Cannaleaf, Inc.

Business Plan

Confidentiality Agreement

The undersigned acknowledges that the information provided by Cannaleaf Inc. in this strategic business
plan is confidential; therefore, he/she agrees not to disclose it without the express written permission of
Cannaleaf Inc.
It is also acknowledged that the information furnished in this strategic business plan is in all respects
confidential in nature, other than information which is in the public domain through other means and that
any disclosure or use of same may cause serious harm or damage to Cannaleaf Inc.
Upon request, this document is to be immediately returned to Cannaleaf Inc.

____________________________________________
Signature

____________________________________________
Name (typed or printed)

___________________
Date
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Business Plan

Table of Contents
Executive Summary ................................................................................................................................... 1
Elevator Pitch ......................................................................................................................................... 1
Company Mission Statement .................................................................................................................. 1
Goals ...................................................................................................................................................... 1
Market/Industry Analysis .......................................................................................................................... 2
Size and Scope of Recreational Cannabis ................................................................................................ 2
Industry Trends ...................................................................................................................................... 3
Cannabis Licensing in New Jersey .............................................................................................................. 6
Medicinal Cannabis Licensing in New Jersey ........................................................................................... 6
Recreational (Adult-Use) Cannabis Licensing in New Jersey .................................................................... 6
Proposed Licensing Requirements .......................................................................................................... 7
Cannaleaf’s Competitive Advantage: ...................................................................................................... 9
Site Selection ....................................................................................................................................... 10
Local Ordinances .................................................................................................................................. 11
Competitive Analysis ............................................................................................................................... 12
Marketing Plan ........................................................................................................................................ 13
General Marketing ............................................................................................................................... 14
Targeted Marketing.............................................................................................................................. 15
Pricing and Monetization Strategies ..................................................................................................... 18
Distribution Strategy ............................................................................................................................ 18
Long Term Growth Strategy ..................................................................................................................... 20
Exit Strategies .......................................................................................................................................... 20
ManagementTeam .................................................................................................................................. 21
Financials ................................................................................................................................................. 23
Anticipated Cash Flow. ......................................................................................................................... 23
Expenses .............................................................................................................................................. 25
Demand Assumptions .......................................................................................................................... 28
Pro Forma Profit & Loss Statement ....................................................................................................... 29
 Executive Summary
Cannaleaf, Inc., a New Jersey-based company, seeks to be among the first recreational cannabis
cultivators and manufacturers in the state.
Cannaleaf is offering 25% of the company's total equity for investor purchase:
• 5% equity level - $250,000 for initial seed capital to gain control of the property, obtain local
approval, and apply for commercial New Jersey cannabis cultivation and manufacturing licenses.
• 20% level - $4.5M post license approval to purchase the target property, design and construct the
16,000 sq. ft. facility, thenset up and begin commercial operations.
The financial section indicates that investors will realize break-even at 23 months and earn profits of
$30,000,000 over the first 36 months. Further, they will possess a valuable investment with tangible
security of assets, including lucrative cannabis licenses, developed commercial property, and a successfully
operating cannabis business in one of the largest markets in the country.

Elevator Pitch
1. Recreational cannabis is a rapidly growing industry across the U.S. due to legalization efforts currently
underway across the country. New Jersey is projected to experience strong growth once recreational
cannabis becomes legal in the coming months, with sales expected to exceed $1 billion within a few
years.
2. Cannaleaf, Inc. intends to establish itself as a premier player in the wholesale and manufacturing
cannabis space of the New Jersey cannabis market. Cannaleaf will provide high-quality flower and
manufactured products to marijuana dispensaries throughout the state.
3. The company will establish a brick-and-mortar facility and (to the extent allowed by regulations) an
online presence to target strong growth opportunities presented by legalization of recreational
cannabis in the state.
4. It will develop and offer the highest quality cannabis-related products in response to the needs of its
customers.
5. The company will leverage technology and digital tools to enhance its value to recreational and
medicinal cannabis dispensaries

Company Mission Statement

The company’s mission is to provide high-end products to licensed retailers while catering a message of
responsible consumption to customers 21 years old and older.

Goals
The goal of Cannaleaf, Inc. is to establish itself as a Top 25 multi-state/nationwide cannabis wholesale
player within the next three years, with presence across many of the states where recreational cannabis is
legalized (to the extent allowed by law).

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Market/Industry Analysis

Size and Scope of Recreational Cannabis

According to Arcview Market Research and BDS Analytics Global, worldwide spending on legal cannabis is
expected to grow 230% from $9.5 (2017) to $32 billion (2022). The research projects a majority of that
growth - nearly $23.4 billion - will come from the United States, as states continue to legalize cannabis.

With revenue of $5.8 billion-$6.6 billion, sales of legal recreational and medical cannabis in the United
States in 2017 topped those of Oreos and organic produce combined. But legal sales represent just a
fraction of the estimated total potential demand for cannabis nationwide, approximately $50-$55 billion,
including black-market demand.
When recreational cannabis is legalized in New Jersey, the state will potentially see $850 million in
annual cannabis sales by 2022. 3

1 https://www.investopedia.com/investing/top-marijuana-stocks/
2 https://mjbizdaily.com/chart-putting-the-55-billion-us-retail-cannabis-market-in-perspective/
3 https://www.fool.com/investing/2018/12/02/the-11th-state-to-legalize-recreational-marijuana.aspx

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Industry Trends
1. Unprecedented Growth – The cannabis industry is on a much higher growth trajectory than either
cigarettes or beer – with sales expected to grow more than 200% between 2017 and 2022. 4

