Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Description
CannaCult is
applying for a
cultivation license
and will be
conducting
business from a
4,000 sq. ft.
facility ...
Table of Contents
EXECUTIVE SUMMARY..........................................................................................
CANNABIS CULTIVATION
Business Plan
4
Executive Summary
Executive Summary
Business Summary
$1,78,668
$120,000
f
CannaCult is a new cultivation company which is intending to penet...
CANNABIS CULTIVATION
Business Plan
6
Goals & Objectives
Main Goals:
✓ To build a successful commercial cultivation facilit...
Market & Opportunities
Executive Summary
Nearly 60% of the U.S. population now lives in states that have legalized some fo...
CANNABIS CULTIVATION
Business Plan
8
Products & Services
The three primary methods of cultivation - outdoor, greenhouse an...
CANNABIS CULTIVATION
Business Plan
10
Company Summary
Company Summary
Company Summary
The Company
CannaCult intends to start its growing business from July 2017.
CannaCult is applying for a ca...
CANNABIS CULTIVATION
Business Plan
12
Start-Up Summary
The total start-up expenses for the first year that the business st...
CANNABIS CULTIVATION
Business Plan
14
Market Overview
Company Timeline
Market Overview
Although the federal government still considers the use of
cannabis a criminal offence, more than half the...
CANNABIS CULTIVATION
Business Plan
16
Target Market
Market Analysis
Market Analysis
72/360
72/360
Twenty-eight states and ...
Market Overview
Colorado Market
Marijuana businesses in Colorado, which
voted to legalize the drug recreationally in
2012,...
CANNABIS CULTIVATION
Business Plan
18
Target Market
According to Arcview’s
estimate for 2016,
based on the 2015
SAMHSA ann...
Industry Analysis
Industry Analysis
CANNABIS CULTIVATION
Business Plan
20
Strategy &
Implementation
Strategy & Implementation
Online Advertising Obstacles
Because cannabis is illegal under federal law, state governments an...
CANNABIS CULTIVATION
Business Plan
22
Marketing Strategy
Marketing and advertising campaign includes:
✓ Meeting with whole...
Cannabis Directories
WEEDMAP
https://weedmaps.com/earth/us/
Marijuana dispensary finder on
the planet. With over 7,750
lis...
CANNABIS CULTIVATION
Business Plan
24
SWOT Analysis
S
• Well-equipped
rooms can run
produce the year-
round harvests.
• Th...
Sales Forecast
Sales Strategy
As growing stage will start from July 2017, sales are projected to be started from the 2017
...
CANNABIS CULTIVATION
Business Plan
26
Sales Forecast
CannaCult will produce up to 2 strains within 5 months of becoming a ...
CANNABIS CULTIVATION
Business Plan
28
Operating Plan
Web Plan Summary
Operating Plan
Hours of Operation
During regular business hours, our premises will be accessible on request to an identifi...
CANNABIS CULTIVATION
Business Plan
30
Video Surveillance
1. The premises will be equipped with a video surveillance system...
CANNABIS CULTIVATION
Business Plan
32
Management
Management
Management Summary
CONFIDENTIAL
CANNABIS CULTIVATION
Business Plan
34
Personnel Plan
Training Plans
1. Train employees at time of hire on business operati...
CANNABIS CULTIVATION
Business Plan
36
Financial Plan
Profit & Loss Forecast
Financial Plan
Business’s revenue is projected to grow significantly during first years’ timeframe....
CANNABIS CULTIVATION
Business Plan
38
Cash Flow Statement
The cash flow projections show that business will have sufficien...
Balance Sheet
Table 4. Projected Balance Sheet, $
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Assets
Current Assets
Cash 774,370 1,...
CANNABIS CULTIVATION
Business Plan
40
Main Financial Ratios
The return on equity ratio (ROE) measures how much the owner a...
