SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d)
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 2021
GREENLANE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
|(State or other jurisdiction
|(Commission File Number)||(IRS Employer Identification No.)|
1095 Broken Sound Parkway, Suite 300
Boca Raton, FL
|(Address of principal executive offices)||(Zip Code)|
Registrant’s telephone number, including area code: (877) 292-7660
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|x||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|¨||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|¨||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|¨||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))|
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading Symbol(s)||Name of each exchange on which registered|
|Class A Common Stock, $0.01 par value per share||GNLN||Nasdaq Global Market|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
|Item 7.01||Regulation FD Disclosure.|
Furnished as Exhibit 99.1 hereto and incorporated by reference into this Item 7.01 is an investor presentation that will be used by Greenlane Holdings, Inc. (the “Company” or “Greenlane”) at the Roth Virtual Golden Cannabis Day conference. The presentation discusses, among other things, the transactions contemplated by the definitive merger agreement (the “Merger Agreement”) announced on March 31, 2021 between Greenlane and KushCo Holdings, Inc. (“KushCo”).
The information in this Item 7.01, including Exhibit 99.1, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report will not be deemed an admission as to the materiality of any information of the information in this Item 7.01, including Exhibit 99.1.
Important Information for Investors and Stockholders
In connection with the proposed transaction, Greenlane expects to file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 that will include a joint proxy statement of Greenlane and KushCo that also constitutes a prospectus of Greenlane, which joint proxy statement will be mailed or otherwise disseminated to Greenlane’s and KushCo’s respective stockholders when it becomes available. Greenlane and KushCo also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain free copies of the registration statement and the joint proxy statement/prospectus (if and when it becomes available) and other relevant documents filed by Greenlane and KushCo with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed by the companies will be available free of charge on their respective websites at www.gnln.com and www.kushco.com.
Participants in Solicitation
This Current Report on Form 8-K relates to a proposed transaction between Greenlane and KushCo. This Current Report on Form 8-K is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the potential transaction. Greenlane, KushCo and their respective directors and executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Greenlane is set forth in its proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on April 24, 2020. Information about the directors and executive officers of KushCo is set forth in its proxy statement for its 2021 annual meeting of stockholders, which was filed with the SEC on December 28, 2020. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
|Item 9.01.||Financial Statements and Exhibits|
|Description of Exhibit|
|99.1||Greenlane Holdings, Inc. Investor Presentation dated April 7, 2021|
|104||Cover page formatted Inline XBRL|
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|GREENLANE HOLDINGS, INC.|
|Date : April 7, 2021||By:||/s/ William Mote|
