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4. 4New Business Introduction
BUSINESS NAME is applying for the marijuana and hemp
cultivator, processor and retailer licenses and will be conducting
business in City, State, Country.
Company will have the ability to vegetate up to 0,000 marijuana
and 0,000 hemp plants.
BUSINESS NAME is also dedicated to making the cleanest, safest,
and premium quality THC and CBD concentrates and infused
products.
The company will distribute products through wholesale and
retail transactions.
Produce and sell the highest-quality THC and
CBD products through wholesale and retail
transactions.
Own and operate hemp and cannabis
cultivation and manufacturing facilities in State.
Utilize cutting edge and proprietary extraction.
Experts project that CBD products market and
cannabis industry will have a compound
annual growth rates of 39% and 28%
correspondingly from 2017 through 2021.
INDUSTRY
TECHNOLOGY
PRODUCTS
5. 5Financial Summary
-$2.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Year 1 Year 2 Year 3 Year 4 Year 5
Millions
Revenue Net Income
$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0
Year 1
Year 2
Year 3
Year 4
Year 5
Millions
Cash Flow (ending period)
From a total investment of $0 million, Company is expected to generate nearly $0 million in gross revenues with pre-tax
income of nearly $0 million in Year 3, its first full year of operations. Revenues are expected to grow to nearly $0 million in
Year 4 and $0 million in Year 5, with pre-tax income of nearly $0 million and over $0 million respectively.
7. 7Mission Statement
To grow one of the best plants and
produce high-quality concentrates to
provide customers with a products
and service they trust
Main Goals:
A. Own and operate 00-acre outdoor hemp and 0,000-sq. ft. indoor
cannabis cultivation facilities in ….
B. To produce high-grade THC and CBD products and build a
recognizable brand in a rapidly growing industry.
C. To be fully compliant with all state and local municipalities and be
primed and ready for expansion.
D. To align ourselves with investors and partners who share our values.
8. 8Business Objectives
Own and operate hemp and cannabis
cultivation facilities in the state of
State. Lookout for ways to improve our
processes and maximize our returns.
Getting State
Cultivation licenses
BUSINESS NAME will seek to leverage on
expertise to build the business brand as
a premiere THC and CBD products
producer within the state of State
Brand and distribute our
product line throughout State
Monthly sales and capacity increasing
steadily throughout the first year. To
open our first store by the end of the
2019 year.
Net annual income to support
operational expenses
To build our brand on the core values of
customer service and care, hospitality,
highest standards of quality, honesty,
integrity and community outreach.
To provide customers with
a product and service they can trust
01 02
03 04
11. 11Start-Up Assets & Use of Funds
Start-Up Assets Quarter 1
Building/Land for cultivation $000,000
Equipment for growing $000,000
Building for equipment $000,000
Extraction equipment $000,000
Manufacturing equipment $000,000
Other equipment $000,000
Store Building and Equipment $000,000
Security System $00,000
Total $0,000,000
Total Use of Funds $0,000,000
Use of Funds
Assets $0,000,000
Direct costs, cultivation $000,000
Direct costs, processing & manufacturing $000,000
Operating expenses, first 6 months $000,000
Salaries $000,000
13. 13Product & Services
Cultivation
Company will have the ability to
grow up to 0,000 hemp and 0,000
marijuana plants from seedling to
finished product.
Description:
Manufacturing
BUSINESS NAME will produce
high-quality THC and CBD
concentrates, edibles and
topicals as own product line
Description:
Distribute
Company intends to distribute
THC and CBD products through
retail and wholesale
transactions.
Description:
14. 14Products Revenue Structure
We will strive to provide our clientele with
both high-end and affordable hemp- and
marijuana- derived CBD and THC products.
We want to build a brand that our customers
will count on for professionalism,
consistency, quality, and innovation.
% of Revenue by Product Category:
revenue
Concentrates 55%
Beverages & Edibles 35%
Topicals & Accessories 10%
16. 16Cannabis Legalization
✓ In 2017, legal cannabis sales in the U.S.
reached $8.5 billion, a 26.9% jump
from the year before.
✓ Legal cannabis sales reached $10.4
billion in 2018. That represents a
22.4% increase over 2017.
✓ In September, 2018, DEA announced
that certain drug products that have
been approved by FDA and which
contain CBD will be considered
Schedule V drugs.
✓ In December 2018, President Trump
signed the bill into law making hemp
legal for the first time since the 1930s
and allowing it to be grown, processed,
and sold as an agricultural commodity.