2. Consumers Drive Evolution – The industry includes customers who buy cannabis for both medical and
recreational purposes. These consumers are driving research and development, as well as product and
brand proliferation.5
3. Brand Surge – In Colorado in 2014, flower captured 63% of all cannabis sales — at a time when all
flower products were unbranded. The branded products — concentrates, edibles and topicals —
lagged far behind. Fast-forwarding to 2018, flower-related products represented only 43% of the
market, and within flower sales, branded products (e.g., Willie’s Reserve) have become very popular.
Meanwhile, sales of branded concentrates, edibles and topicals have surged. Today in Colorado – the
most mature adult-use cannabis marketplace in the US – branding is increasing at a rapid rate. Across
Colorado, Oregon and Arizona, the top five edibles brands in each state own more than 40% of the
market, and the story is similar with concentrates. Further, individual brands have the potential to
achieve explosive growth — sales for one brand in Oregon (Wyldcanna) rose 19,179% between 2016
and 2017. Brands must remain highly attuned to their customers and offer a wide range of products
to achieve and maintain marketplace success. Depending on one winning product is not enough to
sustain a brand.
4. Novel Newbies – Legalization always brings in consumers who are new to cannabis with unique
profiles and habits. Newbies tend to be women between the ages of 25 and 44, half of who say they
are in the market to explore medical applications. Among edibles consumers, newbies are more likely
than cannabis veterans to seek low-dose products.
5. All Praise the Nibblers – Some of the top products in different states arrive with 5 milligrams or less of
THC per serving. That is considered low-dose, and the movement towards weed with less wallop is
expanding. In Colorado, growth for these products hit 83% by the end of 2017. Meanwhile, consumer
research reveals that 33% of cannabis consumers seek low-dose options.

4 https://mjbizdaily.com/chart-putting-the-55-billion-us-retail-cannabis-market-in-perspective/
5 https://bdsanalytics.com/bds-analytics-top-10-cannabis-market-trends-2018/

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6. Marketing for
Mood – As the
universe of
products grows and
consumers become
more educated,
brands target
consumers
interested in
specific effects,
rather than just a
desire to consume
cannabis. Research
indicates that many
consumers
purchase cannabis
for several
different reasons
— ranging from “to have fun” to “manage anxiety.”
This situation offers marketers a wealth of
opportunities. For example, the number 1 brands
within select categories in California and Colorado
market their products to achieve specific effects,
such as improved sleep or increased energy. More
and more brands offering “moods” and
“experiences” are now hitting the shelves and
winning market share. The big brands are
embracing this trend as well.
7. Legal Leads to Luxe 6 – The range of broad retail
identities — budget, mainstream, premium and
luxury — finds sound footing within legal cannabis
markets. And the rise of the upscale cannabis Cannaleaf’s facility will include cannabis concentrate
manufacturing, pictured above. Concentrates will be sold in
consumer is fully flowering. Members of this
a variety of forms, including cartridges for “vape pens,”
segment have higher incomes, more advanced
education, live in the suburbs, enjoy the outdoors
and fine arts, are physically active and consider personal care extremely important. They tend to shop
for organic and gourmet foods, pair cannabis with other products, are fluent in the language of strains
and products, value dispensary relationships, and are comfortable with all modes of consumption —
inhalables, edibles and topicals. These are dream consumers for many kinds of brands.

6 The number of members of this segment is currently being researched.

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High-quality cannabis “flower” or “buds” will be the cornerstone of Cannaleaf’s enterprise. Crops will be harvested for wholesale to dispensaries
and manufactured into cannabis-infused concentrates.

8. Beyond the Bong – Consumers inhale, swallow and slather cannabis products, but as markets mature,
new delivery methods will continue to evolve. Sublinguals are applied beneath the tongue and quickly
lead to a buzz. Transdermals are usually applied via patches placed on the body – THC and other
cannabinoids slowly enter the bloodstream for long-term relief. We can expect to see new alternative
delivery systems as industry scientists explore the plant in greater detail.
9. The Cannabis Industry Takes Many Forms.
For example, by the end of 2018, California cannabis and cannabis-related businesses included:
• 547 retailers
• 231 delivery
• 4,770 cultivation
• 639 manufacturers
• 1,009 distributors
• 200 microbusinesses
• 52 testing
• 70 event organizers

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Cannabis Licensing in New Jersey

Medicinal Cannabis Licensing in New Jersey

Medical Marijuana was legalized in New Jersey in
2010. Six dispensaries (Alternate Treatment
Centers, or ATCs) were set up through a
competitive licensing process. In March 2018,
Governor Murphy made several changes to the
law, perhaps the most significant of which was to
add several new conditions to those eligible for
inclusion in the program, most significantly,
“chronic pain” and “anxiety.” This caused the
number of patients in the program to increase
dramatically – from 15,000 at that time to almost
50,000 today – causing supply shortages, and
excessive wait times, at the state’s six ATCs.
In response legislators approved a licensing
competition for six additional ATCs in August 2018,
two for each of three geographic areas that
lawmakers have created for the state’s medical
marijuana program – North, Central, and South New Jersey.
A total of 146 applications were submitted and reviewed by a six-person committee. Winners, listed the
adjacent chart, were announced in December 2018.

