CANNABON INC.

MARKET ENTRY STUDY

Cannabis is both used for recreational as well as medicinal use.Cannabis is projected to grow at a
CAGR of 25-28% from the year 2024 to 2030.For the case of Medical Cannabis in India,a
CAGR of 13-15% is expected for the years 2024-2028.From reports it was found that Delhi and
Mumbai are the 3rd and 6th most weed consuming cities in the world respectively.This particular
scenario provide immense possibilities for
companies working in these sectors.

Market Size-According to various surveys

conducted in the country by multiple organizations,it
has been found that almost 3% of the Indian
population consumed cannabis that is 31 Million
people, whereas 2.5 million people showed
dependence on cannabis.Owing to the large
population,India offers a huge market for the
business of cannabis in the form of recreational product as well as medicinal.
Competitor Analysis- Competitors include Canopy Growth Corporation,BOHECO,Medical
Marijuana Inc.Aurora Cannabis,Northern Standard etc.However the biggest risk involved is
posed by the individual drug sellers,who cultivate cannabis on large scales in small towns and
sell them on their own.(Assumption)

Financial Feasibility-The cost of settlement

consist of-

● Initial cost of establishment-Imposed

on dispensaries as well as application fees for
production and sales of cannabis.
● Cost of production of cannabis-The
cost can vary depending upon the medium
chosen.Farmers can be given contracts as well
as small farmers can be employed to work on
the land owned by the firm.
● Specialized legal work - As cannabis
is highly regulated,the cost can go pretty high.
● Day-to-Day operating
costs-Specialized softwares might be needed
to maintain records of sales as the government will be actively involved in monitoring the
sales and production.
 ● Labor and Rent-Although India provides an easy option for cheap labor,rents can
significantly play a role in the finance of the firm.

Although the initial cost of

establishment may appear to be
cumbersome,yet the Indian market
provides a strong opportunity for the
company to expand its operations.The
cost of Labor would be cheaper than
any-other country,while the land may
also be easily available for the
production of cannabis because of the
large dependence of the Indian
population on agriculture.Legal Work
might pose an issue for the firm,but the
firm can use its global recognition and
connections to negotiate with the
government and come to a justified conclusion.
Risks Involved- The significant risks that can be faced by the firm arises from the nature of the
business-producing a highly regulated commodity.Also,this commodity isn't sold by any major
corporation but at a smaller level by individuals sellers.This makes the process of tracking
opponents progress a tedious task.The biggest financial risk that can be offered is the
non-adaptability of the Indian consumers due to the pre-existing supply network.Except these
factors,political instability and changing rules with changing states also poses a strong
geo-political risk as these might lead to loss of investors confidence on the firm.
Future Prospects
● Medical Cannabis Segment- With the increasing technical advancements in the medical
field,new researches have found the use of cannabis in treating diseases such as
cancer.This market provides a big expansion opportunity for the company.
● Innovation in Delivery Methods-Company can find new ways to offer discrete
consumption options and enhance product efficacy.
● Expansion into Cannabis Tourism-Potential for cannabis tourism can be explored
leveraging India’s rich cultural heritage as well as scenic beauty.

In conclusion,the Indian cannabis market provides Cannabon Inc.with a compelling opportunity

for market entry and expansion.The market size is large and the large Indian population provides
significant growth opportunities.Financial feasibility analysis shows that,while initial installation
costs may be high, however other variables provides advantages for Cannabon's operations in
India.Therefore,from the analysis carried out in this report,Cannabon Inc is recommended to
pursue market entry into the Indian Cannabis Market.