Cultivation BPT2018

Description
CANNACULT is
applying for a
cannabis cultivation
license and will be
conducting business
from a 7,200-sq. ft.
growing facility in
City, State, Country.
Company will have

the ability to
vegetate up to 1,000
plants and flowers
concurrently, will
grow up to 11
different strains of
marijuana, and will
have the ability to
grow from seedling
to finished product.
CANNACULT
BUSINESS PLAN TEMPLATE
Category: Cannabis Cultivation
Date Created:
00/00/2018
Executive Summary
Executive 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. California, 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 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 medical cannabis products, to establish an innovative cannabis growing
brand with affordable prices to dispensaries 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 marijuana, 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.
CANNABIS CULTIVATION 2
Business Plan
Market Opportunities
60% of the U.S. population now lives in states that have legalized some form of cannabis use and sales,
illustrating the rising acceptance of cannabis nationwide and highlighting the industry’s immense potential
for future growth.
The passage of initiatives in California, Nevada, Massachusetts, Maine, Florida, Arkansas, Montana, North
Dakota, and West Virginia will add $7.4
California 5,619 billion to the 2021 market forecast
Washington 1,975 bringing the overall market projection
Colorado 1,762 for legal adult-use and medical sales in
Massachusetts 1,015 North America to $24.5 billion by 2021.
Oregon 953 That brings the compound annual
Michigan 755 growth rate (CAGR) to 28%.
Florida 726
Arizona 717 In 2015, California lawmakers and the
Nevada 630 governor approved legislation creating
Maine 321 the Medical Cannabis Regulation and
-1,000 1,000 3,000 5,000 7,000 Safety Act (MCRSA) to regulate the
$ million state’s MMJ industry, which has been
Figure 1. Medical and recreational cannabis sales in top states, 2020
governed by a patchwork of local rules.
The MCRSA took effect in January 2016,
and the government has until Jan. 1, 2018, to develop statewide rules.
8th November 2016 California voters have approved cannabis for recreational use. The California
Legislature passed and the Governor 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 California cannabis industry is
regulated by three state agencies: Bureau of Cannabis Control (distribution, testing, retail and
microbusiness), Department of Food and Agriculture (cultivation), Department of Public Health
(manufacturing).
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 provided one regulatory framework for both
medicinal and adult-use commercial cannabis activity within the state. Recreational cannabis sales
officially began in California and during the first six months of 2018 the number of granted licenses jumped
from 1,272 licenses on January 17th to 6,421 licenses on June 30th.
Over the next five years the total California market to grow at a compounded annual rate of 18.5% to $5.6
billion by 2020 according to the Arcview Market Research projections.
Executive Summary
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
Business Plan
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.
Cash Flow Forecast
$600 $1,200
Revenue & Profit Forecast
Thousands
Thousands
$500
$3,000 $1,000
Thousands
$400
$2,500 $800
$300
$2,000 $200 $600
$100
$1,500 $400
$0
$1,000 Year 1 Year 2 Year 3 Year 4 Year 5 $200
-$100
$500 -$200 $0
$0
Year 1 Year 2 Year 3 Year 4 Year 5 Operational Cash Flow Ending Period Cash Flow
-$500
Revenue Gross Profit After the first year of operations, it is expected that
Net Income
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
Table of Contents
Table of Contents
Executive Summary ......................................................................................... 1
Company Summary...................................................................................... 1
Market Opportunities ................................................................................. 2
Start-up Summary ........................................................................................ 3
Financial Summary ...................................................................................... 4
Market Overview ............................................................................................... 7
Global Market ................................................................................................. 7
North American Cannabis Market ......................................................... 8
The U.S. Cannabis Market .......................................................................... 9
Pricing Benchmarks.................................................................................. 10
Target Market.............................................................................................. 11
SWOT Analyses ........................................................................................... 14
Marketing & Sales Strategy ........................................................................ 16
Marketing Plan............................................................................................ 16
Competition.................................................................................................. 18
Target Customers ...................................................................................... 18
Sales Forecast .............................................................................................. 19
Operating Plan................................................................................................. 21
Cultivation Facility .................................................................................... 21
Physical Security Plan .............................................................................. 25
Transportation............................................................................................ 29
Packaging and Labeling........................................................................... 30
Laboratory Testing Requirements ..................................................... 30
Tracking Solution....................................................................................... 31
Organizational Structure............................................................................. 33
Financial Plan .................................................................................................. 36
Funding analysis ........................................................................................ 36
Direct and Operating Expense Breakdown ..................................... 38
Profit & Loss Forecast .............................................................................. 40
Cash Flow Statement ................................................................................ 41
Balance Sheet .............................................................................................. 42
Main Ratios ................................................................................................... 43
Appendix............................................................................................................ 44
Business Plan
Market Overview
Market Overview
Market Overview
Global Market
Spending on legal cannabis worldwide is expected to hit $57 billion by 2027, while cannabis market in
the United States and Canada is estimated to be about $46.5 billion and other $10.5 billion would go to
other markets. The recreational market will cover 67% of the spending; medical cannabis will take up
the remaining 33%.
The global legal cannabis market amounted to $9.5 billion in 2017, growing by 37 percent on the year,
according to the report “The Road Map to a $57 Billion Worldwide Market"1. The largest market was the
United States, which totaled $8.5 billion. It was followed by Canada with $600 million. Analysts predicts
the overall cannabis market for legal adult-use and medical sales in North America to reach $24.5
billion by 2021. That brings the compound annual growth rate (CAGR) to 28%.
According to a report provided by Energias Market Research, the global medical cannabis market is
projected to increase in value from $8.28 billion in 2017 to $28.07 billion in 2024 and at a CAGR of
19.1% from 2018 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 California’s and Canada’s willingness to
legalize adult recreational use triggered a second wave of laws internationally to increase access
to medical cannabis.
• South America has some of the most liberal medical cannabis programs. Led by Brazil, Argentina,
Peru and Uruguay, the South American medical cannabis market may grow from $125 million in
2018 to $776 million in 2027.
• Germany is poised to be the leader of the European cannabis market, and Italy is expected to be
second with $1.2 billion in sales by 2027. Overall, however, the European cannabis market is not
expected to grow as stridently as its potential suggests.
• Australia’s legal cannabis market is forecast to grow from $52 million in 2018 to $1.2 billion in
2027, the 5th largest in the world.
• Israel has a small population and a long history of legal medical marijuana use. It continues as a
leader with years in the development of cannabis pharmaceuticals.
1 https://arcviewgroup.com/research/reports/
Business Plan
North American Cannabis Market