CANNABIS CULTIVATION
Business Plan
42
Appendix
Appendix
Appendix
CANNABIS CULTIVATION
Business Plan
44
Video Surveillance
Video Surveillance
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Business Plan Sample for a Cannabis Cultivation Business Start-Up
Upcoming SlideShare
Loading in …5
×

Business Plan Sample for a Cannabis Cultivation Business Start-Up

19,323 views

Published on

This is the extraction from the Business Plan written for a cannabis cultivation business in Colorado. Find the decision for your business: cannabis business plans templates and financial models https://cannabusinessplans.com/shop/

Published in: Business

Business Plan Sample for a Cannabis Cultivation Business Start-Up

  1. 1. Description CannaCult is applying for a cultivation license and will be conducting business from a 4,000 sq. ft. facility in Colorado. Company will have the ability to vegetate up to 500 plants and flowers concurrently, will grow up to 11 different strains of marijuana, and will have the ability to grow from seedling to finished product. CannaCult BUSINESS PLAN Supervisor: Category: Cannabis Cultivation Date Created: 00.00.2017 Date Issued: 00.00.2017 | Your Business Name: | Address Line: | Country: | City: |Zip Code: | Telephone: | Fax: | E-mail: | Website:
  2. 2. Table of Contents EXECUTIVE SUMMARY...................................................................................................................................... 5 Business Summary ............................................................................................................................................................5 Goals & Objectives.............................................................................................................................................................6 COMPANY SUMMARY ....................................................................................................................................10 The Company....................................................................................................................................................................11 Start-Up Summary...........................................................................................................................................................12 MARKET OVERVIEW........................................................................................................................................14 Market Analysis Summary ..............................................................................................................................................15 Target Market ...................................................................................................................................................................16 STRATEGY & IMPLEMENTATION...................................................................................................................20 Online Advertising Obstacles .........................................................................................................................................21 Marketing Strategy...........................................................................................................................................................22 Cannabis Directories .......................................................................................................................................................23 SWOT Analysis..................................................................................................................................................................24 SALES FORECAST ............................................................................................................................................25 Sales Strategy ...................................................................................................................................................................25 Sales Forecast...................................................................................................................................................................26 OPERATING PLAN...........................................................................................................................................28 Hours of Operation .........................................................................................................................................................29 Physical Security Plan......................................................................................................................................................29 Video Surveillance............................................................................................................................................................30 MANAGEMENT ................................................................................................................................................30 Management Summary ..................................................................................................................................................30 Personnel Plan .................................................................................................................................................................30 FINANCIAL PLAN .............................................................................................................................................30 Profit & Loss Forecast .....................................................................................................................................................30 Cash Flow Statement.......................................................................................................................................................30 Balance Sheet...................................................................................................................................................................30 Main Financial Ratios.......................................................................................................................................................30 APPENDIX.........................................................................................................................................................30
  3. 3. CANNABIS CULTIVATION Business Plan 4 Executive Summary
  4. 4. Executive Summary Business Summary $1,78,668 $120,000 f CannaCult is a new cultivation company which is intending to penetrate into the cannabis market CULTIVATION Own and operate a medical cannabis cultivation facility in the state of Colorado. Sell high-grade cannabis wholesale to dispensary and cannabis extractors and edible manufacturers. - 500 1,000 1,500 2,000 2,500 3,000 3,500 Year 1 Year 2 Year 3 Year 4 Year 5 Profit Forecast ($ 000) Revenue Gross Profit EBITDA Net Income - 1,000 2,000 3,000 4,000 5,000 6,000 - 200 400 600 800 1,000 1,200 1,400 Year 1 Year 2 Year 3 Year 4 Year 5 Cash Flow ($ 000) Operational Cash Flow Ending Period Cash Flow
  5. 5. CANNABIS CULTIVATION Business Plan 6 Goals & Objectives Main Goals: ✓ To build a successful commercial cultivation facility and build a recognizable brand in a rapidly growing industry. ✓ To be fully compliant with all state and local municipalities and be primed and ready for national expansion as federal laws adjust and evolve to the benefit of the cannabis industry. ✓ To be supplying one of the best medicines in the state of Colorado to the dispensaries and manufactures. Mission: ✓ To grow one of the best medical cannabis products for patients that need this type of medicine in Colorado. Main Objectives: ✓ Getting the Colorado Cannabis Grower license ✓ Net annual income to support operational expenses. ✓ Monthly sales and capacity increasing steadily throughout the first years. ✓ Become profitable by the end of the first year of operations. Keys to Success ✓ Focusing on producing unique, high quality, cannabis products. ✓ Maintaining a nimble operational structure and cultivation strong relationships with dispensaries and manufactures that will allow it to quickly respond to shifting customer needs. ✓ Working in conjunction with the local community to foster good will and understanding of the benefits medicinal cannabis provides its afflicted citizenry.