|Chief Financial Officer|
Private & Confidential Private & Confidential INVESTOR PRESENTATION | APRIL 2021
Private & Confidential CAUTIONARY STATEMENT REGARDING FORWARD - LOOKING STATEMENTS THIS PRESENTATION INCLUDES FORWARD - LOOKING STATEMENTS MADE BY REPRESENTATIVES OF GREENLANE HOLDINGS, INC . (“GREENLANE”) . THESE FORWARD - LOOKING STATEMENTS GENERALLY CAN BE IDENTIFIED BY PHRASES SUCH AS “WILL,” “EXPECTS,” “ANTICIPATES,” “FORESEES,” “FORECASTS,” “ESTIMATES” OR OTHER WORDS OR PHRASES OF SIMILAR IMPORT . THESE STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, FORECASTS, AND PROJECTIONS, INCLUDING (BUT NOT LIMITED TO) : CAPITAL MARKET CONDITIONS, THE CURRENT AND FUTURE PERFORMANCE OF GREENLANE’S BUSINESS ; THE COMPANY’S LONG - TERM FINANCIAL TARGETS ; GROWTH IN DEMAND FOR GREENLANE’S PRODUCTS ; GROWTH IN THE MARKET FOR CANNABIS, NICOTINE AND HEMP - DERIVED CBD ACCESSORIES ; GREENLANE’S MARKETING AND COMMERCIALIZATION EFFORTS ; GREENLANE’S FINANCIAL OUTLOOK AND EXPECTATIONS ; THE COMPLETION OF GREENLANE’S PROPOSED MERGER (THE “TRANSACTION”) WITH KUSHCO HOLDINGS, INC . (“ KUSHCO ”) ; THE ABILITY TO RECOGNIZE THE ANTICIPATED BENEFITS OF THE TRANSACTION ; AND THE OTHER RISKS AND IMPORTANT FACTORS CONTAINED AND IDENTIFIED IN GREENLANE’S AND KUSHCO’S FILINGS WITH THE SEC, SUCH AS THEIR RESPECTIVE ANNUAL REPORTS ON FORM 10 - K FOR THE FISCAL YEAR ENDED DECEMBER 31 , 2020 , ANY OF WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FORWARD - LOOKING STATEMENTS IN THIS PRESENTATION . FORWARD - LOOKING STATEMENTS SHOULD NOT BE READ AS A GUARANTEE OF FUTURE PERFORMANCE OR RESULTS AND WILL NOT NECESSARILY BE ACCURATE INDICATIONS OF THE TIMES AT, OR BY WHICH, SUCH PERFORMANCE OR RESULTS WILL BE ACHIEVED . FORWARD - LOOKING INFORMATION IS BASED ON INFORMATION AVAILABLE AT THE TIME AND/OR MANAGEMENT’S GOOD FAITH BELIEF WITH RESPECT TO FUTURE EVENTS, AND IS SUBJECT TO RISKS AND UNCERTAINTIES, SOME OR ALL OF WHICH ARE NOT PREDICTABLE OR WITHIN THE CONTROL OF GREENLANE OR KUSCHCO , THAT COULD CAUSE ACTUAL PERFORMANCE OR RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD - LOOKING STATEMENTS . THERE CAN BE NO ASSURANCE THAT THE TRANSACTION WILL IN FACT BE CONSUMMATED . WE CAUTION INVESTORS NOT TO UNDULY RELY ON ANY FORWARD - LOOKING STATEMENTS . THE FORWARD - LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS PRESS RELEASE . NEITHER GREENLANE NOR KUSHCO IS UNDER ANY DUTY TO UPDATE ANY OF THESE FORWARD - LOOKING STATEMENTS AFTER THE DATE OF THIS COMMUNICATION, NOR TO CONFORM PRIOR STATEMENTS TO ACTUAL RESULTS OR REVISED EXPECTATIONS, AND NEITHER GREENLANE NOR KUSHCO INTENDS TO DO SO . IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS IN CONNECTION WITH THE TRANSACTION, GREENLANE EXPECTS TO FILE WITH THE SEC A REGISTRATION STATEMENT ON FORM S - 4 THAT WILL INCLUDE A JOINT PROXY STATEMENT OF GREENLANE AND KUSHCO THAT ALSO CONSTITUTES A PROSPECTUS OF GREENLANE, WHICH JOINT PROXY STATEMENT WILL BE MAILED OR OTHERWISE DISSEMINATED TO GREENLANE’S AND KUSHCO’S RESPECTIVE STOCKHOLDERS WHEN IT BECOMES AVAILABLE . GREENLANE AND KUSHCO ALSO PLAN TO FILE OTHER RELEVANT DOCUMENTS WITH THE SEC REGARDING THE PROPOSED TRANSACTION . INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION . INVESTORS AND SECURITY HOLDERS MAY OBTAIN FREE COPIES OF THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS (IF AND WHEN IT BECOMES AVAILABLE) AND OTHER RELEVANT DOCUMENTS FILED BY GREENLANE AND KUSHCO WITH THE SEC AT THE SEC’S WEBSITE AT WWW . SEC . GOV . COPIES OF THE DOCUMENTS FILED BY THE COMPANIES WILL BE AVAILABLE FREE OF CHARGE ON THEIR RESPECTIVE