution will help propel The Green Organic Dutchman Holdings Ltd. to become a leader in the global cannabis industry.

Marc Bertrand is a seasoned Consumer Products executive with nearly three decades of success in brand building, strategic licensing, international markets and manufacturing. He joined Ritvik, the family business, in 1985. He participated in the launch of the MEGA BLOKS brand and contributed to 22 consecutive years of growth and profitability, becoming President and CEO in 1996. MEGA BLOKS grew rapidly into the global number-one brand in preschool construction toys and number two in the boys category.

Before TGOD starts taking market share from other licensed producers, it has started taking human capital from them in the form of new management.

Last week, TGOD announced that it had poached Amy Stephenson from Aurora Cannabis. Amy was appointed as CFO of TGOD and has extensive experience in the legal cannabis industry. She was the CFO of both Aurora Cannabis and Bedrocan, and Controller of Canopy Growth Corp.

Secures a Credit Line and Acquires a New Property

To start off the month of September, TGOD secured a $5 million financing agreement with Alterna Savings and Credit Union Limited. The credit line revolves annually and bears an interest rate at Alterna’s prime lending rate plus 150 basis points.

Last week, The Green Organic Dutchman Holdings acquired a 75-acre property located in Salaberry-de-Valleyfield, Quebec. The company plans to develop the Quebec Property in multiple phases, with Phase 1 expected to commence in the fall. The property has the potential to host over 820,000 sq. ft. of highly automated, state-of-the-art, hybrid greenhouse facilities. The property will increase TGOD’s annual productive capacity to 116,000 kg.

TGOD’s alliance partners, Eaton and Ledcor, along with the design services of Larssen Ltd. Greenhouse Engineers are committed to creating one of the most advanced low-cost operations in Canada. The property will boast a state-of-the-art climate controlled environment paired with some of the most advanced automatization technology available, including separate zones with independent air handling and environmental systems.

The property is located approximately 50 km outside of Montreal, and within 1 km of a 50-megawatt substation, which provides a significant amount of power, at one of the lowest commercial power rates in Canada. Combined with Government incentives, TGOD expects to generate power at less than $0.04 per kWh. Additionally, the property is fully serviced, with access to raw water, natural gas, and sewage.

Investment Thesis

TGOD is a licensed medical cannabis producer in Canada uniquely positioned within the burgeoning medical and recreational cannabis industry. We are favorable on the company for the following reasons:

It has one of the largest licensed land packages and its 145,000-sq. ft. phase 1 expansion should be completed in time for the opening of the recreational market
It recently completed its second oversubscribed private placement and has enough capital to execute on its operating plan
The company has strategic partnerships with some of the largest companies in the world
The company received its cultivation license in August and continues to execute on its business plan
It is led by a management team that has a proven track record of building successful multi-billion dollar companies and its board is comprised of highly qualified and well known corporate executives

Its valuation is well below its peers despite its competitive advantages. This is attractive because it most likely offers significantly more share price appreciation potential for investors.

A Differentiated Opportunity

TGOD produces farm grown pharmaceutical grade organic cannabis. The company grows premium grade organic medical cannabis in small batches through all natural craft growing techniques and organic principles.

The company is focused on building a well-balanced and multi-disciplinary team that can leverage the experience, purchasing power and sector specific expertise of two multi-billion dollar companies as strategic partners. These partnerships have de-risked the project and provide shareholders with above average rates of returns based on a platform of long-term growth, stability and profitability.

TGOD has differentiated itself from the competition by offering craft style premium organic cannabis. This style of cannabis is better for the consumer as well as the company since it costs more and has better margins. The company is led by a management team that has a proven track record of success with licensed Canadian medical cannabis producers such as OrganiGram and Emblem Corp.

Previous Offerings Generates Massive Interest

Since its inception, TGOD has been executing on its initiatives and this has put the company in the position it is in today.

In late November, the company announced plans for an equity financing to raise a minimum of $10,000,000. The offering saw remarkably high interest from the market and in less than two days its order book for this proposed offering was more than two-times oversubscribed.

In March, TGOD closed a $27 million non-brokered private placement and within days the offering was oversubscribed. Interest in this company is huge and we expect to see a successful IPO in January 2018.

This level of execution has resulted in the company having approximately 2,400 shareholders.

Strategic Partnerships with Multi-Billion-Dollar Global Leaders

Larssen Greenhouse is focused on the architecture, engineering and oversight of the facility buildout. The company has built more than 15 cannabis cultivation facilities in Canada and has more than 25 years experience specializing in the technical design buildout of modern and sophisticated greenhouses in the industry.

One of the advantages of Larssen is that the company operates independently of all suppliers. This allows Larssen to charge a price that is below that of the competition while ensuring that the facilities are built to the highest standards.

To assist with power and energy optimization TGOD has partnered with Eaton Power and Light. Eaton is a global power management company with approximately 95,000 employees in more than 175 countries, providing energy-efficient solutions that help customers effectively manage electrical, hydraulic and mechanical power more efficiently.

Eaton has one of the largest and most experienced teams of power system engineers, providing a comprehensive portfolio of services tailored for every stage of a power system’s life cycle. Eaton’s electrical business is a global leader with expertise in power distribution and circuit protection, positioned through its global solutions to answer today’s most critical electrical power management challenges.

TGOD secured Ledcor to assist with construction management and this provides the company with a significant advantage. Ledcor is the 2^nd largest multi-disciplinary construction company in Canada with over 6,000 employees.

Ledcor specializes in project and construction management, pre-construction services, design-build, and general contracting. Although they have constructed almost every type of building, this will be its first buildout for a cannabis business.