  6. 6. Market & Opportunities Executive Summary Nearly 60% of the U.S. population now lives in states that have legalized some form of cannabis use and sales, illustrating the rising acceptance of cannabis nationwide and highlighting the industry’s immense potential for future growth. Arcview Market Research, in partnership with New Frontier Data, have released a special update to the official Arcview Market Research growth projections in light of victories from 8 of the 9 cannabis ballot initiatives. The passage of initiatives in Colorado, Nevada, Massachusetts, Maine, Florida, Arkansas, Montana, and North Dakota will add $7.4 billion to the 2020 market forecast. According to the 5th edition of Cannabis Market research, the overall market projection for legal adult-use and medical sales in the U.S. will reach $22.6 billion by 2021. That brings the compound annual growth rate (CAGR) to 28%. Colorado saw $996.2 million in legal sales of medical and recreational pot in 2015, according to the Denver Post‘ calculations of tax data reported this week (and throughout 2015) by the state’s Department of Revenue. In 2014, the state’s legal pot vendors sold roughly $699 million of the drug. In Colorado, recreational marijuana sales approached $900 million in 2016, up 49% from 2015. There were 514 licensed cultivators in the recreational market in January 2016, but by December, that number shot up to 625, a 22% increase. The number of cultivators in the medical market also increased in 2016, but by a relatively modest 5.3%, hitting 791 in December versus 751 in January. California 38% Washingto n 13% Colorado 11% Florida 15% Massachusetts 8% Ohio 8% Pennsylvania 7% Figure 1. Total cannabis sales, including medical and recreational, top 7 2025
  7. 7. CANNABIS CULTIVATION Business Plan 8 Products & Services The three primary methods of cultivation - outdoor, greenhouse and indoor - have different production profiles. The Cons of outdoor growing include: - Growing location is government regulated - Dry season requires more effort in watering - Deer like to eat and destroy if not tended Main indoor cons include: - Maintaining proper ventilation is difficult - Higher household energy costs - Pumped with fertilizers Due to the high energy costs and difficulties with water supplying Company intends to develop marijuana growing business in greenhouses. Those structures are showing an average cost savings of 33% - electric costs for growing marijuana for that way can drop to about $350 a pound. It all starts with our core product line, which will be packaged and distributed Statewide. The main features and benefits of product: The medicinal effects of Cannabis are vast and well noted. Cannabis can be used for pain relief, anxiety, stress, decreased appetite, insomnia, cancer treatment, and relief from side effects of chemotherapy, PTSD and more. Company will have the ability to vegetate up to 500 plants and flowers concurrently, will grow up to 11 different strains of marijuana, and will have the ability to grow from seedling to finished product.
  8. 8. CANNABIS CULTIVATION Business Plan 10 Company Summary Company Summary
  9. 9. Company Summary The Company CannaCult intends to start its growing business from July 2017. CannaCult is applying for a cannabis cultivation license and will be conducting business from a 4,000-sq. ft. facility in Colorado. CannaCult will employ up to 5 people to carry out the operation for a cannabis cultivation license. CannaCult premises is located in an enterprise zone in the city of Colorado. CannaCult will produce up to 2 strains within 5 months of becoming a licensed cultivator. Company will have the ability to vegetate up to 500 plants and flowers concurrently, will grow up to 11 different strains of marijuana, and will have the ability to grow from seedling to finished product. CannaCult will dry and process all cannabis into labeled/inventoried vacuum sealed bags before delivery to compassion centers. Start-up requirements CAPEX Q 1 Q 2 Q 3 Q 4 Security system alarm and fire 3,000 Camera system installed 10,000 Computers (4) 4,000 Office furniture 2,000 Lights (120 per 1000 watt) 35,000 CO2 generators (4 units) 4,000 A/C systems (4 units) 30,000 Master Controllers (3 units) 4,000 TOTAL 92,000 92,000 0 0 0
  10. 10. CANNABIS CULTIVATION Business Plan 12 Start-Up Summary The total start-up expenses for the first year that the business starts operating is approximately $1,200,000, however it is required about $320,000 initial investments until profit stability is achieved. Wholesale revenue from the second quarter will cover the business setting up. Initial Investments would cover capital expenses and fixed expenses. Capital expenses consist of the following: ✓ Security Equipment, including security system alarm and fire $3000 and camera system installed $10000 ✓ Office Equipment, including 4 computers $4000 and office furniture $2000 ✓ Growing Equipment, including 120 1000 watt vita lights $35000, CO2 generators 4 units $4000, A/C systems 4 units $30000 and master controllers for each room $4000 Start-up requirements OPEX Q 1 Q 2 Q 3 Q 4 Electricity, gas, water 26,431 73,292 73,292 73,292 Direct labor 32,500 36,250 36,250 36,250 Growing solutions 976 2,929 2,929 2,929 Trimming & Lab testing 40,092 120,277 120,277 Taxes 22,780 68,339 68,339 68,339 Legal fees & Licensing & Accounting 35,000 Inventory/supplies, soil and fertilizer and other initial costs 20,000 Salaries 15,000 22,500 22,500 22,500 Brokers and Sellers fee (5% for half of sales) 6,346 19,037 19037 Misc. 2,100 2,100 2,100 2,100 TOTAL 1,096,083 154,787 251,848 344,724 344,724