✓ The farm bill completely removes from
the drug schedule all hemp plants and
derivatives with much higher THC
levels, 0.3 percent.
States with
enacted hemp
legislation
41 states enacted the bill 3,546 licenses 78,176 acres of hemp
17. 172018 Farm Bill
✓ The 2018 Farm Bill defines hemp as the plant Cannabis sativa L.
and any part of the plant with a delta-9 THC concentration of not
more than 0.3 percent by dry weight.
✓ The 2018 Farm Bill removes hemp from the Controlled
Substances Act, paving the way for the wholly legal cultivation,
possession, sale and distribution of the hemp plant.
✓ The 2018 Farm Bill delegates to states and Indian tribes the broad
authority to regulate and limit the production and sale of hemp and
hemp products within their borders. States and Indian tribes
cannot, however, limit the transportation or shipment of hemp and
hemp products through their respective jurisdictions.
✓ CBD products produced from industrial hemp are no longer
considered Schedule I substances, CBD products that come from
marijuana plants with more than 0.3 percent THC are still federally
illegal
18. 18Cannabis Market Growth
The North America legal cannabis market amounted to $12 billion in 2018, growing by 30 percent on the year. The largest market was the United States,
which totaled $10.4 billion. It was followed by Canada with $1.6 billion. Report from cannabis industry analysts Arcview Market Research, in partnership
with BDS Analytics, predicts the overall cannabis market for legal adult-use and medical sales in North America to reach $24.5 billion by 2021 with the
compound annual growth rate (CAGR) to almost 28% and will grow to $47.3 billion six years later.
0
3
6
9
12
15
2018
Billion$
Medical Recreational
0
3
6
9
12
15
2019
0
3
6
9
12
15
2020
0
3
6
9
12
15
2021
30% 28% 22% 18%
19. 19
Flowers1
Edibles3
2
All Others4
Concentrates
Sales of cannabis edibles in Arizona, California, Colorado and Oregon
reached US$685 million between January and October of 2018,
according to data provided by BDS Analytics. But consumers in those
states spent more than US$1.4 billion on cannabis concentrates
during the same period.
According to a report by Arcview Market Research in partnership
with BDS Analytics, consumer spending on cannabis concentrates in
the U.S. is projected to reach nearly $3 billion in 2018, an increase
of49 % over last year’s sales.
According to the report, cannabis concentrate's market share grew
from 11.7% to about 29% from 2017 to 2018.
Demand for cannabis concentrates
and edibles is exploding
Concentrates and Infused Products Sector
Trend sample in Colorado
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 Q1 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q3
20. 20Hemp Market Growth
Overall hemp acreage reached 78,176 in 2018 recording a tripling of land under hemp from 25,713 in 2017, with the total number of hemp growing states
up to 23 from 19 states, according to the American hemp advocacy group Vote Hemp. The total number of hemp licenses more than doubled, from 1,456 in
2017 to 3,546 in 2018. More universities also got involved with hemp research.
0
10000
20000
30000
40000
50000
60000
70000
80000
2018 acres
0
10000
20000
30000
40000
50000
60000
70000
80000
2017 acres
25,713
78,176
21. Hemp Market
According to the Global State of Hemp Report, the hemp industry is expected
to grow with a combined annual growth rate (CAGR) of 18.4% from 2018-2022
to become a $2.5-billion industry.
0
0.5
1
1.5
2
2.5
3
2018
billion$
0
0.5
1
1.5
2
2.5
3
2022
18.4%
automotive
products
12%
industrial
products
21%
hemp derived
CBD products
52%
consumer
textiles
15%
22. 22CBD Market
Following passage of the 2018 Farm Bill, CBD producers will have much
greater incentive to use hemp as their primary source for CBD
✓ The U.S. market for CBD products hit $291 million in 2017
– including both hemp and marijuana-derived sources –
while the hemp CBD market has reached an estimated
retail value of $145 million. In 2018, hemp-derived CBD
products sales accounted for about $390 million.
✓ Hemp legalization and new methods of CBD oil extraction
with a growing number of various CBD infused products
available in mainstream markets will lead to an increase in
consumer spending on CBD products.
✓ New Frontier Data estimates hemp-derived CBD market to
reach $1.3 billion in 2022, representing a 27.2% 5-year
CAGR.
✓ Brightfield Group analysts forecast that the total legal
market for CBD can be worth more than $20 billion.
