2. 2
Table of Contents
1 EXECUTIVE SUMMARY
THE TESTING LABS MARKET
MARKET TRIGGERS
BASIC ANALYTICAL LABS
OUR SERVICES
COMPETITIVE LANDSCAPE
SWOT ANALYSIS
MARKETING STRATEGY
2
3
4
5
7
8
9
BUSINESS MODEL
PROJECTIONS
10
11
OUR OPERATIONAL MODEL
6 INVESTMENT12
3. 3
Executive Summary
▪ California is the first state to legalize medical marijuana back in 1996, became even more pot-friendly in 2016 when it made it legal
to use and carry up to an ounce of marijuana without a prescription and is now about to begin issuing licenses to marijuana
dispensaries that allow them to sell nonmedical cannabis from January 1, 2018.
▪ The green rush shows no sign of slowing down despite regulation. The North American marijuana market posted $6.7 billion in
revenue in 2016, up 30% from the year before and has a projected sales growth at a compound annual growth rate of 25% through
2021, when the North American market is expected to top $20.2 billion in 2021.
▪ Cannabis for medicinal use has enjoyed growing support - 89 percent of Americans reportedly support legalization now versus 74
percent in 2011 - and already 25 states have legalized medical cannabis, while several more are on track to do so. The biggest
growth driver is adult recreational use, which is legal in just a handful of states.
▪ With rising demand for medical marijuana throughout the world, and legalized recreational cannabis available throughout more and
more of North America, testing labs will be worth $1.4 billion by 2021—a year-over-year growth rate of more than 10 percent
from its worth of $866 million in 2016.
4. $6.8 Billion
Projected Medical
Marijuana Retail Sales In
The US by 2021
900 Million
Current Market size of
Testing Labs in
the US
The Testing Labs Market
There’s been a boom in just the past few years in testing labs and demand for them, as regulators have become stricter with the
cannabis industry. The lab testing is absolutely set to expand significantly is California where none of the marijuana is subject to state
quality-control standards and may be sold as-is until Jan. 1, 2018.
$1.4 Billion
worth of testing labs in
the US by 2021
5. 5
Market Triggers
1
Mandatory testing will be inevitable
as cannabis becomes a more
mainstream product.
2
A lack of industrywide standards when it comes to
testing practices and methodologies. This will drive
Federal Involvement and impact industry growth
3The Growth of the Cannabis industry will drive increasing entry into the
testing industry, thereby leading to competition and consolidation
These are trends that will
drive and trigger growth in
the Testing Industry
There’s will be increasing boom in the next few years in testing labs
and demand for them, as regulators become stricter with the cannabis
industry.
6. 6
Competitive Advantage
▪ Our lab offers high quality analytical testing with FDA qualified methods.
Our tests are performed with scientific certainty.
▪ No other testing lab, to date, has any standardized methods and we will
become the industry leader as we develop the standardized assay for
potency and pesticide residues.
▪ We also will tap into and develop the "in-process" testing market as well
as quality control for clients to test raw materials and previous analytical
reports. This market is growing and no other lab offer our quality of service.
7. 7
Basis Analytical Labs
High Quality
Exceed
Expecta-
tions
Proven
Basis Analytical Laboratories, LLC is a company that offers
high quality analytical services to a variety of industries.
We have developed assays and methods for determination of
active pharmaceutical ingredients (APIs), excipients, and other
compounds of interest.
Basis Analytical Labs’ main functions will be to test and analyze
cannabis and related products for use in the commercial
sector.
Our methods were developed to meet or exceed FDA
regulation. We are a company for the consumer as well as for
the community.
Our mission is to provide scientifically proven results to our
clients and help interpret the results as needed.
Basis Analytical Labs is also dedicated to creating standards for
the testing industry to employ in their own testing.
8. 8
Our Services
Percent composition (%comp)
Certificates of Analysis (C of A)
Extraction and Purification
Identification and Structural Elucidation
Standardization & Method Development
Custom Synthesis
9. 9
Our Operation Model
Basis Analytical Laboratories, LLC (the Lab) will operate as a for-profit analytical lab specializing in small molecule analysis and
characterization of active pharmaceutical ingredients (APIs).
The Lab will have five (5) main methods that will operate as follows:
Basis Analytical
Labs
Accept
Check
DevelopPublish
Develop
Accept and prepare Chemical
samples for analysis
The Lab will test and ‘Check’
analysis methods of other
laboratories.
Publish methods towards a
‘Standardized Potency Assay’ that
analyze compounds with scientific
certainty.
Development of testing
standards (APIs, pesticides, etc).
Develop New and Novel
testing methods
10. 10
Competitive Landscape
The cannabis testing market is categorized on the basis of product & software, service, end user, and region. Based on the product
& software, the cannabis testing market is segmented into analytical instrument, consumables, and software. The consumables
segment is expected to grow at the highest CAGR during the forecast period owing to their recurring requirement and repetitive
usage.
Prominent players in the cannabis testing products and software market include,
11. 11
SWOT
Strengths
Opportunities
Weaknesses
Threats
▪ Ability to change and evolve quickly as it is
only a new venture.
▪ Few competitors in the state of California
and locally.
▪ Existing intellectual property and over seven
years experience.
▪ Existing contacts and relationships within the
industry.
▪ Opportunity to Partner with new growers
and new partners looking for a smaller scale
lab.
▪ Leader in the Novato area where there is
little competition.
▪ Positive change in community perceptions of
cannabis industry as a whole.
▪ New solutions to problems facing cannabis
industry such as effects of pesticides.
▪ Ability to provide consulting services.