  11. 11. CANNABIS CULTIVATION Business Plan 14 Market Overview Company Timeline
  12. 12. Market Overview Although the federal government still considers the use of cannabis a criminal offence, more than half the states of America have legalized it in some form. Most states sell it only for medical purposes, often broadly defined. But eight states – Alaska, Colorado, Colorado, Maine, Nevada, Massachusetts, Oregon and Washington – and the country's capital have gone further, legalizing the recreational use. Legal weed is more high-priced than the black market variety, but it is better value: three times more potent and only about 50% more expensive1 . The size of the market for legal marijuana in the United States is projected to grow to $8.1 billion in 2017 and to $11.2 billion in 2018, that represents 21% and 38% growth over the previous years, driven largely by adult recreational sales of cannabis, the researchers found. The passage of initiatives in Colorado, Nevada, Massachusetts, Maine, Florida, Arkansas, Montana, and North Dakota will add $7.4 billion to the 2020 market forecast. According to the 5th edition of Cannabis Market research, the overall market projection for legal adult-use and medical sales in the U.S. will reach $22.6 billion by 2021. That brings the compound annual growth rate (CAGR) to 28%2 . Continued revenue growth will attract more investors. The industry has already begun to see signs of this, such as last year’s news that cannabis-focused Privateer Holdings had secured a $75 million investment from Founders Fund, the firm founded by billionaire Peter Thiel. f 1 http://www.economist.com/blogs/graphicdetail/2016/02/daily-chart-10 2 http://www.arcviewmarketresearch.com/ Main Trends and Growth Factors ✓ A total of 28 states have already legalized marijuana in some forms. ✓ The biggest driver of growth in coming years is the legalization of marijuana in some forms by more states. ✓ In 2015, legal cannabis sales in the U.S. reached $5.7 billion, a 23% jump from the year before. ✓ In 2016, legal cannabis sales in the U.S. reached $6.7 billion, a 17.5% jump from the year before. ✓ It is predicted that sales will further grow in 2017, reaching an estimated $7.1 billion in total U.S. sales. Market Analysis Summary 4.3 4.9 5.6 7.0 7.0 7.3 7.7 1.4 1.8 2.5 4.2 7.6 10.7 14.9 0 5 10 15 20 25 2015 2016 2017 (projected) 2018 (projected) 2019 (projected) 2020 (projected) 2021 (projected) Figure 2. Medical and recreational sales combined, billion dollars
  13. 13. CANNABIS CULTIVATION Business Plan 16 Target Market Market Analysis Market Analysis 72/360 72/360 Twenty-eight states and the District of Columbia currently have laws legalizing marijuana in some form. Nearly 60% of the U.S. population now lives in states that have legalized some form of cannabis use and sales, illustrating the rising acceptance of cannabis nationwide and highlighting the industry’s immense potential for future growth. 9 November 2016 three new states approved cannabis medical using: Arkansas, Florida and North Dakota. Four others that already had medical cannabis laws, legalized recreational. New markets could create $7 billion to $8 billion in additional retail revenue for the industry, according to estimates by Marijuana Business Daily. Figure 3. Cannabis legalizing map, the United States
  14. 14. Market Overview Colorado Market Marijuana businesses in Colorado, which voted to legalize the drug recreationally in 2012, reported $900 million in legal sales of medical and recreational marijuana and related products in 2016, according to the latest batch of tax data from the state's Department of Revenue. In 2015, the state saw a 42% bump in legal cannabis sales from 2014, which was the year the state's legal recreational pot market opened for business. Medical marijuana has been legal in the state since 2000. Through October 2016, Colorado has collected more than $150 million in taxes from legal marijuana sales, including nearly $50 million from a specific excise tax that directs funds to school construction projects. The first $40 million collected annually from the excise tax is earmarked for the school projects. The medical industry can be a tremendous asset to a state wanting to expand into the adult-use space. Colorado did it right, by offering the first adult-sales licenses to medical operators who have the knowledge and experience to ensure a successful adult-use roll out. California 2,692 Washington 1,097 Colorado 1,994 Oregon 571 Michigan 500 Arizona 281 Figure 4. Medical and recreational cannabis sales in top states, 2016 California accounted for 27% of the 2016 legal market in North America, Colorado represented 20% and Washington represented 11%.
