Business Plan: Cannabis Cultivation

Address Line,
Address Line
Phone: Number
E-mail: info@businessname.com
Web: www.businessname.com
2021
BUSINESS PLAN
CANNABIS CULTIVATION
This document contains

Confidential & Proprietary Information
belonging exclusively to BUSINESS NAME
2 BUSINESS NAME / BUSINESS PLAN
Content
Executive Summary ................................................... 3 Cultivation Facility ..................................................22
Company Summary .................................................. 4 Physical Security Plan ...........................................26
Market Opportunities .............................................. 5 Transportation .........................................................29
Start-up Summary..................................................... 6 Packaging and Labeling ........................................30
Financial Summary................................................... 7 Laboratory Testing Requirements ...................31
Market Overview......................................................... 8 Tracking Solution ....................................................31
Global Market ............................................................. 9 Organizational Structure ......................................32
North American Cannabis Market.................... 10 Financial Plan..............................................................35
The U.S. Cannabis Market .................................... 11 Funding analysis ......................................................36
California Cannabis Market ................................ 14 Direct and Operating Expense Breakdown ..38
SWOT Analyses ........................................................ 17 Profit & Loss Forecast ...........................................39
Sales Strategy .............................................................. 18 Cash Flow Statement .............................................40
Marketing Plan ......................................................... 19 Balance Sheet ............................................................41
Competition ............................................................... 19 Main Ratios ................................................................42
Sales Forecast ........................................................... 20 Appendix ........................................................................44
Operating Plan............................................................ 21
www.businessname.com 3
01
Executive
Summary
Company Summary
Market Opportunities
Start-up Summary
Financial Summary
Company Summary
CANNACULT is a new company which is intending to penetrate into the cannabis cultivation market in
California. CANNACULT is applying for a Class 2B license and intends to start with one
greenhouse/warehouse 7,200 sq. ft., Location. CANNACULT intends to start its growing business from
….
CANNACULT is to be organized/formed as a Limited Liability Company (LLC)/Corporation and will be

led by …, who will serve as CEO / Owner.
CANNACULT is a company that will be built on a solid foundation. From our inception, we have decided
to recruit only qualified people to man various job positions in our company. CANNACULT will seek to
leverage on their expertise to build our business brand as a premiere medical/recreational cannabis
cultivator within the United States.
Main Goals
 Getting the California Cannabis Grower license and to build a successful commercial cultivation
facility.
 To be fully compliant with all state and local municipalities and be primed and ready for national
expansion as federal laws adjust and evolve to the benefit of the cannabis industry.
Mission
 To grow one of the best cannabis products, to establish an innovative cannabis growing brand
with affordable prices to retailers and manufacturers of California.
Products & Services
Company will have the ability to vegetate up to 1,000 plants and flowers concurrently, will grow up to
11 different strains of cannabis, and will have the ability to grow from seedling to finished product.
CANNACULT will dry and process all cannabis flowers into labeled/inventoried vacuum sealed bags
before delivery.
Objectives
Year 1: Securing the license to start cultivation in state California.

Year 3: Brand and distribute our product line throughout California.
Year 5: The CANNACULT brand is now a trusted and consistent brand.
Year 7: We intend to secure manufacture license.
Market Opportunities
According to the report by Arcview Market Research and BDS Analytics: “The Road Map to a $57 Billion
Worldwide Market" 1, spending on legal cannabis worldwide is expected to hit $57 billion by 2027. The
recreational cannabis market will cover about 67% of the spending while medical cannabis will take up
the remaining 33%.
The North America legal cannabis market amounted to almost $20 billion in 2020, growing by 40
percent on the year. The largest market was the United States, which totaled over $16 billion. It was
followed by Canada with about $3 billion. Analysts predict the overall cannabis market for legal adult-
use and medical sales in North America to reach $23.8 billion by 2021 with the compound annual
growth rate (CAGR) to almost 20%.
With the adoption of the 2020 initiatives, about 30% of the population now lives in jurisdictions that
have legalized recreational cannabis,
California 4,400
and almost 75% of all states have
Colorado 2,175
approved cannabis for medical use.
Washington 1,400 In 2015 Gov. Jerry Brown signed
Florida 1,200 three bills that toughened
Oregon 1,100
regulations for medical cannabis
Illinois 1,000
businesses and sought standards for
Michigan 985
documentation and testing. On
Oklahoma 800
November 8, 2016, California voters
Arizona 750
have approved cannabis for
Massachusetts 700
recreational use.
0 1,000 2,000 3,000 4,000 5,000
$ million On June 27, 2017, the legislature
passed, and Governor Brown signed
Figure 1. Medical and recreational cannabis sales in top states, 2020
into law the Medicinal and Adult-Use
Cannabis Regulation and Safety Act (MAUCRSA), which creates the general framework for the
regulation of both commercial medicinal and adult-use (recreational) cannabis.
On January 1, 2018, the state began issuing licenses for commercial cannabis activity. Additionally, on
January 1, 2018, two new cannabis taxes went into efect: a cultivation tax on all harvested cannabis that
enters the commercial market and a 15 percent excise tax on the purchase of cannabis and cannabis
products.
As of January 2021, the state’s three licensing authorities have issued about 10,000 2 commercial
cannabis licenses to cannabis businesses throughout the state of California.
In 2020, the combined year-to-date sales are estimated to hit $4.4 billion indicating almost 50% growth
compared to 2019 and representing about 27 percent of U.S. sales. According to a study by the
University of California Agricultural Issues Center, California’s recreational cannabis market could be
worth more than $5 billion.
1 https://arcviewgroup.com/research/reports/
2 https://cannabis.ca.gov/check_a_license/
Start-up Summary
The business will be fully funded with $0.0 million. This will include total capital cost of over $0.0
million, leaving nearly $0.0 million as working capital.
Table 1. Start-up expenses, $
$ Quarter 1 Quarter 2 Quarter 3 Quarter 4
CAPEX
Land & Development 0 0 0 0
Building for Cultivation, build out 118,800 0 0 0
Growing Equipment 225,300 0 0 0
Lighting System 101,400 0 0 0
Alarm & Security System 21,384 0 0 0
Monitoring - Video & Camera System 14,969 0 0 0
Computer System 10,692 0 0 0
Other 0 0 0 0
Other 0 0 0 0
Other 0 0 0 0
OPEX
COGS - Cost of Goods Sold 59,205 118,683 192,471 192,411
G&A Expenses - Initial & General Costs 51,048 6,048 6,048 6,048
G&A Expenses - Cultivation 19,550 29,400 32,695 32,505
SG&A Expenses - 750 2,621 19,098 18,148
Marketing & Sales Expenses
Salaries & Benefits 37,261 37,261 37,261 37,261
SG&A Expenses - Misc. 2,635 3,770 4,099 4,080
Total 662,995 197,783 291,673 290,454
Financial Summary
CANNACULT will fund its startup costs largely through personal savings/investments.
From a total investment of $0.0 million, CANNACULT is expected to generate nearly $0.0 million in
gross revenues with net income of nearly $0.0 million in Year 2, its first full year of operations.
Revenues are expected to grow to nearly $0.0 million in Year 3 and $0.0 million in Year 5, with net
income of nearly $0.0 million and over $0.0 million respectively.
Revenue & Profit Forecast