0
200
400
600
800
1000
1200
1400
2017 2018 2019 2020 2021 2022
U.S. Hemp CBD Sales (in $ millions)
23. 23SWOT Analyses
Focus on two growing industries
Diversification of business - cultivation, extraction, manufacturing and retail
Diversified, Strategic Partnerships
Extensive industry knowledge
STRENGTHS
Positive Negative
Internal
External
Strengths
S
Weaknesses
W
Threats
T
Opportunities
O
Product liability / legal issues
Enhanced risk of banking / financial / IRS scrutiny
Crop loss possibility due to pests, heat, human error, etc.
Lack in professional workforce
High energy consumption
High starting capital
WEAKNESSES
High growth industry
Growing interest and demand for natural, alternative medicine
Trend toward greater cannabis legalization, including the use of cannabis for recreational purposes
Hemp and hemp-derived CBD products legalization
OPPORTUNITIES
A significant drop in cannabis wholesale pricing
Enforcement of federal cannabis law, new DEA rules
Possible cannabis and CBD regulations changing
Indicators of a slowed global economy
THREATS
25. 25Marketing Strategy and Positioning
TARGET
MARKET
PRODUCT
QUALITY
BUSINESS NAME will provide the
best products available to establish
its brand and to always ensure that
consistently high-quality products
are in fresh supply.
LOCATION
One of the busiest streets in ….
The facility is well positioned and it
matches the ideal picture of a
community store.
26. 26
PERSONALIZED
SERVICE
We will train knowledgeable and
friendly staff who will help clients
select the best product for their
needs. The management team will
always be available to talk with
customers, providing them with
years of experience and expertise.
PRICING
BUSINESS NAME will set its price
competitively. Average prices range
from $0.00 to $0.00 per gram and
we will deliver premium products at
$0.00 per gram retail. We will
provide free shipping for all orders
over $000.
Marketing Strategy and Positioning
BRAND
We will establish a referral network
that supports product consistency,
brand recognition, and reliable
delivery
27. 27Target CBD Products Customers
About 7% of Americans are already using CBD products, placing the
potential market capacity at $16 billion by 2025
✓According to a new analysis by Cowen & Co, CBD products use is highest among consumers aged 18 to 34.
✓The survey also found that liquid form (tinctures) accounted for the biggest share of the market at 44%, followed by topical forms at 26%,
edible forms (capsules) at 22% and drinks at 19%.
✓CBD users consistently ranked CBD’s lack of psychoactive effects as its best feature, comparing to the price and other factors.
87%
12%
1%
2017
Supplements
Topicals
Food&Other Products
79%
16%
5%
2022
28. A
B
C
D
E
F
Merchandise & Event Sponsorships
BUSINESS NAME -branded products such as shirts,
hats, grinders, cases/containers, etc. Sponsor
cannabis-related industry events to gain brand
exposure and bring the BUSINESS NAME name to
the forefront of the community.
Social Media
We will have a significant social media presence.
Appropriate forums will be monitored daily, with
dedicated staff resources to be active and
knowledgeable participants. We will develop a
social media content strategy which will include
Twitter, Facebook, Instagram, LinkedIn and
YouTube.
Information Kits
Registration forms, brochures,
and general information. They
will provide information on
what our products are.
Brochures
We will produce high-quality
brochures with detailed
information for each product.
Website
We will develop a professionally-
designed website.
Direct Marketing
The marketing and sales
strategy of BUSINESS NAME
Company will be based on
generating long-term
personalized relationships.
28Marketing Plan
30. 30Growing and Manufacturing Facilities
The physical address of our cultivation and manufacturing
facilities will be ….
Company intends to mix hemp outdoor cultivation from
April to October period and all around year cannabis
greenhouse/warehouse cultivation.
The manufacturing premises will be located in a 00,000-sq.
ft. building and will include extraction and refining
equipment, vacuum ovens and packaging machines. This
facility will offer a significant advantage in the development
and manufacture of our flowers, compounds, edible and
topical forms.
We have contracted for our facilities for 0 years with
options for an additional 00 years without rent increase.
Lease costs is $0,000 per month.
❖Vegetative Rooms
❖Flowering Rooms
❖Drying & Trim Rooms
❖Curing Rooms
❖Extraction Rooms
❖Compounding Rooms
❖Cannabis Infused Production room
❖Packaging Rooms
31. 31Growing Forecast
LBS
BUSINESS NAME will have the ability to grow up to 0,000 plants in greenhouses/warehouses and over 00,000 plants outdoor.
Company will use a Perpetual Harvest technique for cannabis cultivation in which growers utilize multiple grow tents/areas to ensure that
there are always plants in both the flowering stage and in the vegetative stage.