WEBSITES AT WWW . GNLN . COM AND WWW . KUSHCO . COM . PARTICIPANTS IN SOLICITATION GREENLANE, KUSHCO AND THEIR RESPECTIVE DIRECTORS AND EXECUTIVE OFFICERS MAY BE CONSIDERED PARTICIPANTS IN THE SOLICITATION OF PROXIES IN CONNECTION WITH THE PROPOSED TRANSACTION . INFORMATION ABOUT THE DIRECTORS AND EXECUTIVE OFFICERS OF GREENLANE IS SET FORTH IN ITS PROXY STATEMENT FOR ITS 2020 ANNUAL MEETING OF STOCKHOLDERS, WHICH WAS FILED WITH THE SEC ON APRIL 24 , 2020 . INFORMATION ABOUT THE DIRECTORS AND EXECUTIVE OFFICERS OF KUSHCO IS SET FORTH IN ITS PROXY STATEMENT FOR ITS 2021 ANNUAL MEETING OF STOCKHOLDERS, WHICH WAS FILED WITH THE SEC ON DECEMBER 28 , 2020 . THESE DOCUMENTS CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE . ADDITIONAL INFORMATION REGARDING THE PARTICIPANTS IN THE PROXY SOLICITATIONS AND A DESCRIPTION OF THEIR DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, WILL BE CONTAINED IN THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT MATERIALS TO BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE . NO OFFER OR SOLICITATION THIS COMMUNICATION IS NOT INTENDED TO AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR A SOLICITATION OF ANY VOTE OF APPROVAL, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION . NO OFFER OF SECURITIES SHALL BE MADE EXCEPT BY MEANS OF A PROSPECTUS MEETING THE REQUIREMENTS OF SECTION 10 OF THE SECURITIES ACT OF 1933 , AS AMENDED . DISCLAIMER 2
Private & Confidential INNOVATING TOMORROW’S PRODUCTS TODAY 3 $31.3B ESTIMATED GLOBAL LEGAL CANNABIS MARKET IN 2022* Greenlane successfully identifies and develops industry leading brands early in their lifecycle, utilizing over 15 years of industry experience and proprietary consumer data . With deep consumer insights, we are strongly positioned to grow and scale to meet the accelerating global demands for both B 2 B and B 2 C products . Proven track - record of successfully identifying & developing the industry’s next leading brands early in their lifecycle As the leading global platform for the development and distribution of premium cannabis accessories and lifestyle products we innovate for tomorrow, today . *SOURCE: ARCVIEW MARKET RESEARCH AND BDS ANALYTICS The preeminent platform for products in the cannabis and alternative space
Private & Confidential INVESTMENT HIGHLIGHTS (1) 4 Driven by our four pillars for growth: • Cost reduction through operational efficiencies • Optimizing assortment towards higher - margin and owned brand products • Strengthening sales approach with a focus on customer experience • Enhancing and expanding our platform RECORD CORE BUSINESS REVENUE IN 2020 $ 125.2 M GLOBAL DISTRIBUTION HUBS 5 YEARS OF INDUSTRY EXPERIENCE 10 M + CONSUMER REACH THROUGH DIRECT + RETAIL RELATIONSHIP 15 PARTNERSHIPS WITH KEY BRANDS 50+ 90.5 % OF FY2020 REVENUE DERIVED FROM CORE BUSINESS $30.4 M YEAR - END 2020 CASH BALANCE 46.3 % GROWTH IN GREENLANE BRANDS REVENUE YOY (1) AS OF DECEMBER 31, 2021
Private & Confidential A GLOBAL DISTRIBUTOR OF BEST IN CLASS PRODUCTS Greenlane Offers a Comprehensive Assortment of Products , Offering Broad Distribution For Brands , & Acting As A One Stop Shop For Both B2B & B2C: 5 Vaporizers & Components Papers & Wraps Functional Glass Customized Packaging Tools & Appliances Hemp CBD Grinders & Storage Parts & Accessories
Private & Confidential CURATING A PORTFOLIO OF GREENLANE BRANDS +1M Social Media Followers* 6 Greenlane brands created leveraging deep consumer insights from years of distributing the industry’s largest brands * MARLEY NATURAL SOCIAL MEDIA CHANNELS ENCOMPASS BOTH BRANCHES OF THE BRAND.