Cash Flow Forecast
$3,000
$600 $1,200
Thousands
Thousands
$2,500 $500
$1,000
$2,000 $400
$800
$300
$1,500
$200 $600
$1,000
$100
$400
$500
$0
Year 1 Year 2 Year 3 Year 4 Year 5 $200
$0 -$100
Year 1 Year 2 Year 3 Year 4 Year 5
-$500 -$200 $0
Revenue Gross Profit Net Income
Operational Cash Flow Ending Period Cash Flow
After the first year of operations, it is expected that CANNACULT will be able to trim expenses through
realizing business efficiencies, gaining operational experience and industry knowledge.
Direct and Indirect Social Impacts
Company will create more than … new jobs in county with over $... million salaries, $... Social Security
taxes, … Medicare taxes and $... for Insurance each year. Company also intends 0.5% of sales will be
allocated to the schools and different community programs.
Table 2. Taxes and social flow, $
Year 1 Year 2 Year 3 Year 4 Year 5
Federal Tax 266,660 614,604 614,604 614,604 614,604
State Tax 17,675 100,826 101,336 101,928 102,799
Community programs 6,623 12,718 12,718 12,718 12,718
02
Market
Overview
Global Cannabis Market
North America Cannabis Market
The U.S. Cannabis Market
California Cannabis Industry
SWOT Analyses
Global Market
In 2019, the global legal cannabis market was estimated at about $14.7 billion. The August 2020 update
to BDSA’s global legal cannabis forecast shows that global cannabis sales for 2020 reaching more than
$20 billion3.
Spending on legal cannabis 50.0

worldwide is expected to reach 46.8
45.0
about $43 billion by 2024 at a 43.1
40.0
compound annual growth rate 38.0
35.0 USA
(CAGR) of 25% from 2019 and 32.1
30.0 CANADA
hit $57 billion by 2027, while
26.1 EUROPE
cannabis market in the United 25.0
States and Canada is estimated 20.0 20.0 LATAM
to be about $46.5 billion and 15.0

ROW
other $10.5 billion would go to 10.0
TOTAL
other markets. The largest
5.0
growth rate is predicted within
0.0
the rest-of-world markets with 2020 2021 2022 2023 2024 2025
projected $2.5 billion in 2027.
Figure 2. Global spending by region (in USD billions), BDSA forecast
The recreational cannabis
market will cover about 67% of the spending while medical cannabis will take up the remaining 33%.
Legal medical cannabis spending outside the U.S. and Canada increased by more than one and a half
times in 2019, from $367 million to $560 million, largely due to markets in Germany and Mexico.
According to the report, the global medical cannabis market is projected to increase in value to about
$14.1 billion in 2024 at a CAGR of 10% from 2019 to 2024.
Key Trends:
• The initial decision by many U.S. states and Canada to create medical-only cannabis regulations
prompted many other countries to act similarly while legalization of adult recreational use in
California and Canada triggered a second wave of legalizing laws internationally to increase
access to medical cannabis.
• The size of the Latin America cannabis market has an estimated market value of $20 million in
2020 and in the second edition of the Latin America and Caribbean Cannabis Report – produced
by London-based advisory group Prohibition Partners – is projected to reach over $500 million
by 2024 with increasing production of cannabis cultivation.
• The August 2020 update to BDSA’s global legal cannabis forecast shows almost $4 billion by 2025
in the European region with about 50% of sales expected to be in Germany, while Brightfield
Group forecasts over $3.1bn with a 2020-2025 CAGR of 52%.
• Australia’s legal cannabis market is forecast to grow from $95 million in 2020 to $1.2 billion in
2027, the 5th largest in the world.
• Israel has a small population and a long history of legal medical cannabis use. It continues to be a
leader over the years in the development of cannabis pharmaceuticals.
3 https://blog.bdsa.com/global-cannabis-markets-to-reach-nearly-20-billion-in-2020
North American Cannabis Market

The North America legal cannabis market amounted to almost $20 billion in 2020, growing by 40
percent on the year. The largest market was the United States, which totaled over $16 billion. It was
followed by Canada with about $3 billion.
The report from cannabis industry analysts BDS Analytics forecasts that the entire legal cannabis
market in North America to reach $23.8 billion in sales – an almost 20% annual growth rate by 2021 –
as more states legalize cannabis for recreational use and existing markets mature and will grow to
$46.5 billion six years later based on the Arcview Market Research report 4.
25
20
15.7
15
11.4
5.7
10
3.5
2.7
1.8
5 1.4
8.2 7.7 8.1
6.5 7.3
4.3 4.9
0
2015 2016 2017 2018 2019 2020 2021
(projected) (projected)
Figure 3. Medical and recreational cannabis sales forecast, billion $
4 https://bdsanalytics.com/
The U.S. Cannabis Market

The U.S. legal cannabis sales reached $12.2 billion in 2019 according to the Arcview/BDS report and
experts forecast that 2020 sales should reach $16.3 billion (about $10 billion of adult-use sales and $6.3
billion for medical sales) and by 2024 could be as high as $31.1 billion.
Although the use of cannabis is illegal under the federal law and the federal government classifies
cannabis as a schedule 1 drug, almost 75% of the U.S. states have legalized it in some form. Most states
legalized it only for medical purposes, but sixteen states – Alaska, Arizona (2020), California, Colorado,
Illinois (2019), Maine, Michigan (2018), Montana (2020), Nevada, New Jersey (2020), New York (2021),
Massachusetts, Oregon, South Dakota (2020), Vermont and Washington – have gone further, legalizing
the recreational use.
Figure 4. U.S. legalization map

Medical / Recreational cannabis legalization
Medical cannabis legalization
Decriminalization
No laws legalizing
As a result, 37 states, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, and the
U.S. Virgin Islands have effective medical cannabis laws, and 16 states and the District of Columbia now
allow cannabis for recreational use.
$ billion
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
California 2.960
Colorado 1.775
Washington 1.081
Oregon 0.726
Nevada 0.692
Arizona 0.580
Florida 0.550
Massachusetts 0.425
Oklahoma 0.345
Michigan 0.282
Figure 5. Medical and recreational cannabis sales in top states, 2019
There are more than 20,000 active licenses for cannabis businesses in the U.S. This includes cultivation,
extraction and manufacturing, retail, distribution and testing licenses.
The industry employed 211,000 people in 2018 and the number of full-time cannabis employees grew
17% to 247,300 in 2019. If cannabis market continues its growth trend, the number of workers in that
industry could reach about 500,000 by 2022.
Wholesale Pricing Benchmarks
2,500
2,000
1,500
1,000
500
Outdoor Greenhouse Indoor Spot Index
Figure 6. U.S. Wholesale flower prices, $/pound 2018-2020

Much of last year was marked in general by an upward trend in the national composite price. The U.S.
Spot 5 increased by 6.7% from the opening to the closing week of 2020. Additionally, for Q4, the national
composite rate averaged $1,586 per pound, on by 30.1% compared to the quarterly average price of
$1,423 per pound, documented in the same period in 2019. Yet, Q4 2020’s mean going rate is on by only
2.7% from Q3’s quarterly average price of $1,544 per pound.
 2016 U.S. Spot Index average = $1,789

The seasonal impact of the fall harvest remains undeniable, driving prices to their annual low in
November the previous three years except of the last two years. The U.S. Spot opened the year at $1,397
per pound and slid to its annual low of $1,322 per pound in the fourth week of May after a strong
outdoor harvest on the West Coast:
 2016 low was $1,386 on November 11th

 2019 low was $1,066 on April 4th
 2020 low was $1,322 on May 22nd
The U.S. Spot upward through the spring, summer, and into the autumn, when it peaked at $1,647 per
pound in mid-November.
5 https://reports.cannabisbenchmarks.com
California Cannabis Market

Legalization
In 1996, California became the first state to allow for medical cannabis use. State voters approved
Proposition 215; the law that made it legal for doctors to recommend cannabis to patients.
California has 482 cities and 58 counties, all with the power to govern their own medical cannabis
industries. The methods they choose vary throughout the state. Some local governments have rules
limiting the number of stores and where they can open. Others passed ordinances banning all cannabis
cultivation.
In 2015 Gov. Jerry Brown signed three bills that toughened regulations for medical cannabis businesses
and sought standards for documentation and testing. The bills are known as the Medical Cannabis
Regulation and Safety Act, or MMRSA for short. Collectively, the legislation also paved the way for
medical cannabis businesses to turn a profit.
On November 8, 2016, California voters have approved cannabis for recreational use.
On June 27, 2017, the legislature passed, and Governor Brown signed into law the Medicinal and Adult-
Use Cannabis Regulation and Safety Act (MAUCRSA), which creates the general framework for the
regulation of both commercial medicinal and adult-use (recreational) cannabis. Under MAUCRSA, the
Bureau of Cannabis Control (Bureau) is the lead agency. The Bureau is charged with licensing,
regulation, and enforcement of the following types of commercial cannabis businesses: distributors,
retailers, microbusinesses, temporary cannabis events, and testing laboratories. The Manufactured
Cannabis Safety Branch, a division of the California Department of Public Health (CDPH), is responsible
for regulating and licensing manufacturers. CalCannabis Cultivation Licensing, a division of the
California Department of Food and Agriculture (CDFA), is responsible for licensing cultivators and
implementing the Track-and-Trace system.
Cultivators
On January 1, 2018, the state began issuing
Retailers licenses for commercial cannabis activity.
Delivery Services Additionally, on January 1, 2018, two new
cannabis taxes went into efect: a cultivation tax
Manufactures
on all harvested cannabis that enters the
Distributors
commercial market and a 15 percent excise tax
Microbusiness on the purchase of cannabis and cannabis
Transporters products.
Event Orginizers As of January 2021, the state’s three licensing

