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

ACKRELL CAPITAL CHAPTER VI U.S. and International Cannabis Market Estimates illustrate the impact of varying these factors with the following sensitivity analysis, which shows the estimated market size at maturity using a range of penetration rates and monthly spending weighted averages. International Legal Cannabis Market Size: Sensitivity Analysis ($ millions) Weighted Average Monthly Consumer Spending $10 $20 $30 $40 $50 5% $10,606 $21,211 $31,817 $42,422 $53,028 10% 21,211 42,429 63,634 84,845 106,056 Adult 15% 31,817 63,634 95,450 127,267 159,084 Population == go 42,429 84,845 127,267 169,690 212,112 Penetration iam 53,028 106,056 159,084 212,112 265,140 Rate 30% 63,634 127,267 190,901 254,534 318,168 35% 74,239 148,478 222,718 296,957 371,196 Source: Ackrell Capital Based on the preceding assumptions and methodology, we believe that the international legal can- nabis market for select countries with medical or recreational laws and certain countries we believe may develop into legal markets for cannabis has the potential to exceed $200 billion within the next 10 to 15 years. And as discussed earlier in this chapter, we forecast the U.S. legal cannabis market to reach more than $100 billion in this same period. Together, these two forecasts indicate a global legal cannabis market in the foreseeable future of more than $300 billion. In our view, most countries located in Asia will take the longest to enact and implement cannabis access laws; therefore, we have not included the markets in countries such as China, with a population of 1.4 billion people, or Japan, with the third highest GDP in the world, in our global market estimate. If cannabis legalization continues in the United States and the rest of the world as we anticipate, we believe that many countries in Asia will ultimately follow suit. If and when that occurs, the size of the global legal cannabis market will increase significantly and, we believe, may ultimately exceed $500 billion annually. As discussed on page 175, readers are cautioned to not place undue reliance on our opinions, pre- dictions or estimates. Almost certainly, our opinions, predictions and estimates will prove inaccurate in some respects. A number of factors could cause actual results or events to differ materially from those indicated by our opinions, predictions and estimates. U.S. states and countries abroad may reverse their cannabis legalization efforts. The medical efficacy of cannabis may not prove to be significant. Cannabis may never be legalized federally in the United States. Certain factors affecting the cannabis industry are discussed in more detail in Chapter [X, Cannabis Industry Risk Factors. © 2017 Ackrell Capital, LLC | Member FINRA/SIPC 115 HOUSE_OVERSIGHT_024751