ACKRELL CAPITAL Cannabis Investment Report | December 2017 through minority investment, by acquisition or otherwise. Examples of the emergence of such strategic investors include Constellation Brands, Inc.’s (NYSE: STZ) approximately $190 million investment in Canopy Growth Corporation (TSX: WEED) and the more than $400 million spent by The Scotts Miracle-Gro Company (NYSE: SMG) to acquire soil, fertilizer, hydroponic equipment and lighting companies that are supplying the cannabis industry. These types of transactions help support the valu- ation levels in the industry and, to an extent, validate investors’ enthusiasm for the industry. The stock price performance and valuations of cannabis-related companies continue to be robust, irrespective of the aforementioned funding gap. In general, we believe that valuations in both the public and private markets are being driven more by investors’ expectations for the future growth of the cannabis industry than by individual company fundamentals. Similarly, especially in the over-the- counter stock market in the United States—where most of the public cannabis-related companies are traded—stock price fluctuations and valuations tend to be heavily influenced by the illiquidity in most stocks and the trading strategies of those involved. Overall, we believe that the capital markets for the cannabis industry will become more efficient and rational over time as we expect increased participa- tion from institutional and strategic investors. m Public Capital Markets More than 300 cannabis-related companies are traded on one or more stock markets in the United States, Canada and other international locations. Although these companies are publicly traded, most are in early stages of development, have de minimis revenue and are not profitable. We use the term “cannabis-related” to include companies that participate solely in the cannabis industry and those that participate in the cannabis industry in addition to other industries