authorities have issued about 10,000 6
Testing
Figure 7. Active cannabis licenses, California Laboratories commercial cannabis licenses to cannabis
businesses throughout the state of California. There are 9,721 active licenses, including 6,258
cultivators, 891 manufactures and 723 retailers, 320 delivery services, 1024 distributors, 281
microbusinesses, 150 transporters, 38 event organizers and 36 testing laboratories.
6 https://search.cannabis.ca.gov/
Market
In California, the weather conditions are ideal for cultivating cannabis outside, while a lot of cannabis is
also grown indoors in massive warehouses. The state's marketplace is also known for its decades-long
experience developing cannabis strains. Third-generation growers and breeders have some
unparalleled knowledge of the plant and of the related regulatory environment compared to other
states.
In 2017, California’s regulatory regime

allowed only holding state-issued medical
cannabis cards to legally purchase cannabis.
But that hasn’t stopped sales in the state from
eclipsing the other states with recreational
sales. Sales in California represented about 34
percent of legal sales in the United States in
2017.
In 2020, California retail stores sold over $4.4

billion worth of cannabis products indicating
almost 50% growth compared to 2019 and
representing about 27 percent of legal sales in
Figure 8. Medical and recreational cannabis sales in top states in 2020, $ billion
the United States while combined sales in
Colorado, Washington and Oregon represented about 29 percent of U.S. sales.
California’s cannabis excise tax generated $181.9 million 7 in 2018, and the recreational cannabis sales
reached about $1,210 million or 48.4% of total sales.
180.0 350.0 Total tax revenue reported by the

160.0 cannabis industry in 2019 is about
300.0
140.0 $590 million, including about
250.0
120.0 $300 million in excise tax.
100.0 200.0
80.0 The first half of 2020 brought in
150.0
60.0 $466.1 million8 of tax revenue, the
100.0
40.0 second half of the year increased
20.0 50.0 to $555.3 million 9.
0.0 0.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Since January 2018, total program
18 18 18 18 19 19 19 19 20 20 20 20 revenue to date is $2.07 billion,
Excise Tax Cultivation Tax Sales Tax Cannabis Taxes which includes $1.04 billion in
Figure 9. Cannabis taxes, $ million cannabis excise tax, $256.6
million in cultivation tax, and $771.7 million in sales tax.
The recreational cannabis sales reached $2 billion in 2019 and grew to over $3.5 billion in 2020.
7 https://www.cdtfa.ca.gov/news/19-02.htm
8 https://www.cdtfa.ca.gov/news/20-14.htm
9 https://www.cdtfa.ca.gov/news/21-02.htm (revisions to 4th Quarter 2020 data are expected in mid-May)
Californians spent most of their dollars (41%) on flower.

Concentrates, the next largest share of the cannabis Other, 3.0%
sales, captures 30% with over 76% of this contributed Pre-Rolled, 11.5%
by cartridges. Edibles, with 15%, came in third. The top
performers in the California edibles market include
Edibles, 14.8% Flower, 40.8%
cannabis-infused chocolate, gummies and beverages.
Pre-rolled joints grab 12% of the market and other
products categories represented less than 3% of the
marketplace.
According to a study by the University of California

Concentrates, 29.9%
Agricultural Issues Center, California’s recreational
Figure 10. Cannabis products sales structure
cannabis market could be worth more than $5 billion;
however, the benchmark will only be achieved once cannabis consumers fully embrace the state’s legal
market. While recreational cannabis market is expected to grow, medical cannabis sales are expected to
decline as people migrate toward the adult-use market to avoid medical cannabis ID fees. It is projected
that legal recreational use will make up 61.5% of the overall market, illegally purchased cannabis will
make up about 29.5% of the market and legal medical cannabis use will be about 9% of the overall
market, the analysis estimated.
Concentrates and Infused Products Market in California
At year-end 2020, sales from recreational accounted for nearly 80% of total Concentrate sales in
California and continue to increase in proportion to overall category sales.
The top 10 Concentrate brands in California continue to increase their share of the market, accounting
for more than a half of the total sales in this category.
120% 120%
100% 100%
80% 80%
56% 52% 51% 55%
69% 67%
60% 77% 60%
40% 40%
20% 44% 48% 49% 45%

20% 33%
31% 23%
0% 0%
2018 2019 2020 2017 2018 2019 2020
Medical Recreational Top ten All other
Figure 12. California concentrates market Figure 11. Top ten brands’ share of concentrates sales
SWOT Analyses
S W O T
• New cultivation • Product liability / • High growth • A significant drop
technologies will legal issues industry in wholesale
allow significantly pricing
• Enhanced risk of • Growing interest
decrease
banking / and demand for • Enforcement of
electricity bills
financial / IRS natural, federal law
and increase
scrutiny alternative
profit while • Possible cannabis
• Crop loss medicine
competitive law changing
prices possibility due to • Trend toward
• Indicators of a
pests, heat, greater cannabis
• Extensive slowed global
human error, etc. legalization,
industry economy
• Lack in including the use
knowledge • Large companies
professional of cannabis for
• Proven, recreational entering the
workforce for a
disciplined purposes market
cannabis industry
management
• High energy • Global Market
team
consumption
03
Sales
Strategy
Marketing Plan
Competition
Sales Forecast
Marketing Plan
Because cannabis is illegal under federal law, state governments and online advertising platforms are
placing strict rules on how companies can market their products.
Google, Facebook and Twitter all have advertising policies that restrict the promotion of the sale of
cannabis. Google’s policy prohibits ads that promote “substances that alter mental state for the purpose
of recreation.” Facebook restricts any “illegal, prescription, or recreational drugs.” And Twitter bans
“illegal drugs” as well as substances that cause “legal highs.” Instagram and Facebook have decided to
go a step further by removing pages of cannabis related businesses.
The most effective strategies for legal marijuana companies are direct marketing at industry
conferences and other events, building communities around marijuana -related concerns such as health
and wellness. The marketing and sales strategy of CANNACULT will be based on generating long-term
personalized relationships with manufactures and dispensaries.
Marketing and advertising campaign includes:
- Meeting with distributors and retailers

- E-mail Marketing
- Advertising and articles in the thematic Magazines
- Business events and conferences
- Business and industry associations
- Brand development
- Brochures
- Website development with search engine optimization
- Cannabis business directories and platforms
Table 3. Cannabis business directories
WEEDMAP With over 7,750 listings WeedMaps has 7.96

https://weedmaps.com/ throughout the U.S., Canada, and million total visits each
Europe. month.
LEAFY Leafy is a cannabis information Leafy has 226.27
https://www.leafly.com/ resource for finding the right thousand total visits each
strains and products. month.
https://www.cannasaver.com/ Websites for cannabis and related 310.04 and 81.49
http://cannabiscouponcodes.com/ coupons. thousand total visits each
month correspondingly.
Competition
In every business there is competition, however, we believe we possess several strengths that will allow
us to remain visible on CANNACULT radar at all times. The cannabis industry is known to be highly
competitive in the U.S and in most parts of the world. The industry is growing and there are alternative
ways through which clients/patients can obtain their cannabis. There is alternative provide methods
like mail-order firms, grocery chains, mass merchants and dollar stores; these are the real competitors
in the industry. These competitors ensure that they do all that lies within their power to gain a
favorable market share of the available market in any given region.
In this industry, most of the competitive dynamics center around the quality of cannabis cultivated, the
service offered, the location where the cultivation will be done. The branding of CANNACULT plays a
significant role. Even though competition is stiff especially from the big, well-backed enterprises,
smaller enterprises can still get their fair share of the market if they stay true to the competitive
dynamics. It is a fact that small cannabis cultivation operations will always struggle with larger based
cannabis cultivation operations when it comes to pricing power and brand recognition, hence the
reason why smaller based operations will always go out of their ways to deliver excellent client service.
It is through top-notch client service that they can secure a fair share of the available market.
Sales Forecast Indoor Greenhouse Outdoors Trim
As growing stage will start from …, sales YEAR 7 1,260 525

are projected to be started from … and
they will significantly increase from the YEAR 6 1,260 525
second year.
YEAR 5 1,260 525
Company intends to mix outdoor
YEAR 4 1,260 525
cultivation from April to October period
and all-around year indoor/greenhouse YEAR 3 1,260 525
cultivation.
YEAR 2 1,260 525
Growth rate for revenue is about 70%
for the second year. YEAR 1 650 315
Figure 13. Sales forecast, lbs.