Private & Confidential STRONG PARTNERSHIPS WITH AWARD WINNING BRANDS 7 AS A PIONEER IN THE CANNABIS SPACE, GREENLANE IS THE PARTNER OF CHOICE FOR MANY OF THE INDUSTRY’S LEADING BRANDS BEST PRODUCT 2017 +3M TOTAL FOLLOWERS COMBINED TOP 20 BRAND PARTNERSHIPS
Private & Confidential 100+ CUSTOM PRODUCT & PACKAGING CUSTOMERS 8
Private & Confidential ADDING VALUE THROUGH EVERY STEP OF THE PRODUCT LIFECYLE Product Development Go - to - Market Strategy Sales & Marketing Support Direct - to - Consumer Fulfillment 9 Customer Service Supply Chain Management Direct Access To Retail Outlets Distribution
Private & Confidential STRATEGICALLY POSITIONED THROUGHOUT THE VALUE CHAIN PRODUCT PACKAGING, LABELS, & SUPPLIES VAPORIZATION HARDWARE & TECHNOLOGY CONSUMPTION PRODUCTS RETAIL & GO TO MARKET EXECUTION • Industry leader in child resistant stock, or custom child resistant packaging • Supporting large & small operators with compliant labels & processing supplies • Customization capability based in USA • Cartridges, batteries, & pod vapor systems with a variety of heating technologies & capabilities • Includes specialized filling equipment & consumables • Grinders, water pipes, rolling papers, & more • Exclusive distributor of VIBES rolling papers in partnership with Gilbert “Berner” Milam Jr. • Exclusive distributor of Higher Standards brand • GNLN Studio: including design, marketing, legal, distribution, & strategy development • Greenlane distribution execution, and full - service warehouse & supply chain capability CULTIVATION RETAILERS CONSUMERS MANUFACTURERS DISTRIBUTION BRANDS
Private & Confidential GROWTH STRATEGY 1 2 3 4 Grow Scale, Scope, & Efficiency Of Our Business Build Proprietary Portfolio Of Greenlane Brands & Key Brand Partnerships Create Elevated Omnichannel Experiences Across Our Brands Improve & Expand Global Platform 11
Private & Confidential Expand our market share and product offering through strong customers and supplier relationships supported by best - in - class oper ations . 1 . GROW SCALE, SCOPE, AND EFFICIENCY OF OUR BUSINESS • Warehouse & Logistics • Organizational Structure 12 COMPLETED SUBSTANTIALLY COMPLETED IN PROGRESS Reposition focus on higher margin revenue opportunities • Refocused effort on higher margin revenue ie . Greenlane Brands • Reduced proportion of revenues derived from lower - margin nicotine products to below 10% Add new senior leadership • Hired new leadership to grow and expand business segments Reevaluate cost structure to drive efficiencies • Streamlined and consolidated distribution centers from 7 to 5, enhancing automation & efficiencies • Performed a strategic review of workforce • Reduced North American staff by 31% Expand the GNLN platform & Strategic Acquisitions • Pursuing opportunities for channel expansion and digital solutions • Evaluating a robust pipeline of M&A opportunities Focus on Organic Growth • Optimizing assortment of products to meet customer needs • Upgrading customer service approach to support the broader customer experience • Increasing penetration rates, in terms of both number of customers and shelf space per customer • Target high lifetime value consumers In Q1 2020, Greenlane announced its plan to operate a high - growth, profitable business through various strategic initiatives :