Although the federal government still considers the use of cannabis a criminal offence, more than half
the states of America have legalized it in some form. Most states sell it only for medical purposes, often
broadly defined. But eight states – Alaska, California, Colorado, Maine, Nevada, Massachusetts, Oregon
and Washington – have gone further, legalizing the recreational use. Legal weed is more high-priced
than the black-market variety, but it is better value: three times more potent and only about 50% more
expensive2.
Legal cannabis sales reached $9.2 billion in North America in 2017, according to a new report from
cannabis industry analysts Arcview Market Research, in partnership with BDS Analytics. That
represents an unprecedented 33% increase over 2016.
The report further predicts the entire legal cannabis market to reach $24.5 billion in sales – a 28%
annual growth rate by 2021 – as more states legalize cannabis for recreational use and existing markets
mature.
30
25
20
15.4
15 12.4
8.9
5.0
10
2.7
5 1.8
1.4 8.4 9.1
8.4 8.2
6.5
4.3 4.9
0
2015 2016 2017 2018 2019 2020 2021
(projected) (projected) (projected) (projected)
Figure 2. Medical and recreational cannabis sales forecast, billion $
2 http://www.economist.com/blogs/graphicdetail/2016/02/daily-chart-10
Market Overview
The U.S. Cannabis Market

60% of the U.S. population now lives in states that have legalized some form of cannabis use and sales,
illustrating the rising acceptance of cannabis nationwide and highlighting the industry’s immense
potential for future growth.
Figure 3. U.S. legalization map