Table 4. Sales Forecast for first three years, $
$ 1m 2m 3m 4m 5m 6m
Year 1 0 0 0 0 0 14,844
7m 8m 9m 10m 11m 12m
Year 1 249,969 211,969 211,969 211,969 211,969 211,969
1m 2m 3m 4m 5m 6m
Year 2 211,969 211,969 211,969 211,969 211,969 211,969
7m 8m 9m 10m 11m 12m
Year 2 211,969 211,969 211,969 211,969 211,969 211,969
1m 2m 3m 4m 5m 6m
Year 3 211,969 211,969 211,969 211,969 211,969 211,969
7m 8m 9m 10m 11m 12m
Year 3 211,969 211,969 211,969 211,969 211,969 211,969
04
Operating
Plan
Cultivation Facilities
Physical Security
Transportation
Packaging and Labeling
Testing Requirements
Tracking Solution
While most businesses in any industry try to keep startup costs as low as possible, that isn’t necessarily
the best way to proceed when opening a grow. Creating a cost-efficient cultivation site often involves
investing in technology and processes that may result in a big near-term hit.
Yields and quality of plants grown under artificial lights mostly depend on:
1. the seed variety,

2. whether the plants are grown from seeds or clones,
3. after how many days of growing the plants are put into flowering, and
4. the optimization of the climatic conditions of the grow-room.
Cultivation Facility
The cultivation premises will be located in a 7,200-sq. ft. building and will be adequate to house and
grow up to 1,000 plants.
Our cultivation & processing area will include:
• Mother Room & Cloning

• Vegetative
Growth Rooms
• Flowering Rooms
• Drying & Trim Rooms
• Curing Rooms
• Packaging Rooms
Our company will grow from seeds/clones

of the following strains:
Warehouse Design
A. A warehouse environment
provides with maximum control, and therefore the most reliable consistent cannabis crops can
be produced in a properly designed warehouse grow room.
B. Without natural light, warehouse grow rooms depend on intelligent grow lights which need to
replicate the parts of the sunlight spectrum that the marijuana plants need at each stage of
growth. Lighting is a key component in an integrated system.
C. Air filtration and circulation systems are essential for controlling heat buildup and eliminating
exhaust odors. It is critical that the air circulation in a marijuana warehouse is designed in
conjunction with the grow lights because lighting systems emit large amounts of heat.
D. There are various irrigation systems for growing cannabis appropriate for growing in a
warehouse: including drip irrigation, hydroponic flood benches, or trough benches.
E. The irrigation system should be designed in conjunction with a nutrient management system for
maximizing the production yield of the cannabis plants.
F. Environmental computer. The computer control systems for a cannabis warehouse control and
monitor all the nutrients, lights, air circulation, and irrigation needs of the plants
G. De-humidification to optimize growing environment.

H. Computer controlled CO2 injection and monitoring.
Greenhouse Design
Greenhouses combine the latest technology in HVAC, light deprivation, environmental controls,
irrigation, insect exclusion, benching systems, hybrid techniques, and much more to create a systematic
and efficient growing approach:
A. The biggest advantage Greenhouse Marijuana Growers have is the abundance of natural light coming
into the greenhouse.
B. While cannabis likes long daylight during the vegetative stage, a good blackout system is required for
the best flowering production.
C. Heating and Cooling Systems are an important component of the marijuana greenhouse.
D. CO2 is essential for maximizing the quality and production of Marijuana.
E. Ventilation is essential as with all greenhouse crops, however marijuana legislation, and local
municipality requirements may also impose strict requirements for eliminating exhaust odors. Our
integrated growing solutions will include air filtration systems where required.
F. A nutrient management system is essential for maximizing the production yield of the cannabis plants
and ensuring consistent and reliable quality.
G. The brains of the complete marijuana growing system whether a greenhouse production facility or a
warehouse grow up is our environmental computer. The computer control systems for a marijuana
greenhouse controls and monitor all the nutrients, lights, blackout, air circulation, CO2 and irrigation
needs of the plants, it is designed to maintain the exact environment needed for as many different
growing zones as you want and can handle different environments for propagation, cloning, flowering
and for as many different varieties as you want to control.
Company will use rolling benches / growing tables which are highly recommended for any commercial
cannabis grow operation. They provide up to 50% more plant space by eliminating the need for a
dedicated aisle. With a crop, as valuable as marijuana, this directly equates to much higher profits and
maximum space efficiency.
Main features:
 Aluminum extruded sides and ends

 Miter cut corners
 Hot dipped galvanized steel stands
 Aluminum cross members
 Snap together fittings
 Threaded rods for adjustment up to 12"
 Top quality plastic or aluminum flood trays
 13 gauge expanded metal bench tops
 2" diameter rolling tubes
Outdoor Cannabis Farming
CANNACULT plans outdoor cannabis farming in 000 acres of agricultural land in …. Cannabis will be
planted through mid-to-late Month and Company expects to harvest 0,000 plants per acre.
Phases of Production
• Germination of seeds, gendering plants, male/female, or feminized plants (10 weeks)

• 1st stage: taking and rooting clones (2 weeks)
• 2nd stage: clone/vegetation (1 week)
• 3rd stage: vegetation (2 weeks)
• 4th stage: flowering (8 weeks)
• 5th stage: processing/trimming (3 days)
• 6th stage: drying and curing (11 days)
• Total elapsed time: approximately 15 weeks
Germination of
Seeds
Lab Testing &

Cloning Mother Quarantine & Quality
Plants & Rooting Assessment Assurance
Clones
Trimming &
Processing Preparation
Plant Vegetation
Curing Vault Storage
Plant Flowering Harvesting Inventory Shipping
Figure 14. Phases of production, cultivation

Product Timeline and Production Schedule
As growing stage will start from …, sales are projected to be started from the … and they will
significantly increase from the second year.
Company will have the ability to vegetate up to 1,000 plants and flowers concurrently, will grow up to
11 different strains of cannabis, and will have the ability to grow from seedling to finished product.
Company intends to grow 5-7 exclusive strains that other growers do not have.
Table 5. Growing Assumptions, first six months
M1 M2 M3 M4 M5 M6
Sq. ft available for "mother" - 400 400 400 400 400
Sq. ft available for clones' - 500 500 500 500 500
Sq. ft available for vegetative - 840 840 840 840 840
Sq. ft available for flowering - 4,200 4,200 4,200 4,200 4,200
Number of “mother” plants - 100 100 100 100 100
Number of clones - - - 1,000 1,000 1,000
Number of Veg Plants - - - 500 1,000 1,000
Number of Flower Plants - - - - 500 1,000
Yields, pounds - - - - - 125
1,600
1,400
1,200
1,000
Indoor
800
Greenhouse
600
Outdoors
400
200
0
Year 1 Year 2 Year 3
Figure 15. Yields forecast, pounds

