Next Green Wave Research Report

Daniel Pronk

Hello everyone, I want to write an in depth document on this business and include all of my information
sources so you can see my thinking in detail as well as confirm for yourself what I am seeing. Let’s first
start by talking about Next Green Wave (NGW) and what they do.

NGW is a small cannabis producer located in California. Currently they have only one 35,000 sq ft.
production facility that generates about 3.7 million grams of cannabis annually. This production facility
(Facility A) came online in April of 2019 when they received their certificate of occupancy, and this is
when the company finally had a chance to prove itself.

I have attached a photo of NGWs Instagram below, which is dated April 18th, 2019. This seems to be the
date they received their permit to start production in Facility A.

https://drive.google.com/file/d/1uF2QcYJcdv7WUrT2bujKUTigh34gaiLg/view?usp=sharing

NGW is located in California, and it looks to me like California is the market they are solely focussing on
– for now. NGW is a relatively small cannabis producer, so I think them sticking to one market is the best
option at this point.

The companies competitive advantage is the quality of their cannabis. The Founder and CEO of NGW,
Mike Jennings, is a legacy grower and has been growing cannabis almost his whole life. Growing
cannabis runs in his family, as he remembers his father growing from the time Mike was 4 or 5.

This comes from NGWs own website:

“Mike is a Central Valley, California native who has been working in the Cannabis industry for 20+ years.
In addition to large cultivation projects, Mike has specialized in owning and operating several
dispensaries. As the co-founder of Loud Seeds, a multiple High Times Cannabis Cup winning breeding
and cultivation company, he has been involved in cannabis cultivation, breeding, and marketing for 15+
years, establishing brands in both the US and Europe.”

Mike Jennings was also interviewed by Forbes here, and had this to say:

https://www.forbes.com/sites/warrenbobrow/2020/07/19/7-questions-with-mike-jennings-divergent-
ceo-of-next-green-wave/?sh=24104a614ed6

MJ: “My current goal is to continue to grow Next Green Wave into the mature, profitable company it is
already becoming and expand on that business model into strategic markets. Over the next six months
that means getting our extraction facility online and beginning the process of expanding our flower
production capacity. Over the next twelve months I’d like to continue to focus on the CPG side of Next
Green Wave by further expanding our product portfolio in the California recreational market to continue
to capitalize on the rapidly growing demand for our artisanal grade products. That being said, the main
obstacle we have in the short term is supply, because we are consistently 100% sold out of everything
we produce, sometimes weeks in advance, so we need to expand capacity and fast. As far as stigmas
go, that’s so far in my rearview mirror I don’t even see it.
Honestly at this point the best thing I can do to reduce the stigma, or any other cannabis CEO for that
matter, is to continue to operate the most compliant, efficient, profitable company I can, period. In
those terms the only thing that’s going to remove any remaining stigmas on the cannabis space is
legitimacy.”

I want to start out this document by showing you who is running the business, what his goals are, and a
little bit more about his views. Paying attention to the management of the investment I am taking on is a
critical piece in my analysis.

The main things we can take away from Mikes interview is that NGW is currently selling out all of the
cannabis they produce, they need to expand capacity, and that his goal is to operate the most profitable
cannabis company he can.

However, talk is cheap, and the vast majority of the time CEO’s are nothing more then marketers for
shareholder money to find its place in their business. I pay attention to what the CEO is saying about the
business, but then I need proof. The proof often times can be found in the financials. Numbers don’t lie,
and if you know how to read financial statements then you can confirm or deny if the words of the CEO
are true, or solely promotion.

Reading financials is like cutting the crap out of the equation. Show me the numbers, and let’s talk
business. So, let’s take a look at the financials of NGW and see if they can prove what Mike is saying
about his business and goals. Are they really selling all the cannabis they can produce? Are they really a
profitable business? Do they need to expand? Let’s look.

Before we move on I also want to say that the Founder and CEO owns roughly 17% of the shares of
NGW. Insiders in total own about 27%. NGW has high insider ownership, and the CEO has not been
selling any shares despite the stock seeing massive returns recently.

