IM Cannabis Stock

IM Cannabis Corp. (IMC) operates as an international cannabis company.

The company focuses on providing premium cannabis products to medical patients in Israel and Germany, two of the world's largest federally legal cannabis markets.

In Israel, the company continues to expand IMC brand recognition and supply the growing Israeli medical cannabis market with its branded products. The company offers medical cannabis patients a rich variety of high-end medical cannabis products through strategic alliances with Canadian suppliers supported by a highly skilled sourcing team.

The company provides premium cannabis products to medical patients and adult-use recreational consumers. With operations in Israel, Canada, and Germany, the world's three largest federally legal cannabis markets, the company has developed its own proprietary import/export supply chain in order to efficiently deliver premium cannabis to patients and consumers under a uniform global branding umbrella.

The company entered additional segments of the medical cannabis value chain in Israel, namely the distribution and retail segments. The company, through I.M.C Holdings Ltd. (IMC Holdings), acquired three licensed pharmacies in 2022, the Israeli Pharmacies, each selling medical cannabis products to patients: Oranim Plus, Israel's largest pharmacy in Jerusalem and one of the largest in Israel; Vironna, a leading pharmacy in the Arab sector; and Pharm Yarok, the largest pharmacy in the Sharon plain area and the biggest call centerin the country.

As part of the Panaxia Transaction, the company has also acquired home-delivery services and an online retail footprint, operating under the name 'Panaxia-to-the-Home', which includes a customer service center and an Israeli medical cannabis distribution licensed center, from Panaxia Pharmaceutical Industries Israel Ltd. and Panaxia Logistics Ltd., part of the Panaxia Labs Israel, Ltd. group of companies (collectively, 'Panaxia').

The entrance into the new segments in Israel position the company as a large distributor of medical cannabis in Israel. The company strategically focuses on establishing and reinforcing a direct connection with medical cannabis patients, providing direct access to it products, obtaining and leveraging market data and gaining a deeper understanding of consumer preferences. The acquisition of the Israeli Pharmacies allows the company to increase purchasing power with third-party product suppliers, offers potential synergies with its established call center and online operations, achieves higher margins on direct sales to patient and creates the opportunity for up-sales across a growing range of products.

In Europe, the company operates in Germany through Adjupharm GmbH (Adjupharm), its German subsidiary and EU-GMP certified medical cannabis producer and distributor. The company continues to lay its foundation in Germany, which is the European market with the largest number of medical cannabis patients. 1 Leveraging the company's global supply chain, it continues to focus on growing its business in Germany to be well-positioned through brand recognition in preparation for future regulatory reforms.

Similar to Israel, the company's focus in Germany is to import premium dried cannabis from its supply partners, which will satisfy the rapid growth in demand for high-THC premium cannabis across a variety of strains and qualities. In addition, Adjupharm sells cannabis extracts to meet the existing demand in the German market.

Adjupharm received a revised EU-GMP license in May 2022 that permits it to engage in additional production, cannabis testing and release activities. It allows Adjupharm to repackage bulk cannabis, to perform stability studies and offer such services to third parties.

In Canada, in November 2022, the company announced that it is pivoting its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany, while also commencing its exit from the Canadian cannabis market. The Canadian operations are being wound-down under the Companies' Creditors Arrangement Act (CCAA) under the supervision of the Court. The CCAA Proceedings afford the Trichome group the stability and flexibility required to orderly wind-down its business and operations.

The company has exited its operations in Canada, and deconsolidated Trichome on November 7, 2022, pursuant to International Financial Reporting Standards (IFRS). The CCAA Proceedings are solely in respect of the Trichome Group. As such, the company's other assets or subsidiaries, including those in Israel and Germany, are not parties to the CCAA Proceedings.

Principal Products and Brands

The IMC brand has established its reputation in Israel for quality and consistency and with new high-end, ultra-premium strains that have made it to the top-sellers list in pharmacies across the country. The Group maintains a portfolio of strains sold under the IMC umbrella from, which popular medical cannabis dried flowers and full-spectrum cannabis extracts are produced. The company launched the IMC brand in Germany in 2020.

Israeli Medical Cannabis Business

The IMC brand offers four different product lines, leading with the Craft Collection, which offers the highest quality Canadian craft cannabis flower and has established IMC as the leader of the super-premium segment in Israel.

The Craft Collection - The IMC brand's super-premium product line with indoor-grown, hang-dried and hand-trimmed high-THC cannabis flowers. The Craft Collection includes exotic and unique cannabis strains, such as Cherry Crasher, Peanut Butter MAC, and Watermelon Zkittlez.

The Top-Shelf Collection - The newest addition to IMC's brand portfolio, launched in September 2022 as IMC's premium product line, offers indoor-grown, high-THC cannabis flowers with strains, such as Lemon Rocket and Diesel Drift. Inspired by the 1970's cannabis culture in America, the Top-Shelf Collection targets the growing segment of medical patients who are cannabis culture enthusiasts.

The Signature Collection - The IMC brand's high-quality product line with greenhouse-grown or indoor grown, high-THC cannabis flowers. The Signature Collection includes well known cannabis dried flowers, such as Roma, Tel Aviv, and London, as well as Strawnana, an indoor-grown flower, and Sydney, the company's first high-CBD cannabis strain, both launched in Q3 2022.

The Full Spectrum Extracts - The IMC brand's full spectrum, strain-specific cannabis extracts, including high-THC Roma oil, balanced Paris oil and Super CBD oil and the new Roma T15 oil and Tel Aviv oil, which were launched in Q3 (the year ended December 31, 2022).