Physical Security Plan

Physical Building
The physical address of our cultivation facility will be …
We have located our cultivation facility in a light industrial complex area that includes manufacturing
and industrial businesses. Located on a large lot within a secured fence, the facility has numerous
intrinsic security features and is easily converted to high-security use. The facility will be the sole
occupant of a building that / will be housed in a building that does not adjoin high-use public areas, sits
in the middle of a secured lot of lot size, is not visible from the street, is set back from high traffic
intersections, is distance feet from the nearest public road, has secure means of ingress and egress, is
located in a light industrial complex, is not accessible to foot traffic, is in an area of low vehicular traffic,
is in an area with little or no non-commercial traffic, is not located near any schools, freeways,
residential housing, or places of worship. There is one entrance, one side exit, and three roll-up steel
doors for deliveries. There are no windows. Car access also will be limited.
A site plan showing the entire structure of the cultivation center, including the street(s), parking lot(s),
other tenants within the facility, and any other entities that physically border the cultivation is shown in
an attachment.
Areas where cannabis will be kept or handled have no external doors or windows and can be accessed
only from within the facility.
All main access point door hinges will be equipped with hinge-pin-locking screws to increase security.
This configuration yields optimal conditions for surveillance. These existing design elements will not
only make unauthorized access extremely unlikely, but also act as a deterrent discouraging theft.
Floor Plan
A floor plan of the cultivation facility detailing the location of the following:
1. All entrances and exits;

2. The location of any windows, skylights, and roof hatches;
3. The location of all cameras, and their field of view;
4. The location of all alarm inputs (door contacts, motion detectors, duress/hold up devices) and
alarm sirens;
5. The location of the digital video recorder and alarm control panel; and
6. Restricted and public areas is shown at the Diagram
Insert Floor Plan

Lighting
The main objectives of our security lighting system are to illuminate dark areas and detect and
recognize movement in the protected area. The best vision with outdoor lighting is obtained from
downward directed and shielded security lighting that is constantly on, supplemented with instant-on
lighting triggered by motion detectors.
CANNACULT will ensure that sufficient lighting requirements are met between dusk and dawn.
We will add external security lighting, including high flood spot lights to both facilities. Each facility and
all walkways of each facility will be well illuminated to maximize visibility. Lighting will be operated
automatically by a photo-sensor, ensuring that lighting will at all times be optimal for video capture.
Guards
Once each facility is operational, we will employ name of company, a private company that will provide
security guards. Uniformed armed and unarmed security personnel will be on site monitoring the
facility during hours of operation. All security personnel will be thoroughly screened, trained, and
strictly supervised by our Security Department working in conjunction with Security Consultant to
ensure they are of the highest capability.
During operating hours, we will have at least one or total of number on-site security guards at the
cultivation entrance. After operating hours, we will have total of number on-site security guards at the
cultivation facility.
Security personnel will perform and keep records of having performed routine regular inspections of all
security systems, barriers, gates, doors, and locks, immediately reporting any malfunctioning or
compromised security feature to the Security Agent. Any incidents qualifying as irregular or suspicious
will be handled immediately.
Perimeter Security
We will secure the perimeter of our facilities to prevent unauthorized intrusion. With our cultivation
facility, we plan to use one or more of the following critical elements to secure the perimeter of our
building: security fencing, security guards, and electronic surveillance (round-the-clock manned or
alarmed camera surveillance and electronic intrusion detection).
The cultivation facility currently has type of fencing on the location side and a height foot high material
fence around the entire perimeter with number locked gate entries. Any new fencing will be installed in
such a way that no gaps will be left between the fencing and areas where it butts up against the building
or yard. The security of any perimeter fencing will be checked by guards daily.
The perimeter of each building will be secured by video surveillance and adequate outside security
lighting. In addition, during non-operational hours, all entryways and exits and all windows will be
externally covered by according metal fencing.
Name of company motion detectors will monitor the inside of all exterior doors and windows. These
are separate sensors from our video camera motion detectors.
Internal Access-Point Control
Movement within each facility will be tightly controlled. All main access doors and doors to the
cultivation rooms will require keycards and electronic passcodes. Only permitted employees will be
allowed to enter into the cultivation facility. The cultivation facility [describe interior layout, including
doors, locks, access].
Limited Access to Secured Areas and Visitors
CANNACULT has the limited access areas. CANNACULT ensures that the secured areas are accessible
only to licensee, licensee representatives, and authorized personnel, service personnel or distributors.
Video Surveillance
We will install a comprehensive electronic security system with video surveillance/recording

capability, third-party monitoring, intrusion detection, and panic buttons.
We will employ state-of-the art external and internal cameras, each with a minimum resolution capacity
of 704 x 480 pixels per sq. inch. This is sufficient to allow facial identification of anyone in or nearing
the facility. All cameras are equipped with motion detection and will have infrared technology for low
light conditions, capable of identifying activity at night or in unlit rooms. Our CCTV camera system with
digital recorder includes:
Insert specs
External video surveillance will cover all areas of possible ingress and egress. Internal video
surveillance will cover the waiting room, reception office, and cultivation rooms. This covers all areas
where cannabis is present or handled, including all point-of-sale locations, and all means of access to
such areas. Video surveillance will cover external and internal areas 24/7.
Electrical backup will be provided by a Name brand Uninterrupted Power Supply unit sufficient to
supply a minimum of five minutes of backup power to our cameras and computers. We have both on
and off-site storage capacity of 2TB, enabling us to store at least 60 days of video surveillance recording.
A failure notification system will provide both audible and visible notifications if there is any failure in
the electronic monitoring system.
Third-Party Monitoring
We anticipate contracting with vendor to help deter, detect, and document security events at each
facility from a remote location. Vendor will monitor for fire and for security breach of doors or
windows. Trained professionals from their monitoring centers will be able to access our security
surveillance system at all times and will report and document any suspicious activity. Our internal
security personnel will work with vendor to establish guidelines for what entails suspicious activity and
to ensure regulatory compliance.
There will be triggers around the facility to alert our monitoring team of a possible intrusion or
unauthorized access. Triggers can be:
 Motion-sensor surveillance cameras

 Motion-sensor laser beams
 Unauthorized electronic access
 Security and fire alarms

Intrusion and Motion Detection
Our alarm system will have motion detectors covering entryways and exits, hallways, cultivation rooms,
storage rooms, and windows. Vendor motion detectors will be utilized to monitor the interior side of all
exterior windows and doors. (These are separate from our video camera motion detectors.)
Burglary Alarm System
We shall install, maintain, and use a professionally monitored robbery and burglary alarm system;
which meet the following requirements:
 A test signal shall be transmitted to the central station every twenty-four (24) hours;
 At a minimum, the system shall provide coverage of all facility entrances and exits, rooms with
exterior windows, rooms with exterior walls or walls shared with other facility tenants, roof
hatches, skylights, and storage room(s) that contain safe(s);
 The system shall include at least one (1) holdup alarm for staff use; and
 The system shall be inspected, and all devices tested annually by a qualified alarm vendor.
Panic Buttons and Internal Communications
Panic buttons will be installed at the ….
Fire Security
The Cultivation Facility will comply with all local fire code requirements. Fire Prevention is a vital
aspect of cultivation safety. As part of CANNACULT commitment to the safety of our employees, we
have developed a comprehensive Fire Plan to address how fires will be prevented and
managed/contained if they do occur. Knowing that people are our most valuable resources, all
employees will be trained and required to conduct themselves with consistent due diligence to prevent
fires from occurring.
Transportation
1. Cannabis items will be transferred only between licensed premises by a licensee or licensee
representative.
2. An individual authorized to transport cannabis items will have a valid Driver’s License.
3. CANNACULT intend to:
• Keep cannabis items in transit shielded from public view;
• Use a vehicle for transport that is:
- Insured at or above the legal requirements in California;
- Capable of securing (locking) the cannabis items during transportation;
- Equipped with an alarm system; and
- Capable of being temperature controlled if perishable cannabis items are being
transported.
• Use CTS, generate a printed transport manifest that accompanies every transport of cannabis
items that contains the following information:
- The name, contact information of a licensee representative, licensed premises address
and license number of the licensee transporting the cannabis items;
- The name, contact information of the licensee representative, licensed premises address,
and license number of the licensee receiving the delivery;
- Product name and quantities (by weight or unit) of each cannabis item contained in each
transport, along with the UIDs for every item;
- The date of transport and approximate time of departure;
- Arrival date and estimated time of arrival;
- Delivery vehicle make and model and license plate number; and
- Name and signature of the licensee’s representative accompanying the transport.
4. Company will generate the manifest of this rule at least 24 hours in advance of initiating
transportation.
5. All cannabis items will be packaged in shipping containers and labeled with a UID tag prior to
transport.
6. Company will be able to provide a copy of the transport manifest to each licensed premise
receiving the inventory described in the transport manifest.
7. Company will be able to provide a copy of the printed transport manifest and any printed receipts
for cannabis items delivered to law enforcement officers or other representatives of a
government agency if requested to do so while in transit.
8. CANNACULT will contact the Commission immediately, or as soon as possible under the
circumstances, if a vehicle transporting cannabis items is involved in any accident that involves
product loss.
9. Company will provide temperature control for perishable cannabis items during transport.
10. Company will notify the Commission in advance of the location of every stop at an unlicensed
location that exceeds two hours in duration and will make the vehicle and its contents available
for inspection upon the request.
Packaging and Labeling

Company will conduct the following regulations for packaging and labeling:
1. Cannabis packages and labels shall not be made to be attractive to children.