I like to start with the balance sheet to see how the businesses finances are. An over leveraged balance
sheet is always a red flag and can usually send me on my way without having to investigate further. The
balance sheet on the next page comes from NGWs most recent financial reporting. I have highlighted
key things that I noticed and pay attention to.

Please understand that this document is my own analysis, and should not be seen as a recommendation
to buy the stock. I would strongly recommend reading my disclaimer at the bottom/end of the
document.
The first thing I was to say is that this is a balance sheet comparison from December 31st 2019 to
September 30th 2020. It’s a 9 month comparison to show how the balance sheet of the business is
developing.

What I am noticing right away is the cash position has grown from $1.2 million to $2.2 million, an
increase of $1 million. This is good to see, but don’t get your hopes up when you see this. The company
could very well be taking on debt or diluting shareholders to raise money, so you always want to ask
where is this cash coming from? I’ll show you how to find that out in a minute.
Next we can see the inventory has gone down over the last 9 months, this is good to see. Inventory for a
cannabis company is simply the cannabis inventory they’re sitting on. Seeing the inventory decline
means the business is in fact selling cannabis, and they’re not growing more then they sell.

Hypothetically, if the inventory doubled then I would see that as a red flag because I would want to
know why the inventory isn’t moving/selling – especially when the CEO says they’re selling everything
they produce right now. Essentially, the inventory going down means they’re actually selling what they
grow and it’s good to see. Inventory is worthless if no one is buying.

Next is Biological Assets. This is simply cannabis plants that are currently growing and underway. We can
see a slight boost here, but nothing of major to point out. I imagine this number changes based on
where the company I in their harvest cycles.

What I found interesting is that NGW has investments, and that these investments have grown by nearly
$1 million over the course of the year. The investments being in “Current Assets” also tells me they are
fairly liquid, and the company can sell them quickly to bolster the cash position if they needed to.
Essentially, I view this as a liquid asset.

We can see the Total Current Assets have increased by ~$1.6 million over the 9 months, which is led
mostly by an increase in cash and investments. This is great to see. If the current assets were growing
only or mostly due to a rising inventory – that would be a red flag. You will see this in the cannabis
industry too, but remember inventory is worth nothing if no one is buying.

Now, let’s move on to liabilities. Current liabilities and Total Liabilities are both down, which is
awesome. This just means that they are lowering their liabilities while at the same time increasing assets
and cash. This also tells me that the companies’ cash position has a high chance of increasing
organically, because liabilities/debt are going down while cash is going up.

Also, if we look at the businesses cash and investments, we can see that together they can pay off
almost all the liabilities that the business currently has. This means that NGW is very well funded, and
shouldn’t have any financial stress.

Lastly, we can see total shareholder equity has increased by about $4 million, which once again is
awesome. This simply means that assets are growing more rapidly then liabilities. We also learned that
the assets are increasing mostly from the cash and investment gains. I love that.

Next let’s take a look at the income statement for the business, again I have highlighted some key points
I found.
This Income Statement compares year over year (YoY) results for Q3 as well as the first 9 months of the
year. We are mostly going to focus on Q3 YoY results though, which is the left hand pair of numbers.

Right away, we can see that revenue exploded to $3.582 million in Q3 2020 from only $83,894 in Q3
2019. As we learned earlier though, NGW completed their production facility in April 2019. Cannabis
takes time to grow, harvest, package, sell etc. One does not simply build a facility then start producing
revenue instantly. There is a ramp up phase to get to full production potential.

2020 was the year of ramping up for NGW, and this is what the income statement is showing. Anyways,
the gross profit for Q3 2020 was $1.720 million, which also gives them a gross margin of 48% which is
fairly good.

Next what I like is that the salaries and management fees are only $162,745 for Q3 2020. This tells me
the management is not taking on ridiculously high salaries and trying to suck money out of the business.
I truly believe the CEO and management are in this business to see it succeed long term.