Medical / Recreational cannabis legalization
Medical cannabis legalization
No laws legalizing
As at June 2018, there are 30 States that now allow cannabis for medical use, 16 States allow
Cannabidiol (CBD), 9 States and the District of Columbia now allow for recreational cannabis use.
There are 9,397 active licenses for cannabis businesses in the U.S., according to Ed Keating, chief data
officer for Cannabiz Media, which tracks cannabis licenses. This includes cultivators, manufacturers,
retailers, distributors, deliverers and test labs.
The industry employed 121,000 people in 2017. If cannabis continues its growth trajectory, the number
of workers in that field could reach 292,000 by 2021, according to BDS Analytics.
According to research firm Cowen & Co the U.S. legal cannabis industry is expected to reach $75 billion
in sales by 2030.3
3https://www.bloomberg.com/news/articles/2018-04-04/cannabis-sales-forecast-suggests-it-may-
surpass-soda-by-2030
Business Plan
Pricing Benchmarks
2,000 Analysis of monthly
1,800 nationwide wholesale rates
1,600 for cannabis flower in state-
1,400
1,200
legal markets in 2017 shows
1,000 remarkable steadiness.
800
600 While the average wholesale
400 price has been highest in April
200
-
in 2017, the highest monthly
rate observed in 2016 was
$2,059, in May, with the
weekly peak price for 2016
Outdoor Greenhouse Indoor Spot Index
occurring late that month as
Figure 4. U.S. Wholesale flower prices, $/pound 2017-2018 well. So far, this year, the
highest weekly U.S. Spot price
was observed in the week ending March 31st, at $1,682 per pound, roughly two months ahead of when
2016’s peak rate was documented.
2017 closed with a more modest rise in the U.S. Spot than has been observed in prior years.
Furthermore, anticipated disruption due to the imposition of regulation on the major markets of
California and Michigan has not resulted in dramatic price fluctuations in those states to this point.
Increasingly, it appears market participants believe that the transition to licensed, regulated systems in
those states will be a gradual process, at least through the first half of 2018.
The U.S. Cannabis Spot Index averaged $1,562 per pound in 2017, a decline of 13% from the average of
$1,789 per pound in 2016
✓ 2016 U.S. Spot Index average = $1,789

✓ 2017 U.S. Spot Index average = $1,562
The seasonal impact of the fall harvest remains undeniable, driving prices to their annual low in
November the last two years
✓ 2016 low was $1,386 on November 11th

✓ 2017 low was $1,368 on November 17th
The volume of wholesale flower sold in the U.S. cannabis market grew 22% in 2017
✓ Estimated 3.0 million pounds in 2016

✓ Estimated 3.7 million pounds in 2017
The U.S. wholesale market for cannabis flower was $5.7 billion in 2017
✓ 77% the size of the U.S. wholesale wheat market of $7.4 billion
Market Overview
Target 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 dispensaries and where they can open. Others passed ordinances banning all
cannabis cultivation.
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 the years since medical legalization, consumers have become more educated and sophisticated about
products, and the state's medical market is relatively saturated. Consumers have high expectations for
quality, according to ArcView research.
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. The legislation is impacting cannabis business models in
other ways. The laws have eliminated the idea of home-based dispensaries.
On November 8, 2016, California voters have approved cannabis for recreational use.
On November 16, 2017, California published rules and regulations to implement voter approved
Proposition 64, the Adult Use of Cannabis Act of 2016, which legalized adult use of cannabis in the State
of California. The California Legislature passed and the Governor 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
California cannabis industry is regulated by three state agencies: Bureau of Cannabis Control
(distribution, testing, retail and microbusiness), Department of Food and Agriculture (cultivation),
Department of Public Health (manufacturing).
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 provided one regulatory framework for both
medicinal and adult-use commercial cannabis activity within the state. The state cannabis authorities
adopted emergency regulations in December 2017 for initial implementation of the provisions of
MAUCRSA and are now using the regular rulemaking process to adopt permanent regulations.
The current emergency regulations, adopted by the Bureau of Cannabis Control, California Department
of Public Health and California Department of Food & Agriculture in December 2017 and readopted in
Business Plan
June 2018, were originally issued through the emergency rule-making process to meet the legislative
mandate to open California’s regulated cannabis market on January 1, 2018. These emergency
regulations will remain in effect until the non-emergency rule-making process is complete.4
Recreational cannabis sales officially began in California and during the first six months of 2018 the
number of granted licenses jumped from 1,272 licenses on January 17th to 6,421 licenses on June
30th. The number of licenses grew during the first six months of 2018:
- cultivation - 1001%
- distributor and delivery - 263% and 252%, respectively
- manufacturing - 175%
- microbusiness - 160%
- retail/dispensary - 113%
- testing licenses - 107%
Market
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.
CA state dispensaries sold $2,757 million

worth of cannabis products, compared to
$1,129 million in Colorado’s robust cannabis
marketplace, $975 million in Washington,
and $502 million in Oregon.
In fact, sales in California represented about