2. All cannabis product labels shall include the following information, prominently displayed and in
a clear and legible font:
a. Manufacture date and source.
b. The statement “SCHEDULE I CONTROLLED SUBSTANCE.”
c. The statement “KEEP OUT OF REACH OF CHILDREN AND ANIMALS” in bold print.
d. The statement “FOR MEDICAL USE ONLY.”
e. The statement “THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE DELAYED BY
UP TO TWO HOURS.”
f. The statement “THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE OR OPERATE
MACHINERY. PLEASE USE EXTREME CAUTION.”
g. For packages containing only dried flower, the net weight of cannabis in the package.
h. A warning if nuts or other known allergens are used.
i. List of pharmacologically active ingredients, including, but not limited to,
tetrahydrocannabinol (THC), cannabidiol (CBD), and other cannabinoid content, the THC
and other cannabinoid amount in milligrams per serving, servings per package, and the
THC and other cannabinoid amount in milligrams for the package total.
j. Clear indication, in bold type, that the product contains cannabis.
k. Identification of the source and date of cultivation and manufacture.
l. Any other requirements set by the bureau.
m. Information associated with the unique identifier issued by the Department of Food and
Agriculture pursuant to Section 11362.777 of the Health and Safety Code.
n. Only generic food names may be used to describe edible cannabis products.
Laboratory Testing Requirements

 Untested cannabis goods cannot be sold by a retailer and must be destroyed. A retailer may not
send cannabis goods to a distributor for testing.
 Untested cannabis goods manufactured or harvested before January 1, 2018, in possession of a
distributor that are owned by the distributor must be destroyed.
 Untested cannabis goods manufactured or harvested before January 1, 2018, in the possession of
a distributor owned by a manufacturer or cultivator may be returned to the licensee who owns
the cannabis goods. If a cultivator or manufacturer chooses to sell the returned cannabis goods,
the cannabis goods must be sent to a distributor for testing and must meet all of the testing
requirements in effect at the time of testing before transported to a retailer for sale.
Tracking Solution
Company intends to use special seed-to sales tracking solution for the cannabis cultivation business,
which allows licensed operators to remain compliant while helping to identify key data points to
streamline and optimize inventory management at each phase of the operation:
(A) Custom Compliance-Focused Reporting

(B) Track Waste, Destruction, Account for Conversion and Moisture Loss
(C) Real-Time Product and Strain Recalls
(D) Easily Track Clones Back to Mothers
(E) Transport Manifests with All Required Info, including Transport Product with Ease
(F) Compliance-Focused Labels
The solution also includes the following modules:
Yield Forecasting – Monitoring and analyzing the harvest data to optimize for larger yields.
Grower-Centric – Customizing workflows to support the weighing of multiple plant by-products (wet
or dry), plus multiple data collection points and ability to grade product quality upon curing.
Analyze Efforts – Monitoring Pesticides and Nutrients applied, log Strain Notes detailing light and
watering cycles, plus review Past Harvest Data to optimize your future yields.
05
Organizational
Structure
Structure
Ownership
CANNACULT is a business that will be built on a solid foundation. From the outset, we have decided to
recruit only qualified people to man various job positions in our company. We are quite aware of the
rules and regulations governing the cannabis industry of which medical marijuana growing falls under
which is why we decided to recruit experienced and qualify employees as foundational staff of the
organization. We hope to leverage on their expertise to build our business brand to be well accepted in
the United States.
These are the positions that will be available at CANNACULT:
Head Cultivator Assistant Trimmers/Packagers
Board
Maintenance & General
Labor
General Manager
Sales Representatives
Figure 16. Organizational structure

Table 6. Personnel plan
Position Year 1 Year 2 Year 3 Annual

Salary
Operating Director 1 1 1 %
Master Grower 1 1 1 50,000
Assistant to master grower 1 2 2 45,000
Trimming, per pound 2 3 3 100
Plant maintenance and general labor 3 5 5 90,000
Admin and Logistics Personnel 1 2 2 72,000
Sales& Marketing Personnel 1 1 1 60,000
Security 1 2 2 50,000
Training Plans
1. Train employees at time of hire on business operations and compliance.

2. Train employees regularly after hire.
3. Training plan and training log will be available for inspection on the licensed premises.
4. Any person entering data into the Cannabis Tracking System (CTS) first be trained by the CTS
administrator for the license.
5. All individuals will be required to have a valid Marijuana Worker Permit complete the required
training and maintain their permit while working on behalf of the Licensee.
Ownership
…
06
Financial
Plan
Funding Analyses
Direct and Operating Expenses
Profit & Loss Forecast
Cash Flow Statement
Balance Sheet
Main Ratios
Funding analysis
Company intends to raise $0,000,000 for 5 years with ROI 12% and profit share 5%. First repayment
will start from 11th month.
Table 7. Long-term debt schedule, $
Long-term Debt 1 2 3 4 5 6
Long-Term Debt Beginning Balance 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Long-Term Debt Repayment 0 0 0 0 0 0
Long-Term Debt Ending Balance 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
ROI 10,000 10,100 10,201 10,303 10,406 10,510
Profit Share (Investors) 0 0 0 0 0 0
Long-term Debt 7 8 9 10 11 12
Long-Term Debt Beginning Balance 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 979,167
Long-Term Debt Repayment 0 0 0 0 20,833 20,833
Long-Term Debt Ending Balance 1,000,000 1,000,000 1,000,000 1,000,000 979,167 958,333
ROI 10,615 10,721 10,829 10,937 10,838 10,738
Long-term Debt 13 14 15 16 17 18
Long-Term Debt Beginning Balance 958,333 937,500 916,667 895,833 875,000 854,167
Long-Term Debt Repayment 20,833 20,833 20,833 20,833 20,833 20,833
Long-Term Debt Ending Balance 937,500 916,667 895,833 875,000 854,167 833,333
ROI 10,637 10,535 10,432 10,328 10,223 10,117
Long-term Debt 19 20 21 22 23 24
ROI 10,010 9,901 9,792 9,682 9,570 9,458
Long-term Debt 25 26 27 28 29 30
ROI 9,344 9,229 9,113 8,996 8,877 8,758
Long-term Debt 31 32 33 34 35 36
ROI 8,637 8,515 8,392 8,267 8,142 8,015
Long-term Debt 37 38 39 40 41 42
ROI 7,887 7,757 7,626 7,494 7,361 7,226
Long-term Debt 43 44 45 46 47 48
ROI 7,090 6,953 6,814 6,674 6,532 6,389
Long-term Debt 49 50 51 52 53 54
ROI 6,245 6,099 5,951 5,803 5,652 5,501
Long-term Debt 55 56 57 58 59 60
Long-Term Debt Beginning Balance 83,333 62,500 41,667 20,833 0 0
Long-Term Debt Repayment 20,833 20,833 20,833 20,833 0 0
Long-Term Debt Ending Balance 62,500 41,667 20,833 0 0 0
ROI 5,347 5,192 5,036 4,878 0 0
Direct and Operating Expense Breakdown

