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ACKRELL CAPITAL CHAPTER! Executive Summary U.S. Legalized Cannabis Market $140,000 Path to Federal Legalization $120,000 FDA Approves Cannabis-Derived Pharmaceuticals More States Adopt Medical Cannabis Laws $100,000 : More States Adopt Recreational Laws @ $80,000 FDA Routinely Approves CBD Drugs Re) = FDA Routinely Approves THC Drugs «# $60,000 Federal Government Legalizes Cannabis $40,000 $20,000 co —_ 70M 60M 50M 40M SIOLUNSUOD JO JOqUINN 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 | | Legalized Cannabis Market Size === Consumers Source: Ackrell Capital. Assumes cannabis will be legalized federally by 2027. Cannabis may never be legalized federally in the United States. = To Watch in 2018 We believe that the following events will impact the legalized cannabis industry in 2018. Increasing Recreational Legalization We expect 2018 will be a watershed year for recreational markets, both in the United States and internationally. Cal- ifornia will begin implementing its new recreational law in January 2018, and Canada’s proposed recreational law is widely expected to be approved in some form by mid-2018. California, which has a population of 38 million people and receives 250 million visitors annually, is poised to tran- sition from the world’s largest medical cannabis market to the largest recreational market with the implementation of its recreational law in January 2018. In each of the three largest U.S. states to implement rec- reational laws—Colorado, Oregon and Washington— the To Watch in 2018 Increasing Recreational Legalization Cannabis Consumer Experience goes “Mainstream” FDA Approval of Cannabis- Derived Pharmaceuticals Commoditization of Cannabis Flower Access to Banking Services for U.S. Cannabis Companies Increasing Strategic Investor Activity; Continuing Funding Gap size of the legalized cannabis market expanded significantly, doubling the size of the overall market in each of these states in the first full calendar year after implementation. The world has yet to experience a legalized recreational cannabis market in a jurisdiction as large as California, and how the supply chain, consumer response and regulatory framework will coalesce in such a market remains to be seen. © 2017 Ackrell Capital, LLC | Member FINRA/SIPC HOUSE_OVERSIGHT_024643