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TRANSCRIPT
Overview
Cannabinoid extracts are consumed as concentrates and used to manufacture edibles,
lotions, pet care, vaporizer pens, capsules, and wellness products.
These products represent a large and high-growth segment of the current cannabinoid
market.
Search volume and social sharing show CBD interest is growing faster than cannabis overall.
CBD has entered the upper echelon of wellness trends, competing even with meditation for digital interest.
Market trends - CBD is Buzzing
Source: Pulsar
Market trends: CBD
Source: BDS Analytics
Even with all the buzz, CBD consumer penetration is estimated at less than 15%, leaving much room for growth.
BDS Analytics and Arcview are forecasting consumer CBD sales to eclipse $20 billion by 2024, growing at a 49% CAGR from 2018’s $1.9 billion
Implications:The market for CBD products will grow by billions of dollars in the next several years. As major consumer brands enter, they will require access to bulk quantities of clean extracts.
$20 billion in sales by 2024
Producing pure cannabis oil is difficult
1Current extraction technology is inefficient, expensive, difficult, can be dangerous to operate, and does not scale to industrial volumes.
2Pesticides, herbicides, metals, and biotoxins are also concentrated in the extract.
3The supply is often of dubious quality (counterfeit lab analysis reports) due to an underdeveloped testing ecosystem.
The result is a high-margin opportunity to supply the growing demand for pure cannabinoid concentrates
Solution: Polar Extracts Cryogenic Oils
1 Leveraging advanced technology from other industries to improve quality, efficiency, and economics.
2 Mobile Extraction Lab simplifies logistics of processing large volumes of plant material, resulting in higher margins.
3 We are an extraction service provider and can provide solutions for cultivators, manufacturers, and brands.
Our B2B solution avoids brand risk and costs of building a new consumer brand while participating in this high-growth, high-margin space.
Cannabinoid Value Chain
Cultivator Extraction Brand / Manufacturer
Dispensary / Retailer
Patient / Consumer
Trim/Flower Extract Wholesale Products Retail Products
Economics of CBD extraction
Example: Wholesale CBD (60% potency) crude extract - split toll processing
● 1,000 kg of 7% CBD hemp biomass
Total crude 116 kg
Polar Extracts share @ 40% toll 47 kg
Price per kg $2,500
Revenue $117,500
3 Year Financial ProjectionsRevenue and Gross Profit
Year 1 Year 2 Year 3
Kilograms Produced (crude) 3,400 15,000 30,000
Revenue $8,500,000 $$37,500,000 $75,000,000
Cost of Goods Sold $2,850,000 $12,555,000 $25,110,000
Gross Profit $5,650,000 $24,945,000 $49,890,000
Gross Margin 67% 67% 67%
Total Operating Costs $1,250,000 $4,696,645 $9,071,299
EBITDA $4,400,000 $20,248,355 $40,818,701
Marketing Approach
Brand:
● Science● Engineering● Safety
Target:
● Startups & New Brands● White Label Opportunities● Brands ready to scale
Channels:
● Conferences / Events● Social● Incubate new brands
Long Term Strategy
Develop a significant IP portfolio
○ Mobile extraction
○ Process & hardware patents
○ Automation and AI technology
Perfectly Positioned for Acquisition / IPO
High Value target for Alcohol,
Tobacco, Beverage, Big Ag, Pharma,
Private Equity, and Big Cannabis
firms
Initial Public OfferingEnterprise value: $200 Million+ in year 4
Cryogenic Extraction Process
01
Highest Quality
Testing and quality controls ensure the highest
purity extract, with no toxins, pesticides, or
hazardous solvents
02
Hyper-efficient
Cutting-edge manufacturing born from the
pharmaceutical and chemical processing
industries
03
Healthy and Safe
Food-grade ethanol identical to that found in
beer and wine is chilled to -40, making it
non-flammable
Improved Efficiency:
Mobile Extraction Facility
4Offers flexible location and possibly temporary licensing advantage
3 Reduces real estate overhead and licensing challenges.
1Self-contained, portable extraction lab can travel to the grow site, eliminating shipping and logistics challenges.
2 Modular units can scale easily.
Advantages
Mobile extraction lab eliminates logistics problems and allows us to focus on B2B processing and sales
01 | Bulk sales to brands & manufacturers
02 | Avoid cost & risks of building new consumer brand
03 | Partnerships to fill in infrastructure gaps
04 | R&D opportunity for expansion into new business lines
05 | Price and quality resulting from our scale and process
Progress
LOI Signed
500+ acre hemp farm
Bakersfield, CA
CBD processing begins
on split toll basis
in Los Angeles
Mobile extraction
first installation test
Mobile extraction
multiple active units
Factory scale
CBD production
Expand into other
cannabinoids
Raising $400,000 SAFE - $5.5 million cap
This allows Polar Extracts to:
● Fabricate equipment for large-scale processing
● Develop IP portfolio● Accelerate sales pipeline growth
Pro rata rights are included for investors in this round.
Pre-Seed / Friends & Family
SalesEntrepreneur, conference owner, super connector, community builder, and enterprise sales specialist.
Founded and grew one the largest technology conference series in Southern California before launching L.A. Joint Ventures and the Beach Cities Cannabis Conference in 2018.
CTO and Co-Founder
Sean Kelly, Ph.D.
Technology
Zach Sekar
Serial entrepreneur, research scientist with expertise in prototyping, mechanical, and thermal engineering.
Expert in cryogenic ethanol extraction.
Professional Engineer, Certified Fire & Explosion Investigator.
CEO and Co-Founder