3,060
6,120
6,120
YEAR 1 YEAR 2 YEAR 3
Bio-mass Seeds Fiber
714
1,904
1,904
918
2,448
2,448
YEAR 1 YEAR 2 YEAR 3
Indoor Cannabis Greenhouse Cannabis
32. 32Technology
0 20 40 60 80 100 120 140 160
9
12
15
18
21
24
Pounds
Hours
Pounds Processed
CO2
Supercritical
C02 Extraction
Run Time (Minutes) 480
Changeover/Prep (Minutes) 30
Time Window (Hours) 24
Capacity (Litres) 100
Biomass Per Run (Pounds) 50
Biomass within Window (Pounds) 141
Yield within Window (Tons) 0.07
Oil Yield (Pounds) 21
Pounds Per Acre 625
Acres Processed in Window 0.23
Supercritical C02 Extraction
We intend to use a High Production CO2 Extraction Equipment to get a primary extract. The equipment utilizes a Dual-Phase Pumping System – a liquid pump
that allows for high CO2 flows at higher pressures and the Diaphragm Compressor Technology gas pump for energy efficiency and cold separation, this system
will provide high production with a wide range of processing options for supercritical and subcritical extractions. We will then use a High Production WFE
system which offers high-capacity, high-production operations with fast, efficient molecule of botanical oils without thermal degradation.
33. 33Technology
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dry Herb Ethanol Water CO2 BHO Rosin
THC Strengths of Cannabis Extracts
BHO Extraction
BHO extraction technique is the most cost-efficient extraction method available. With an average extraction cycle of less than one hour, BHO is
the fastest commercial extraction method. That is 9 times faster than the average 9 – 10 hours comparable CO2 supercritical extraction cycle.
The cost of BHO extraction equipment is also much lower than CO2 equipment.
34. We intend to use High Production Extraction system, which efficiently extract botanical oils without thermal degradation at industry-leading processing rates.
System utilize alcohol which acts as a solvent and strips the THC, CBD, Terpenes, Chlorophyll, and wax compounds from plant material then carrying them in
solution form within the alcohol.
Advantages
✓ The FDA classifies ethanol as “Generally Regarded as Safe,” or GRAS,
meaning that it is safe for human consumption.
✓ Ethanol is safer than butane and more effective than supercritical CO2.
✓ The ethanol removed from the finished concentrate can be reused in
multiple extractions, which effectively eliminates the production of
chemical waste.
34Ethanol ExtractionTechnology
35. We intend to use a High Production Extraction system, which is equipped for
both ethanol and hydrocarbon based solvents, to get a primary cannabis extract.
We will then use a High Production WFE system which offers high-capacity, high-
production operations with fast, efficient molecule of botanical oils without
thermal degradation.
35Ethanol & Hydrocarbon ExtractionTechnology
Ethanol Advantages
✓ The FDA classifies ethanol as “Generally Regarded as Safe,” or
GRAS, meaning that it is safe for human consumption.
✓ The ethanol removed from the finished concentrate can be
reused in multiple extractions, which effectively eliminates the
production of chemical waste.
✓ Ethanol extraction can eliminate the need for a dewax or
winterization and suites for creating a full spectrum cannabis
extracts and tinctures.
Hydrocarbon Advantages
✓ Butane/Propane extraction technique is the most cost-efficient
extraction method available.
✓ BHO is the fastest commercial extraction method.
✓ Can resolve some ethanol extraction disadvantages, including
the limitation in the products can be produced and high post
processing labor intensive, involving the use of several different
methods of refinement and filtration.
36. 36Production Forecast
BUSINESS NAME intends to produce a wide range of cannabis oil infused
products with different concentration, including pure oil (1000mg),
cartridges (500mg), pills (500mg), tinctures (430mg), beverages (120mg),
edibles (100mg) and topicals (250mg). BUSINESS NAME cartridges will
include 500 milligrams co2 cannabis oil and will be compatible with any
510-thread battery.
All BUSINESS NAME cannabis products will include Laboratory Test
Results in their packaging.
unit
5,557
13,440
14,971
18,524
44,799
49,902
7,410
17,920
19,961
12,924
31,255
34,816
55,573
134,396
149,707
37,049
89,598
99,805
14,820
35,839
39,922YEAR 1 YEAR 2 YEAR 3
CANNABIS OIL (1000mg)
PRE-FILLED CARTRIDGES (500mg)
CAPSULES, PILLS (500mg)
TINCTURES (430mg)
BEVERAGES (100mg)
GUMMIES, COOKIES AND
CHOCOLATE (100mg)
TOPICALS (250mg)
BUSINESS NAME will also produce 1000 mg CO2 CBD oil Vape Pens/
Cartridges, 1000mg capsules and suppositories packs, 1000mg pure oils
and 450mg tinctures jars.