Direct Costs
Table 8. Direct costs, $
$ Year 1 Year 2 Year 3 Year 4 Year 5
Cultivation Electricity 130,532 191,247 191,247 191,247 191,247
Cultivation Water 2,284 3,483 3,483 3,483 3,483
Cultivation Labor 234,536 294,880 294,880 294,880 294,880
Growing Solutions 25,725 37,380 37,380 37,380 37,380
Seeds/Clones 700 0 0 0 0
Trimming & Packaging 1,510 2,520 2,520 2,520 2,520
Transport 1,950 3,780 3,780 3,780 3,780
Lab testing 16,044 26,775 26,775 26,775 26,775
Other Direct Cultivation Costs
Grow Light Bulbs 12,029 12,029 12,029 12,029 12,029
Other Supplies 11,880 5,940 5,940 5,940 5,940
Other costs 0 0 0 0 0
Taxes
Cultivation Taxes 125,582 209,580 209,580 209,580 209,580
Total 562,771 787,614 787,614 787,614 787,614
Operating Expenses
Table 9. Operating costs, $
$ Year 1 Year 2 Year 3 Year 4 Year 5
G&A Expenses - Initial & General
Costs
Legal Fees & Licensing for setting up 45,000 0 0 0 0
Licensing, renewal 0 30,000 30,000 30,000 30,000
Professional fees, Insurance 24,192 24,192 24,192 24,192 24,192
Other general expenses 0 0 0 0 0
G&A Expenses - Cultivation
Building Renting 63,360 69,120 69,120 69,120 69,120
Building Maintenance, including 9,623 10,498 10,498 10,498 10,498
utilities (non-production)
Equipment Maintenance 3,920 4,277 4,277 4,277 4,277
Administrative expenses, including 5,280 5,760 5,760 5,760 5,760
phone and internet
Inventory Control Systems, Security 25,344 27,648 27,648 27,648 27,648
& Other Software Services
Community Service (% of sales) 6,623 12,718 12,718 12,718 12,718
SG&A Expenses -
Marketing Expenses, including PR, 7,500 9,000 9,000 9,000 9,000
Branding, Online and Offline
advertising
Brokers and Sellers Fees 33,116 63,591 63,591 63,591 63,591
SG&A Expenses - Misc. 14,584 16,321 16,321 16,321 16,321
Salaries & Benefits 149,045 149,045 149,045 149,045 149,045
TOTAL 387,588 422,169 422,169 422,169 422,169
Profit & Loss Forecast

Business’s revenue is projected to grow significantly for the first two years’ timeframe. The yearly
projections are in the table below:
Table 10. Income Statement, $
$ YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue 1,324,656 2,543,625 2,543,625 2,543,625 2,543,625
COGS - Cost of Goods Sold 562,771 787,614 787,614 787,614 787,614
Gross Profit 761,885 1,756,011 1,756,011 1,756,011 1,756,011
% of revenue 58% 69% 69% 69% 69%
SG&A Expenses
G&A Expenses - Initial & General Costs 69,192 54,192 54,192 54,192 54,192
G&A Expenses - Cultivation 114,150 130,021 130,021 130,021 130,021
SG&A Expenses - 40,616 72,591 72,591 72,591 72,591
Senior Management Salaries & Benefits 80,255 80,255 80,255 80,255 80,255
IT Salaries & Benefits 0 0 0 0 0
Other Salaries & Benefits 68,790 68,790 68,790 68,790 68,790
SG&A Expenses - Misc. 14,584 16,321 16,321 16,321 16,321
Total SG&A Expenses 387,588 422,169 422,169 422,169 422,169
Operating Income (EBITDA) 374,297 1,333,842 1,333,842 1,333,842 1,333,842

% of revenue 28% 52% 52% 52% 52%
Depreciation and Amortization 26,726 29,156 29,156 29,156 29,156
Earnings Before Interest & Taxes (EBIT) 347,571 1,304,686 1,304,686 1,304,686 1,304,686
Interest Expense -147,627 -164,119 -158,350 -151,655 -141,800
Earnings Before Taxes (EBT) 199,944 1,140,568 1,146,336 1,153,031 1,162,886
Income Tax 284,335 715,430 715,940 716,532 717,403

Net Income -84,391 425,138 430,396 436,499 445,483
% of revenue -6% 17% 17% 17% 18%
Cash Flow Statement

The cash flow projections show that business will have sufficient cash to support the activity. The
following table presents a view of projected cash flow of the business.
Table 11. Cash Flow Statement, $
Net Income -84,391 425,138 430,396 436,499 445,483
Cash Flow from Operations

Depreciation 26,726 29,156 29,156 29,156 29,156
Change in Receivables -105,984 0 0 0 0
Change in Inventory -26,611 0 0 0 0
Change in Accounts Payable 32,069 248 0 0 0
Total Cash Flow from Operations -158,191 454,541 459,551 465,655 474,639
Cash Flow from Investing

Capital Expenditures (CAPX) -492,545 0 0 0 0
Other 0 0 0 0 0
Total Cash Flow from Investing -492,545 0 0 0 0
Cash Flow from Financing

Revolver Issuance / (Repayment) 1,000,000 0 0 0 0
Long-Term Debt Issuance / -33,333 -200,000 -200,000 -200,000 -366,667
(Repayment)
Paid in Capital 0 0 0 0 0
Drawings (profit share) 0 -17,291 -64,559 -65,475 -66,822
Total Cash Flow from Financing 966,667 -217,291 -264,559 -265,475 -433,489
Total Change in Cash 315,930 237,250 194,992 200,180 41,150

Beginning Period Cash 0 315,930 553,180 748,172 948,352
Ending Period Cash 315,930 553,180 748,172 948,352 989,502
Balance Sheet
The balance sheet shows healthy growth of net worth and strong financial position.
Table 12. Balance Sheet, $
Assets
Current Assets
Cash 315,930 553,180 748,172 948,352 989,502
Receivables 105,984 105,984 105,984 105,984 105,984
Inventory 26,611 26,611 26,611 26,611 26,611
Total Current Assets 448,526 685,776 880,768 1,080,948 1,122,097
Long Term Assets

Property Plant & Equipment (PPE), 492,545 492,545 492,545 492,545 492,545
gross
Accumulated Depreciation of PPE -26,726 -55,882 -85,037 -114,193 -143,349
PP&E, net 465,819 436,663 407,508 378,352 349,196
Total Assets 914,345 1,122,439 1,288,275 1,459,299 1,471,293
Liabilities
Current Liabilities
Accounts Payable 32,069 32,316 32,316 32,316 32,316
Accrued Expenses 0 0 0 0 0
Total Current Liabilities 32,069 32,316 32,316 32,316 32,316
Long Term Liabilities 966,667 766,667 566,667 366,667 0

Total Liabilities 998,735 798,983 598,983 398,983 32,316
Equity
Paid-in Capital/Drawings 0 -17,291 -81,850 -147,325 -214,148
Retained Earnings -84,391 340,747 771,143 1,207,642 1,653,125
Current Period Retained Earnings -84,391 323,456 689,292 1,060,317 1,438,977
Total Equity -84,391 323,456 689,292 1,060,317 1,438,977
Total Liabilities and Equity 914,345 1,122,439 1,288,275 1,459,299 1,471,293
Main Ratios
The return on equity ratio (ROE) measures how much the owner and investors earn for their
investment in the company. The higher the ratio percentage, the better return is. In general, financial
analysts consider return on equity ratios in the 15-20% range as representing attractive levels of
investment quality. As we can see ROE (DuPont) for our project is higher and draw up 31%.
Return on assets (ROA) gives an idea as to how efficient management is at using its assets to generate
earnings.
Profitability ratios are a class of financial metrics that are used to assess a business's ability to generate
earnings as compared to its expenses and other relevant costs incurred during a specific period of time.
Table 13. Main Ratios for five years
Ratio Analysis Year 2 Year 3 Year 4 Year 5 Avg. (2-5 years)
Return on Equity 355.7% 85.0% 49.9% 35.6% 131.6%
Return on Assets 32.1% 27.8% 25.1% 24.6% 27.4%

