ACKRELL CAPITAL Cannabis Investment Report | December 2017 Nonetheless, we believe that California’s state-legal market may double from an estimated $3.2 billion in 2017 to approximately $6.5 billion in 2018. Canada has assumed the role of a global leader of cannabis legalization. Although Canada’s legal cannabis market is presently limited to medical cannabis, it is currently the largest federally legal can- nabis market in the world, estimated at $1.5 billion in 2017. In April 2017, a proposed recreational law was introduced in the Canadian parliament; the proposed Cannabis Act would allow adults to pur- chase cannabis from federally licensed producers and to possess and share cannabis with other adults. The Cannabis Act is widely expected to be approved in some form by the Canadian parliament by mid- 2018. If approved, Canada would be the largest country in the world to legalize recreational cannabis on a national level, and we believe that the implementation of the Cannabis Act would significantly expand. the size of Canada’s overall market. Canada has demonstrated that by providing a national legal framework for cannabis, companies operating legally within the industry have had a clear “first to market” advantage, allowing them to raise significant amounts of capital and to pursue domestic and international expansion opportunities. If these recreational laws stimulate demand, as expected, and are otherwise viewed as successful, we expect more U.S. states and additional countries to follow suit with similar laws. In the United States, legislatures in eight states (Arizona, Delaware, Florida, Michigan, New Jersey, Ohio, Rhode Island and Vermont) are expected to introduce ballot measures or explore regulatory frameworks for recreational cannabis in 2018. Cannabis Consumer Experience Goes “Mainstream” Cannabis consumer product companies and retailers are rapidly evolving to meet the needs of the “mainstream” cannabis consumer. Cannabis consumers are no longer