Liberty Leaf Report (Canadian Stock) PDF

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http://www.libleaf.ca

Liberty Leaf Holdings Ltd (CSE: LIB, OTCQ: LIBFF, FSE: HN3P) British Columbia, Canada A Medicinal and Recreational Cannabis Products Developing Company Liberty Leaf Holdings Ltd. is a publicly traded company in the business of acquiring partnership interests in up-and-coming and established companies in the medicinal and recreational cannabis space. The Company operates in Canada and is actively seeking to enter the various legal cannabis markets globally. The shares of the company are traded internationally. Liberty Leaf invests strategically in companies that are established, proven performers. The company provides funding, management, HR resources, and marketing expertise to help those companies thrive and accelerate their growth. LIB also forms working relationships with organizations engaged in research and development (R&D) of cannabis uses and products and use the knowledge gained from them to help its own business expand and develop new markets.

Important Milestones from Mining to Cannabis •

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From inception until October 20, 2016: The Company named as Weststar Ltd, was a junior mineral exploration company engaged in the business of acquiring, exploring and evaluating natural resource properties. The Company no longer has any mineral exploration interests.

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December 31, 2014 : the Company began evaluating business opportunities outside of the mineral exploration sector, primarily within the cannabis sector.

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October, 2015: Weststar (Liberty Leaf formerly known as Weststar) closes oversubscribed financing of $509,000 towards concluding a deal to purchase North Road Ventures, a company actively seeking a Health Canada Producer’s Licence. Note: as of 2017, producer licences are estimated to be worth $50 million.

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December 31, 2015: Weststar advanced $107,500 to North Road in order to further its ACMPR (Access to Cannabis for Medicinal Purposes Regulations) license application.

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September 28, 2016: Weststar receives conditional approval from the Canadian Securities Exchange on a Fundamental Change to the business concerning the purchase of North Road Ventures. The company also announces its intent to change its name to Liberty Leaf Holdings Ltd., and to change its stock symbol to “LIB”.

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October 20, 2016: Weststar announces that the Company’s shares will begin trading on the CSE under the name Liberty Leaf Holdings Ltd. and symbol “LIB”.

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During 2017: Liberty Leaf begins trading its common shares at different global exchanges •

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The Frankfurt, Berlin, and Stuttgart Stock Exchanges under the ticker symbol: HN3P and WKN: A2AT5C. These listings in provide the Company with increased exposure to some of the largest capital markets in the world and enable its European investor base to trade the Company’s common shares in their home currency. The OTCQB Venture Market this furthers its strategy to engage and expand its U.S. investor audience. The company’s symbol on the OTCQB is LIBFF. It remains LIB on the CSE.

May, 2019

Equity Research Price (C$) 24/05/2019 Price Target 52 week high 52 week low

C$0.14 -$1.00 $0.08

Shares Outstanding (millions)

Basic Shares Options & Warrants Fully Diluted Capitalization (C$ millions) Current Market Cap Target Market Cap Revenue (C$ millions) FY-18 FY-17 FY-16

127.53 -127.53

17.85 --

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December 6, 2017: The Company signed an agreement to acquire shares of Just Kush Enterprises Ltd. (“Just Kush”), a cannabis company with a pending ACMPR license.

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December 9, 2017: The Company entered into an agreement for services to be provided by Blox Labs Inc. (“Blox”), a blockchain technology company in Ontario. Under the terms of the agreement, Blox will develop on behalf of the Company a blockchain based software application to track and monitor the sale and distribution of cannabis and marijuana products, from cultivator to end consumer.

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August 2018: the Company’s first CBD research trial on pain medication for dogs was completed. Results from the ESEVmanaged, randomized, placebo-controlled clinical trials were positive.