  15. 15. CANNABIS CULTIVATION Business Plan 18 Target Market According to Arcview’s estimate for 2016, based on the 2015 SAMHSA annual survey, 8.8% of Americans are using cannabis on a monthly basis. However,legitimization of existing demand for smokable flower is just the beginning for the legal cannabis market. The early sales results from the first adult-use markets in Colorado, Washington and Oregon point to a significant, untapped market opportunity for alternative methods of consumption. Adult-use legalization and the normalization of cannabis consumption is prompting development of a variety of different ingestion methods, which are broadening the appeal of cannabis. A closer examination of sales trends in the bellweather state of Colorado provides insight into the future opportunity of these alternative cannabis products. According to BDS Analytics’ retail sales tracking data for 2014-2016, Colorado’s retail sales in adult-use and medical dispensaries grew from $675 milion in 2014, to over $1.3 million in 2016. While all categories of cannabis products enjoyed healthy growth, alternative methods of consumption outpaced traditional flower sales. In Q1 2014 when adult-use launched in Colorado, over 70% of sales came from dried flower; in Q3 2016, that was down to 56%. In contrast, concentrate sales were $20 million in Q1 2014, or 13% of sales. By Q3 of 2016 they had quadrupled to $80 million and 22% of sales. Edibles (including candy, beverages, tinctures, and all food) more than tripled during the same period, from $17m to $53m, moving from 11% to 14% of sales. Vape pens and vape products, candy, and other portable and convenient methods of consumption are especially popular with Colorado consumers
  16. 16. Industry Analysis Industry Analysis
  17. 17. CANNABIS CULTIVATION Business Plan 20 Strategy & Implementation
  18. 18. Strategy & Implementation Online Advertising Obstacles Because cannabis is illegal under federal law, state governments and online advertising platforms are placing strict rules on how companies can market their products. Google, Facebook and Twitter all have advertising policies that restrict the promotion of the sale of cannabis. Google’s policy prohibits ads that promote “substances that alter mental state for the purpose of recreation.” Facebook restricts any “illegal, prescription, or recreational drugs.” And Twitter bans “illegal drugs” as well as substances that cause “legal highs.” Instagram and Facebook have decided to go a step further by removing pages of cannabis related businesses. Alternative Online Advertising Options Three most effective strategies for legal marijuana companies are direct marketing at industry conferences and other events, building communities around marijuana-related concerns such as health and wellness and aggregating online cannabis publishers, which don’t raise any legal concerns:  Mantis. Mantis provides alternative options for advertisers. The model is slightly different – the cost per click prices are set vs. a bid market. But they offer a solid and growing network of sites including The Cannabist, Leafly, The Daily Chronic, and more. Mantis reaches 6 million unique visitors each month. A nice complement to display ads is pay per click content marketing to promote a brand.  420 Network. Marketing themselves as “the advertising network for alternative lifestyle brands”, 420 Network offers both CPC and fixed price advertising options.  420 Click. Offering targeted Pay Per Click ads that display across their network of cannabis related websites, 420 Click can be a great option for getting service in front of an interested audience, and only be charged when someone clicks an ad. The site touts itself as “The Marijuana Advertising Network” and an account can be launched for as little as $10 which makes the risk negligible.  Women Grow. Founded in 2014, Women Grow is now the largest national network of cannabis professionals with Monthly Events for women & men in 45 cities across the US & Canada.  Cannabrand is a full-service cannabis branding agency, dedicated to the marketing of cannabis products and services.