Total operating expenses are actually down in Q3 2020 from Q3 2019. This is great to see because
revenue exploded in 2020 all while the business being able to actually reduce operating expenses. Well
done NGW.
Finally we get Net Income, and we can see NGW is actually producing positive net income as well. Now
personally, I don’t like to focus so much on net income anymore because I believe it does not show you
the true profitability of a business. It factors in so many non cash items like gain on biological assets,
depreciation of the facility, etc. These things do not affect the cash of the business, so if you’re looking
for how much cold hard cash the business is actually bringing in, then you need to look at the cash flow
statement. So, let’s do that.

This cash flow statement compares the 9 months ended Sept 30th in 2020 and 2019.
The first thing we can see is that for the 9 months ended Sept 30th, 2020 they actually produced $1.584
million in cash from operations. This simply means the company’s operations are actually producing
cash.

Next, we can see that the cash used in investing activities is $210,194. This is very insignificant relative
to the cash generated from operations.

Now, we can see that the cash flow used in financing activities is $323,233. I actually see this as a good
thing, because it means the business is not raising money, and they actually have raised $0 in all of 2020,
which is incredible to see.

The cash from financing activities is how you can tell if a business is taking on debts or diluting, and this
right here tells me that NGW is not raising money through debts or dilution. This also tells me that the
increase of $1 million in cash we saw on the balance sheet is 100% organic, and coming from pure
profits the business is generating.

I love this, and NGW is an outlier in the industry. Most cannabis companies both small and large take on
massive debts or dilute their shareholders aggressively to grow and expand. Seeing a company grow the
balance sheet organically, and not dilute shareholders is very impressive. This reminds me a lot of how
Trulieve grows their business.

Lastly, we can see at the bottom that NGW managed to increase the cash position by $1.024 million in
the first 9 months of 2020. Again, the cash is clearly entering the business through the cash from
operating activities, because that is the only positive cash income on the cash flow statement.

Quarterly Free Cash Flow Via Yahoo Finance:

We can also see on Yahoo Finance that the free cash flow for NGW has been above $1 million for the
last 2 quarters. The first quarter of 2020 they were still cash flow negative, and in the 2 recent quarters
have really scaled up to near full production. Again, I personally believe this gives us a better idea of the
true profitability of the business.

On an annual basis, NGW is now producing over $4 million in free cash flow based on their most recent
quarters as well. This simply means that NGW is actually producing about $4 million in cash annually,
and I would consider this the profitability of the business as it stands now.

Another thing I want to point out comes from their quarterly reporting’s for 2020. Pay attention to the
revenue growth over the 3 quarters, and the operating expenses. What do you notice?
Q1 2020

Q2 2020
Q3 2020

What I am noticing is that the revenue has been growing, yet the operating expenses have remained
relatively flat. This tells me the businesses operating expenses should be capped under $1
million/quarter at their facility as they ramp up production. As an investor, I love to see this.

Everything we have looked at this far has been up to the end of the 3rd quarter in 2020, which ended
September 30th. NGW has not yet reported their Q4 results, and I imagine they will near the end of
March 2021. However, they have given us a little insight to numbers we should expect for Q4.

https://www.nextgreenwave.com/news-releases/next-green-wave-announces-q4-results-and-
corporate-appointments/

Here we can see that revenue for the 4th quarter grew to $4.632 million, and EBITDA grew to $2.305
million. This is once again great to see, and it also shows me that the business has an adjusted EBITDA
margin right near 50%.
For those of you who don’t know, EBITDA stands for earnings before interest, taxes, depreciation and
amortization. It tells you how profitable the business is before interest and tax payments, and
accounting for depreciation on the facility.

Essentially, it removes some of the post production costs and shows you the core business profitability.
This can be good to note, but you also need to remember that with these profits they do still have some
expenses, so it’s not true profitability.