Investment Summary This is a detailed coverage on Liberty Leaf Holdings Ltd. (CSE: LIB). Liberty Leaf Holdings Ltd. (the "Company") is a Vancouver, British Columbia, based company incorporated under the name Weststar Resources Corp. on October 27, 2004 in the province of British Columbia. During the year ended December 31, 2006, the Company completed its initial public offering on the TSX Venture Exchange ("TSX-V"), and the Company’s shares were listed for trading on September 22, 2006. Weststar was a mineral exploration company until October 21, 2016, when the Company changed its name to Liberty Leaf Holdings Ltd and completed a transition to the cannabis business through the acquisition of North Road Ventures Ltd. (“North Road”), and began trading under the symbol "LIB". On December 9, 2016, the Company sold its interest in the Axe Property for $21,000 and recorded a gain on sale of exploration and evaluation assets of $20,999. The Company no longer has any mineral exploration interests. For Liberty Leaf, the main aim is not to spend money developing cannabis growing operations, harvesting and processing facilities, or distribution channels. Instead, the company looks for viable companies already engaged in those pursuits and negotiate profitable purchase deals for part or complete ownership of those companies. The landscape in Canada will be changing dramatically over the next few years with regards to medical and recreational marijuana acceptance and legalization. One of the companies at the helm of the Canadian marijuana emergence is Liberty Leaf Holdings Ltd. Liberty Leaf Holdings Ltd has currently established themselves in three, vastly emerging marijuana markets: Wholesale and Retail of marijuana, Distribution of marijuana and Nutraceutical marijuana products aimed specifically for pets. Current Holdings and Partners

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North Road Ventures: North Road is an emerging distributor of cultivated and manufactured cannabis products to licensed legal retailers.

Liberty Leaf North Road 100%

The company is at the later stages to obtain ACMPR license.

Just Kush 60%

The wholesale and retail aspect of Liberty Leaf Holdings Ltd will commence with its wholly owned Subsidiary North Road Ventures which is an ACMPR Applicant for a distribution license of marijuana under Health Canada. This Distribution license will allow Liberty Leaf Holdings Ltd. to distribute 7,500 Kilograms (16,500 pounds) of marijuana to retailers in Canada.

Signature Cannabis Retail ESEV R&D

BloxLabs Joint Venture

100%

Just Kush Enterprises: Just Kush Enterprises Ltd. owns and operates medicinal cannabis production facility. The company is at the later stages to obtain ACMPR license. 

Signature Cannabis Retail: Signature Cannabis Retail Ltd. ("Signature Cannabis") is the retail channel with an operational network slated to include flagship stores (each range in size from approximately 1,500-2,500 square feet), as well as corporateowned satellite stores, partner operations and online dealer-support networks. The enterprise is intended to capitalize on the legalization of recreational cannabis across the country.The plan is to serve as many communities across Canada as possible.

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ESEV Genetics: ESEV is an American based life sciences company that is dedicated to the advancement in research on cannabis and the development of breakthrough cannabis-derived medical solutions. Headquartered in New York, ESEV R&D is centered and operating R&D projects in Israel, where they are cooperating with the country’s top scientific institutions, who have been researching medicinal cannabis for 50 years. Liberty Leaf Holdings Ltd and ESEV are working together on the third Canadian emerging marijuana opportunity, which could easily become the largest opportunity for Liberty Leaf. That sector is the pet health and wellness market. Recent data from the National Pet Owners Survey conducted on a bi-annual basis by the American Pet Products Association reported that USD $7 Billion is spent by US consumers on pets and pet ailments annually.

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Blox Labs Inc: Blox Labs Inc. is a technology development company focused on creating best-in-class software solutions driven by emerging trends in Blockchain, Smart Contracts and Decentralized Applications (DApps).

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Cannabis Compliance Inc: Cannabis Compliance Inc. are a team of professional consultants who specializes in assisting its clients with facility design, cultivation & sales license, cultivation program and business planning. Cannabis Compliance as one objective, and that’s obtaining an ACMPR license approval from Health Canada for their clients. Liberty Leaf hired Cannabis Compliance Inc. that has helped the well known licensed producers such as Tweed, 7 Acres, Delshen, Aurora and Praire Plant Systems.

Industry Overview The Canadian Medical and Recreational Cannabis Industry

Cannabis: also known as marijuana among other names is a psychoactive drug from the Cannabis plant used for medical or recreational purposes. The main psychoactive part of cannabis is tetrahydrocannabinol, one of 483 known compounds in the plant, including at least 65 other cannabinoids.. The Cannabis Industry: is composed of legal cultivators and producers, consumers, independent industrial standards bodies, ancillary products and services, regulators and researchers concerning cannabis and its industrial derivative, hemp. The cannabis industry has been inhibited by regulatory restrictions for most of recent history, but the legal market has emerged rapidly as more governments legalize medical and adult use. Uruguay became the first country to legalize recreational marijuana through legislation in December, 2013 Cannabis in Uruguay. Canada became the first country to legalize private sales of recreational marijuana with Bill C-45 in 2018 Cannabis in Canada. Recently, Coca-Cola has shown interest in producing cannabis infused drinks.