▪ Basis Analytical Labs is a new venture.
▪ Finance is limited.
▪ Time is required to set up.
▪ Insufficient clients.
▪ Lack of funding through funding
rounds or private investment.
▪ Changes to regulations or legislation.
▪ Negative change in community
perceptions of cannabis industry as a
whole.
▪ Threat to loss of intellectual property.
▪ Growing industry can lead to increase
in competition over time.
SWOT Analysis
12. 12
Marketing Strategy
1
Building and launching of website that will highlight
products, expertise and other background and contact
information in full compliance with the regulations
3 Online and Social Media Marketing
2
Basis Analytical Labs will enter into partnerships with
processing and distribution centers in order to drive
sales
13. 13
Projections
0
1000000
2000000
3000000
4000000
5000000
6000000
2017 2018 2019 2020 2021 2022 2023
Amount
Year on Year Growth
Revenue vs Gross Profit Margin
Projected Revenue
Gross Margin
1,300,000
PROJECTED REVENUE IN YEAR ONE
2018 - 2024
25%
80%
25% projected Year on Year
sales growth
2018 - 2024
80% Gross Margin
14. 14
Projected Income Statement
Projected Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
REVENUE
Selling price per Sample 50 50 50 50 50 50 50
Sales - Grams 20% YoY 26,000 31,200 37,440 44,928 58,406.40 75,928.32 98,706.82
Sales - Dollars 1,300,000 1,560,000 1,872,000 2,246,400 2,920,320 3,796,416 4,935,341
Other - Rents 16,000 16,000 16,000 16,000 16,000 16,000 16,000
COST OF GOODS SOLD
Selling price per gram 20% 10 10 10 10 10 10 10
Sales - dollars 260,000 312,000 374,400 449,280 584,064 759,283 987,068
GROSS MARGIN 80% 1,056,000 1,264,000 1,513,600 1,813,120 2,352,256 3,053,133 3,964,273
EXPENSES
Salaries 172,800 259,200 388,800 583,200 874,800 1,312,200 1,968,300
Equipment 155,000
Adminstrative 15,000 18,000 21,600 25,920 31,104 37,325 44,790
Sales and marketing 65,000 78,000 93,600 112,320 134,784 161,741 194,089
Research and development 50,000 67,500 91,125 123,019 166,075 224,202 302,672
Shipping 65,000 78,000 93,600 112,320 146,016 189,821 246,767
General Maintenance & Repairs 23,250 25,575 28,133 30,946 34,040 37,444 41,189
Total 546,050 526,275 716,858 987,725 1,386,820 1,962,732 2,797,807
EBIT 509,950 737,725 796,743 825,396 965,436 1,090,400 1,166,466
INCOME TAXES
Income tax expense 27% 137,687 199,186 215,120 222,857 260,668 294,408 314,946
Income tax recoveries
Total 137,687 199,186 215,120 222,857 260,668 294,408 314,946
NET INCOME - AFTER TAX 372,264 538,539 581,622 602,539 704,769 795,992 851,520
15. 15
Projected Cash Flow Statement
Projected Cash Flow Statement Starting Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Cash Flow fromOperations
Net Income 372,264 538,539 581,622 602,539 704,769 795,992 851,520
Adjustments
Cash fromoperations 372,264 538,539 581,622 602,539 704,769 795,992 851,520
Cash Flow fromInvesting
Purchase of equipment 50,000- 25,000- 25,000- 25,000- 25,000- 25,000-
Cash fromInvesting Activities - - 50,000- 25,000- 25,000- 25,000- 25,000- 25,000-
Cash Flow fromFinancing
Proceeds from equity, net 200,000 1,000,000
Proceeds from debt, net
Cash fromFinancing Activities 200,000 - 1,000,000 - - - - -
Beginning cash balance - 200,000 572,264 2,060,803 2,617,425 3,194,963 3,874,732 4,645,724
Increase (decrease) in cash 200,000 372,264 1,488,539 556,622 577,539 679,769 770,992 826,520
Ending cash balance 200,000 572,264 2,060,803 2,617,425 3,194,963 3,874,732 4,645,724 5,472,244
17. 17
Meet Our Team
Donnie Shackelford
CEO Basis Analytical Labs LLC.
5 years closed loop extraction technician
Donnie comes from a background of cottage
industry extraction and helped develop the industry
in Northern California. He has worked closely with
early closed loop hydrocarbon pioneers Bhogart to
help advance their system capabilities.
He has worked closely to manage the formation of
Higher Vision Cannabis, a cannabis terpene Full
spectrum distillate. Branded with visionary artist Alex
Grey and winner of the current Emerald cup distillate
category.
Donnie owned and operated a Apeks supercritical
CO2 extractor for over 4 years that specializes in
cutting edge equipment selection and training
Kevin DeSisto, Ph.D.
Consultant at Basis Analytical Labs, LLC
Dr. Kevin S. DeSisto has worked in the pharmaceutical
and chemical industry for the past eight (8) years.
Currently, he is a consultant with Basis Analytical
Laboratories, LLC in Novato, CA and was chief scientific
officer for Eden Eco-Cycle, LLC in Woodstock, GA, a
bioremediation company. Kevin is an accomplished
chemist having been a medicinal chemist for
HydraBiosciences in Cambridge, MA where he designed
TRP-A1 inhibitors as a drug candidate.
Previously, a process development / analytical chemist
preparing and elucidating structures of drug candidates,
metabolites, as well as impurities. Prior to receiving his
Ph.D. from the University of Vermont, Kevin worked in a
cGMP pilot plant at Pharm-Eco, Inc. (Andover, MA).