Regardless, a 50% EBITDA margin is very good, and we can see this margin has also grown dramatically
from the 3rd quarter to the 4th quarter. In Q3 their EBITDA margin was roughly 25%, and is now once
again sitting at just under 50%. That is incredible.

Also, I just want to point out that revenue increase by roughly $1.050 million quarter over quarter
(QoQ), but the EBIDTA increased by roughly $1,305. This tells me that operating efficiencies could have
increased somewhere because the profitability is increasing more rapidly then the revenue.

This article here I believe explains where the increase in profitability is coming from in Q4:

https://www.nextgreenwave.com/news-releases/next-green-wave-records-us1000000-adjusted-ebitda-
in-october-2020/

“The Company is also pleased to announce that it has been awarded:

- A Certificate of Occupancy (Occupancy Permit) by the City of Coalinga, for its 3,500 square foot
manufacturing facility (“Site C”), and will initiate operations immediately.

- A Type P Manufacturing license from the California Department of Public Health. This allows NGW to
efficiently increase production volumes of all consumer packaged goods by increasing the space and
labor allocated to weighing, packaging, quality control and storage of Next Green Wave branded
products.

The benefits of Site C are as follows:

- Allows for increased efficiencies and space for packaging, which will lower product costs and lead to
higher margins.

- Keeps the manufacturing (extraction) costs at a minimum as the licensing, capital and staff
requirements for the new objective at Site C are significantly reduced from original expectations.

- Because the manufacturing process is completed by a third party, there are no current capacity
constraints related to manufacturing and can be scaled quickly based on demand.

- Allows NGW to scale multiple product sku categories in a single location (i.e. gummies, sauce carts,
diamonds, badder, pre rolls, etc.)”

Essentially, this “Site C” is increasing the margins and profitability of NGW even further, and the
announcement of this facility coming online was during Q4 2020.
Ultimately this tells me that the profitability/cash flow for the business is most likely increasing. We
learned that free cash flow was just over $1 million for Q2 and Q3, so I wouldn’t be surprised to see free
cash flow in the range of $1.3 - $1.5 million reported for Q4. This would bring the annual free cash flow
to $5.2 - $6 million on an annual basis, based on Q4.

I would personally look at Q4 figures and extrapolate them out on an annual basis because this is a
growing business. Q2 and Q3 no longer reflect where the company is now, which is why I am saying at
this point I would not be surprised to see NGW producing $5.2 - $6 million in free cash flow annually.

Now, if we look at NGWs market cap on Yahoo Finance, we can see it is currently $108 million. If we
divide this by the free cash flow the business is generating on an annual basis, we can find the Price to
free cash flow (P/FCF)

$108 million / $5.2 million = 20.77

This means that if I were to buy this whole business today for $108 million dollars, then it would take me
roughly 20 years to get all my money back from the cash flow the business generates. A P/FCF of 20 I
have found is about the “fair value” for a business that is experiencing no growth. Obviously this
changes from business to business, but I think it’s a fair valuation.

What this also tells me is that NGW is selling for about fair value right now and isn’t really factoring in
any growth. I love seeing this because it tells me that if the business can increase cash flow in the future,
then the valuation should grow to reflect the growing profitability, thus producing a gain on my
investment. Or in other words, I am getting growth for free.

Disclaimer: there is no one calculation that will tell you the fair value of a business, and it is very much up
to the individual investor to decide what they are willing to pay for any business. I strongly recommend
looking at every investment opportunity on a case by case basis.
Now, before we get into the expansion/growth of the business we first need to answer one of our
critical questions – Is expansion necessary? To answer this question let’s once again look at the
financials and see what they’re saying.

This article here is a reporting of their October figures:

https://www.nextgreenwave.com/news-releases/next-green-wave-records-us1000000-adjusted-ebitda-
in-october-2020/

Right at the top it tells us NGW produced $1.7 million in revenue and approximately $1M in EBITDA
for October 2020.

Now for their November figures:

https://www.nextgreenwave.com/news-releases/next-green-wave-records-second-consecutive-month-
of-us1000000-adjusted-ebitda/

Right at the top again they announce they have produced about $1.65 million in revenue for the
month of November, and approximately $1M in EBITDA again.