Recreational (Adult-Use) Cannabis Licensing in New Jersey

As of mid-February 2019, multiple sources report that a deal is imminent between the Murphy
Administration and legislators on the adult-use cannabis bill. The two issues stalling progress were taxes
and how this new industry is to be regulated. This issue would be addressed through the creation of a five-
member commission. Three members would be appointed by the Governor and one each by the Senate
President and the Assembly Speaker. After certain agreements on the process for the appointments to the
commission were finalized, the focus shifted back to taxes. Following a stalemate between Senator
Sweeney and Governor Murphy on the tax rate, a new proposal was put on the table, a flat fee/tax that
would be added to each ounce rather than a specific tax percentage whose revenue would fluctuate based
the price per ounce.

According to NJ.com, the per ounce fee would be $42. This flat fee changes the political discussion and
provides a predictable revenue stream for tax purposes. Now that the principals of an agreement are in
place, the "devil in the details" must be worked out, put into writing and then agreed upon again by the
bill sponsors. Then, the Legislature must amend the bills to reflect this new agreement and other changes.
These amendments can be developed in committee, but more likely and preferably, they will be
accomplished by voice vote in the Assembly and Senate chambers. Following the amendments, a final
vote would be scheduled. Clearly, the state is closer than ever, and apparently Governor Murphy is now
re-engaging legislators to gain support for passage. Proposed legislation would legalize the possession and
recreational use of up to one ounce or less of marijuana, 16 ounces of marijuana-infused products in solid
form (edibles), 72 ounces in liquid form and seven grams of cannabis concentrate. Purchasers must be at

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least 21 years old. 7 Adults will need to find designated retailers to buy their legal pot. These dispensaries
must hold a state-issued Class 4 Marijuana license. Different permits will be required for growers,
wholesalers and testing facilities.

Proposed Licensing Requirements

• A cannabis producer must have a Class 1 Cannabis Cultivation Facility license issued by the division
for the premises at which the cannabis is produced.
• A cannabis processor must have a Class 1 Cannabis Product Manufacturing Facility license issued
by the division for the premises at which the cannabis is processed.
• A cannabis wholesaler must have a Class 2 Cannabis Wholesaler license issued by the division for
the premises at which the cannabis is warehoused.
• A cannabis retailer must have a Class 3 Cannabis Retailer license issued by the division for the
premises at which the cannabis is retailed.
• A cannabis transporter must have a Class 4 Cannabis Transportation license issued by the
division.8
Under SB 830, a “marijuana producer” and “marijuana processor” are entities licensed to cultivate
marijuana and process it into items for sale to licensed marijuana retailers. All such entities must hold a
Class 3 Marijuana Retailer license to purchase the items produced by marijuana producers and marijuana
processors.
Under the bill, each application for an annual license to operate a marijuana establishment would be
submitted to the division. A separate license would be required for each location at which a business seeks
to operate.
To obtain a cultivation and manufacturing license, applicants must provide proof that they have been a
New Jersey resident for two or more years and are 21 years of age or older. They must also undergo a
criminal history record background check and submit to being fingerprinted. Applicants will bear the cost
for the criminal history record background check, including all costs of administering and processing the
check.
The Director of the Division of Marijuana Enforcement may not approve an applicant for any Marijuana
licenses if the criminal history record background information of the applicant reveals any disqualifying
conviction. If the applicant is disqualified, the division will provide written notice identifying the
conviction that constitutes the basis for the disqualification.
To obtain a Marijuana cultivation and manufacturing licenses, applicants must also comply with all
regulations promulgated by the Division of Marijuana Enforcement. While these rules have yet to be
drafted, SB 830 directs that they must:
• Require a marijuana business to annually renew a license issued under this section;
• Establish application, licensure, and renewal of licensure fees for marijuana business;
• Require marijuana produced by marijuana cultivators and manufacturers to be tested in
accordance with the law;

7 https://www.nj.com/marijuana/2018/11/nj_officially_on_path_to_recreational_marijuana_he.html
8 https://scarincihollenbeck.com/law-firm-insights/cannabis-law/apply-marijuana-dispensary-license/

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• Require marijuana cultivators and

manufacturers to submit, at the
time of applying for or
renewing a license, a report
describing the applicant’s or
licensee’s electrical and water
usage; and
• Require a marijuana license holder
must meet any public health and
safety standards, industry best
practices, and all applicable
regulations established by the
division by rule related to the sale of
marijuana. Cannaleaf will cultivate cannabis using similar means in a 16,000-square-foot
facility in Greenwich, NJ. Facilities will include an onsite extraction lab to
Under the proposed bill, the director must manufacture cannabis-infused concentrates.
approve or deny an application within 60
days after receipt of a completed application. The denial of an application would be considered a final
agency decision, subject to review by the Appellate Division of the Superior Court. The director may also
suspend or revoke a Marijuana license for cause, which would also be subject to review by the Appellate
Division of the Superior Court.

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Once an entity has been issued a license, it must be displayed at the premises at all times when marijuana
is being warehoused. The bill further provides that a licensee must report any change in information to
the director not later than 10 days after such change, or the license will be deemed null and void.
The legislation also lays out requirements for packaging and advertising, addressing the fears of many New
Jersians that cannabis would be easily accessible or even marketed to children.
Under the bill, regulation would prevent the marketing of cannabis items and paraphernalia to people
under the legal age to purchase the drug. Under those restrictions, packaging would be prohibited from
featuring false statements, promoting overconsumption, depicting anyone under the legal age consuming
cannabis, or including objects such as toys, characters, or cartoons.
Further, no licensed cannabis establishment would be permitted to advertise any cannabis items or
paraphernalia on television or radio between the hours of 6 A.M. and 10 P.M. and they could not engage
in advertising unless the business had “reliable evidence that at least 71.6% of the audience for the
advertisement is reasonably expected to be 21 years of age or older.” No cannabis-related business would
be permitted to advertise within 200 feet of elementary or secondary school grounds.

