CAPITAL CHAPTER VI U.S. and International Cannabis Market Estimates

ACKRELL CAPITAL CHAPTER VI U.S. and International Cannabis Market Estimates m U.S. State-Legal Cannabis Market More than 97% of the U.S. population lives in a state or district (District of Columbia) with at least one law that permits the manufacturing, distribution, dispensing or possession of cannabis or con- centrates. As described in more detail in Chapter IV, U.S. Legal Landscape, most of these laws are medical laws, and only eight states have enacted recreational laws. While the overall state-legal market has grown significantly, the addressable market has been constrained due to the lack of access to purely recreational consumers and the sometimes-narrow scope of medical conditions that qualify a patient to access medical cannabis. We estimate that the 2017 U.S. state-legal cannabis market was $8.0 billion, with more than four million consumers. The breakdown of this estimate by state is shown in the following chart. 2017 U.S. State-Legal Cannabis Market Estimate Other States $1.9B California $3.2B Colorado $1.5B Oregon Washington $470M $929M Source: Ackrell Capital Recreational Sales as a Key Market Driver Of the eight states that have enacted recreational laws, all had previously implemented medical laws. As shown in the following graphs for the three largest states to implement recreational laws, imple- mentation of a recreational law significantly expanded the overall size of the legalized cannabis market, doubling the size of the market in each of these states in the first full calendar year after implementa- tion. In addition, the percentage of the total market attributable to recreational consumers increased quickly. This indicates significant, pent-up consumer demand for legal cannabis in the United States, and we expect a significant increase in the size of the overall state-legal market as more states implement recreational laws. © 2017 Ackrell Capital, LLC | Member FINRA/SIPC 105 HOUSE_OVERSIGHT_024741