Now finally, their January Figures:

https://ca.finance.yahoo.com/news/next-green-wave-announces-us-130000512.html

“The Company's Adjusted EBITDA* was approximately US$1,000,000 for January 2021, on revenues of
approximately US$1,600,000.”

This tells me that revenue has hovered around $1.6 - $1.7 million and EBITDA has hovered right around
$1 million from October 2020 to January 2021. This essentially tells me the company is no longer
growing now, and that the facility is fully producing cannabis.

The relatively consistent figures also tell me that the company is in fact selling all of the cannabis the
facility can produce. It also tells me that the revenue and profitability are now capped, and if NGW does
want to continue growing revenue and cash flow, then they are going to need to build another
production facility.

Also, another thing to note is that on NGWs Q3 financial statements it shows that the average selling
price for their cannabis has increased from $4.40 as of December 31st 2019 to $5.07 as of Sept 30th 2020
(see image below). The fact that their average selling price is increasing tells me demand is for their
product is there. This is very good to see as an investor, and once again confirms what Mike Jennings
said – that their main problem is lack of supply to meet demand.
So, we have learned that NGW is in fact selling all the cannabis the business can grow. This was shown in
the consistent revenue figures posted in the last few months, and the average selling price of their
cannabis increasing. As an investor looking in, I would say the only option going forward is in fact for this
business to expand.

This is exactly what they announced they are doing on December 17th, when they confirmed their
expansion plans:

https://www.nextgreenwave.com/news-releases/next-green-wave-confirms-expansion-plans/

“Vancouver, B.C. — December 17, 2020 — Next Green Wave Holdings Inc. (CSE: NGW) (OTCQX: NXGWF)
(“Next Green Wave”, “NGW” or the “Company”) is pleased to confirm it will immediately move forward
with expansion plans for a 50,000 square foot premium indoor cultivation facility (“Facility B”) in
Coalinga California. Facility B will be located on 2 acres of Company owned land directly adjacent to the
current 35,000 square foot cultivation and distribution facility. When fully operational the Company
will have a combined production capacity of close to 20,000 pounds of premium flower per year
representing close to a 150% increase based on current production levels.”
NGW is in fact building a new facility, in which they call “Facility B.” This facility will be larger then their
current one by 15,000 sq ft. and will increase the total production capacity of the business by nearly
150%.

Why I love this is because NGW proved demand for their product and profitability in their business
model before expanding. This is something many cannabis producers do not do. If I were running a
cannabis business, I would be doing exactly what NGW is doing, and proving the concept before
expanding aggressively. NGW got to a point where expansion was needed, and that is when they
decided to execute on it.

In the article it also says:

“The City of Coalinga has approved the expansion and the Company will work towards the following
timetable:

- Engineering and Architectural designs fully complete by Q1 2021

- Construction commencing Q2 2021

- Certificate of Occupancy obtained Q4 2021.

The Company will finance the construction through current cash flows and debt. At this time, the Company
does not anticipate the need to do a dilutive equity financing in order to complete Facility B.”

From this, we learn that the 50,000 sq ft. facility should be ready to begin operations sometime in Q4 of
2021, and that NGW plans on financing the construction through the positive cash flow the business has
achieved, and debt. They do not plan on diluting shareholders to fuel the next expansion phase. NGW
is doing everything right, and again, this is exactly how I would run the business.

They achieved profitability first, and now this profitability will help them build out and expand. Now yes,
they are going to take on some debt to build out this facility as well, but the balance sheet of the
business is not over leveraged at all right now.

Remember, their cash on hand and investments can pay every liability the business currently has. I
imagine the balance sheet will only be stronger in their upcoming Q4 reporting as well. Since NGW is
producing positive cash flow, as time goes on, their cash position will only get better.

