COVID-19 and the Cannabis Industry What you Need to Know Webinar - PowerPoint PPT Presentation

COVID-19 and the Cannabis Industry What you Need to Know Webinar March 25, 2020 Presented by: Nic Easley Founder & CEO 3C Confidential

Disclaimer Personal I apologize in advance if I offend you, your state, country, company, or ideas. All of my observations are based on my 14 years of experience in legal medical and recreational cannabis programs both foreign and domestic. I have no personal bias, these are just the facts, and i’m not guessing. Sorry in advance, but you can’t fix stupid. Legal This presentation is not intended as an offer, a solicitation of an offer, or an advertisement for the sale of securities in any jurisdiction. Any such offer or solicitation, if made, will only be made by means of appropriate disclosure documents delivered confidentially to certain qualified accredited investors. I am not a lawyer nor am I an accountant. USE THESE PROFESSIONALS!!! 3C Confidential 2

My Background 14 Years of experience in the legal cannabis industry ● Veteran of the United States Air Force ● Worked with over 500 cannabis companies in 17 countries, ● 34 U.S. states, and two territories Founder & CEO of 3C Consulting, LLC™ ● CEO & Managing Director of Multiverse Capital ● Co-Founder & Strategic Advisor to Cannabis & Hemp ● Benchmarks, world reports on cannabis industry pricing Served on numerous state and international regulatory ● boards, including Board of Directors of Americans for Safe Access (ASA), the United Nations advisory panel, National Cannabis Industry Association (NCIA), CCIA and CDA Former Colorado Mountain Guide, 10 Grand Canyon Private ● River Guide Trips, Hiked the whole Appalachian Trail Love Crushing it in Cannabis ● 3C Confidential 3

Presentation Outline COVID-19 - What are we dealing with? Additional COVID-19 impacts ● ● Immediate actions for your business Best practices for each business type ● ● Worker protection regulatory changes Downfalls and losses from COVID-19 ● ● HR considerations Opportunities ● ● Cannabis dispensaries deemed “essential” Thoughts on COVID-19’s impact on the ● ● Emergency regulatory changes future of the industry ● Business Strategy in the face of adversity Q&A ● ● Small business aid ● Impact of retail sales ● Supply chain status ● Global market dynamics ● Access to capital ● 3C Confidential 4

COVID-19 - What are we Dealing with? Symptoms How it is spread: Actions to reduce the likelihood ● ● ● (Appearing 2-14 days after Close contact with other people of catching the virus ○ exposure): Respiratory droplets from coughs or Practice social distancing ○ ○ Fever sneezes Stay home if you’re sick ○ ○ Cough Clothing Cover coughs and sneezes ○ ○ ○ Shortness of breath Airborne (up to a few hours) Wear a face mask if you’re sick ○ ○ ○ Infected surfaces (up to three days) Frequently wash hands and ○ ○ Asymptomatic individuals can spread it disinfect surfaces ○ 3C Confidential 5

Immediate Actions for your Business Employee and Customer Safety is the Top Priority ● Stay up-to-date with the latest information from sources like ○ the WHO, CDC, OSHA, and local health departments Allow employees to work from home if possible ○ Communication ● Develop a plan for communicating the latest updates and ○ practices to your employees Involve your employees in developing internal plans and ○ keep them informed of the company specifics “Communicate with fervor, frequency and healthy ○ fanaticism” - Mazakali Check Up on Business Vitals ● “Stress test your P&L and liquidity with worst-case ○ assumptions” - Mazakali Review language related to “disaster” in any key contracts ○ Review your insurance policies to see if you have coverage ○ for situations like this 3C Confidential 6