Cannaleaf’s Competitive Advantage: To optimize Cannaleaf’s opportunity to acquire NJ cannabis licenses,

it has engaged Higher Yields Consulting (HYC), a Colorado-based consulting company with a successful
record of obtaining licenses for its clients. To date, HYC’s team has submitted successful applications in 13
states and worked internationally with countries like Mexico to develop regulatory standards and
requirements.
HYC (https://higheryieldsconsulting.com), formerly C&C Consulting Group, is a firm that has been
successfully serving the commercial cannabis industry since 2010. HYC has developed exceptional garden
management systems, business processes, and technical skills as its cornerstone.
The company was developed with these components and has maintained its integrity by providing
industry expert consultants who have unique combinations of business and professional expertise in the
industry. HYC has proven over time to be the best option for marijuana businesses seeking assistance and
advice in the fast growing and highly competitive industry from Seed to Scale.
The HYC team gained their thorough understanding of the industry by developing a strong team of
owners, operators and managers with practical hands-on experience in the industry.
Cannaleaf’s application is also strengthened by several important factors:
• An experienced cannabis partner (HYC) able to provide comprehensive documentation (e.g.,
Standard Operating Procedures, security plans, compliance, etc.) to support the application, plus
opertional support and guidance going forward.

• An experienced management team unencumbered by any cannabis-related legal issues.

• An investor-grade business plan backed by strong financials.

• Ability to control a compliant site for cultivation/manufacturing facility.

• Local political approval.

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Site Selection
The town selected for the facility is East Greenwich Township, located in Gloucester County, New Jersey.
As of the latest Census, its population was 9,555, reflecting an increase of 4,125 (+76.0%) from the 5,430
counted in 2010, which had in turn increased by 172 (+3.3%) from the 5,258 counted in 1990.
This specific location was chosen because it offers real estate that is ideally suited for this project and has
demonstrated a favorable political climate. The township has amended its master plan and zoning laws to
allow medical and recreational marijuana cultivation, manufacturing, testing, distribution and retail
operations under certain conditions.
According to the ordinance adopted October 9, 2018, marijuana facilities are prohibited outside three
specific zones in the township. The measure also sets certain buffer zones around schools, daycare
facilities and churches. 9 Company representatives have also met with the mayor who has expressed his
support for this project.
The site is currently comprised of sports fields with easy access to US Route 295. Additional Information
on the property is available at http://sjbullpen.com/.

Cannaleaf will retrofit a 16,000 sq. ft. facility on the property into a commercial cultivation facility and
extraction lab. Initially Cannaleaf will build 13,000 square feet of cultivation space that uses state-of-the-
art technology and environmental systems to mitigate risk and optimize efficiency. Cannaleaf will also
develop a 3,000-square-foot extraction lab for the manufacturing of cannabis concentrates using the
marijuana we grow, eliminating the need to seek out raw materials from other licensed providers in the
state. This will allow for greater diversify in Cannaleaf’s product line, and quality control will ensure the
brand remains untarnished.
The proposed site’s nine acres will facilitate development of an additional 100,000 square feet of
commercial greenhouses and extraction labs, as needed, from Cannaleaf’s first two to three years of
profits. Expansion will open potential for larger revenues and provide additional opportunities to earn
more equity in the property.

9https://www.courierpostonline.com/story/news/local/south-jersey/2018/09/28/medical-marijuana-weed-
dispensary-south-jersey/1431921002/

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Local Ordinances
The following ordinance governs cannabis facilities located within East Greenwich, New Jersey.

Medical and Recreational Marijuana Dispensary and Sales, and Cultivation,

Testing and Processing Facilities as Conditionally Permitted Uses
Conditional Permitted Use

a. Specifically prohibited in all Zoning Districts with the exception of I, and B-1 and B-2 Districts.
b. Minimum distance from School and Daycare Facilities including public and private: 1,000 linear
feet measured lot line to lot line.
(See also: New Jersey State Sanitary Code (NJSSC) Chapter XI Public Campgrounds N.J.A.C. 8:22-
3.2.27).
c. Minimum distance from Places of Worship: 500 linear feet measured lot line to lot line.
d. Maximum hours of dispensary and sales operation: 8:00 a.m. to 7:00 p.m.
e. Drive thru facilities are not permitted.
f. The Planning Board shall be satisfied that the off-tract circulation, and access to and from the site
are adequate.
g. The dispensary and sales minimum lot width at the building line shall be 100 feet and the
minimum lot size shall be 20,000 s-f. Minimum rear and side yard setbacks shall be thirty feet
(30’). Minimum front yard setback shall be fifty feet (50’), twenty-five feet (25’) of which shall be
appropriately landscaped and buffered/screened.
h. Minimum bulk requirements of the respective zone shall be met, except as noted in g.
i. Off-street parking schedule: Off-street parking for dispensary and sales shall be provided in
accordance with the East Greenwich Zoning Code as deemed sufficient by the Township Traffic
Engineer.
j. A Site Management Plan is required and shall address at a minimum vehicle traffic control, and
methods and designs to prevent loitering and promote public safety.
k. Signage shall be permitted and regulated as a business sign in accordance with the East Greenwich
Zoning Code.
l. State of the Art security measures shall be in place to the satisfaction of the Planning Board.
All facilities, processes and dispensary/sales shall be in compliance with New Jersey State Regulations.