34 percent of legal sales in the United States.
In comparison, combined sales in Colorado,
Washington and Oregon represent 41
percent of U.S. sales according to BDS
Analytics report.
The California Department of Tax and Fee

Figure 5. Medical and recreational cannabis sales in top states, 2017
Administration (CDTFA) have released
revenue numbers for cannabis sales in the first quarter of 2018. Tax revenue from the cannabis
industry totaled $60.9 million since January 1, 2018, which includes state cultivation, excise and sales
taxes. It does not include local tax revenue collected by cities or counties.
California’s excise tax on cannabis generated $32 million in revenue for the first quarter of calendar
year 2018. The cultivation tax generated $1.6 million, and the sales tax generated $27.3 million in
4 https://cannabis.ca.gov/2018/07/13/28617/
Market Overview
revenue. Medicinal cannabis is exempt from sales tax if the purchaser holds a valid Medical Marijuana
Identification card.
Pre-Rolled, 5% Other, 3%
Californians spend most of their dollars (55 percent)
on flower. Concentrates, the next largest slice of the
cannabis pie, captures 25 percent of the market.
Edibles, 12%
Edibles, with 12 percent, come in third. Pre-rolled
joints grab 5 percent of the market, and non-THC items
like apparel and devices represent much smaller
Flower, 55%
slivers of the marketplace.
According to a study by the University of California

Concentrates, 25% Agricultural Issues Center, California’s recreational
cannabis market could be worth more than $5 billion;
however, the benchmark will only be achieved once
Figure 6. Cannabis products sales structure
cannabis consumers fully embrace the state’s legal
market. While recreational cannabis market is expected to grow, medical cannabis sales are expected to
decline down to $600 million as people migrate toward the adult-use market to avoid medical cannabis
ID fees. After the state adopts regulations, legal recreational use will make up 61.5 percent of the overall
market, illegally purchased cannabis will make up about 29.5 percent of the market and legal medical
cannabis use will be about 9 percent of the overall market, the analysis estimated.
A report from the cannabis industry research firm BDS Analytics estimates sales of cannabis to hit $3.7
billion in 2018 alone and predict that number will increase to $5.1 billion in 2019 as more dispensaries
come online.
Business Plan
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
Market Overview
Marketing & Sales Strategy

Business Plan

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 manufactures and dispensaries

- E-mail Marketing
- Advertising and articles in the thematic Magazines, including:
▪ Cannabis Now
▪ 420 Magazine
▪ Marijuana Venture
▪ MG Magazine
- Business events and conferences
- Business and industry associations
- Brand development
- Brochures
- Website development with search engine optimization
▪ Keywords
▪ Fresh content
- Cannabis industry platforms and directories.
Table 3. Cannabis business directories
WEEDMAP Marijuana dispensary finder on the planet. With WeedMaps has 7.96
over 7,750 listings throughout the U.S., Canada, million total visits each
https://weedmaps.com/
and Europe. month.
LEAFY Leafy is a cannabis information resource for Leafy has 226.27
finding the right strains and products. Services thousand total visits each
https://www.leafly.com/
include: cannabis finder, online store, branding, month.
doctors’ portal.
https://www.cannasaver Canna-Saver is website for cannabis and related Cannasaver has 310.04
.com/ coupons, devoted to medical marijuana deals thousand total visits each
and savings. Offers a constant flow of deals and month.
savings from the top cannabis and medical
marijuana retailers.
http://cannabiscouponc Website with cannabis coupon codes. Cannabiscouponcodes has
odes.com/ 81.49 thousand total
visits each month.
Business Plan
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 medical/recreational 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 medical/recreational
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.
Target Customers
Main customers are dispensaries and manufactures of edible products.
Sales Forecast Indoor Greenhouse Outdoors Trim
Assumptions YEAR 7 1,260 525

