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ACKR CAPI BLL CHAPTERV_ Global Cannabis Regulation = Global Outlook While the medical potential of cannabis is driving an initial wave of legalization, we believe countries will eventually legalize the commercial production and sale of cannabis to adults for recreational use. In this regard, 2018 will be an important year, with the expected approval of the recreational Cannabis Act in Canada and the implementation of California's new recreational law. In Canada, we may observe for the first time the implementation of a large-scale national recreational law. Similarly, as the most populous U.S. state and one of the world’s largest economies, California’s recreational cannabis rollout will be a bellwether for the global cannabis industry. The successes, failures and lessons learned in Can- ada and California will have significant impacts on the cannabis industry worldwide. In our view, the course taken by the U.S. federal government will impact the global cannabis indus- try more than any other factor. If the U.S. federal government were to change its current practice and ageressively enforce existing federal cannabis laws, we would expect a corresponding dampening of the industry worldwide. If the status quo were to continue in the United States, we would expect the current global legalization trend to continue, particularly in Europe, South America and Africa. And if federal prohibition in the United States ends, we expect a surge in cannabis legalization worldwide. © 2017 Ackrell Capital, LLC | Member FINRA/SIPC 101 HOUSE_OVERSIGHT_024737