BUSINESS NAME intends to offer CBD-infused beverages and a wide
range of topicals, including patches, creams and ointments.
All BUSINESS NAME CBD products will include Laboratory Test Results in
their packaging.
3,341
11,214
14,555
3,341
11,214
14,555
18,561
62,299
80,861
7,424
24,920
32,344
3,341
11,214
14,555
2,227
7,476
9,703
22,273
74,759
97,033
8,909
29,904
38,813
YEAR 1 YEAR 2 YEAR 3
CBD OIL (1000mg)
VAPE, PENS, CARTIDGES
(1000mg)
CBD-INFUSED BEVERAGES (12-b
pack, 120mg)
TINCTURES (450mg)
SOFT GEL PILLS 30 COUNT
BOTTLE (1000mg)
DAYTIME FORMULA,
SUPPOSITARIES (1000mg)
PATCHES SINGLE BOX (100mg)
CREAMS AND OINTMENTS
(250mg)
37. 37
Expenses Cut
Operating Needs
Sales Growth
Year 1: Sales are expected to start
conservatively the first few months and
increase steadily through the second,
third and fourth quarters of the first year
of operations. Years 2-3: Retail income
from $0,000-$0,000 a day for the first few
months with increasing to about $00,000
a day within 1-2 years.
Cash will be retained in the business to
cover cash operating needs as well as
future expansion to meet the demands.
After the first year of operations, it is
expected that BUSINESS NAME will be
able to trim expenses through realizing
business efficiencies, gaining operational
experience and industry knowledge.
Sales Forecast
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
Year 1 Year 2 Year 3 Year 4 Year 5
Millions
CBD
Hemp CBD Products
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
Year 1 Year 2 Year 3 Year 4 Year 5
Cannabis
Dried Cannabis Cannabis Products
42. 42Projected Profit and Loss, $ YEAR 1 YEAR 2 YEAR 3
Revenue
COGS - Cost of Goods Sold
Gross Profit
% of revenue
SG&A Expense
Initial & General Costs
Operating Expenses
Total Sales & Marketing Expenses
Total Senior Management Salaries & Benefits
Total IT Salaries & Benefits
Total Other Salaries & Benefits
Total SG&A Expense
Operating Income (EBITDA)
% of revenue
Depreciation and Amortization
Earnings Before Interest & Taxes (EBIT)
Interest Expense
Earnings Before Taxes (EBT)
Income Tax
Net Income
% of revenue
43. 43Projected Cash Flow, $
YEAR 1 YEAR 2 YEAR 3
Net Income
Cash Flow from Operations
Depreciation
Change in Receivables
Change in Inventory
Change in Accounts Payable
Change in Accrued Expenses
Total Cash Flow from Operations
Cash Flow from Investing
Capital Expenditures (CAPX)
Other
Total Cash Flow from Investing
Cash Flow from Financing
Revolver Issuance / (Repayment)
Long-Term Debt Issuance / (Repayment)
New Equity Investments
Dividends
Total Cash Flow from Financing
Total Change in Cash
Beginning Period Cash
Ending Period Cash
44. 44Ratio Analysis
Ratio Analysis YEAR 2 YEAR 3 YEAR 4 YEAR 5 Avg. (2-5 years)
Return on Equity 76.1% 47.5% 33.9% 25.3% 45.7%
Return on Assets
Return on Sales 29.9% 30.6% 30.9% 30.9% 30.6%
Asset turnover 2.55 1.55 1.10 0.82 1.50
Profitability
Gross margin 56.9% 57.7% 58.1% 58.1% 57.7%
SG&A as % of Sales 6.9% 6.5% 6.3% 6.3% 6.5%
Operating Margin 49.8% 51.0% 51.6% 51.6% 51.0%
Asset Turnover Ratios
Accounts Receivable Turnover 36.2 36.1 36.1 36.0 36.1
Fixed Asset Turnover 38.5 48.2 58.4 69.0 53.5
45. 45Funding Analyses, $
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
Long-Term Debt Beginning Balance
Long-Term Debt Repayment
Long-Term Debt Ending Balance
ROI
Profit Share (Investors)
Company intends to raise $0,000,000 for 5 years with ROI 12% and profit share 5%. First repayment will start from 11th month.