Worker Protections that Employers Need to Know Families First Coronavirus Response Act - Signed into law on 18 Mar Applicable to all employers with fewer than 500 employees ● All employer-sponsored health plans need to cover costs and services related to COVID-19 testing without cost-sharing, prior ● authorization, or other medical management requirements The Family and Medical Leave Act (FMLA) has been temporarily expanded to allow eligible employees up to 10 weeks of paid ● FMLA leave with a 10-day “waiting period” if they are unable to work or telework as a result of caring for a child whose school is closed or whose child care provider is unavailable due to COVID-19 The 10 weeks of leave will be paid at two-thirds the employee’s regular rate of compensation for the employee’s expected ● hours , capped at a maximum payment of $200/day and a total payment of $10,000 Employers must provide emergency paid sick leave for those unable to work or telework if the employee is quarantined, ● self-quarantined, caring for a child whose school or childcare is closed or experiencing symptoms and seeking a diagnosis Eligible full-time employees are entitled to 80 hours at their regular rate of pay, limit $511/day and $5,110 in total ● If the employee is caring for a family member, they are paid two-thirds their regular rate of pay, limit $200/day and $2,000 total ● Eligible part-time employees are entitled to the equivalent rate of pay for an average number of hours during a two-week period ● An employer may not require an employee to use available sick leave before these payments are made ● By March 25, 2020, the Department of Labor is required to issue a model notice for employers to post in a conspicuous place ● informing employees of this paid sick leave Guidance for businesses with less than 50 employees will be available in April, there will be exemptions to the above ● Employers providing emergency FMLA or paid sick leave under the Emergency Paid Sick Leave Act are entitled to refundable ● employment tax credits equal to 100 percent of these wages paid 3C Confidential 7

Additional HR Considerations Update sick leave policies to encourage the ill to stay home ● Eliminate the need for a doctor’s note to validate an employee’s ○ condition Post COVID-19 signage in the workplace encouraging: ● Employees to stay home when sick ○ Proper cough and sneeze etiquette ○ Consistent handwashing ○ Provide necessary cleaning supplies ● If an employee is showing symptoms: ● Kindly separate them from the rest of the staff and customers ○ Ask the person to travel home and contact their primary caregiver ○ and/or the local health department Ask all staff to wash their hands and avoid touching their faces ○ Contact your local health department ○ Follow cleaning procedures outlined by your local health department ○ If downsizing make decisions based on non-discriminatory business ● related terms If an employee is confirmed to have COVID-19 inform the rest of the staff ● while maintaining confidentiality as required by ADA It is your responsibility to provide a safe and healthy workplace for all ● employees 3C Confidential 8

Cannabis Businesses Deemed “Essential” Americans for Safe Access (ASA) sent a letter to ● governors and state regulators urging them to prioritize the needs of medical cannabis patients when creating emergency COVID-19 plans San Francisco and Los Angeles were among the first ● municipalities in the country to deem cannabis dispensaries holding a medical cannabis license essential States and jurisdictions around the country have ● since followed suit, declaring medical marijuana dispensaries “essential” services akin to pharmacies Recreational businesses should also be seen as ● essential since many adult-use customers use cannabis for therapeutic purposes and aren’t Medical (and some recreational) Cannabis necessarily official medicinal patients businesses deemed essential or allowed to operate via delivery only. 3C Confidential 9

Emergency Regulatory Changes Delivery Curbside Pickup Arizona ● Arizona - Local Considerations ● California - Local Decision ● California - Local Decision ● Connecticut ● Connecticut ● Florida ● Delaware ● Maryland ● Illinois - Medical Only ● Massachusetts - Medical Only ● Iowa ● Michigan ● Maryland - Local Considerations ● Missouri ● Massachusetts ● New Mexico ● Michigan ● Additional Regulatory Changes New York ● New Jersey ● Shared “sniff jars” suspended - Maryland ● Nevada ● New Hampshire ● Delivery is currently available for hospice ● Oregon ● Oregon ● patients - Connecticut New Hampshire ● Pennsylvania ● Consumption lounges closed - California, ● Pennsylvania - Via Caregiver ● Washington ● Denver, CO, Nevada Mandatory Pre-Ordering Massachusetts ● As of 24 Mar 2020 3C Confidential 10