What I am trying to say is I don’t think taking on some debt to expand here is a bad thing, and I think
long term it will benefit the shareholders, especially if the new facility can generate the same type of
cash flows as Facility A.

You know what, let’s do some math.

The first thing I want to find out is NGWs free cash flow margin. The best way to do this before Q4
financials are released is to use their Q3 figures. Honestly, I think their margins have a strong chance of
improving in Q4, but let’s use Q3 and be conservative.

$1,004 (Q3 free cash flow) / $3,582 (Q3 revenue) X 100% = 28% free cash flow margin

Currently we learned that NGW is capped at about $1.6 million in revenue/month right now on the low
end.
$1.6 million/mth X 12 mths/yr = $19.2 million/yr in revenue

We can now use their free cash flow margin to find their current annual cash flow.

$19.2 million X .28 = $5.4 million in free cash flow annually

Okay, now that we have the revenue and cash flow numbers for NGWs 35,000 sq ft. facility, we can
extrapolate these out. This will assume that the new 50,000 sq ft. Facility C will be able to produce the
same margins and cannabis amounts as Facility A.

Let’s first add the 2 facilities together to get the total square footage NGW will have.

35,000 (Facility A) + 50,000 (Facility B) = 85,000 total

Now we can find how much of an increase this is over their current capacity.

85,000 sq ft. / 35,000 sq ft. = ~2.43x

Okay, so Facility C will in reality increase the total production potential by about 2.43x. We can now use
this number and apply it to the revenue NGW is currently generating.

$19.2 million X 2.43 = $46.7 million in annual revenue

Now, we also learned that NGW has a free cash flow margin of 28% currently. However, they did say
that they plan on issuing debt to help fund the expansion. This will harm the company’s profitability
until the debt is paid off. I don’t have construction or debt figures yet, so I don’t know how much this
will harm the free cash flow margin. Let’s think long term though, and assume that the debt one day will
be paid off.

$46.7 million X .28 = $13.1 in free cash flow annually

What this tells me is that once the new facility is fully operational and running, if it can maintain the
same profitability margins as Facility A, then it should bring NGW to producing about $13.1 million in
free cash flow annually.

If we now take NGWs market cap today of $108 million and divide it by $13.1 million in free cash flow,
we can get a forward P/FCF for the business.

$108 million / $13.1 million = 8.2

A P/FCF of 8.2 is incredibly low. That means if I bought NGW for $108 million today, then when facility C
is online and fully operational, I would be getting my initial $108 million back every 8.2 years from the
cash flow the business is now generating.

Also, I personally don’t think NGW will be valued at a P/FCF of 8.2 when Facility C is online, and I would
imagine NGW will maintain a roughly 20 P/FCF valuation. So, if they can in fact produce $13.1 million in
free cash flow when Facility C is completed, then I can use a P/FCF of 20 to find the valuation I can
expect once this thesis plays out.

$13.1 million X 20 = $262 million

So, if this thesis plays out and the numbers hold true then NGW could be valued at roughly 262 million
by the time Facility C is fully operational. This is about 150% higher then todays valuation. We also
learned that Facility C will come online sometime in Q4, so by Q1 2022 I expect the ramp up of the
facility will begin.

Remember that screenshot from April 18th showing facility A getting their approval? Well, we also
learned the facility became fully operational around October of 2020. This tells me it takes about 17 - 18
months for a facility to come online fully. From this, I think it’s safe to assume that Facility C will be fully
operational by the middle of 2023.

Now, there’s more. In this article it says:

https://investingnews.com/company-profiles/next-green-wave-cse-ngw-medicinal-and-recreational-
cannabis-producer-california/?fbclid=IwAR0UCD-
pT1w0mNA37AffsVPIUrQ2QJv0lFiuFyFuzsUyxB4vSPKSOPl1anc

“Facility D

A proposed 250,000-square-foot mixed-light, deprivation greenhouse for which Next Green Wave is
currently developing a site plan.”

This shows us that long term, NGW is planning on developing another, much larger facility. This facility is
planned to be 250,000 sq ft., which will massively increase NGWs production, revenue, and cash flow
potential.