  19. 19. CANNABIS CULTIVATION Business Plan 22 Marketing Strategy Marketing and advertising campaign includes: ✓ Meeting with whole buyers and dispensaries management ✓ E-mail Marketing ✓ Promotional directly through special platforms, including: • weedmaps.com • leafly.com • stickyguide.com • www.cannasaver.com • cannabiscouponcodes.com • weedealio.com ✓ Advertising and articles in the thematic Magazines, including: • Dope • Cannabis Now • 420 Magazine • Marijuana Venture • MG Magazine ✓ Business events and conferences ✓ Business and industry associations ✓ Website development, Branding appearance development, including mission statement, logo, colors, brochures etc. SEO optimization, focusing on: • Keywords • Adding fresh content • Improving link popularity. ✓ AdWords. Testing various keywords to select familiar to topic and at the same time acceptable by Google’s algorithm: green, medicine, 502, infused, relaxing, stimulating, enhanced, alternative therapies, alternative medicine, natural, and others. ✓ Mantis, 420 Network, 420 Click
  20. 20. Cannabis Directories WEEDMAP https://weedmaps.com/earth/us/ Marijuana dispensary finder on the planet. With over 7,750 listings throughout the U.S., Canada, and Europe. WeedMaps has 2.8 million unique visitors each month. LEAFY https://www.leafly.com/ Leafy is a cannabis information resource for finding the right strains and products. Services include: cannabis finder, online store, branding, doctors’ portal. 49,950 unique visitors per day. https://www.stickyguide.com/bay- area Medical marijuana dispensary, doctor and medicine directory with reviews. 360,000 unique visitors each month. https://www.cannasaver.com/ Canna-Saver is website for cannabis and related coupons, devoted to medical marijuana deals and savings. Offers a constant flow of deals and savings from the top cannabis and medical marijuana retailers. 12,000 unique visitors each month. http://cannabiscouponcodes.com/ Website with cannabis coupon codes. 21,000 unique visitors each month. https://www.weedealio.com/ Weedealio is one of the known companies in providing the best of the deals related to Marijuana, weed deals and other cannabis products. 53,000 unique visitors each month.
  21. 21. CANNABIS CULTIVATION Business Plan 24 SWOT Analysis S • Well-equipped rooms can run produce the year- round harvests. • The owners other cannabis businesses are near the Mother Earth premises. • ThegGrowing premises is located along highway in an industrial area. W • Product liability / legal issues • Crop loss possibility due to pests, heat, human error, etc. • Difficulties with finding employees. Location is a bit remote and not much depth in local workforce • High energy consumption O • High growth industry • Trend toward greater cannabis legalization, including the use of cannabis for recreational purposes • Global Market T • A significant drop in wholesale pricing • Enforcement of federal law, uncertainty with president election • Possible Rhode Island law changing • Indicators of a slowed global economy
  22. 22. Sales Forecast Sales Strategy As growing stage will start from July 2017, sales are projected to be started from the 2017 autumn and they will significantly increase from the second year. Table 1. Growing Assumptions, first six months Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Number of Rooms 3 3 3 3 3 3 Indoor Sq. Ft available 4,800 4,800 4,800 4,800 4,800 4,800 Sq. ft. available for growing 1,920 1,920 1,920 1,920 1,920 1,920 Number of Plants 65 65 65 65 65 65 Yields, pounds - - 130 130 130 1,701 3,402 3,402 3,402 3,402 3,402 3,402 1 2 3 4 5 6 7 Yields (lbs)
  23. 23. CANNABIS CULTIVATION Business Plan 26 Sales Forecast CannaCult will produce up to 2 strains within 5 months of becoming a licensed cultivator. Company will have the ability to vegetate up to 500 plants and flowers concurrently, will grow up to 11 different strains of marijuana, and will have the ability to grow from seedling to finished product. CannaCult intends to grow 5-7 exclusive strains that other growers do not have. Taxes For large-scale cultivators and small scale caregivers, that amounts to a $350-dollar tax per plant. 1,776,814 3,137,345 3,198,264 3,259,184 3,320,103 3,350,563 3,381,022 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Figure 5. Sales Forecast, $
  24. 24. CANNABIS CULTIVATION Business Plan 28 Operating Plan Web Plan Summary
  25. 25. Operating Plan Hours of Operation During regular business hours, our premises will be accessible on request to an identified inspector. Outside of regular business hours, our premises will be accessible on request to an identified inspector who has reason to believe a violation has occurred. Physical Security Plan Premises Access ✓ All external doors and gates will be secured by commercial locks rated to ANSI grade 1 or ✓ similar standards and materials will be available on-site for inspection to verify the security ✓ rating. ✓ During not operating hours, all usable marijuana, harvested plants, and finished product will be stored indoors on the premises in a secure area with all entries secured with a steel door in a steel frame or the equivalent and commercial locks. ✓ When not operating, all exterior doors, windows, or other points of ingress/egress will be locked. Premises Alarm & Monitoring ✓ The premises will have an alarm system programmed to activate upon unauthorized breach of ✓ any door, window, or other point of entry. ✓ The alarm system will be capable of detecting unauthorized access to any portion of the premises, including any unenclosed portion of an outdoor production operation. ✓ The alarm system will provide notification to an authorized representative in the event of any unauthorized entry to any portion of the premises. ✓ The alarm system will provide a mechanism to contact law enforce by one or more of the following methods: o At least two “panic buttons” are installed on the premises that can trigger the alarm system and immediately notify a security company or law enforcement. o Mobile “panic buttons” are carried by all license representatives on the premises that can trigger the alarm system and immediately notify a security company or law enforcement. o An operational landline telephone is present at all times within the limited access area that is capable of contacting security or law enforcement.
