Harvest Health & Recreation : Investor Presentation

Investor Presentation

June 2021

CSE: HARV OTCQX: HRVSF [e-mail]

DISCLAIMER

IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING:

The information contained in this document has been prepared by Harvest Health & Recreation Inc., a British Columbia, Canada corporation ("HHR"), and Harvest Enterprises Inc., a Delaware corporation and a wholly owned subsidiary of HHR (collectively and together with their subsidiaries, "Harvest" or the "Company") and contains summary information pertaining to the business, operations and assets of the Company. The information contained in this document (a) is provided as at the date hereof and is subject to change without notice, (b) does not purport to contain all the information related to the Company and (c) is not to be considered and does not constitute a recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision in the Company's securities.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:

This press release contains "forward-looking statements," within the meaning of United States and Canadian securities laws. Such statements reflect current estimates, expectations and projections about future events and involve risks and uncertainties relating to future events and Harvest Health and Recreation Inc.'s ("Harvest") performance, and actual events may differ materially from these forward looking statements, which may be identified by the use of words such as, "may", "would", "could", "will", "likely", "expect", "anticipate", "believe, "intend", "plan", "forecast", "project", "estimate", "outlook" and other similar expressions. These forward looking statements include, without limitation, statements regarding including statements regarding Trulieve Cannabis Corp.'s ("Trulieve") and Harvest's strategic business combination and the expected terms, timing and closing of the combination, estimates of pro-forma financial information of the combined company, Trulieve's and Harvest's expected financial performance for fiscal 2021, the combined operations and prospects of Trulieve and Harvest, the current and projected market and growth opportunities for the combined company and value for shareholders; statements regarding our expectations for 2021 financial performance and targeted revenue; the prospects for growth in the cannabis industry; the development of federal and state cannabis regulatory framework in the United States applicable to multi-state operators, including a delay in, or a failure to, federally decriminalize cannabis in the United States, as well as such frameworks in Harvest's core markets; adverse changes in the application or enforcement of current laws, including those related to taxation; adverse changes in the public perception of cannabis; the effects of the weather, natural disasters, and health pandemics, including the novel coronavirus (COVID-19) on customer demand, Harvest's supply chain as well as its consolidated results of operation, financial position and cash flows; the ability of Harvest to develop Harvest's brand and meet its growth, revenue and profitability projections and objectives; its ability to generate sufficient cash flow to repay debt obligations and to fund operating expenses and future investment; the ability of Harvest to complete planned acquisitions that are accretive to its revenue; the ability of Harvest to obtain and/or maintain licenses to operate in the jurisdictions in which it operates or in which it expects or plans to operate; changes in general economic, business and political conditions, including changes in the financial markets, and, in particular, the ability of Harvest to raise debt and equity capital in the amounts and at the costs that it expects; the ability to locate and acquire suitable companies, properties or assets necessary to execute on Harvest's business plans; the ability of Harvest to execute planned store openings and secure cannabis supply at appropriate amounts and cost; fluctuations in the prevailing prices for cannabis and cannabis products in the markets that Harvest operates in and sources supply; its ability to resolve existing and future litigation and arbitrations on acceptable terms; and increasing costs of compliance with extensive government regulation. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. In addition, even if the outcome and financial effects of the plans and events described herein are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.

Forward-looking statements involve significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements. Please see the heading "Risk Factors" in (i) Harvest's Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") and in Harvest's Annual Information Circular, which was filed on SEDAR, both of which were filed on March 30, 2021, (ii) in Harvest's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC and on SEDAR on May 13, 2021, and (iii) in subsequent filings that Harvest makes with the SEC and on SEDAR, for a discussion of the material risk factors that could cause actual results to differ materially from the forward-looking information. Harvest does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.

CAUTIONARY NOTE REGARDING FUTURE-ORIENTED FINANCIAL INFORMATION:

To the extent any forward-looking information in this presentation constitutes "future-oriented financial information" or "financial outlooks" within the meaning of applicable United States and Canadian securities laws, such information is being provided to demonstrate the anticipated market penetration and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-oriented financial information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking information generally, are, without limitation,

based on the assumptions and subject to the risks set out above under the heading "Forward-Looking Information." Please also see risks highlighted under the heading "Risk Factors" in our U.S. and Canadian filings, and under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and in our subsequent filings in the United States and Canada. Harvest's actual financial position and results of operations may differ materially from management's current expectations and, as a result, Harvest's revenue and expenses may differ materially from the revenue and expenses profiles provided in this presentation. Such information is presented for illustrative purposes only and may not be an indication of Harvest's actual financial position or results of operations.