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Competitive Analysis

Cannaleaf, Inc. will compete with various groups:

• Existing black market players who currently command a majority of the market share.
• Numerous other new entrants will enter the space due to sudden growth in demand after legalization.
• Existing multi-state operators and large publicly listed companies will also start exploring growth
opportunities in the state. These include players such as Green Thumb Industries, MPX Bioceutical,
Marimed, Curaleaf and TerrAscen.

10

The fragmented, state-by-state nature of the marijuana industry historically has been dominated by small,
local players, but larger, publicly traded companies with multistate operations are becoming an
increasingly prevalent force.
Most of these larger players are currently in “acquisition mode,” overvaluing and purchasing licenses for
the purpose of building strong resumes. Some of these groups have recently come into legal troubles
regarding their structures and executive team members such as MedMen.
Most of these groups have business models that seek to take advantage of unsavvy investors by
developing highly published companies that fit the wall street model of a “pump and dump.” Cannaleaf
will outshine these groups through strong process, procedure and policy development. Cannaleaf will also
create a “complaint” and “transparent” company culture to ensure truth and honesty from the top down
and across the entire organization. The company has developed a strong business plan and execution
strategy via its partnership with HYC and its well-rounded leadership team with professional experience in
finance, sales, and marijuana operations.

10https://mjbizdaily.com/chart-multistate-cannabis-operators-rapidly-expanding-new-markets/

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Additionally, the town of Greenwich has already paved the way for recreational cannabis businesses,
passing ordinances in preparation for legalization in 2018. The site location for Cannaleaf’s cultivation and
manufacturing facilities meet existing zoning requirements, and company owners’ close relationships with
elected officials have allowed them to work directly with Grennwich’s Mayor to increase the likelihood of
securing a letter of support to include with our state licensing applications and all necessary local
operating permits. Cannaleaf’s owners also have a large network of qualified professionals to hire as
competent employees.

Greenwich is located in close proximity to Philadelphia, opening up a potentially significant out-of-state

client base. And pending legislation passage and regulatory approval, Cannaleaf will have the opportunity
to become a “vertically integrated” cannabusiness, combining cultivation and manufacturing with our own
retail store within the first year of operations, allowing us to sell our products to consumers directly.

Marketing Plan

Cannaleaf, Inc. will position itself as a

strong B2B player that provides a
range of superior plant, concentrate
and edible products to its retailer’s
customers, with a strong focus on
consistency and high quality.
Products will include:
• Top-shelf flower: The largest,
most attractive and potent
“buds” each plant will produce to
be cured, packaged. This product
is often “hand trimmed.”
• Mid-grade flower: Smaller, less-
potent and/or visually striking
buds to be cured, packaged and
sold to dispensaries or edible Cannaleaf’s brand will be anchored by a modern, sophisticated logo.
manufacturers, or used to make
concentrates. This product is often “machine Trimmed.”
• Top-shelf trim: Produced during the process of hand-trimming top-shelf flowers, this product can be
used for manufacturing products for resale, or sold to other players to produce concentrates, edibles,
etc.
• Machine trim: Produced during the process of machine trimming mid-grade flower, this project can be
sold to edibles manufacturers wholesale or used to make concentrates.
• Concentrates: Produced post cultivation. These products are completed through some form of
extraction and create products such as wax, shatter, distillate for vape pens.

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In order to establish a strong niche and
strategic positioning in the New Jersey B2B
cannabis space, Cannaleaf, Inc. will develop
focused marketing plans and a sophisticated
branding strategy that clearly communicates
the value proposition of its products and
services. This branding will remain consistent
throughout all of Cannaleaf’s marketing
initiatives. 11.
Product packaging and advertising that
resonates with consumers will allow it to
stand out from the competition. The
following are mock-ups of planned ads,
labels, etc.

General Marketing: Cannaleaf, Inc. will create

strong awareness to dispensary owners regarding the company and its cannabis products. Knowledgeable
B2B sales representatives will use samples to educate partnering dispensaries about our product line, its
advantages, its target markets, and all partners will receive in-store point-of-sale displays, posters, and
other informational marketing materials for display in their stores. These types of educational platforms,
plus outstanding quality and sophisticated branding, will provide Cannaleaf with unique positioning at the
B2B and customer level.

Managers will work locally to provide interviews to popular newspapers and news stations. Cannaleaf will
also work with popular online news portals or websites focused specifically to the cannabis industry
including businesses like Potguide, Weedmaps and Leafly to cast a vast message to both retailers we look
to work with as well as the consumers who visit our retail partners. These forums will disseminate our
brand to large audiences as they are a popular and convenient source of information and advice for both
cannabis companies and consumers.

Cannaleaf will engage in extensive social media campaigns to expand consumers’ knowledge and
awareness about recreational cannabis, our brand, and where our products are sold. Social media
platforms such as Instagram will play a prominent role in targeting customers in the local area as
Cannaleaf, Inc. builds a fan base via targeted campaigns and other SEO strategies.
The company will engage in price-based promotions to facilitate its ability to successfully compete with
other new entrants. For value-added or premium offerings such as edibles it can offer specific price
promotions and discounts through loyalty or long-term volume discount programs.
To date, New Jersey cannabis-related trade shows have primarily been oriented to entrepreneurs
interested in obtaining licenses. As the market develops, trade shows will likely be introduced to display
products and services to the cannabis dispensaries. Cannaleaf can exhibit at these shows to promote its
products to dispensaries.