  26. 26. CANNABIS CULTIVATION Business Plan 30 Video Surveillance 1. The premises will be equipped with a video surveillance system. 2. Cameras will cover all areas where any marijuana items (including plants and waste) will be present at any time including pathways where product will be moved, without any “blind spots” 3. Cameras will cover all areas within 15 feet of all points of entry/exit from the licensed premises in all directions. 4. All cameras will record continuously 24 hours a day at a resolution of 1280 x 720 pixels or better in all lighting conditions. 5. All cameras will cover areas where marijuana items will be present and all cameras covering the surveillance area record at a minimum of 10 frames per second. 6. All cameras will cover exterior non-limited access areas record at a minimum of 5 frames per second. 7. The surveillance room will contain a list of personnel authorized to access the surveillance system. 8. We will keep a log of all maintenance activity for the surveillance equipment including name of the individual, date and time of access, and reason for access. 9. The surveillance system will include a monitor capable of viewing video from any camera, a digital archiving device, and a printer. 10. The surveillance system will have a backup battery that will provide at least one hour of continuous recording in event of any power failure. 11. An authorized representative will receive immediate notification within one hour of the failure of any security camera or portion of the surveillance system. 12. All required recordings, including the backups of the surveillance area recordings kept for 90 days with a method to store video longer than 90 days if requested.
  27. 27. CANNABIS CULTIVATION Business Plan 32 Management
  28. 28. Management Management Summary CONFIDENTIAL
  29. 29. CANNABIS CULTIVATION Business Plan 34 Personnel Plan Training Plans 1. Train employees at time of hire on business operations and compliance. 2. Train employees regularly after hire. 3. Training plan and training log will be available for inspection on the licensed premises. 4. Any person entering data into the Cannabis Tracking System (CTS) first be trained by the CTS administrator for the license? 5. All individuals will be required to have a valid Marijuana Worker Permit complete the required training and maintain their permit while working on behalf of the Licensee. Position $ Master grower, annual 100,000 Assistant to master grower, annual 45,000 Trimming, per pound 150 Plant maintenance and general labor, annual (3) 90,000 Board Head Cultivator Robert Obrien Assistant Trimmers/Packagers General Manager Maintenance & General Labor
  30. 30. CANNABIS CULTIVATION Business Plan 36 Financial Plan
  31. 31. Profit & Loss Forecast Financial Plan Business’s revenue is projected to grow significantly during first years’ timeframe. The yearly projections are in the table below. Table 2. Income Statement, $ YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Revenue 1,776,814 3,137,345 3,198,264 3,259,184 3,320,103 Direct Costs 764,510 1,059,344 1,059,344 1,059,344 1,059,344 Gross Profit 1,012,304 2,078,001 2,138,921 2,199,840 2,260,759 % of revenue 57% 66% 67% 67% 68% Operating Expense Legal Fees & Licensing & other initial costs for setting up 55,000 5,000 5,000 5,000 5,000 Licensing, accounting, and other legal fees - 30,000 30,000 30,000 30,000 Other Overheads 8,400 8,400 8,400 8,400 8,400 Total Sales & Marketing Expenses 44,420 78,434 79,957 81,480 83,003 Total Operating Expense 107,820 121,834 123,357 124,880 126,403 Operating Income (EBITDA) 904,483 1,956,168 2,015,564 2,074,960 2,134,357 % of revenue 51% 62% 63% 64% 64% Depreciation and Amortization 9,200 9,200 9,200 9,200 9,200 Earnings Before Interest & Taxes (EBIT) 895,283 1,946,968 2,006,364 2,065,760 2,125,157 Income Tax 358,113 778,787 802,546 826,304 850,063 Net Income 537,170 1,168,181 1,203,818 1,239,456 1,275,094 % of revenue 30% 37% 38% 38% 38%