As part of its recent rebranding the company expanded its Roma product portfolio in Q3 2022 to include pre-rolls and oils range, offering the widest range of different product SKUs for a single strain in the Israeli market. This delivers a variety of formats of IMC's most successful and well-known strain to Israeli medical cannabis patients. IMC's Roma strain is a high-THC medical cannabis flower that offers a therapeutic continuum and is known for its strength and longevity of effect.

The WAGNERS brand launched in Israel in 2022, with premium indoor-grown cannabis imported from Canada. The WAGNERS brand was the first international premium, indoor-grown brand introduced to the Israel cannabis market, at a competitive price point. The WAGNERS brand includes the Dark Helmet, Cherry Jam launched in Q1 2022, and Golden Ghost that was launched in Q4 2022.

BLKMKT, the company's second Canadian brand, was introduced to the Israeli market in 2022.

German Medical Cannabis Business

In Germany, the company sells IMC-branded dried flower products and full spectrum extracts. The medical cannabis products sold in the German market are branded generically as IMC to increase recognition of the company's brand in establishing a foothold with German healthcare professionals. The company's IMC-branded cannabis products are launched in Germany with one high-THC flower strain. Adjupharm launched another high-THC flower strain and two full spectrum extracts. In 2022 Adjupharm launched a third strain, a high-CBD flower, to offer a more complete portfolio to German physicians and patients. In 2022 the company's IMC Hindu Kush strain was the top selling T20 in the market, strengthening Adjupharm's position as one of the top 10 cannabis companies in Germany. December 2022 was Adjupharm's strongest sales month to date.

New Product Offerings

Between the company's various geographies, the strategy for new products varies given that each market is at a different stage of development with respect to regulatory regimes, patient and customer preferences and adoption rates.

Israel

In 2022, the company launched the third product in the 'Top Shelf' Collection, Tropicanna Gold, a super premium sativa flowers, which together with Diesel Drift and Lemon Rocket launched in 2022, constitute a full super-premium high THC portfolio with sativa, hybrid, and Indica strains.

The company expects to launch in Q1 2023, two additional products under the 'Top Shelf' Collection: Lucy Dreamz and Santa Cruz.

In 2022, Golden Ghost was introduced to WAGNERS in Israel as its first new cultivar since the launch of the WAGNERS brand in Israel in 2022, and is the first out of three new cultivars for the WAGNERS brand to be further introduced in 2023. In addition, in 2022 the WAGNERS brand entered two new market segments with Dark Helmet pre-rolls, and Dark Helmet minis, a smaller size cannabis flowers with an even more affordable price offering of its signature strain.

In 2022 the company launched the brand BLKMKT as its second Canadian brand introduced into Israeli market, marking the next step in its extensive partnership with Avant Brands.

Production, Distribution and Sales in Principal Markets

Israel

Focus Medical Herbs Ltd. is the primary cultivator of medical cannabis products sold under the IMC brand in the Israeli market. Until July 2022, Focus Medical Herbs Ltd. held an IMCA license to cultivate medical cannabis at the Focus Facility. In 2022, the company closed the Focus Facility to concentrate on leveraging its skilled sourcing team and strategic alliances with Canadian suppliers, as well as the import of medical cannabis from its Canadian Facilities. In July 2022, Focus Medical received the Focus New License, which allows it to continue to import cannabis products and supply medical cannabis to patients through licensed pharmacies despite the closure of the Focus Facility. To supplement growing demand, the company plans to continue its relationships with third-party cultivation facilities in Israel for the propagation and cultivation of its existing proprietary genetics and for the development of new products.

In addition, in July 2022, I.M.C Farms Israel Ltd. (IMC Farms) obtained a license from the Israel Medical Cannabis Agency (IMCA), which allows it, among others, to import cannabis products and supply medical cannabis to patients through licensed pharmacies.

The packaged medical cannabis products are then sold by the Group under the company's brands to local Israeli pharmacies directly or through contracted distributors.

Europe

Similar to Israel, the company's focus in Germany is to import premium dried cannabis from its supply partners, which will satisfy the rapid growth in demand for high-THC premium cannabis across a variety of strains and qualities. In addition, Adjupharm sells cannabis extracts to meet the existing demand in the German market.

The company intends to leverage the foundation established by Adjupharm, its state-of-the-art EU-GMP Logistic Center, its vast knowledge in the cannabis market and costumers' preferences and its network of distribution partners to expand into other jurisdictions across the continent in which medical cannabis is legal.

Adjupharm received a revised EU-GMP license in May 2022 that permits it to engage in additional production, cannabis testing and release activities. It allows Adjupharm to repackage bulk cannabis, to perform stability studies and offer such services to third parties.

Intangible Properties

'IMC' is a registered trade name and trademark valid in Israel through May 2027, in Germany and in Portugal through the World Intellectual Property Organization through November 2027. In Canada, the company applied for registration of the IMC name for use in connection with various food supplements, vitamins, minerals and proteins and is awaiting a response to its submissions. As of December 31, 2022, the pending trademark application had been examined by Canada Patent and Trademark Office. The opposition period ended on 19 March 2022 and the company is waiting for registration.

In February 2022, the company successfully completed the registration of its well-known medical cannabis brand strain 'ROMA' as a trade name in Israel and is valid through July 2031. In addition, the company commenced trademark applications for its new branding and the name 'I AM Cannabis' in Israel.

Trichome JWC Acquisition Corp. (TJAC) has also commenced a trademark application for the name 'WAGNERS' in Canada.