Private & Confidential A DISCIPLINED APPROACH TO VALUE - ENHANCING STRATEGIC ACQUISITIONS • Market Share Growth & Enhanced Product Portfolio • Disciplined Operators & Cultural Alignment • Margin Accretion • Fortifies Global Position • Additional Product Categories COMPLETED ACQUISITIONS February 2018 January 2019 October 2019 Next Largest Vapor & Accessory Wholesaler & E - Commerce Player Bolstered E - Commerce & Fulfillment Capabilities & Added 5th Distribution Center Increased Our Sales By Introducing Products From Our Existing Portfolio To Customers of VaporNation California - Based Designer of Child - Resistant Packaging & Storage Solutions Expanded Our Portfolio of Proprietary Owned Brands Improved Margins by Vertically Integrating Our Supply & Packaging Segment Leading European Wholesaler & Retailer of Consumption Accessories, Vaporizers & Other Premium Products Immediate Expansion Into European Market Increased B2B & B2C Sales & Accretive to Gross Margin (CONSCIOUS WHOLESALE) DATE DESCRIPTION RATIONALE FINANCIAL IMPACT ACQUISITION CRITERIA As the industry continues to see consolidation, Greenlane remains at the forefront with a strong balance sheet and discipline d a pproach to acquisitions. 13 March 2021 World’s Leading Brand of Silicone Smoking Products Expanded Our Portfolio of Proprietary Owned Brands Immediately Accretive to Revenue and Earnings
Private & Confidential TRANSFORMATIVE MERGER, CREATING THE LEADING ANCILLARY CANNABIS COMPANY AND HOUSE OF BRANDS ESTABLISHED PLATFORM WELL - POSITIONED TO CAPITALIZE ON INDUSTRY T AILWINDS ENHANCED PORTFOLIO DEPTH AND INNOVATION PIPELINE TO DELIVER VALU E TO CUSTOMERS AND CONSUMERS COMPLEMENTARY PORTFOLIO OF BRANDS, PRODUCTS & SERVICES OFFER SIG NIFICANT CROSS - SELLING OPPORTUNITIES EXPERIENCED INDUSTRY LEADERS WITH 25+ YEARS OF CANNABIS OPERATIN G EXPERIENCE COMBINED PRO FORMA 2020 REVENUE ESTIMATED TO BE OVER $250 MILLIO N POSITIONED TO SERVE THE ENTIRE VALUE CHAIN FROM LEADING OPERATOR S TO RETAIL AND CONSUMERS IMPROVED MARGINS AND MEANINGFUL POTENTIAL SYNERGIES EXPECTED TO DRIVE IMMEDIATE PROFITABILITY
Private & Confidential TRANSACTION OVERVIEW • Stock - for - stock combination with approximately 0.2546 Greenlane Class A shares received for each KushCo share (the “Base Exchange Ratio”), subject to adjustment (1) • Expected pro forma ownership to Greenlane stockholders of 50.1%(1) and to KushCo stockholders of 49.9% (1) • All of Greenlane Class C Common Stock to be converted to Class B Common Stock on a 3 - to - 1 basis which will have the effect of re tiring the existing enhanced voting rights of Greenlane’s majority stockholder • Subject to customary closing conditions, including regulatory and Greenlane and KushCo stockholder approvals • Expected to close in late Q2 2021 or early Q3 2021 (1) The Merger Agreement permits Greenlane to continue to pursue opportunistic and strategic priorities prior to the closing of t he Transaction, including engaging in certain contemplated acquisitions and capital raising transactions. If Greenlane issues additional securities prior to the closing of the Transaction in connec tio n with any acquisitions or capital