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DISCLAIMER

USE OF NON-U.S. GAAP FINANCIAL MEASURES:

To supplement its financial statements, Harvest provides investors with information related to Adjusted EBITDA, which is a financial measure that is not calculated in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, has been provided in this presentation. Adjusted EBITDA is calculated as net income (loss) before non-controlling interest before net interest and other financing costs, income taxes, depreciation and amortization expenses; fixed and intangible asset impairments; gain or loss on assets; change in fair value adjustment of liability; other (income) expense; foreign exchange gain (loss); share-based compensation expense; contract asset (recovery) impairment; discontinued operations, net of tax; other expansion expenses (pre-open); and transaction and other special charges. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Harvest believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Harvest's financial condition and results of operations. Management uses these non-GAAP financial measures to compare Harvest's performance to that of prior periods for trend analyses and planning purposes. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. Non-U.S. GAAP measures exclude significant expenses

that are required by U.S. GAAP to be recorded in the Harvest's financial statements and are subject to inherent limitations.

THIRD PARTY INFORMATION:

This presentation includes market and industry data ("Third-Party Content") which was obtained from various publicly available sources and other sources. The Third-Party content is not created or endorsed by Harvest. The Third-Party Content is obtained from sources believed to be reliable and that no guarantees are made by Harvest as to its accuracy, completeness, or timeliness. THERE IS NO WARRANTY OF MERCHANTABILITY, NO WARRANTY OF FITNESS FOR A PARTICULAR USE, AND NO WARRANTY OF NON-INFRINGEMENT. THERE IS NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, REGARDING THIRD PARTY CONTENT.

CANNABIS-RELATED ACTIVITIES ARE ILLEGAL UNDER U.S. FEDERAL LAWS:

The U.S. Federal Controlled Substances Act classifies "marihuana" as a Schedule I drug. Accordingly, cannabis-related activities, including without limitation, the cultivation, manufacture, importation,

possession, use or distribution of cannabis and cannabis products are illegal under U.S. federal law. Strict compliance with state and local laws with respect to cannabis will neither absolve the Company of liability under U.S. federal law, nor will it provide a defense to any federal prosecution which may be brought against the Company with respect to adult-use or recreational cannabis. Any such proceedings brought against the Company may adversely affect the Company's operations and financial performance. Prospective investors should carefully consider the risk factors described under "Cautionary Note Regarding Forward-Looking Information" and "Cautionary Note Regarding Future-Oriented Financial Information" in this presentation and in our other reports filed with United States and Canadian securities regulators before investing directly or indirectly in the Company and purchasing the securities described herein.

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THE CANNABIS INDUSTRY

• Presents significant growth opportunity over the next decade as more countries and markets embrace medical and recreational cannabis use
• Intersects with various industries including pharmaceutical, consumer retail, and health and wellness segments
• Conversion from prohibition to legal markets provides an opportunity for disruption

U.S. and Global Legal Cannabis Sales (USD Billions)

	60.0
	50.0
										14.0
Billions)										12.0
40.0						8.5	10.5
(USD	30.0
		6.5
Sales
20.0		4.1							39.0	41.4
							31.2	35.6
	2.4		25.9
	10.0		20.2
	13.3
	0.0
	2019	2020E	2021E		2022E	2023E	2024E	2025E
						U.S.		Global

Source: New Frontier Data, company estimates January 2021

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U.S. MULTI-STATE OPERATORS

• The legal U.S. cannabis market is expected to reach over $40 billion by 2025
• Recent U.S. election results could lead to federal cannabis reform
• The U.S. is at the forefront of the movement toward mainstream acceptance
• The U.S. is global launchpad for cannabis culture, product development, and trends
• Current regulatory environment provides a unique opportunity for U.S. Multi-State Operators (MSOs) to

U.S. Legal Cannabis Industry (USD Billion)

45.0

40.0

35.0

	30.0
	25.1
B		23.5
(USD	25.0	21.3
Sales		18.4
20.0	14.9

15.0	11.6

10.0 7.4

						12.8	14.3	15.5	16.3
			11.0
5.0
	8.6
5.9
0.0
2019	2020E	2021E		2022E	2023E	2024E	2025E
					Medical		Adult Use

Source: New Frontier Data, company estimates January 2021

build out assets with a limited pool of competitors

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