Market value: The cannabis industry can be considered a multibillion dollar component of a larger pharmaceutical industry . The exact value of cannabis sales worldwide remains unknown as the vast majority of the market remains illicit. With movement around legalization of Cannabis, it is attracting more investments from alcohol and drug companies.

Source: Wikipedia

Market value: Country Wise Analysis

Canada: Canada is set to become the second country to legalize adult-use of marijuana (after Uruguay) and first country to legalize private sales of recreational marijuana with Bill C-45 on July 1, 2018 Cannabis in Canada. As of December 2017, there are 79 licensed marijuana producers in Canada with most concentrated in Ontario and British Columbia. ccording Deloitte, the base retail market is valued at $4.9-$8.7 billion annually. Including ancillary opportunities, Deloitte estimates a market worth $12.7-$22.6 billion annually, demonstrating an upside of more than $20 billion. USA: Marijuana (cannabis drug) sales in North America reached $6.7 billion in 2016, representing 30% growth year-over-year. Cannabis is the United States' largest cash crop and "a pervasive and ineradicable part of the national economy". A 2015 Arc-View Group report

stated that it was the fastest growing industry in the United States. The industry in the United States is expected to grow from $2 billion in 2014 to as much as $10 billion in 2018, depending on legalization outcomes. By one estimate the industry in the United States could be $35 billion in 2020.

Future Projections about Canada’s Cannabis Industry The total cannabis market in Canada, including medical, illegal, and legal recreational products, is expected to generate up to $7.17 billion in sales in 2019—up to $4.34 billion of which will come from the legal recreational market. Medical cannabis is anticipated to generate an additional $0.77 billion to $1.79 billion in sales, with the illegal market bringing in a further $0.51 billion to $1.04 billion. Overall consumption through legal channels is expected to rise by up to 35 percent, as likely new consumers offset the proportion of current ones who elect not to transition to legal channels. The cannabis spend overall is also expected to rise by up to 58 percent, owing primarily to the fact that prices for legal products will be higher.

Source: Lib-Leaf corporate presentation

Management William Rascan, President and Director

Mr. Rascan joins Liberty Leaf with +25 years’ experience in the investment brokerage industry, most recently as a Partner, Senior Investment Advisor with Northern Securities. Mr. Rascan’s business ranged from active international trading clients to raising capital for junior mining companies on the TSX Venture Exchange (“TSXV”). Past firms include, CM Oliver, Research Capital, Blackmont and Jennings Capital. Prior to his years as an Investment Advisor, Mr. Rascan was Vice-President, Institutional Money Market Sales with ScotiaMcleod Inc. Jamie Robinson; Chief Financial Officer (CFO)

Mr. Robinson is a Chartered Accountant, specializing in accounting, auditing and financial reporting under both IFRS and ASPE. Prior to joining Liberty Leaf, Mr. Robinson worked at Deloitte as a Manager focusing on publicly listed and private company audits as well as business reviews, performance enhancement engagements and formal restructuring proceedings. After his public practice experience, Jamie worked as a Senior Financial Analyst at Corinex Communications, performing in-depth financial analysis of currencies, commodities, and financial statements for the purpose of investment and hedge fund trading. Mr. Robinson holds a CA designation and a Bachelor of Commerce from McGill University. Kelly Pladson – Corporate Secretary

Kelly Pladson has provided corporate governance and regulatory compliance services to many TSX Venture and CSE listed companies since 2009. She works closely with the company’s CEO and legal counsel in maintaining corporate records, managing the day to day operations of the company and ensuring the company’s filings with the securities commissions and exchanges are accurately filed and in accordance with their deadlines. Prior to 2009, Ms. Pladson was an investment advisor’s assistant for two years