11https://www.headset.io/blog/what-does-the-average-cannabis-consumer-look-like

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Targeted Marketing: Research suggests that men account for 68.9% of all cannabis customers, more than
twice the number of female customers. This disparity is not surprising given cannabis culture’s emphasis
on the male “pothead.” 12

The average customer age in the US is 37.6 years old, which is higher than one might expect given
stereotypes regarding marijuana users. The average age for female customers is slightly older at 38.2,
while the average age for males is 37.4. People ages 65 to 95 make up less than 5% of customers. Most
spend between $25 and $50 per trip to a marijuana store, spending an average of $33 per visit. 34.7% of
customers spend less than $10 on average, usually picking up a single item such as a half gram pre-roll or a
carbonated beverage. Only 8.2% spend more than $100 per trip.
Cannabis consumers encompass a broad range of individuals and classes within the US market. No longer

12https://www.cannabisconsumer.org/uploads/9/7/9/6/97962014/cannabis_consumer_demographics_and

_behavior.pdf

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exclusive to the counter-culture and urban youth, cannabis consumption is common among all classes,
with those in the lower-middle class consuming the most. Just over a quarter of cannabis consumers (27%)
have combined incomes of over $75,000, illustrating that they are professionals from all walks of life and
not the stereotypical “couch potatoes” depicted in the media and in anti-cannabis campaigns. The
majority have combined household incomes of $26,000 - $55,000. They are young professionals and
millennials at the helm of major shifts in economic and political behavior.
Among recreational cannabis users, 25- to 29-year-olds account for the largest percentage of
customers (20%), followed by 21- to 24-year-olds (16%). Target Segment One - Males ages 21-30.
Members of this segment are empowered, engaged and early adopters of new technology. They want
businesses to demonstrate social responsibility and care about causes. They are team players and enjoy
group dynamics and they are generally optimistic and upbeat. They are early adopters of social
movements and they seek authenticity and transparency in marketing.
They look for trusted sources to verify products and advertising claims, so word-of-mouth is critical.
Marketing messages that resonate include those that involve social responsibility with a connection to the
brand. Fifty-eight percent like ads more when they feature one of their favorite digital stars, while
traditional celebrity endorsements will not be effective because it lacks an authentic sense of involvement
with the brand. Messages that will NOT resonate include those that are cynical, negative or angry.
Cannaleaf will work with partnering dispensaries to develop and market products that are catered toward
the large majority of users in these age groups who are male This includes as many branded or “value-
added” products as possible to establish Cannaleaf as a preferred customer for millennials and younger
men, especially newbies who are trying cannabis products for the first time. Cannaleaf will also focus on
low-potency or low-dosage products, as most new users will be opting for such products, as per trends
identified by industry experts. We will also establish a personal connection with younger customers via in-
store promotional booths and/or events.
Some of the most effective communications channels are Instagram or similar story-telling media
emphasize visual components, including video and photography. Cannabis brands must tread lightly when
working with social media platforms. Facebook and Instagram have taken a strong stance about
condoning the sale and production of cannabis and cannabis products given the current status of cannabis
on the federal level. Cannaleaf will create social media strategies that focus on educating young men
about our products and responsible
consumption.
The latest “2018 State of Cannabis”
report from San Francisco-based
cannabis-delivery software platform
Eaze states that “Women and Baby
Boomers are the fastest-growing
consumer segments among marijuana
users. 13 This position is repeated by a
comprehensive cannabis consumer
research report recently published by
New Frontier and other research.
These women make many of their families’ health decisions. Research further indicates that women will
play a major role in shaping the cannabis industry by adopting cannabis as a wellness product.

13 https://ellementa.com/2019/01/23/women-and-baby-boomers-cannabis/

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Women are increasingly turning to cannabis for health reasons with menstruation, menopause and sex
listed as the top conditions they are treating. They are consuming cannabis at higher rates than before and
boosting sales of items like infused candy, baked goods and skin care products. They look to companies
that can reflect marijuana’s evolution in their lives and seek out ways to responsibly consume without
disrupting the flow of their lives. 14
The industry is starting to recognize that
women consumers need high quality products
that seamlessly fit into their lives in a way that
can replace a bad habit like drinking too much
alcohol to unwind or taking a pill to go to
sleep. As the market matures, brand
aesthetics and designs push consumer
products into the mainstream and more
dialogue around cannabis is possible. Women
will feel comfortable accepting and talking
about using cannabis the more that it
becomes normalized.
Overall, the number of women buying
cannabis products almost doubled in 2018,
increasing by 92 percent. Women now make
up 38% of all cannabis consumers. They also
are more likely than men to purchase edibles.
It is also interesting to note that females aged 51-60 are known to be important potential cannabis
products, but often wish to remain discreet. The company will need to prepare customized strategies to
acquire this highly profitable segment, i.e., female customers aged 51-60). Video is effective – 27%
regularly watch video on Facebook 15.
Cannaleaf will collaborate with partnering dispensaries to offer higher-end products for older females,
meeting their needs for beauty and discretion. Members of this segment have a “forever young” attitude
and being engaged and empowered are important to them. They are outgoing, joyful and assertive. They
have a strong work ethic, they are optimistic, and they are brand loyal one trust is built. They want
research to be backed by trustworthy sources – physicians, nurses or wellness practitioners.
Marketing should avoid using any of the following terms/phrases: senior citizen, retiree, aging, golden
years, silver years, prime time, or mature. Messages that resonate with them should be educational and
entertaining (how-to and instructive). They are much more likely to engage with brands that acknowledge
their interest in active, healthy lifestyles.
Women in this age group are more tuned into e-mail and are heavy consumers of mainstream media,
including broadcast and cable TV/radio. This market segment carries frequent and active users of
Facebook. This group is more likely than other generations to share information on social media
platforms, such as Facebook . Cannaleaf will seek to capitalize on this platform for its higher-end products