I imagine this facility will begin production sometime in 2023 if the next expansion, Facility C, proves
profitable and NGW is continuing to sell out all of the cannabis they grow once the expansion if fully
ramped up.
Here is an image from the article that shows the different NGW facilities and plans. You can see for
yourself how large Facility D is planned to be.

This would increase NGWs total production square footage to 335,000 sq ft, which is almost 10X what
they produce today. This right here is where the long term, 10X potential for the investment comes
from. So, once again let’s do some math.

335,000 / 35,000 = 9.57

9.57 X $19.2 million = $183.7 million in annual revenue with all 3 production facilities fully operational.

Now once again let’s use a free cash flow margin on 28% to find the potential cash flow produced from
this revenue

$183.7 million X .28 = $51.4 million free cash flow

Let’s multiply this by a P/FCF of 20 once more

$51.4 million X 20 = $1,028 million

This is an increase to the valuation today of nearly 10X, and would produce returns of over 900%. This is
the long term vision of the company, and if this can all play out then it would produce huge returns for
my investment.

I imagine Facility D will be confirmed sometime in 2023 if it is going to happen, and then I would assume
the facility will be completed sometime in 2025, along with ramp up beginning in the same year. Ramp
up should be completed by 2026, and that is when the full $1 billion valuation thesis could be realized.
As I said, this is a long term investment thesis and it really depends on NGW continuing to execute.

We have already learned that NGW is selling all of the cannabis they grow at facility A, it’s reflected in all
the financials we looked at. They also proved to us that they have already produced and maintained
incredibly profitable cash flow margins. They’re now expanding and building another production facility,
and if they continue to sell out all the cannabis they produce from the second facility, then it’s on to the
massive expansion with Facility D.

Now I am quite confident that NGW will continue to sell great volumes of cannabis. Here is one article
that was released on January 6th 2021 that adds to my confidence:

https://www.nextgreenwave.com/news-releases/next-green-wave-finalizes-agreement-with-cookies/

“Next Green Wave Holdings Inc. (CSE: NGW) (OTCQX: NXGWF) (“Next Green Wave”, “NGW” or the
“Company”) is pleased to confirm it has signed a 2 year supply and production agreement (the
“Agreement”) with COOKIES. COOKIES is one of the most well-respected, top-selling and premiere
cannabis brands in California and throughout the world. COOKIES has 26 total retail stores in operation
which includes; 17 retail stores in California, 6 retail stores across the U.S., and 3 international stores (in
Barcelona and Tel Aviv). In 2021, COOKIES expects to double the current total open store count across
the U.S. and internationally.

The partnership will commence immediately and aligns both companies core goals to produce, package
and distribute premium cannabis products to California connoisseurs.”

NGW signed a 2 year supply contract with Cookies, which is a massive and premier cannabis brand in
California and has locations across the US, and internationally. Cookies is also planning on doubling their
retail network in 2021 both in the US and internationally.

What this means is that NGWs cannabis is not only going to be in California anymore, but through this
agreement will be spread throughout the US and internationally. As Cookies grows, so does NGWs
exposure, and I see this as a great thing. Now check this out:
“The key terms of the two-year Agreement are:

- COOKIES will sell Next Green Wave branded products in the COOKIES retail locations across California.

- Next Green Wave will cultivate exclusive COOKIES genetics to be packaged and sold under the Cookies
brand name.

- It has also been agreed that contingent upon the completion of Next Green Wave’s new cultivation
facility, expected in Q4 2021 (see press release HERE), a portion of the new production will be allocated
to the COOKIES brand.”

From this we learn that Cookies is heavily interested in working with NGW, and they are going to be
selling NGW branded products in the California locations.

The second point also says that Cookies will have NGW cultivate exclusive genetics for Cookies brand.
This tells me that Cookies sees the quality that NGW produces, and they want exclusivity to that quality
for their own brand. It’s essentially a testament to the quality of NGW.