Steven Feldman; Director

Mr. Feldman has more than 25 years' experience in the capital markets. Notably, Mr. Feldman was part of the original management team of SouthGobi Resources that evolved from a $20 million market cap explorer to a $2 Billion+ market cap coal producer with senior listings on the Toronto and Hong Kong Stock Exchanges. Currently, Mr. Feldman is a Social Media Consultant and a participant in the global cannabis industry. Additionally, Mr. Feldman has over six years' experience in Investment Counsel and has completed the Canadian Securities Course (CSC), Canadian Options Course (OLC) and the Professional Financial Planner Course (PFPC). Doug Macdonell; Consultant

Mr. Macdonell is a retired RCMP officer and recognized expert in the field of cannabis and cannabis cultivation. He initiated and supervised RCMP marijuana grow facilities in Vancouver and Edmonton for the purpose of training RCMP and City Police personnel to become experts in this field. In addition to training police in the field of cannabis production, Mr. Macdonell has also lectured extensively to other agencies such as the Drug Enforcement Agency in the U.S. and Department of Justice Personnel in Canada. He has been recognized as an expert witness in cannabis, cannabis production and distribution at all levels of the Canadian court system.

Other Key Officers and Consultants Robert W.E. Laurie; Advisory Board Chair

Mr. Laurie is an international lawyer, writer and speaker, qualified as a solicitor in England and Wales and called to the British Columbia Bar as a barrister and solicitor. Barinder Rasode; Advisory Board

Barinder Rasode currently serves as CEO of the National Institute for Cannabis Health & Education (NICHE), an independent, notfor-profit organization that provides impartial, evidence-based research about cannabis production and use in Canada.

Financial Forecast and Analysis SUMMARY The valuation of LIBERTY LEAF HOLDINGS LTD. (CSE: LIB) is not possible. The current financial picture of the company is weak as the company has not started generating revenues under its core cannabis space due to non issuance of required licenses by Canadian health department. The company currently is mainly focusing on investing money to develop cannabis growing operations, harvesting and processing facilities, or distribution channels i.e the company is expensing on R&D. Hence it is not possible to calculate company’s future cash flow values. This is due unavailability of cash flow and dividend data.

The company is a loss making company but has strong fundamentals. The important fundamentally positive factors that are being considered while analyzing the company are

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The management of the company is very well experienced and highly professional.

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The company is on the verge to obtain its cannabis production and distribution ( ACMPR) licenses from Canadian Health Department. 

The Company has submitted an application for a license under the ACMPR through each of its subsidiaries, North Road and Just Kush. A license is required to grow and sell medical marijuana in Canada.

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In our opinion Liberty Leaf Holding Ltd will most likely obtain their license as they have hired Cannabis Compliance Inc. to ensure they meet all regulatory standards and maximizing their ability in obtaining a license. Cannabis Compliance Inc. has helped licensed producers such as Tweed, 7 Acres, Delshen, Aurora and Praire Plant Systems

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Liberty Leaf’s business model does not include cannabis cultivation and production. But its main objective is to support the existing cultivators with R&D and manufacture recreational and medicinal products and its distribution.

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The company has a well established production and distribution setup that is ready to use as soon as the Canadian Health department issues the required licenses.

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The Company is continuously evaluating additional investment opportunities in the cannabis sector. 

The company entered into an agreement to develop up to 4 proprietary cannabidiol (“CBD”) formulations from ESEV R&D LLC.

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The Company entered into an agreement for services to be provided by Blox Labs Inc. (“Blox”). Under the terms of the agreement, Blox will develop on behalf of the Company a blockchain based software application to track and monitor the sale and distribution of cannabis and marijuana products, from cultivator to end consumer. Blox has commenced the initial Phase 1 development of “cannaBLOX”, a Blockchain-based smart contract supply chain management platform for the legalized cannabis industry.

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The Company launched its Signature Cannabis Retail e-commerce website, an online shopping experience offering quality cannabis accessories to consumers. Signature already has an operational network slated to include flagship stores (each range in size from approximately 1,500-2,500 square feet), as well as corporate-owned satellite stores, partner operations and online dealer-support networks.

RESULTS OF OPERATIONS For the year ended December 31, 2018 During the year ended December 31, 2018, th...