Financial Leverage 8.52 2.38 1.57 1.17 3.41
Correction Factor 1.30 1.28 1.26 1.24 1.27
Return on Assets
Return on Sales 12.8% 13.2% 13.6% 14.2% 13.4%
Asset turnover 2.50 2.11 1.85 1.74 2.05
Profitability
Gross margin 69.0% 69.0% 69.0% 69.0% 69.0%
SG&A as % of Sales 16.6% 16.6% 16.6% 16.6% 16.6%
Operating Margin 51.3% 51.3% 51.3% 51.3% 51.3%
Interest Expense as % of 6.5% 6.2% 6.0% 5.6% 6.1%
Sales
Effective Tax Rate 62.7% 62.5% 62.1% 61.7% 62.3%
Asset Turnover Ratios

Accounts Receivable 24.0 24.0 24.0 24.0 24.0
Turnover
Inventory Turnover 29.6 29.6 29.6 29.6 29.6
Accounts Payable Turnover 24.5 24.4 24.4 24.4 24.4
Fixed Asset Turnover 5.6 6.0 6.5 7.0 6.3
Days Turnover Ratios

Days Receivables 15.2 15.2 15.2 15.2 15.2
Days Inventory 12.3 12.3 12.3 12.3 12.3
Days Payables 14.9 15.0 15.0 15.0 15.0
Net Trade Cycle 12.6 12.6 12.6 12.6 12.6
Liquidity Analysis
Solvency Ratio 0.57 0.77 1.17 14.69 4.3
Current Ratio 21.22 27.25 33.45 34.72 29.2
Quick Ratio 20.40 26.43 32.63 33.90 28.3
CFO-to-Current Liabilities 14.12 14.22 14.41 14.69 14.4
Interest Coverage 8.13 8.42 8.80 9.41 8.7

Cash Interest Coverage 8.13 8.42 8.80 9.41 8.7
DuPont Analyses
Net Profit Margin 17% 17% 17% 18% 17.1%

Asset Turnover 2.27 1.97 1.74 1.73 192.8%
Equity Multiplier 3.47 1.87 1.38 1.02 193.4%
DuPont Return on Equity 131% 62% 41% 31% 66.5%
07
Appendix
Cultivation Site Description. A general description of the proposed cultivation site, including the
street address, parcel number, the total square footage of the site, the total square footage of marijuana
canopy, and the characteristics of the surrounding area.
Floor plan. A scaled floor plan for each level of each building that makes up the cultivation site,
including the entrances, exits, walls, and cultivation areas. The floor plan must be professionally
prepared by a licensed civil engineer or architect.
Site plan. A scaled site plan of the cultivation site, including all buildings, structures, driveways, parking
lots, landscape areas, and boundaries. The site plan must be professionally prepared by a licensed civil
engineer or architect.
A cultivation site shall comply with the following requirements:
A. Entrances. All entrances into the buildings on the cultivation site shall be locked at all times with
entry controlled by the marijuana cultivation managers and staff.
B. Main entrance and lobby. The cultivation site shall have a building with a main entrance that is
clearly visible from the public street or sidewalk. The main entrance shall be maintained clear of
barriers, landscaping, and other obstructions. Inside of the main entrance, there shall be a lobby to
receive persons into the site and to verify whether they are allowed in the cultivation areas.
C. Cultivation area. All cultivation areas in any building on the cultivation site shall be separated from
the main entrance and lobby and shall be secured by a lock accessible only to managers and staff of the
marijuana cultivation permittee.
D. Transport area. Each building with a cultivation area shall have an area designed for the secure
transfer of marijuana from the cultivation area to a vehicle for transportation.
E. Storage area. Each building with a cultivation area shall have adequate storage space for marijuana
that has completed the cultivation process or is otherwise not being cultivated. The storage areas shall
be separated from the main entrance and lobby and shall be secured by a lock accessible only to
managers and staff of the marijuana cultivation permittee.
Security plan. A detailed security plan outlining the measures that will be taken to ensure the safety of
persons and property on the cultivation site. The security plan must be prepared by a qualified
professional.
A cultivation site shall comply with the following security requirements:
A. A marijuana cultivation permittee shall comply with the security plan that is approved by the city
manager, which plan may include building specifications, lighting, alarms, and state-licensed security
personnel.
B. Each security plan approved by the city manager must include the following:
1. Security surveillance cameras. Security surveillance cameras and a video recording system must be
installed to monitor all doors into the buildings on the cultivation site, the parking lot, loading areas,
and all exterior sides of the property adjacent to the public rights of way. The cameras and recording
system must be of adequate quality, color rendition, and resolution to allow the identification of any
individual present on the cultivation site. The recording system must be capable of exporting the
recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.
2. Security video recording and retention. Video from the security surveillance cameras must be
recording at all times (24 hours a day, seven days a week) and the recording shall be maintained for at
least 30 days. The video recordings shall be made available to the city upon request.
3. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must
be installed and maintained in good working condition. The alarm system must include a private
security company that is required to respond to every alarm.
C. A marijuana cultivation permittee shall report to the city police department all criminal activity
occurring on the cultivation site.
Lighting plan. A lighting plan showing existing and proposed exterior and interior lights that will
provide adequate security lighting for the use.
Odor control. A detailed plan describing the air treatment system, or other methods that will be
implemented to prevent odors generated from the cultivation and storage of marijuana from being
detected outside the buildings on the cultivation site.
A marijuana cultivation permittee shall prevent all odors generated from the cultivation and storage of
marijuana from escaping from the buildings on the cultivation site, such that the odor cannot be
detected by a reasonable person of normal sensitivity outside the buildings.
Compliance with the Planning and Development Code. A copy of a valid conditional use permit
approved by the city for the proposed location.
Statement of owner’s consent. Written consent of the owner or landlord of the proposed site to
operate a marijuana cultivation business, specifying the street address and parcel number.
Price list. A list of the most recent prices for all products and services provided by the applicant.

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CANNACULT is to be organized/formed as a Limited Liability Company (LLC)/Corporation and will be

Year 1: Securing the license to start cultivation in state California.

Revenue & Profit Forecast

Direct and Indirect Social Impacts

Spending on legal cannabis 50.0

to be about $46.5 billion and 15.0

North American Cannabis Market

Figure 3. Medical and recreational cannabis sales forecast, billion $

The U.S. Cannabis Market

Figure 4. U.S. legalization map

Figure 5. Medical and recreational cannabis sales in top states, 2019

Wholesale Pricing Benchmarks

Outdoor Greenhouse Indoor Spot Index

Figure 6. U.S. Wholesale flower prices, $/pound 2018-2020

 2016 U.S. Spot Index average = $1,789

 2016 low was $1,386 on November 11th

California Cannabis Market

Event Orginizers As of January 2021, the state’s three licensing

In 2017, California’s regulatory regime

In 2020, California retail stores sold over $4.4

180.0 350.0 Total tax revenue reported by the

Californians spent most of their dollars (41%) on flower.

According to a study by the University of California

Concentrates and Infused Products Market in California

20% 44% 48% 49% 45%

Medical Recreational Top ten All other

Marketing and advertising campaign includes:

- Meeting with distributors and retailers

WEEDMAP With over 7,750 listings WeedMaps has 7.96

Sales Forecast Indoor Greenhouse Outdoors Trim

As growing stage will start from …, sales YEAR 7 1,260 525

Figure 13. Sales forecast, lbs.

1. the seed variety,

Our cultivation & processing area will include:

• Mother Room & Cloning

Our company will grow from seeds/clones

G. De-humidification to optimize growing environment.

 Aluminum extruded sides and ends

• Germination of seeds, gendering plants, male/female, or feminized plants (10 weeks)

Lab Testing &

Plant Flowering Harvesting Inventory Shipping

Figure 14. Phases of production, cultivation

Product Timeline and Production Schedule

Figure 15. Yields forecast, pounds

Physical Security Plan

The physical address of our cultivation facility will be …

1. All entrances and exits;

Insert Floor Plan

Internal Access-Point Control

Limited Access to Secured Areas and Visitors

We will install a comprehensive electronic security system with video surveillance/recording

 Motion-sensor surveillance cameras

 Security and fire alarms

Burglary Alarm System

Panic buttons will be installed at the ….

Packaging and Labeling

1. Cannabis packages and labels shall not be made to be attractive to children.

Laboratory Testing Requirements

(A) Custom Compliance-Focused Reporting

These are the positions that will be available at CANNACULT:

Head Cultivator Assistant Trimmers/Packagers