14 https://www.forbes.com/sites/kristianastre/2018/07/22/how-self-care-and-womens-health-are-
shaping-the-cannabis-industry/#652c4f201f31
15 Since Facebook regulations change periodically, they may (or may not) allow cannabis-related

material at the time of planned publication; therefore, their current policies should be reviewed and
complied with.

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that will be catered to older females.
Cannaleaf will also offer processing services for other growers and licensees in the region such as
extraction and packaging. The company will follow best practices in cannabis extraction to provide the
highest possible quality of concentrates to dispensaries in the region, and it will offer a wide variety of
industry-compliant packaging solutions.

Pricing and Monetization Strategies

Wholesale cannabis product pricing will be influenced by a wide range factors, such as local population
and demographics, competition of both black- and white-market cannabis providers, the relative potency
and appeal of various locally available strains, and the customer experience. All these factors will
contribute to determining overall pricing. The situation is further complicated by the growing importance
of edibles and concentrates in the legal cannabis market, many of which are basically brand-new products
from a retail perspective, with little to no track record to help evaluate potential future performance or
prices. 16
The legalization of recreational cannabis in New Jersey will see several new companies trying to capture
market share in the newly legalized market in anticipation of strong market growth and opportunity.
Hence, initial prices will need to be extremely competitive and in line with market trends since cannabis
may be considered a commodity and consumers will not shy away from switching to another provider if
prices offered by one company is lower than another. However, Cannaleaf, Inc. can pursue on a premium
pricing strategy by offering a high-level branding, the highest quality of regular and value-added cannabis
products to retail outlets. 17
Marijuana pricing strategy can also be influenced by the customer experience.
For example, making the purchase as easy as possible through the use of highly efficient online portal and
CRM tools will differentiate Cannaleaf, Inc. from other distributors through the use of features that
improve ease-of-use for retailers in terms of placing orders and reorders, access to account information,
and delivery status.
This will create loyalty that encourages retailers to try different products, expanding the market for
edibles and concentrates that are not currently available or popular within the area. Cannaleaf will
provide an aesthetically pleasing array of products and packaging that appeal to the target audiences.
These techniques can assist in maximizing sales volume and profit.
Monitoring wholesale and retail prices for various cannabis products to ensure that the company’s
offerings remain competitively priced will be of utmost importance to client retention.

Distribution Strategy
Brick-and-mortar – Cannaleaf, Inc. is in the process of purchasing a property in East Greenwich, New
Jersey, for $1.2 million. The building is 16,000 square feet in size and is situated on 9 acres of land. The
mayor has been apprised of the plan and has given his concurrence.
From this location, the company will engage in cultivation of cannabis, processing of cannabis into various
products. It will engage in wholesale distribution/B2B marketing by selling its high-quality offerings to
cannabis retailers within New Jersey cannabis market.

16https://www.covasoftware.com/blog/how-to-create-a-marijuana-pricing-strategy-at-your-dispensary
17https://grizzle.com/marijuana-prices-legal-growers-market/

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Online – Pending legislation will dictate the extent to which cannabis licensees can implement an online
presence. If allowed, the company will develop and implement online distribution strategies. The younger
population will be more inclined to use digital medium to preorder value added products such as edibles,
oils, vape pens, etc. Cannaleaf will look to add this to their strongest retailers’ websites as a value added
to retailers and a way for Cannaleaf to acquire additional digital real estate to develop its’ brands.

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Long Term Growth Strategy

The company will:
• Continue to expand by introducing new value added products such as gourmet food products, new
medical products, methods of cannabis use, strains, etc.
• Expand its geographical reach by selling products to dispensaries in other atates to the exent allowed
by regulations
• Operate additional marijuana cultivation and processing operations in other areas of New Jersey or in
other states.
Exit Strategies
While Cannaleaf looks to be a long-time supplier of raw and concentrated cannabis goods to the New
Jersey market, the company also understands the volatile nature of start-ups and the cannabis industry.
To secure investors capital, Cannaleaf suggests the following strategies in the event an exit is required. In
all cases, investors would hold a dominant position in terms of the disbursement of funds. For example,
they can be issued "preferential shares" or “preference shares” that would have seniority versus other
classes of shares.
1. Historically, cannabis businesses have proven to be cash cows that can generate significant returns for
investors.
2. The fully developed business can be acquired by a larger player such as a publicly listed firm wishing to
enter the New Jersey market, or alternately by a business conglomerate that wishs to diversify into
cannabis.
3. The company can also exit the venture through the liquidation of assets, i.e., their New Jersey
cannabis licenses, existing customer base, real estate (who’s value has been enhances through its
development for cannabis use), inventory, the brand, intellectual property, operational systems,
training materials, technology, etc.
4. The company may aso excerise the option of leasing the developed property to other licensed
operators.

