ACKRELL CAPITAL CHAPTER! Executive Summary U.S. Legalized Cannabis Market $100,000 : 50 M : 3 iS 3 ‘ ° ® $60,000 30M 2 $40,000 20m % $20,000 10M s) —_ om 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 | i Legalized Cannabis Market Size === Consumers Source: Ackrell Capital. Assumes cannabis will be legalized federally by 2027. Cannabis may never be legalized federally in the United States. = To Watch in 2018 We believe that the following events will impact the legalized To Watch in 2018 cannabis industry in 2018. * Increasing Recreational Legalization Increasing Recreational Legalization ; ; * Cannabis Consumer Experience We expect 2018 will be a watershed year for recreational goes “Mainstream” markets, both in the United States and internationally. Cal- : _& a —_ ‘ F ¢ FDA Approval of Cannabis- ifornia will begin implementing its new recreational law in , . . Derived Pharmaceuticals January 2018, and Canada’s proposed recreational law is widely expected to be approved in some form by mid-2018. | * Commoditization of California, which has a population of 38 million people Se Eee and receives 250 million visitors annually, is poised to tran- | * Access to Banking Services for sition from the world’s largest medical cannabis market to U.S. Cannabis Companies the largest recreational market with the implementation of |, Increasing Strategic Investor its recreational law in January 2018. Activity; Continuing Funding In each of the three largest U.S. states to implement rec- Gap reational laws—Colorado, Oregon and Washington— the size of the legalized cannabis market expanded significantly, doubling the size of the overall market in each of these states in the first full calendar year after implementation. The world has yet to experience a legalized recreational cannabis market in a jurisdiction as large as California, and how the supply chain, consumer response and regulatory framework will coalesce in such a market remains to be seen. © 20