As growing stage will start from …, sales
YEAR 6 1,260 525
are projected to be started from … and
they will significantly increase from the YEAR 5 1,260 525
second year.
YEAR 4 1,260 525
Company intends to mix outdoor
YEAR 3 1,260 525
cultivation from April to October period
and all-around year indoor/greenhouse YEAR 2 1,260 525
cultivation.
YEAR 1 650 315
Growth rate for revenue is about 70%
for the second year.
Figure 7. 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
Business Plan
Operating Plan
Operating Plan
Operating Plan
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
Business Plan
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.
Operating Plan
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
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 8. Phases of Production - Cultivation

Business Plan
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 9. Yields forecast, pounds

Operating Plan
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

Business 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.
Operating Plan
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
Business Plan
✓ 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.
Operating Plan
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 marijuana 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 marijuana 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 marijuana 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 marijuana 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.
Business Plan
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 medical 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 medical 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.
3. 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.
Operating Plan
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.
Business Plan
Organizational Structure
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 10. 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
Business Plan
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
…
Financial Plan
Business Plan
Financial Plan
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
Long-Term Debt Repayment
Long-Term Debt Ending Balance
ROI
Profit Share (Investors)
Long-term Debt 7 8 9 10 11 12
ROI
Long-term Debt 13 14 15 16 17 18
ROI
Long-term Debt 19 20 21 22 23 24
ROI
Financial Plan
Long-term Debt 25 26 27 28 29 30
ROI
Long-term Debt 31 32 33 34 35 36
ROI
Long-term Debt 37 38 39 40 41 42
ROI
Long-term Debt 43 44 45 46 47 48
ROI
Long-term Debt 49 50 51 52 53 54
ROI
Long-term Debt 55 56 57 58 59 60
ROI
Business Plan
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 (0.5% of the total batch 16,044 26,775 26,775 26,775 26,775
size weighing no more than 10
pounds)
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
Financial Plan
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
Website/Ecommerce platform 0 0 0 0 0
development
Other initial expenses 0 0 0 0 0
General expenses from the second 0 0 0 0 0
year
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
Other G&A Expenses 0 0 0 0 0
Property Taxes 0 0 0 0 0
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
Other Marketing & Sales Expenses 0 0 0 0 0
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
Business Plan
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%
Financial Plan
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
Business Plan
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
Financial Plan
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 in average draw up 00%.
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
Business Plan
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%
Financial Plan
Appendix
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
Financial Plan
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.

Cultivation BPT2018

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Cultivation BPT2018

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Description

Company will have

Category: Cannabis Cultivation

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

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

Direct and Indirect Social Impacts

North American Cannabis Market

Figure 2. Medical and recreational cannabis sales forecast, billion $

The U.S. Cannabis Market

Figure 3. U.S. legalization map

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

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

✓ Estimated 3.0 million pounds in 2016

CA state dispensaries sold $2,757 million

In fact, sales in California represented about

The California Department of Tax and Fee

According to a study by the University of California

Marketing & Sales Strategy

Marketing & Sales Strategy

Marketing and advertising campaign includes:

- Meeting with manufactures and dispensaries

Table 3. Cannabis business directories

Sales Forecast Indoor Greenhouse Outdoors Trim

Assumptions YEAR 7 1,260 525

1. the seed variety,

Our cultivation & processing

• Mother Room & Cloning

Our company will grow from seeds/clones of the following strains:

Company will use rolling benches / growing

▪ Aluminum extruded sides and ends

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

Lab Testing &

Figure 8. Phases of Production - Cultivation

Product Timeline and Production Schedule

Figure 9. 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

✓ Unauthorized electronic access

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

Figure 10. Organizational structure

Position Year 1 Year 2 Year 3 Annual

1. Train employees at time of hire on business operations and compliance.

Direct and Operating Expense Breakdown

Profit & Loss Forecast

Operating Income (EBITDA) 374,297 1,333,842 1,333,842 1,333,842 1,333,842

Depreciation and Amortization 26,726 29,156 29,156 29,156 29,156

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

Cash Flow Statement