raising transactions, the Base Exchange Ratio will be adjusted such that Greenlane’s existing stockholders maintain an aggregate interest of at least 50.1%, and not mor e than 51.9%, in the combined company. ENHANCED SCALE • Products sold in over 8,000 retailers globally, including U.S. MSO and smoke shop channels • Access to millions of customers in B2C channel • Presence in 4 continents • Over 200 articles of IP POTENTIAL SYNERGIES TO ACCELERATE PROFITABILITY • Estimated $15 - $20 million of pre - tax annual run - rate cost synergies • Achievable within 24 months following close of transaction • Opportunity for revenue synergies through cross - selling of highly complementary offering of brands, products & services EXPERIENCED INDUSTRY LEADERS • Combined company leadership team will have 25+ years of operating history in the ancillary cannabis industry • Nick Kovacevich, will serve as CEO • Bill Mote, will serve as CFO • Aaron LoCascio will serve as President • Adam Schoenfeld, will serve as CSO • KushCo’s deep U.S. MSO and Canadian LP upstream customer relationships coupled with Greenlane’s downstream focus and Greenlane owned brands enable significant growth opportunities and ability to deliver additional value to customers WELL - POSITIONED ACROSS THE ENTIRE VALUE CHAIN
Private & Confidential 2 . BUILD PROPRIETARY PORTFOLIO OF GREENLANE BRANDS & KEY BRAND PARTNERSHIPS LUXURY MEETS CANNABIS DARE TO DREAM SYMBIOTIC RELATIONSHIPS REWRITING THE RULES GROWTH FOCUSED As a global house of brands, we embody elite craftsmanship, technological innovation, and novel experiences. With a 360 - degree industry view and award - winning expertise, Greenlane drives innovation in the brand landscape. Expand offering and develop strong representation in all product categories for our customer base. Curate Greenlane Brands portfolio through a thoughtful methodology bolstering margin profile, customer loyalty, and differentiation. Leverage unparalleled access to shelf space to quickly scale and drive margins. 16
Private & Confidential 3 . CREATE ELEVATED OMNICHANNEL EXPERIENCES ACROSS OUR BRANDS RETAIL: Through our Higher Standards retail locations we can keep a pulse on the market and customers, informing our strategy for the most effective store merchandising. Groundbreaking stores in both New York City’s Chelsea Market, Malibu, California & Barcelona, Spain through our partnership with Cookies. E - COMMERCE: With Vapor.com, we drive critical mass with users to rationalize a unique, offline marketing strategy to reach cannabis consumers. Poised to become the leading e - commerce destination for cannabis connoisseurs in the United States, Canada, Europe, and beyond. 17 17 +110% E - COMMERCE SALES 2019 TO 2020 Heading into 2021, momentum has continued with strong demand for B2C
Private & Confidential 18 4 . IMPROVE & EXPAND GLOBAL PLATFORM NEW LEADERSHIP WITHIN THE INTERNATIONAL BUSINESS SEGMENTS UPGRADE GLOBAL PLATFORM FOR BEST - IN - CLASS DIGITAL CUSTOMER EXPERIENCES GREENLANE IS THE AMBASSADOR OF "AMERICAN CANNABIS CULTURE" IN EUROPE
