Cannabis Investment Report | December 2017

CKRELLE CAPITAL OY Cannabis Investment Report | December 2017 products industries, especially as companies from those industries look to enter the cannabis industry, through acquisition or by other means. As demonstrated by the more than $2.0 billion raised by publicly traded and private cannabis- related companies in 2017, capital continues to be available to support the growth of the industry. In the public markets, we believe that Canadian stock markets will continue to be the most receptive globally (until more progress is made in the United States toward federal legalization of cannabis). Overview of Canadian and U.S. Stock Markets Toronto Stock Exchange (TSX) Largest exchange in Canada and one of Canada TSX Venture Canadian Securities Exchange (TSXV) Exchange (CSE) Nasdaq/NYSE Affiliate of the TSX for smaller capitalization Perceived as the “OTC’ of the United States Largest and most recognized stock oTc Negative reputation with many investors Summary world’s largest companies Canadian markets by exchanges in the and regulators many investors world High volume of trading Possible uplisting to Receptive to High volume of trading Possible uplisting to and liquidity; brand the TSX; better brand — companies with U.S. and liquidity; brand other markets: very Benefits recognition; strong than the CSE cannabis operations; recognition; strong few requirements to institutional support very few listing institutional support trade requirements Not receptive to Not receptive to Limited trading Stringent listing Limited trading companies that companies that volume and liquidity; requirements volume and liquidity; Issues violate U.S. federal violate U.S. federal significant price significant price law law; limited liquidity fluctuations; limited fluctuations; limited for small issues institutional support institutional support Expected to continue —_ Viable exchange for Viable exchange for With few exceptions, Cannabis companies to attract the largest smaller Canadian smaller Canadian cannabis companies will continue to trade Outlook Canadian companies —_ companies with no companies with will not be able to on the OTC despite in the cannabis cannabis operations cannabis operations list while federal the limited benefits industry in the United States in the United States prohibition continues Although capital continues to be available for select issuers in both the public and private markets, we believe that the cannabis industry will continue to face a large funding gap for the foreseeable future, driven by the lack of institutional investors. However, we believe a growing number of retail, institutional and family office investors will support the industry in 2018 and beyond. 136 © 2017 Ackrell Capital, LLC | Member FINRA/SIPC HOUSE_OVERSIGHT_024772