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ManagementTeam

Christina Caltabiano, Chairman and Chief Executive Officer

Christina Caltabiano is Chairman and Chief Executive Officer of Cannaleaf Inc. Christina’s leadership,
Cannaleaf Inc has created a relationship with Dale Archer, Mayor of East Greenwich Township located in
Gloucester County, New Jersey. Additionally, Christina has partnered with Higher Yields Consulting, a
nationally renowned cannabis consultant. These relationships have positioned Cannaleaf, Inc to acquire a
license to cultivate, manufacture, distribute, and dispense recreational marijuana.
In August of 2013, Christina’s 17-year-old brother, Zachary Nichols, was diagnosed with the terminal brain
cancer Glioblastoma. This earth-shattering life event prompted her to research any and all solutions that
could help her brother. Through that research, Christina found not only the benefits of cannabis for
medicinal purposes, but also the misplaced and misguided information surrounding the drug. In
December of 2015, she lost her brother, Zachary, to Glioblastoma. This loss, along with that research,
ignited her passion for cannabis.
She founded and is the board president of the Zachary Nichols Head Strong Foundation, which donates its
proceeds to children and young adults who are diagnosed with Glioblastoma and similar terminal brain
cancers.
Cannaleaf, Inc and the Zachary Nichols Head Strong Foundation are not merely entities to Christina – to
her, these organizations keep Zachary’s memory alive. They are channels for helping people, and they
afford her the opportunity to give back to a community.
Christina graduated from Temple University with a Biology degree. She is currently working as a Medical
Device Sales Representative with Valeritas. Additionally, she has been a top seller of medical devices and
pharmaceuticals for other major corporations such as Stryker, Meridian Bioscience, and MannKind
Corporation. Christina intends on working full-time with Cannaleaf, Inc. pending funding and obtaining a
recreational marijuana license.

Lou Eliades, Sales Manager / Distribution

Mr. Eliades is a Board Member and Share Holder of Cannaleaf Inc. He has a strong background in
complex/strategic sales and has been a top performer in the medical device industry since 2013. Lou will
be instrumental in helping to execute Cannaleaf’s monetization, product positioning, distribution, and
long-term growth strategy to establish itself as a premium provider of cannabis goods and services in the
New Jersey market.
Lou has had a successful career in medical sales and is currently employed by Stryker. During his time at
Stryker, Lou has received numerous honors and accumulated a record setting $17,000,000 in capital sales
over the past 4 years in the highly competitive North New Jersey-New York market. Lou is also the
treasurer of Christina’s non-profit, the Zachary Nichols Head Strong Foundation.
Lou graduated from Pennsylvania State University in 2010 with a B.S in Kinesiology. While at Penn State,
Lou was a three-year varsity letterman and scholarship athlete on the football team. He later went on to
play football professionally for the Oakland Raiders before a reoccurring knee injury ended his career.

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Wayne Nichols, Director of Extraction and Management

Mr. Nichols holds a passion for cannabis and botanical medicine. He first began researching ways to help
his brother who was diagnosed with the terminal brain cancer, Glioblastoma Multiforme, in August of
2013. In he and Christina’s journey to find ways to help their brother they stumbled upon a plethora of
evidence showing how cannabis can help. Realizing the true medicinal potential of cannabis, other plants
and seeing the underutilization of them in the medical field troubled him. Wayne has given presentations
on the medicinal benefits and looks to spread awareness and promote the benefits of cannabis by
becoming an active memebr of the cannabis industry
Wayne has first-hand experience with cannabis. He worked at Curaleaf dispensary in Bellmawr, New
Jersey, for one year within the processing department, hand- or machine-trimming harvested crops,
keeping track of inventory and packging product. He eventually helped manage the department part-time.
Wayne is very aware of concerns that customers/patients may have such as the quality/cleanliness of
products being sold, and he will encourage all products to be held to an even higher standard. Wayne
gained knowledge about the ins and outs of how a dispensary should operate on many levels, how to
manage employees, what products patients desire.

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Financials

Cannaleaf Inc. understands the need for strong and “true” financials and are collaborating with HYC to
provide accurate numbers and accounting for an industry with little track record that can be verified
through banking records.

HYC works hand-in-hand with industry specialists Safe Harbor Banking Solutions as a third-party auditor
for cannabis bank accounts around the country. Audits continue to inform HYC of common financial
pitfalls cannabusinesses encounter, and they give the team a better understanding of how to replicate
unexpected success.

HYC also provides accounting and data analytics services to multiple medical and recreational license
holders around the country and has used their expertise to develop Cannaleaf’s financials, Anticipated
Cash Flow, Expenses, Demand Assumptions, and Pro Forma Profit and Loss Statement, all included in the
pages below.

More information and additional modeling can be provided to determine different variables that may
occur in the start-up process. HYC has considered multiple factors and took a conservative approach to
these projections.

Investment Requirements
Phase I - Application Preparation
• Seed capital - $250K for 5% stake.
• Tentative land control
• Licensing
• Plan development
Phase II - Acquisition, Development and Operations
• Capital requirement - $4,750,000 for 20% stake.
• Land Acquisition
• Facility construction
• Equipment acquisition and installation
• Staffing and training
• Inventory
• Security
• Accounting and IT

Estimated Business Valuation

• Cultivation License: $2,000,000 Asset
• Manufacturing License: $2,000,000 Asset
• Property Acquisition: $1,200,000 Asset
• Equity Post Construction: $3,000,000 Equity
• Estimated 36 Profit: $30,000,000 Revenue

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Anticipated Cash Flow

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Expenses

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Demand Assumptions

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Pro Forma Profit & Loss Statement

36 Month Period Beginning at Commencement of Operations

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