Private & Confidential SUCCESSFUL TRACK RECORD (1) 19 46 % YOY REVENUE GROWTH FOR GREENLANE BRAND PRODUCTS 7 OWNED BRANDS TO DATE 320 BPS Y oY ADJUSTED GROSS MARGIN* IMPROVEMENT OWNED BRAND PRODUCTS AVAILABLE IN 5000+ GLOBAL LOCATIONS (1) As of December 31, 2020 (2) Excluding the impact of certain inventory adjustments which incurred in the third quarter of 2020 $125.2 M RECORD CORE BUSINESS REVENUE
Private & Confidential FINANCIAL HIGHLIGHTS $ in millions, unless otherwise noted Q4 2020 Q 4 20 19 FY 2020 FY 2019 NET SALES $36.3 $37.2 $138.3 $185.0 CORE BUSINESS* SALES $33.9 $30.5 $125.2 $111.1 % of NET SALES 93.4% 81.8% 90.5% 60.1% SALES OF GREENLANE BRANDS $7.7 $5.2 $27.2 $18.6 % of NET SALES 21.4% 13.8% 19.7% 10.1% GROSS PROFIT $6.2 $6.5 $22.8 $31.1 GROSS MARGIN 17.1% 17.5% 16.5% 16.8% G&A $9.6 $8.0 $35.3 $23.6 ADJUSTED EBITDA - $7.2 - $7.6 - $24.4 - $13.4 CASH $30.4 $47.8 $30.4 $47.8 20 *Defined as non - nicotine revenue
Private & Confidential EXPERIENCED EXECUTIVE LEADERSHIP TEAM Aaron LoCascio Chief Executive Officer Co - Founder; Overseeing day - to - day operations of Greenlane. Serial entrepreneur since encountering his first vaporization product at age 19. Sensed the commercial and technological potential of vaporization and began purchasing and re - selling units online shortly thereafter. Bill Bine Chief Operating Officer 25 years experience leading supply chain and operations growth and transformation in the consumer products and manufacturing industries. Built career in diverse global business environments and delivered accretive results in domestic and international business growth, M&A, and business transformation. Formerly SVP, Global Supply Chain and Operations at Crocs. Prior, held multiple leadership positions including: Interim Chief Sourcing Officer and VP, Global Sourcing Operations at Ascena Retail Group, VP International Operations and Supply Chain Strategy at Chico’s FAS, Inc. and senior positions at L Brands, Inc. US Navy veteran, BS, Electrical Engineering from the University of Notre Dame and Finance and Operations from Duke University. Adam Schoenfeld Chief Strategy Officer Co - Founder; Early adopter and pioneer of vaporization. Integral role in the adoption and success of numerous successful brands in the vaporization space, now household names. Keen understanding of the diffusion of innovation and a mastery of the web marketing, advertising, and search engine optimization techniques to accelerate that diffusion. Bill Mote Chief Financial Officer Over 25 years of experience building and leading finance teams in global corporations with significant operating scale and complexity. Formerly CFO at Basic Fun and previously at Summer Infant (NASDAQ:SUMR) and the Poarch Band of Creek Indians. Held senior level finance roles at Jakks Pacific, Easton Bell Sports and Hewlett - Packard. Graduated from Louisiana State University in Baton Rouge with a bachelor’s degree in Accounting and a master’s degree in Business Administration. 21 Doug Fischer General Counsel Practiced at Cadwalader, Wickersham & Taft, representing corporations and individuals in an array of settings spanning white collar criminal, regulatory, and complex commercial matters. Former Chief Legal Officer of the National Association of Cannabis Businesses where he worked with leading cannabis businesses to establish national compliance standards.