  32. 32. CANNABIS CULTIVATION Business Plan 38 Cash Flow Statement The cash flow projections show that business will have sufficient cash to support the activity. The following table presents a view of projected cash flow of the business. Table 3. Cash Flow Statement, $ YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Net Income 537,170 1,168,181 1,203,818 1,239,456 1,275,094 Cash Flow from Operations Depreciation 9,200 9,200 9,200 9,200 9,200 Change in Receivables - - - - - Change in Inventory - - - - - Change in Accounts Payable - - - - - Change in Accrued Expenses - - - - - Total Cash Flow from Operations 546,370 1,177,381 1,213,018 1,248,656 1,284,294 Cash Flow from Investing Capital Expenditures (CAPX) (92,000) - - - - Other - - - - - Total Cash Flow from Investing (92,000) - - - - Cash Flow from Financing Revolver Issuance / (Repayment) - - - - - Long-Term Debt Issuance / (Repayment) - - - - - New Equity Investments 320,000 - - - - Dividends - - - - - Total Cash Flow from Financing 320,000 - - - - Total Change in Cash 774,370 1,177,381 1,213,018 1,248,656 1,284,294 Beginning Period Cash - 774,370 1,951,751 3,164,769 4,413,425 Ending Period Cash 774,370 1,951,751 3,164,769 4,413,425 5,697,719
  33. 33. Balance Sheet Table 4. Projected Balance Sheet, $ YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Assets Current Assets Cash 774,370 1,951,751 3,164,769 4,413,425 5,697,719 Receivables - - - - - Inventory - - - - - Total Current Assets 774,370 1,951,751 3,164,769 4,413,425 5,697,719 Long Term Assets Property Plant & Equipment (PPE), gross 92,000 92,000 92,000 92,000 92,000 Accumulated Depreciation of PPE (9,200) (18,400) (27,600) (36,800) (46,000) PP&E, net 82,800 73,600 64,400 55,200 46,000 Total Assets 857,170 2,025,351 3,229,169 4,468,625 5,743,719 Liabilities Current Liabilities Long Term Liabilities - - - - - Total Liabilities - - - - - Equity (see funding rounds sheet) Current Period Net Income 857,170 2,025,351 3,229,169 4,468,625 5,743,719 Plus: Prior Period Retained Earnings - - - - - Current Period Retained Earnings 857,170 2,025,351 3,229,169 4,468,625 5,743,719 Total Equity 857,170 2,025,351 3,229,169 4,468,625 5,743,719 Total Liabilities and Equity 857,170 2,025,351 3,229,169 4,468,625 5,743,719
  34. 34. CANNABIS CULTIVATION Business Plan 40 Main Financial Ratios The return on equity ratio (ROE) measures how much the owner and investors earn for their investment in the company. The higher the ratio percentage, the better return is. In general, financial analysts consider return on equity ratios in the 15-20% range as representing attractive levels of investment quality. As we can see ROE for our project is higher and in average draw up 46%. Return on assets (ROA) gives an idea as to how efficient management is at using its assets to generate earnings. Profitability ratios are a class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period. Table 5. Main Financial Ratios Ratio Analysis Year 2 Year 3 Year 4 Year 5 Avg. Return on Equity 81.1% 45.8% 32.2% 25.0% 46.0% Return on Assets Return on Sales 37.2% 37.6% 38.0% 38.4% 37.8% Asset turnover 2.18 1.22 0.85 0.65 1.22 Profitability Gross margin 66.2% 66.9% 67.5% 68.1% 67.2% SG&A as % of Sales 3.9% 3.9% 3.8% 3.8% 3.8% Operating Margin 62.1% 62.7% 63.4% 64.0% 63.0%
  35. 35. CANNABIS CULTIVATION Business Plan 42 Appendix Appendix Appendix
  36. 36. CANNABIS CULTIVATION Business Plan 44 Video Surveillance Video Surveillance

×