Finally, the third point says that a portion of the production from NGWs 50,000 sq ft. facility will go
directly to Cookies. This once again confirms that there is demand for NGWs cannabis. I mean think
about that, they already have a client waiting for their new production to come online, and they already
signed a deal saying they want a portion of it.

Cookies themselves are wanting to double their retail network in 2021 as well, and the more Cookies
expands, the more cannabis they will want from NGW. I think this is great for the future prospects of
NGW.

Now, read what the Cookies CEO had to say about NGW:

“Noticing and identifying talent in the cultivation space is something we focus on a lot, especially with a
new menu bred by myself. We wanted to align and build a long-term partnership with someone we
know will both produce some of the best flower in the State of California, and also keep those strains
exclusive; which is why a deal like this is ideal for COOKIES. Next Green Wave is performing very, very
well, and I can’t wait to put these new strains in their hand.” – Berner, Founder and CEO of COOKIES

The CEO of Cookies said themselves that NGW produces some of the best cannabis in the state, and
they’re putting their money where their mouth is. I love to see it, and this ultimately increases NGWs
potential of selling all of the cannabis they produce from Facility C.
Alright, we have covered a lot of info in this document, so let’s go over some of the highlights and risks.

Highlights:

- Seeing great growth to revenue

- Selling out all their product

- Incredibly Profitable

- Great profit and cash flow margins

- Will use profitability to expand (no dilution)

- Great balance sheet

- Founder led, and large insider ownership

- Selling for fair value currently

- Clear runway for growth and proof of concept

- Great management execution

- Award winning cannabis products

- Demand for their cannabis is high

Major Risks:

- Facility B can’t sell all cannabis produced

- The company relies heavily on one facility right now

- Facility D may never come into play

- Demand for their products diminishes

- Margins and profitability compress

Regardless of Facility D coming into existence, I still think that with Facility C beginning construction and
coming online by the end of the year that NGW could see incredible growth to its valuation in the range
of 150% over the coming years.

The management has more then proven themselves to me. They are financially responsible and all of
the fundamental numbers of the business prove this. Numbers don’t lie, and I have done significant
research and due diligence into this business, and I have yet to find anything that tells me there isn’t
potential with this business.
Disclaimer:

Obviously there are risks here, but I personally think the risk/reward potential is very attractive with
NGW. I also think they’re a clear example of a great opportunity for a retail investor such as myself to
capitalize on potentially great gains over the coming years.

For all of the reasons stated in this document, I have initiated a position in Next Green Wave of X shares
at X price. My plan is to hold these shares long and allow the business to develop itself. However, I must
also say that I am an adaptable investor, and if I see Next Green Waves fundamentals starting to
stumble, or if my initial investment thesis seems to change at any point, then I could exit my position at
any time.

As an investor, I believe being adaptable to situations is incredibly important. My thesis stands as of

now, but as new quarterly reports and updates come out for NGW, I will continue re assessing my
investment.

Please do not buy Next Green Wave shares solely because I am. Please do all your own research and
verify my own. To buy shares only because I am is not investing, and it is taking on incredible risk for
yourself. I believe every investor should know what they own and why they own it. If you buy stock
solely based on the fact that someone else is, your going to become very emotional and make bad
decisions if something happens to the share price.

Don’t do it.

My goal is not to pump this stock. I have not been compensated by anyone, or any business for my
research, writing this document, or my YouTube video on Next Green Wave. I am simply explaining my
own investment thesis, and my investment thesis is not meant to be perceived as investment advice.

You and only you are responsible for the decisions you make. I am not a financial advisor. I am just some
guy on the internet who loves investing and as a passion for business. Any losses you may incur are your
own doing, and again, I am not a financial advisor.

All of my content, and this document is not meant to be a recommendation to Buy Next Green Wave, or
any stock for that matter. Again, it is never my goal to tell anyone what to do with their finances or their
investments. Everything I state is my own opinion, and that’s it.

Please do your own research before buying.