Private & Confidential BOARD OF DIRECTORS Aaron LoCascio Chief Executive Officer Richard Taney Director • Member of the Audit Committee • Chair of the Compensation Committee • Member of the Nominating & Corporate Governance Committee Adam Schoenfeld Chief Strategy Officer Neil Closner Director • Member of the Audit Committee • Member of the Compensation Committee • Chair of the Nominating & Corporate Governance Committee Jeff Uttz Director • Chair of the Audit Committee • Member of the Compensation Committee • Member of the Nominating & Corporate Governance Committee 22
Private & Confidential APPENDIX
Private & Confidential SHARES OVERVIEW NASDAQ: GNLN $6.20 $ 261 Million TICKER RECENT PRICE (AS OF 04 / 01 /2 1 ) MARKET CAP (AS OF 04 / 01 /2 1 ) $239 Million 42.2 Million Shares ENTERPRISE VALUE (AS OF 04 / 01 /2 1 ) SHARES OUTSTANDING 2 PUBLIC FLOAT 3 13.1 Million Class A Shares $ 138.3 million 2020 REVENUE 1) Reflects Cash & Total Debt at December 31, 2020. Debt Includes Current & Long - Term Portions of Notes Payable & Finance Leases 2) See Appendix for Detail s 3) Includes Shares Sold to IPO Investors & Converted Shares From Convertible Note 24
Private & Confidential HISTORICAL INCOME STATEMENT 25 Note: US$ in thousands. 1. We monitor our Adjusted EBITDA, which is defined as net (loss) income before interest expense, income tax expense, depreciati on and amortization expense, equity - based compensation expense, other income, net, and non recurring expenses primarily related to our transition to being a public company. These non - recurring expenses, which are reported within general and administrative expenses in our consolidated stateme nts of operations, represent fees and expenses primarily attributable to consulting fees and incremental audit and legal fees . A djusted EBITDA is a non - GAAP performance measure that we believe assists investors and analysts as a supplemental measure to evaluate our overall operatin g p erformance and how well we are executing our business strategies. We believe that the inclusion of certain adjustments in pre sen ting Adjusted EBITDA is appropriate to provide additional information to investors because adjusted EBITDA excludes certain items that we believe are not indicative of our core operating performance and that are not excluded in the calculation of net income. 2020 2019 Net sales $ 138,304 $ 185,006 Cost of goods sold 115,539 153,916 Gross Profit 22,765 31,090 % Margin 16.5% 16.8% Operating expenses: Salaries, benefits and payroll taxes 24,909 29,716 General and administrative 35,315 23,593 Goodwill Impairment Charge 8,996 - Depreciation and amortization 2,520 2,705 Total operating expenses 71,740 56,014 % of Net sales 51.9% 30.3% Net Loss (47,704)$ (39,824)$ Adjusted EBITDA (24,352)$ (13,424)$ Operating expenses as % of net revenue: Salaries benefits and payroll Taxes 18.0% 16.1% General and administrative 25.5% 12.8% Depreciation and amortization 11.1% 8.7% Year Ended December 31, (in thousands)
Private & Confidential ADJUSTED EBITDA RECONCILIATION Note: US$ in thousands. (1) Includes rental and interest income, changes in the fair value of contingent consideration, and other miscellaneous incom e. (2) Includes certain non - recurring fees and expenses primarily attributable to consulting fees and incremental audit and legal f ees incurred in connection with our IPO. (3) Includes non - recurring expenses related to the initial project design for our planned ERP system implementation. (4) Includes primarily severance payments for employees terminated as part of our transformation plan. (5) Includes certain non - recurring charges related to management's strategic initiative. These adjustments were incurred liquida te inventory on hand and on order, rationalize product offerings, improve inventory turnover of slow - selling products and vacate warehouse space for products with higher margin and marketability. 26
Private & Confidential SHARE COUNT DETAIL (1) Represents the total number of outstanding shares for each class of common stock as of December, 31, 2020. (2) Represents the number of shares of Class A common stock that would be outstanding assuming the exchange of all outstandin g s hares of Class B common stock and Class C common stock upon redemption of all related Common Units. Shares of Class B common sto ck and Class C common stock, as the case may be, would be canceled, without consideration, on a one - to - one basis in the case of Class B common stock and a th ree - to - one basis in the case of Class C common stock, pursuant to the terms and subject to the conditions of the Operating Agree ment. (3) Represents the indirect economic interest in the Operating Company through the holders' ownership of common stock. (4) Represents the aggregate voting interest in us through the holders' ownership of Common Stock. Each share of Class A comm on stock, Class B common stock and Class C common stock entitles its holder to one vote per share on all matters submitted to a vot e of our stockholders. (5) Represents the aggregate economic interest in us through the holders' ownership of Class A common stock 27
Private & Confidential THANK YOU INVESTOR CONTACT: ROB KELLY INVESTOR RELATIONS, MATTIO COMMUNICATIONS GREENLANE@MATTIO.COM